Performance of the functions and the exercise of powers of the
Australian Building and Construction Commissioner
Quarterly Report
Secondquarter of 2017–18 Financial Year
Operations from 1 October– 31 Decemberinclusive
Letter of transmittal
28 March 2018
The Hon Craig Laundy MP
Minister for Small and Family Business, the Workplace and Deregulation
Parliament House
Canberra ACT 2600
Dear Minister,
The Building and Construction Industry (Improving Productivity) Act 2016 (BCIIP Act) requires the Australian Building and Construction Commissioner to prepare a report each quarter on the performance of the Commissioner’s functions and the exercise of powers and to provide that report to the Minister.
I am pleased to present to you this quarterly report, which covers the Australian Building and Construction Commission’s operations in the secondquarter of 2017-18 (1 October – 31December 2017).
I note subsection 20(5) of the BCIIP Act which provides that the Minister must cause a copy of the report to be laid before each House of the Parliament within 15 sitting days of that House after its receipt.
Yours sincerely,
Stephen McBurney
Commissioner
Australian Building and Construction Commission
Contents
Letter of transmittal
1.Introduction
2.Methodology
3.Performance of functions and exercise of powers
a)Matters investigated
b)Assistance and advice
c)Building Code compliance
d)Matters investigated in relation to building employers
e)Proceedings commenced
f)Number and cost of proceedings finalised
g)Legal expenses incurred as a result of enforcement action
h)Details of industry conditions
i)Compliance of products used in building work
j)Examination notices issued
4.Additional reporting
a)Directions given by the Minister
b)Delegations made by the Australian Building and Construction Commissioner
1.Introduction
On 2December2016, the Building and Construction Industry (Improving Productivity) Act 2016(BCIIP Act)and the Building and Construction Industry (Consequential and Transitional Provisions) Act 2016commenced. As a result, the Australian Building and Construction Commission (ABCC) commenced operations on 2December2016.
Section 20 of the BCIIP Act requires the Australian Building and Construction Commissioner to prepare and give to the Minister a report on the performance of the Australian Building and Construction Commissioner’s functions and the exercise of the Australian Building and Construction Commissioner’s powers during that quarter (the Quarterly Report).
The Quarterly Report must include details of the matters set out in subsections 20(2) and 20(3) of the Act.
The following report sets out the activities undertaken by the Australian Building and Construction Commissioner in the secondquarter of 2017-18 financial year, i.e.1 October to 31December 2017(the reporting period).
2.Methodology
As reported in the previous Quarterly Report, the ABCC has commenced use of a case management system “inCase” with a tailored activity-based costing module. The system commenced on 31 July 2017.
The system provides a specific facility to record nominal time costing against agency investigations and proceedings. The internal costs allocated to investigations and prosecutions are derived from the case management system.
3.Performance of functions and exercise of powers
a)Matters investigated
In the reporting period,the ABCC had 78open investigations.
Table A1 below shows the number of investigations that were open during the reporting period by the main allegation being investigated.
Table A1:Investigations open during the reporting period
Main Allegation / Number of InvestigationsWages and entitlements / 24
Coercion / 16
Right of entry / 14
Unlawful industrial action / 13
Freedom of association / 6
Misclassification/sham contracting / 5
Total / 78
Table A2 below shows the approximate internal cost in the reporting period of each of these investigations.
