Divide And Conquer On Victorian Worksites


The Victorian Government is trying to wipe out Enterprise Bargaining Agreements in the building industry that impose union standards on third-party contractors. How? By imposing the government’s own standards on third-party contractors instead.

The Code of Practice regulates the building industry in Victoria, largely deferring to the National Code and the Gillard Government’s Fair Work Building Commission — but the Baillieu government introduced new guidelines (pdf) to the code that took effect on 1 July  this year.

NM reported on the new regulations after building workers protested in July. As I wrote then, it was unlikely Baillieu’s ideological war would motivate big construction firms to sacrifice profits for the sake of "cultural change".

The new guidelines work by restricting access to lucrative government contracts, including public-private partnerships, in order to persuade companies to enforce tougher conditions on workers through their own contracts with unions.

Much of the focus has been on Baillieu’s attempt to remove union flags from cranes — an important cultural symbol, but not the most pressing concern for a company’s bottom line. The dominant thrust of the code is, however, to stop agreements that force companies to pay union rates to (very often) non-unionised sub-contractors and their employees.

Lend Lease, a big player in the construction market, signed a four-year national EBA (pdf) in August with the Construction, Forestry, Mining and Energy Union. It was approved by Fair Work Australia on 13 September and has been in operation since 20 September.

But the agreement caused a stir last Monday, with a Fairfax report saying the deal undermined the Victorian Code, in particular by setting wages for contractors not party to the agreement.

Lend Lease replied in a media statement saying, "JDA8 [Joint Development Agreement Eight] is not a project agreement and does not apply to workers not employed directly by Lend Lease". Project agreements, disparaged by the new regulations, set wages for all workers on a particular building site, union and non-union alike.

But there is no doubt the Lend Lease EBA does set rates for third-parties, in section 27, saying these workers should be employed on, "terms and conditions contained in the range of standard regional CFMEU enterprise agreements covering the type of work performed by the subcontractor and its Employees."

There is nothing unusual in any of this, as Lend Lease’s statement went on to say, "This is the eighth JDA agreed between Lend Lease and its workforce over the past 20 years".

Nor is it surprising that within the limits of the Enterprise Bargaining process, designed by ALP politicians in the Accord era, there remain some remnants of basic union principles. The way to combat competition between unionised and subcontracted workers, is for those on the outside to be brought into the fold.

The CFMEU knows that if companies are able to bring in sub-contractors at sub-prices, it will undermine union wages. This logic explains why part of the industrial muscle of the CFMEU is expended on ensuring potentially non-union labour is paid at union rates, even though it creates the contradiction that unionists are paying non-union members pay increases.

The ugly alternative is for unions to call for restrictions on they kind of workers who may enter the market at a lower rate, as the blue-collar unions have done in relation to non-citizens recently, many of who work precariously in their trades.

Along these lines, a 2009 CFMEU submission (pdf) to the senate inquiry into the welfare of international students, called for tougher border control. Another submission (pdf) to a review of employer sanctions legislation showed the NSW branch has even added clauses to EBAs that hand draconian powers to employers to investigate the visa status of workers.

Such moves denigrate the labour movement and in the long run only further weaken Australian unions by handing powers of intimidation to employers and governments, creating hyper-exploitable workforces both here and overseas.

Forcing companies to pay union rates to non-union workers is the progressive way to combat competition from non-unionised parts of the workforce. This is especially true where unions are too weak to impose no-ticket-no-start rules through their own industrial strength (a process that necessarily involves bringing competing sections of the workforce into the union).

Clauses such as the one found in the Lend Lease/CFMEU agreement also address the issue the National Union of Workers enlisted Billy Bragg to protest in the city on Friday. The overall trend towards casualisation and precarious work is a direct result of enterprise bargaining, as companies avoid union deals by classifying workers as sub-contractors working for smaller, separate enterprises.

Baillieu’s code is an attempt to further the cause of enterprise bargaining by stamping out the practice of progressive unionism, even at the enterprise level.

The irony is the government is using the same method of pursuing its market power through contracts as a supplier of capital, as the union does as a supplier of labour when it imposes minimum wages for sub-contracted employees.

In Baillieu’s code, any measure in an EBA that dictates how non-union labour must be treated, is described as infringing on the third-party contractor’s freedom:

"An industrial instrument must not contain… provisions that stipulate the terms and conditions for the labour of any person not a party to the industrial instrument."


"It is the responsibility of a contractor to negotiate with its employees the form and content of their workplace arrangements free of any coercion or undue influence."

Yet the government claims the right to exploit its own market power as a large financier of construction work, to impose conditions on third-parties, even when the agreements between those parties is completely legal, having been approved by the national regulator.

Under the Victorian code, building companies must submit a Workplace Relations Management Plan describing all types of labour and productivity decisions that would need to be negotiated with unions and sub-contractors. The plan should include, "Conditions to be imposed on subcontractors to ensure they comply with … the WRMP."

Baillieu’s new code is nothing but an attack on unionism that will continue the trend towards separating workers into competing parts and criminalising solidarity between those parts. It will lead to smaller and smaller sections of the workforce on the good wages and conditions of the CFMEU, to the extent that workers are able to unionise in high demand industries (mining, some sections of construction). Others will be left behind, and as they become competitors with the remaining privileged unions, another type of unionism will rear its ugly head.

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