JUNE 2009:

  • Introduction
  • The ABCC
  • National Code of Practice for the construction industry and implementation guidelines
  • The role of the Federal Safety Commissioner under harmonised laws
  • Scaffold Safety - “Falling Standards”

 

The ABCC, National Code and current OH & S issues in the construction industry

 

Introduction

Welcome to HWL Ebsworth Lawyers Construction Industry Workplace Bulletin. The purpose of this is to provide clients with news and views on recent developments in industrial relations and safety in the construction industry.

On Tuesday 17 June 2009, the Federal Government introduced legislation which outlines the abolition and replacement of the ABCC, the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2009 (the Bill). The Office of the Fair Work Building Industry Inspectorate (the Building Inspectorate) will take over the role of industry watchdog. It will have similar powers as the ABCC currently does, with a control mechanism over the use of coercive powers. Essentially, the Building Inspectorate will need to satisfy a presidential member of the Administrative Appeals Tribunal before exercising powers and there are more legal rights available to those summonsed to an examination, such as choice of legal representative.

A controversial provision creates the office of Independent Assessor, who on application from unions or builders may make a determination that the coercive examination powers will not apply to a particular “peaceful” project. It remains to be seen how this may work in practice given that stakeholders may not agree on the application or exemption.

The Bill also winds back penalties for breaching the industrial legislation to the same levels as which apply to the rest of the workforce.

Given these important changes, this seems a perfect time to review the ABCC’s performance and impact on the industry.

With the announcement this week, media focus is squarely on the activities of the CFMEU and the potential impact of winding back the ABCC and its powers. Many industry players are rightfully questioning what the future will look like for construction industry industrial relations. In conjunction with this, the Government has also announced that it will issue revised Implementation Guidelines for the National Code of Practice for the Construction Industry. The noise being generated by the Union movement certainly indicates that Government is pushing to maintain a “tough cop on the beat”.

We have also included two articles which highlight important OH & S developments for all construction industry participants.

 

 

The ABCC

While the ABCC has enjoyed a controversial existence, condemned broadly by the labour movement, the Rudd Government has recently firmed in its commitment to maintain a strong industry watch dog in the face of enormous internal political pressure. In many respects, this is a situation which can be attributed to a small number of union officials and members within some branches of the construction industry unions. Indeed, Kevin Rudd and Julia Gillard have both confirmed this in recent media interviews explicitly naming the Western Australian and Victorian branches of the construction division of the CFMEU.

The ABCC came into operation following the enactment of the Building and Construction Industry Improvement Act 2005 (the BCII Act) with the aim of securing industrial peace and an acceptable level of productivity in the industry.

After less than four years the ABCC is now set to be replaced with a specialist division within the new Fair Work Ombudsman. The proposed powers this body will have will be contained in the legislation to be introduced to Parliament this week. Predictably, they will be largely shaped by Justice Murray Wilcox’s report titled “Transition to Fair Work Australia for the Building and Construction Industry” (the Wilcox Report), which makes recommendations on the structure and powers of the specialist division and has been adopted in principle by the Rudd government.

The Wilcox Report makes numerous recommendations for the specialist division including:

  1. that it should be a semi autonomous unit of the Fair Work Ombudsman rather than Fair Work Australia;
  2. that compliance powers should be retained but with additional checks; and
  3. that breaches of the law in the construction industry be penalised at the same level of breaches in other industries.

The most controversial aspect of this report is a recommendation that the cohesive powers be retained. These recommendations come at a time when it appears the ABCC has finally found its feet.

Over the past twelve months the ABCC has successfully prosecuted breaches of the BCII Act in almost all cases which it has initiated. The consistency seen in ABCC prosecutions over the past twelve months is somewhat of a new phenomenon. In 2005 when the ABCC was established, its prosecutions were patchy and plagued by errors. In the year 2005 to 2006, six of its applications were dismissed. In 2006 to 2007 of the eight penalty proceedings initiated, two were discontinued.
Over the past 18 months the success rate of the ABCC has dramatically improved.