Table A2:Approximate nominal internal cost in the quarter of open investigations
1
Quarterly Report – Second quarter of 2017-18 Financial Year
Ref / Main Allegation / Cost16679 / Unlawful industrial action / $2,845
24059 / Wages and entitlements / $1,060
27233 / Wages and entitlements / $1,397
27240 / Misclassification/sham contracting / $973
27242 / Unlawful industrial action / $579
27245 / Right of entry / $6,265
27246 / Right of entry / $4,566
27813 / Wages and entitlements / $150
27818 / Right of entry / $5,618
27841 / Wages and entitlements / $208
27845 / Wages and entitlements / $14,023
27847 / Right of entry / $414
27849 / Freedom of association / $732
27859 / Right of entry / $5,012
27860 / Wages and entitlements / $13,348
27862 / Unlawful industrial action / $7,123
27864 / Coercion / $8,238
27869 / Freedom of association / $215
27870 / Misclassification/sham contracting / $2,148
27879 / Wages and entitlements / $3,293
27883 / Right of entry / $2,260
27884 / Unlawful industrial action / $2,635
27893 / Wages and entitlements / $1,008
27894 / Coercion / $13,429
27903 / Coercion / $8,393
28828 / Right of entry / $183
28844 / Coercion / $6,250
28847 / Coercion / $893
28856 / Right of entry / $6,191
28859 / Coercion / $2,177
28860 / Unlawful industrial action / $4,937
28861 / Freedom of association / $5,556
28971 / Right of entry / $2,668
28972 / Coercion / $500
28973 / Right of entry / $3,313
28974 / Unlawful industrial action / $847
28975 / Unlawful industrial action / $137
29673 / Coercion / $86
29870 / Wages and entitlements / $87
29952 / Unlawful industrial action / $3,441
29974 / Wages and entitlements / $2,033
30089 / Unlawful industrial action / $7,276
30128 / Wages and entitlements / $1,996
30238 / Coercion / $1,444
30405 / Wages and entitlements / $4,128
30437 / Freedom of association / $5,184
30463 / Unlawful industrial action / $8,333
30542 / Misclassification/sham contracting / $2,280
30587 / Coercion / $2,011
30607 / Wages and entitlements / $1,962
30660 / Coercion / $3,063
30697 / Misclassification/sham contracting / $479
30987 / Wages and entitlements / $2,614
31071 / Wages and entitlements / $377
31111 / Right of entry / $2,293
31278 / Freedom of association / $587
31393 / Coercion / $8,677
31596 / Unlawful industrial action / $1,124
31636 / Wages and entitlements / $548
31672 / Coercion / $1,313
31676 / Wages and entitlements / $1,032
31679 / Misclassification/sham contracting / $842
31680 / Wages and entitlements / $1,394
31705 / Wages and entitlements / $910
31749 / Coercion / $1,138
31806 / Wages and entitlements / $792
31833 / Wages and entitlements / $1,119
31982 / Unlawful industrial action / $2,914
32188 / Right of entry / $1,098
32216 / Right of entry / $2,126
32222 / Freedom of association / $1,689
32338 / Unlawful industrial action / $666
32340 / Coercion / $752
32426 / Wages and entitlements / $752
32436 / Wages and entitlements / $514
32550 / Coercion / $74
32625 / Right of entry / $747
32732 / Wages and entitlements / $84
1
Quarterly Report – Second quarter of 2017-18 Financial Year
b)Assistance and advice
In thereporting period, the ABCC provided assistance and advice by responding to 1,675enquiries. TableB below shows these enquiries by main topic and the category of the enquirer.
Table B:Assistance and advice provided to building industry participants in response to enquiries
Main Topic / Building industry participant / Member of the public / Government / TotalCode / 1,079 / 38 / 59 / 1,176
Code assessment / 587 / 12 / 6 / 605
General Code information / 258 / 12 / 30 / 300
Code advice / 194 / 12 / 23 / 229
Security of Payment - notification / 12 / 0 / 0 / 12
Notice of Code breach / 10 / 0 / 0 / 10
Security of Payment - enquiry / 8 / 1 / 0 / 9
s.6A/6B application / 9 / 0 / 0 / 9
State Code information / 0 / 1 / 0 / 1
s.6A/6B general advice / 1 / 0 / 0 / 1
Workplace laws - building work / 202 / 3 / 12 / 217
Right of entry / 70 / 0 / 5 / 75
Wages and entitlements / 53 / 1 / 3 / 57
Unlawful industrial action / 29 / 0 / 2 / 31
Coercion / 23 / 2 / 0 / 25
Freedom of association / 13 / 0 / 1 / 14
Misclassification/sham contracting / 11 / 0 / 1 / 12
Strike pay / 2 / 0 / 0 / 2
Misrepresentation of workplace rights / 1 / 0 / 0 / 1
Non-designated building laws / 76 / 60 / 0 / 136
ABCC information and activities / 68 / 23 / 13 / 104
Not relevant to the building industry / 4 / 18 / 1 / 23
Non building work / 14 / 4 / 1 / 19
Total / 1,443 / 146 / 86 / 1,675
c)Building Code compliance
In the reporting period, the agency finalised 19Building Codeaudits and 56Building Code inspections. Table C1 below shows the outcome of all Building Code audits finalised in the reporting period. Table C2 below shows the outcome of all Building Code inspections finalised in the reporting period.
Six Building Code audits found potential issues, with contractors committed to rectification in each instance.
Tenadditional Building Code audits were commenced during the reporting period but were not finalised in the same reporting period.
