Opinion & Commentary

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A war that’s building over bottles of beer

Alexander Philipatos | The Punch | 29 November 2012
A pattern is emerging in the building and construction industry – a pattern of battles not between capital and labour but between labour and labour. More specifically, union versus non-union.

In what looked like escalating into a Grocon Mark II dispute, unionists blockaded the Little Creatures brewery in South Geelong on and off for more than a month until last week in breach of a Supreme Court injunction.

Unionists from the Construction Forestry Mining and Energy Union (CFMEU) and the Australian Manufacturing Workers Union (AMWU) have been in dispute with Western Australian contracting firm TFG Group over the use of non-union contract workers at the Little Creatures brewery.

The unions object to the employment of non-union labour on individual contracts, and are demanding that TFG employ local workers from Geelong on an enterprise bargaining agreement.

The new brewery represents a $60 million investment from Lion, Little Creatures’ parent company, and TFG has been hired to administer the fit-out of specialist brewing equipment. According to Little Creatures, 95% of TFG’s contractors are Victorians, and the brewery will offer significant opportunities for local jobs upon its completion.

The CFMEU and AMWU claim that TFG has engaged its labourers in sham contracts to avoid paying entitlements normally afforded to regular employees, such as sick and holiday leave, superannuation, and redundancy payments.

But if unionists were really worried that TFG was engaged in sham contracting, they only need to refer the matter to the building and construction industry watchdog. No such action has occurred.

This dispute is not about workers’ rights or sham contracting. According to Leela Sutton from Lions, the workers have indicated satisfaction with their conditions and do not wish to be represented by the union. This dispute is about growing membership through intimidation and boosting membership fees.

In an economy where just 18 per cent of the workforce is unionised, workers ought to have the right to union representation, but equally, workers ought to have the right to represent themselves, free from a meddling union.

Gone are the days of the 1970s when one in two workers was a union member and unions had a guaranteed place at the bargaining table.

The Fair Work Act has a place for unions but it does not authorise a group of unionists who do not even work at a site to blockade it and prevent workers from entering and earning an income.

Under the Fair Work Act there are several ways in which employees can gain union representation. Every worker has the right to associate and be a member of a union. The union is also the default bargaining representative for any employee who is a union member.

However, in this case the specialist workers are contractors, not employees.  As such they are employed under commercial terms, not regular employment terms. This means if the workers wish to be unionised, they would first need to become regular employees of TFG. Only then should the union be involved.

But there is also a bigger story. The building and construction industry has long had a reputation of militant union activity, and the CFMEU has long-standing reputation for thuggish behaviour.

The Cole Commission (2001–03) was established to investigate the degree of lawless and criminal behaviour in the building and construction industry, and its report found widespread disregard for the rule of law, particularly in relation to illegal strike activity, pattern bargaining, and intimidation tactics.

To remedy this problem, it recommended establishing a watchdog – the Australian Building and Construction Commission (ABCC) – to police the sector.

The ABCC has had positive effects on the industry, including a reduction in illegal strike action, pattern bargaining and intimidation, and an increase in productivity. Unfortunately, the ABCC was replaced with a new watchdog this year, Fair Work Building and Construction (FWBC). The new watchdog has reduced powers compared to its predecessor.

Most significantly, the maximum fines that can be imposed by the commissioner on organisations (or unions) and individuals have been reduced.

Several in the business community, including the ABCC’s former commissioner John Lloyd, believe that watering down the commission’s powers has weakened its deterrent effect and emboldened the union movement.

Times are tough for manufacturing in Victoria. Qantas has just sacked 250 heavy maintenance staff from its Avalon facility, 440 jobs have been cut from Ford’s Geelong plant, and a further 50 workers are expected to be sacked from Alcoa’s smelter in Point Henry.

At a time when local communities in Victoria need all the investment and job opportunities they can get, the industrial campaign at Little Creatures in Geelong serves as a deterrent to firms considering investing their time and effort in Victoria.

Alexander Philipatos is a Policy Analyst with the Economics Program at The Centre for Independent Studies.