1. Evolution of the Fair Work System Date: 22 February 2011 Presented by: Cliff Pettit

2. Program Overview Evolution of the ABCC Transitions – 27 March 2011 Continued application of the FW Act Sham Contracting

3. Our Role Promoting appropriate standards of conduct Instituting proceedings against those who contravene the law; Investigating possible contraventions of relevant laws, the National Code of Practice and industrial instruments; and Providing advice and assistance to building industry participants. The ABCC improves the workplace relations framework of the building and construction industry by:

4. History Cole Royal Commission Final Report of the Cole Royal Commission tabled in Parliament 26 & 27 March 2002 Building Industry Taskforce (BIT) Established in October 2002 in response to the findings of the Cole Royal Commission Operated until ABCC established ABCC Established on 1 October 2005 New Commissioner 11 October 2011

5. ABCC Executive ABC Commissioner Leigh Johns

6. Key Regulatory Issues North West shelf of WA National Broadband Network Rebuilding Queensland Ongoing cultural reform

7. Full service regulator The mission of the ABCC is to become a ‘full service regulator’ in the building and construction industry. Our aim is to bring about ‘fair and productive’ building and construction work. Productive - eliminating unlawful industrial action and barriers to participation. Fair - harmonious, equitable practices on site. High visibility regulator.

8. What do we do? Providing reporting facility through the 1800 Hotline Conducting site visits to educate and investigate Increasing ABCC presence in the construction industry Monitoring behaviour and enforcing laws Encouraging a positive cultural change toward the ABCC and lawful compliance amongst the industry Our activities include:

9. A transparent regulator We will continue to be a tough ‘cop on the beat’, in a way that is open, and transparent. Have published a: Litigation Policy; Investigations Policy; and Undertakings Policy. More will be published.

10. Section 52 Continuing need to use section 52 examinations. Tribe decision - need to put in place new delegations. Need to use section 52 examinations would diminish if employers and their staff voluntarily assisted the ABCC in its investigations. These requests account for nearly 35% of examinations. Sub-contractors can continue to expect protection through the use of section 52.

11. Transitions – March 2011 A number of instruments have sunset clauses in place, including: NAPSAs Division 3 pre-reform certified agreement Old IR Agreements – 27 March 2011 Section 170MX Awards – 27 March 2011 Schedule 6 instruments (Sch. 20 TPCA)

12. Div 3 Certified Agreements Cover excluded employers Constitutional corporations bound by Div 3s had their agreements deemed to be pre-reform collective agreements Terminate 27 March 2011 Parties will revert to State system

13. Notional Agreements Preserving State Awards NAPSAs only apply to constitutional corporations Operate in conjunction with transitional wage instrument NAPSA terminates on 1 January 2014 Cease to cover employees who become covered by a Modern Award (aside from MMA) NAPSA may still cover some employees FWA conducting process to terminate NAPSAs and pre-reform awards (Not Sch 6 Awards)

14. Schedule 6 Awards – March 2011 Originally (2006) called Transitional Awards Cover non-constitutional corporations Have had wage rates updated by AIRC, based on AFPC decisions Terminate 27 March 2011 Parties will revert to State system

15. Ongoing Application of FW Act FW Act contains provisions that will continue to apply to employers reverting to State system, specifically: Part 3-1 General Protections Part 6-3 NES elements Part 6-4 Termination of employment elements

16. NES/Termination of employment Part 6-3 extends the NES entitlements to unpaid parental leave (and related entitlements) and notice of termination (or payment in lieu of notice) to all employees. Part 6-3 does not exclude applicable State laws that provide these entitlements and are more beneficial than the NES. Part 6-4 provides protection against unlawful termination to all employees.

17. General Protections Part 3-1 is designed to: protect workplace rights and freedom of association; and provides protection against discrimination and sham contracting arrangements. Applies to action taken by any person that affects, is capable of affecting, or is taken with intent to affect the activities, functions, relationships or business of a national system employer or an organisation.

18. General Protections – Sham Contracting Fair Work Act 2009 prohibits: misrepresenting employment dismissing or threatening to dismiss to re-engage misrepresenting to re-engage (Div. 6, Part 3-1) civil penalty ($6600/$33,000) plus injunction, compensation or reinstatement (s. 539-545 FW Act)

19. Broader Issues Sham contracting exists when people who ought to be treated as employees are treated as independent contractors. Sham contracting can mean employees miss out on legitimate entitlements like annual leave and long service leave. ABCC has a role in ensuring all employees receive their lawful entitlements. Also adversely affects decent employers by placing them at a competitive disadvantage.

20. Cole Royal Commission High levels of incorporation and ABN by Building and Construction Industry Contractors....“supports the view that there may well be significant illegitimate contracting (paragraph 276, Report) Approximately 9% (1 million) of all Australian workers (in main job) identified as Independent Contractors - eighth largest employing industry 33% most likely in Building & Construction industry - highest (next is professional/scientific/technical services 14.6%)

21. Issues of Concern about Sham Contracting Cole identified evasion of employer responsibilities, including payroll tax, workers compensation and OH&S; National employment standards Unfair dismissals Awards & Agreements Superannuation Evasion by workers of taxation obligations

22. Sham Contracting Inquiry On 19 November 2010 announced the Sham Contracting Inquiry. On 22 December 2010 released discussion paper. The ABCC invites interested persons to submit a written response to the discussion paper by Monday, 7 March 2011. Roundtables will be held in Sydney, Melbourne, Brisbane, Canberra and Perth commencing in late March 2011. Each roundtable will be hosted by an expert panel of invited guests. Public fora that will provide attendees the opportunity to examine strategies to address sham contracting in the building and construction industry.

23. Key Questions for Consideration include: What is the extent and nature of sham arrangements in the building and construction industry? What factors are relevant in determining whether a construction worker is an employee or a contractor? How well are the differences between contractors and employees understood in the industry? To what extent are labour hire arrangements essential to the efficient functioning of the building and construction industry? How could the ABCC assist all stakeholders in the building and construction industry to ensure labour hire and contracting practices are both fair and efficient?

24. Expected outcomes Final report to be released by 30 June 2011. Information obtained will inform future educative and compliance activities of the ABCC. Individuals and stakeholders are invited to participate by attending and Sham Contracting Roundtable Inquiry or providing a written submission at www.shamcontractinginquiry.gov.au www.shamcontractinginquiry.gov.au

25. Views Invited: Statistical profile Employee vs Contractor Labour hire arrangements Fairness of bargaining positions Evasion by employers of responsibilities to employees and others Evasion by workers of taxation obligations Regulatory framework & regulatory agencies

26. Contact details ABCC Helpline - 1800 00 33 38 7:00am – 7:00pm Eastern Standard Time 7 days a week Cliff Pettit Australian Building and Construction Commissioner Telephone:(08) 9238 9708 Email:clifford.pettit@abcc.gov.au@abcc.gov.au

27. Questions