Current successes

  1. Prosecutions

    Since 2008 there have been over 20 successful prosecutions concluded by the ABCC and many others are under way. Of these successful prosecutions, four arose in NSW, 10 from Victoria, four from Western Australian and one in Queensland and South Australia.

    Unions have been heavily penalised in these proceedings. In 2008 and 2009 so far, the CFMEU has been ordered to pay over $250,000 in damages. In addition, it is quite common now that Unions are being ordered to pay, or at least contribute to the legal costs of the ABCC. On top of their own legal fees, this adds up to an expensive exercise. Additionally, individual Union Officials have also been ordered to pay tens of thousands of dollars in fines.

    Whilst there is an increasing rate of success in the prosecutions initiated by the ABCC, the sheer volume of prosecutions launched in the last year also suggests that there are still consistent breaches of industrial laws in the industry, particularly in Victoria which maintains a disproportionate level of legal activity.
  2. Rate not declining

    Since the introduction of the ABCC the number of prosecutions initiated has not declined, rather it has increased. The Wilcox Report commented that the high success rate achieved by the ABCC, in relation to penalty proceedings launched at the rate of about one per month, suggests that there is still a significant degree of non-compliance with rules governing the industry. It is this activity that makes the findings of the Wilcox report and in the recommendation to retain coercive powers not particularly surprising.
  3. Productivity gains

    The success of the ABCC has not just been measured by the number of successful prosecutions. Productivity gains were also of focus of the Wilcox Report.

    There has been much speculation as to the impact of the BCII Act and the operation of the ABCC on lifting labour productivity in the industry. In 2007 a report by KPMG Econtech reported that productivity in the industry had lifted by 9.4%. John Holland Group assessed that the increase was 10%. Both of these figures are irreconcilable with ABS National Accounts Data. The Wilcox Report stated “I accept that there has been an increase in building industry labour productivity over the last few years, but only a modest one. I reached this conclusion because it is consistent with ABS data”.

    There is no doubt that productivity gains in the building and construction industry have occurred due to changes in the industrial regulation of the sector. The simple fact is that there is less industrial action occurring now then prior to the introduction of the BCII Act and the operation of the ABCC.
  4. The future

    The ABCC was ostensibly created to introduce industrial peace to the construction industry with an acceptable level of productivity .Based on these measures alone, it appears that the ABCC has had some success in meeting its original imprimatur.

    Will this last? Certainly the Federal Government appears to be committed to obtaining “a tough cop on the beat” and is positioning itself as no fan of the Victorian and Western Australian branches of the construction division of the CFMEU. In recent interviews, Prime Minister Rudd expressed no sympathy for Ark Tribe who is currently facing imprisonment for refusing to comply with a direction to attend an examination with the ABCC. Similarly when Minister Gillard addressed ACTU Congress recently, she cited aberrant industrial behaviour in Victoria in justification of the ABCC in defiance of the union audience.

    Accordingly, it is clear that from the 1st of February next year the specialist construction division of the Fair Work Ombudsman will continue to pay an important role in policing the laws and regulations in the industry.

 

 

National Code of Practice for the construction industry and implementation guidelines

The Rudd Government has just announced that it will issue an amended National Code of Practice for the Construction Industry and Implementation Guidelines (the New Code and Guidelines) to operate from 1 July 2009.

The Rudd Government has been conspicuously silent on the future of the current Code and Guidelines since its election. While there is an abundance of focus on the ABCC and the BCII Act, it is in fact the current Code and Guidelines which have forced builders to undertake wholesale reviews of their on site IR practices.