Table C1: Outcome of audits
Outcome of audit / TotalNo issuesidentified / 13
Potential issues identified / 6
Total / 19
Table C2: Outcome of inspections
Outcome of inspection / TotalNo issues identified / 49
Potential issues identified / 7
Total / 56
d)Matters investigated in relation to building employers
In the reporting period,the conduct of employers was thesubject of investigation in41matters.[1] Table D1below shows the breakdown of those investigations by the main allegation being investigated.
Table D1: Investigations open during the reporting period where employers werea subject of the investigation
Main Allegation / Number of investigationsWages and entitlements / 24
Misclassification/sham contracting / 5
Coercion / 4
Freedom of association / 4
Unlawful industrial action / 3
Right of entry / 1
Total / 41
Table D2 below shows the approximate internal cost in the reporting period of each of these investigations.
Table D2:Approximate internal cost in the quarter of investigations where employers were the subject of the investigation.
1
Quarterly Report – Second quarter of 2017-18 Financial Year
Ref / Main Allegation / Cost24059 / Wages and entitlements / $1,060
27233 / Wages and entitlements / $1,397
27240 / Misclassification/sham contracting / $973
27813 / Wages and entitlements / $150
27818 / Right of entry / $5,618
27841 / Wages and entitlements / $208
27845 / Wages and entitlements / $14,023
27860 / Wages and entitlements / $13,348
27862 / Unlawful industrial action / $7,123
27869 / Freedom of association / $215
27870 / Misclassification/sham contracting / $2,148
27879 / Wages and entitlements / $3,293
27893 / Wages and entitlements / $1,008
27894 / Coercion / $13,429
28861 / Freedom of association / $5,556
29870 / Wages and entitlements / $87
29952 / Unlawful industrial action / $3,441
29974 / Wages and entitlements / $2,033
30089 / Unlawful industrial action / $7,276
30128 / Wages and entitlements / $1,996
30405 / Wages and entitlements / $4,128
30542 / Misclassification/sham contracting / $2,280
30587 / Coercion / $2,011
30607 / Wages and entitlements / $1,962
30660 / Coercion / $3,063
30697 / Misclassification/sham contracting / $479
30987 / Wages and entitlements / $2,614
31071 / Wages and entitlements / $377
31278 / Freedom of association / $587
31636 / Wages and entitlements / $548
31672 / Coercion / $1,313
31676 / Wages and entitlements / $1,032
31679 / Misclassification/sham contracting / $842
31680 / Wages and entitlements / $1,394
31705 / Wages and entitlements / $910
31806 / Wages and entitlements / $792
31833 / Wages and entitlements / $1,119
32222 / Freedom of association / $1,689
32426 / Wages and entitlements / $752
32436 / Wages and entitlements / $514
32732 / Wages and entitlements / $84
1
Quarterly Report – Second quarter of 2017-18 Financial Year
In the reporting period,employers were a complainant in 45 open investigations.Table D3below shows the breakdown of those investigations by the main allegation being investigated.
Table D3: Investigations open during the reporting period where employers were a complainant in the investigation
Main Allegation / Number of investigationsCoercion / 14
Right of entry / 12
Unlawful industrial action / 11
Wages and entitlements / 5
Misclassification/sham contracting / 2
Freedom of association / 1
Total / 45
Table D4 below shows the approximate internal cost in the reporting period of each of these investigations.
Table D4:Approximate internal cost in the quarter of investigations where employers were a complainant in the investigation
1
Quarterly Report – Second quarter of 2017-18
Ref / Main Allegation / Cost16679 / Unlawful industrial action / $2,845
27233 / Wages and entitlements / $1,397
27240 / Misclassification/sham contracting / $973
27245 / Right of entry / $6,265
27246 / Right of entry / $4,566
27847 / Right of entry / $414
27859 / Right of entry / $5,012
27862 / Unlawful industrial action / $7,123
27864 / Coercion / $8,238
27883 / Right of entry / $2,260
27884 / Unlawful industrial action / $2,635
27893 / Wages and entitlements / $1,008
27894 / Coercion / $13,429
27903 / Coercion / $8,393
28828 / Right of entry / $183
28844 / Coercion / $6,250
28847 / Coercion / $893
28856 / Right of entry / $6,191
28859 / Coercion / $2,177
28860 / Unlawful industrial action / $4,937
28973 / Right of entry / $3,313
28974 / Unlawful industrial action / $847
28975 / Unlawful industrial action / $137
29673 / Coercion / $86
29870 / Wages and entitlements / $87
29952 / Unlawful industrial action / $3,441
30089 / Unlawful industrial action / $7,276
30238 / Coercion / $1,444
30437 / Freedom of association / $5,184
30463 / Unlawful industrial action / $8,333
30542 / Misclassification/sham contracting / $2,280
30587 / Coercion / $2,011
31111 / Right of entry / $2,293
31393 / Coercion / $8,677
31596 / Unlawful industrial action / $1,124
31672 / Coercion / $1,313
31676 / Wages and entitlements / $1,032
31749 / Coercion / $1,138
32188 / Right of entry / $1,098
32216 / Right of entry / $2,126
32338 / Unlawful industrial action / $666
32340 / Coercion / $752
32426 / Wages and entitlements / $752
32550 / Coercion / $74
32625 / Right of entry / $747
1
Quarterly Report – Second quarter of 2017-18
e)Proceedings commenced
In the reportingperiod, the agency commencedtwo proceedings with the following respondents:
Table E: Proceedings commenced by category of building industry participant
Case – name and court file number / Building association / Building association representativeTAD47/2017– Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union & Ors / 1 / 2
SAD316/17– Australian Building and Construction Commissioner v Mark Gava & Anor / 1 / 1
Costs during the reporting period of proceedings commenced:
- TAD47/2017– Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union & Ors;the agency incurred $25,747.11 in external legal costs during the quarter. Nominal internal costs of $6,191were recorded against this matter during the quarter.
- SAD316/17– Australian Building and Construction Commissioner v Mark Gava & Anor; the agency incurred $19,517.32 in external legal costs during the quarter. Nominal internal costs of $3,313were recorded against this matter during the quarter.
In the reporting period, the agency intervened in two proceedings in the Fair Work Commission:
- RE2017/1280- Application for entry permit –Toby Thornton; the agency incurred $387in nominal internal legal costs.
- RE2017/1380 -Application for entry permit – Michael Robinson; the agency incurred$855 in nominal internal legal costs.
f)Number and cost of proceedings finalised
In the reporting period,the agency finalised eight Court proceedings.
- Australian Building and Construction Commissioner v Jody Moses & Ors (No.2) [2017] FCCA 2738; BRG450/2016; the agency incurred a total of $233,823.46 in external legal costs. Nominal internal costs of $4,291 were recorded against this matter since 2 December 2016.
- Australian Building and Construction Commissioner v Parker & Ors(No.2) [2017] FCA 1082; NSD467/2016; the agency incurred a total of $1,678,821.54 in external legal costs. Nominal internal costs of $10,610 were recorded against this matter since 2 December 2016. This matter is subject to appeal.
- Australian Building and Construction Commissioner v Hanna & Anor (No.3) [2017] FCCA 2519; BRG98/2016; the agency incurred a total of $131,253.90 in external legal costs. Nominal internal costs of $2,224 were recorded against this matter since 2 December 2016. This matter is subject to appeal.
- Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union(Werribee Shopping Centre Case) [2017] FCA 1235; VID860/2016; the agency incurred a total of $90,039.86 in external legal costs. Nominal internal costs of $6,019 were recorded against this matter since 2 December 2016.
- Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union& Ors [2017] FCA 1269; QUD389/2016; the agency incurred a total of $414,091.53 in external legal costs. Nominal internal costs of $2,175 were recorded against this matter since 2 December 2016.
- Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The Footscray Station Case) [2017] FCA 1555; VID27/2015; the agency incurred a total of $316,966.70 in external legal costs. Nominal internal costs of $2,514 were recorded against this matter since 2 December 2016.
In the reporting period, the following two appeal decisions were delivered that relate to previously finalised matters:
- Scott Adams & Ors v Australian Building and Construction Commissioner [2017] FCAFC 228; (WAD488/2015; WAD26/2014) the agency incurred a total of $591,176.55 in external legal costs. Nominal internal costs of $620 were recorded against this matter since 2 December 2016.The case before the single judge of the Federal Court continues and has not yet been finalised.
- Powell v Australian Building and Construction Commissioner [2017] (VID704/2014; VID1361/2016; M87/2017) the agency incurred a total of $225,679.25 in external legal costs. Nominal internal costs of $8,040 were recorded against this matter since 2 December 2017. The case before the single judge of the Federal Court continues and has not yet been finalised.