For example, as the current Code required contractors to comply with the guidelines on privately funded projects from November 2005, code compliant behaviour has become the norm and with this a trickle down effect has ensured sub-contractors are complying with its provisions as well. The biggest impact is likely to be in respect of Right of Entry procedures. While the Right of Entry procedures in the Fair Work Act 2009 are not significantly different to those currently in the Workplace Relations Act 1996, the fact that the current Code and the Guidelines require the provisions to be enforced, has been the subject of much debate and disputation in the industry throughout the last couple of years. If this requirement is removed, industry employers will need to make a policy decision as to whether they require union officials to comply with the legislation going forward.

The New Code and Guidelines may also herald a different approach to managing government construction projects. Project agreements were unheard of under the Howard government for projects covered by the current Code, but it is not beyond the realms of possibility that they may be returned. It is interesting to note that President Obama recently changed the US government procurement guidelines to allow “labour” agreements on construction projects which was previously outlawed by the Bush administration.

It remains to be seen what the Government will do in relation to this controversial aspect of the current Code and Guidelines. Thus far, there has been no indication from Government as to the content of the amendments. We will keep you updated of the changes, together with the likely impact on businesses as soon as it is released.

 

 

The role of the Federal Safety Commissioner under harmonised laws

The role of the Federal Safety Commissioner (Commissioner) was established in June 2004 on the back of the Cole Royal Commission into the building and construction industry.

The Commissioner’s functions include the promotion of best practice OHS on Australian Government building and construction projects, to develop and administer the Australian Government building and construction OHS accreditation scheme, promote the adoption of safe design on Australian Government construction projects and work in conjunction with industry to identify any initiatives that will assist in improved OHS performance in the construction industry.

With the prospect of harmonised OHS laws being enacted, what will be the future role of the Commissioner under those laws?

The 2nd report published by the OHS Review panel recommended the appointment of inspectors. As all States and Territories have established inspectorates. It is likely that those inspectors would be appointed under harmonised OHS laws to enforce the laws in each State and Territory.

To ensure a consistent approach by a “harmonised inspectorate” it is critical that all inspectors receive training in a nationally uniform compliance and enforcement policy. If no uniform approach exists then true harmonisation cannot be achieved.

The harmonised legislation proposes adopting a uniform compliance and enforcement model, with increased penalties and other enforcement options such as enforceable undertakings (enforceable undertakings are currently available in some jurisdictions). Consistent enforcement of the harmonised laws will allow national employers and employees to devote their time to ensuring the continual improvement of their national safety management system.

The recent agreement by the Queensland Government to adopt the same criteria as that used under the Commissioner’s OHS accreditation scheme for accreditation of its own government related construction work, indicates that there is scope for the Commissioner to take on a co-ordinating role in relation to Federal, State and Territory government construction projects to ensure consistency across all construction sites.

Whether the Commissioner will be required take on a broader regulatory role under harmonised OHS laws remains to be seen. However, given the Federal Government’s commitment to maintaining a separate regulatory body for the construction industry in relation to industrial matters (currently the ABCC), it is more than likely that the Commissioner will continue to perform its current role with a new body established to coordinate the regulators’ implementation of the proposed harmonised OHS laws.

 

 

Scaffold Safety - “Falling Standards”

Scaffolding is an effective system used in the construction industry to protect workers from the risk of falling from heights, as well as protecting workers and the general public from the risk of being struck by falling objects.

Swinging stages or suspended scaffolds provide an alternative safe work platform where it would be impossible to erect a static scaffold system.

A scaffold structure or swinging stage that has a design fault or is not maintained or monitored to ensure all components are in place, may itself pose a risk to the safety of workers.

On busy construction sites the structural integrity of a scaffold structure can be easily compromised when structural components are removed.

Where the removal of scaffold components is done in a systematic way so that other methods of support may be installed to ensure the structural integrity of the scaffold structure the risk to safety is minimised or eliminated.

Controlling risks associated with suspended scaffold systems

Suspended scaffolds require the implementation of regular and comprehensive maintenance programs. As a minimum, safe work methods must be developed and implemented, and a comprehensive maintenance and inspection process undertaken and documented.