In the reporting period, the agency finalised its involvement in sevenproceedings in the Fair Work Commission:
- Application by the Construction, Forestry, Mining & Energy Union, Industrial Union, Queensland for an entry permit for Jade Anthony Ingham – RE2015/1159 and 2015/1160; the agency incurred a total of $6,877.28 in external legal costs. Nominal internal costs of $205 were recorded against this matter since 2 December 2016.
- Application by the Construction, Forestry, Mining & Energy Union, Industrial Union for an entry permit for Bradley Upton – RE2017/657; the agency did not incur any external legal costs. Nominal internal costs of $4,926 were recorded against this matter since 2 December 2016.
- Application by Australian Manufacturing Workers Union, Vic Divisional Branch for an entry permit for Steve Dodd – RE2017/435; the agency did not incur any external legal costs. Nominal internal costs of $2,915 were recorded against this matter since 2 December 2016.
- Fair Work Commission application to revoke or suspend the entry permit of Stephen Long – RE2016/590; the agency incurred a total of $2,465.91 in external legal costs. Nominal internal costs of $2,781 were recorded against this matter since 2 December 2016.
- Fair Work Commission application to revoke or suspend entry permit for David Kirner – RE2016/586; the agency did not incur any external legal costs. Nominal internal costs of $1,979 were recorded against this matter since 2 December 2016.
- Fair Work Commission application to revoke or suspend entry permit for Moe Kalem – RE2016/588; the agency incurred a total of $5,227.27 in external legal costs. Nominal internal costs of $4,355 were recorded against this matter since 2 December 2016.
- Fair Work Commission application to revoke or suspend entry permit for Johnny Lomax – RE2016/589; the agency incurred a total of $2,318.18 in external legal costs. Nominal internal costs of $2,311 were recorded against this matter since 2 December 2016.
g)Legal expenses incurred as a result of enforcement action
In the reporting period,the agency incurred$769,198.50inexternal legal expenses as a result of enforcement action undertaken in 43matters by the ABCC.
This figure has been calculated by reference to invoices received by the ABCC by 31January2018 that relate to the reporting period. There may be invoices for work undertaken in the reporting period that are yet to be received by the ABCC.Some invoices received after 31 January 2018are still being examined and any adjustments in invoiced amount are not included in the reported figure above.
h)Details of industry conditions
In the reportingperiod the agency received 44 complaints. Table H below shows the breakdown of complaints received by the main topic discussed.
Table H: complaints received in the reporting period by main topic
Main topic of complaint / TotalWages and entitlements / 14
Coercion / 11
Freedom of association / 6
Right of entry / 6
Unlawful industrial action / 4
Misclassification/sham contracting / 2
Security of payment - notification / 1
Total / 44
i)Compliance of products used in building work
The ABCC has published model clauses, including the Australian Standard requirement, for use by funding entities in their contracts for building work. The ABCC continues to educate agencies on their obligations under the Code, and has continued to receive notification forms from funding entities providing evidence that relevant Australian Standard clauses have been included in contracts.
The ABCC continues to monitor compliance of supply chain contracts to ensure that the requirement to use building materials that comply with relevant Australian standards is passed down the supply chain. During the reporting period, no non-compliancewas identified by the ABCC with section 26(8) of the Building Code 2016.
j)Examination notices issued
Threeexamination notices were issued in two investigations.
- One notice was issued in a coercion investigation.
- Two notices were issued in a right of entry investigation.
.
4.Additional reporting
a)Directions given by the Minister
During the reporting period,no directions were issued by the Minister to the ABC Commissioner under sections 17 or 18 of the BCIIP Act.
b)Delegations made by the Australian Building and Construction Commissioner
During the reporting period 1 October – 31 December 2017, the Australian Building and Construction Commissioner did not make any delegations under section 19 of the BCIIP Act.
In the previous reporting period, on 20 September 2017 the following delegation was made:
I, Nigel Clive Hadgkiss, Australian Building and Construction Commissioner appointed under section 21 of theBuilding and Construction Industry (Improving Productivity) Act 2016(Cth) (BCIIP Act) by virtue of item 4 of Schedule 2 of theBuilding and Construction Industry (Consequential and Transitional Provisions) Act 2016(Cth), acting under subsection 19(2)of the BCIIP Act, delegate my powers and functions under subsections 61E(3) and (4) and 61F of the BCIIP Act to Anthony Southall QC, Deputy ABC Commissioner.
1
Quarterly Report – Second quarter of 2017-18
[1] The conduct of others may also have been considered in these matters.