Components of a suspended scaffold may be liable to failure if they are not thoroughly inspected on a regular basis, including prior to every use. Any defects identified during an inspection must be rectified before the scaffold is used.

The recent fatality involving a swinging stage at the Maroubra Seals Sports Community Club in Sydney’s south east is a tragic reminder of the need to have robust monitoring and maintenance systems in place.

In this incident the winch mechanism at one end of the swinging stage used at the time failed resulting in a worker falling to his death. Compounding the issue was the fact that the deceased worker was not wearing a safety harness.

A risk assessment of the swinging stage should have identified the need for workers to wear a safety harness whilst working from the stage and for the scaffold hoist mechanism to include back up safety systems such as a single rope protective device or a second rope in order to hold the scaffold level should such a failure occur.

As a result of this incident WorkCover NSW released a safety alert recommending the following procedure be adopted in relation to suspended scaffold systems:

  1. The implementation of specific safe work procedures.
  2. An inspection of suspended platform components including, winches, ropes and counterweights prior to every use.
  3. All components to be subject to regular maintenance and repairs.
  4. Appropriate fall arrest devices are to be used and attached correctly.
  5. That protective devices such as single rope or second rope protective devices are utilised on each suspended scaffold.

Similarly, in Queensland after multiple fatal incidents involving the failure of suspended scaffold components, the following measures, which will augment the current Queensland Scaffolding Code of Practice 2004, were implemented:

  1. A suitably qualified engineer must inspect and verify the initial set up of the suspended scaffold suspension system and provide engineering drawings and a set up statement.
  2. An engineer must provide a statement on the adequacy of the structure the suspended scaffold is being installed on.
  3. A competent person must inspect and verify subsequent installations of the suspended scaffold system.
  4. A load test is to be conducted on each installation.
  5. The principle contractor or building owner must sight all documentation before allowing work to begin.

Control risks associated with static scaffold structures

The ongoing monitoring and review of the effectiveness of a static scaffold structure as a fall prevention control measure is critical, particularly due to the ever changing nature of construction work.

It is crucial that a safe system of work in relation to scaffolding includes the following minimum requirements:

  1. The design and installation of the scaffold must be suitable for the specific tasks on the construction site and in particular the methodology and sequence that will be adopted for construction.
  2. Ensuring that the design and installation of the scaffold is in accordance with AS/NZS1576 and 4576.
  3. Ensure that the scaffold is tied to the structure in accordance with the relevant standards.
  4. Ensure that only a licensed scaffolder modifies the scaffold (where major modifications are made engage an engineer to assess the scaffold for load bearing capacity and design compliance).
  5. Ensure adequate supervision of all workers who perform work from the scaffold.

In Inspector Ron Spence v Allam Homes Pty Limited and Inspector Ron Spence v Mehrban Allam [1] the company and its managing director, Mr Allam were fined a total of $154,000 after a carpenter contracted by the defendant corporation fell more than two metres and suffered multiple fractures, displacement of vertebrae and slight amnesia after the scaffold platform that he was working on collapsed.

The incident occurred because contractors delivering gyprock to the site had dismantled and re-erected the scaffold structure in order to facilitate the delivery. Instead of arranging for a licensed scaffolder to dismantle and re-erect the scaffold, the contractors had done so themselves, failing to properly install supports, struts and braces.

Justice Haylen of the Industrial Court in sentencing noted that there were simple remedial steps available to the defendants that would have prevented the incident, including passing on information to subcontractors regarding the dismantling or modification of scaffold structures and ensuring adequate supervision of subcontractors on site.

Conclusion

Importantly, static scaffold structures and suspended scaffold systems must be subjected to ongoing maintenance, review and monitoring to ensure that they meet the original design specifications and load calculations to ensure they remain effective as a fall prevention control measure.

[1]

[2008] NSWIRCOMM 249

 

These articles were written, in conjunction with our partners, by our OH&S expert Michael Connolly, Special Counsel.