Defending construction workers and their union - observations from the outside

“Through the tumult of the 1980s, activists had been steeled to recognize that a share of their troubles had been of their own making. … Nothing is gained by recounting only the good side. The fuller picture reminds us to be on guard against the weaknesses that bosses prey on.” (We Built this Country: Builders’ Labourers and Their Unions 1787 to the Future, Humphrey McQueen, Ginninderra Press, 2011).

Mainstream media reports suggest widespread union corruption, violence and other misbehaviour in the Construction & General Division of the CFMEU (“the Construction Division”).

In July, a self-indulgent and ill-judged industrial threat from the Victorian Branch Secretary of the Union, John Setka, to shutdown Australian Football League-linked building sites because it employed the former boss of the industrial police force (the Australian Building and Construction Commission – ABCC) against construction industry workers. Not long after Setka resigned during a union’s National Council meeting.

The mainstream media decided the focus should not be on the corporations and business networks that own and control the industry, except incidentally. There's no real surprise there.

So, without proper legal testing, the Labor government decided the allegations are true and, normal due process should be put aside. The government has created a “Scheme of Administration” (The Scheme) that drills into the union, not employers and their associates, nor their organizations. The Fair Work Commission (FWC) has appointed Mark Irving as the Administrator to take charge of the Scheme and the Union.

Since then the Construction Division’s own investigation, started before the Scheme, has said the Victorian Branch of the union has been infiltrated by “criminal elements” and is now “influenced” by them and “vulnerable to corruption”.

The Government is saying that its own creation, the Fair Work Act 2009, both the general Act and its associated Registered Organizations Act, the associated institutions (FWC and the Fair Work Ombudsman), including amendments to it from LNP governments and themselves, and various police departments don’t have enough power to tackle the media allegations.

In the Parliament, in collaboration with Dutton’s LNP Liberal-National Party (LNP), they amended both Acts to permit the special statutory Scheme that, among other things, imposes an external Administrator to run the union and investigate everything for the next 5 years.

The Scheme in effect defines the union and 250 odd of the members’ representatives as agents of corruption. However, being “caught up in corruption” is not the same as being a protagonist of it.

One day it will become clear why the Labor government did not seriously try to assist those union leaders who were taking the steps to identify and get rid of the corruption, and why it turned a blind eye to identifying employers who were agents of corruption.

Disgracefully, the Labor government deliberately chose to use the notorious anti-union LNP to co-design their scheme instead of the pro-union Greens. In effect, the Labor government has taught the LNP – beyond judicial inquiries and Royal Commissions - how to take apart militant unionism.

Screenshot - Source: The Age – 19/8/24

The Scheme: A Closer Look

The sackings of union representatives

First, the Scheme vacates and terminates 292 positions (waged and volunteer) held by 250 odd-named officers and officials, properly elected by the members or appointed under the rules. The Rues are properly registered under industrial relations law. Many are volunteer delegates elected by their peers to sit on various committees. They are assumed guilty of media allegations, legally untested, and nothing in the scheme provides for their redress. Maybe new legal action will test whether the general legal arrangements for any union employee to challenge and reverse termination from employment can be applied against this Scheme.

Other Key Features

·      The Administrator has exclusive power to investigate who in these 292 positions (and any others remaining) might be further charged and how beyond their immediate punishment.

·      The 71 who have not been removed must act according to the Administrator’s rules, not the Rules they were elected or appointed to uphold and, the Administrator can vacate any of those 71 other positions at any time. There is no internal due process from now on, except for what the Administrator decides.

·      Members have no say whether they wish their contact details to be handed over to the Administrator.

·      The Administrator has full power to refer the conduct of the removed persons to any Commonwealth or state body, including allegations or other information about unlawful conduct, requiring further investigation to appropriate law enforcement or similar investigators. This power extends to any other person, business, entity or organization, and thus may be applied against employers and others in the industry.

·      The Administrator controls all future elections.

·      The “Responsibilities“ of the Administrator regarding the all-important members’ rights are defined by the word “may”.  The Administrator is not required to protect and improve members’ rights or adopt recommendations from members about them.

·      The Administrator’s new “complaints procedure” about “improper, unlawful or criminal” behaviour can only be about “an officer or employee of the CFMEU or any of its branches, divisions or parts working in the Construction and General Division or any of its branches”. Thus, members cannot submit complaints about such behaviour by employers or their agents.

The scheme is a thorough system of autocratic inquisition and governance that pays lip service only to established or improved union democracy.

Unlike Royal Commissions, the investigating power is set up inside the union. Thus, it intends to disrupt from within the normal, democratic, practical and lawful operation of the union, including established, effective assistance to workers and their reps on construction.

Membership control over their union is one of the basic principles of unionism in any democratic society: members should be enabled to be their union; to determine who their representatives shall be, how others can be employed to represent them and their membership dues managed, the strategy and methods to improve their job security, wages and conditions, retirement protections and so on, and to spread their presence in the industry.

That core principle, essential for any union in a democratic society, is stolen and denied in this Scheme.

It is nonsense that an externally appointed Administrator will know more than members, elected union officials and job delegates how to pursue members' needs.

The deliberate intent is for a weak and bureaucratic union, bereft of membership dynamism.

The Fair Work Commission has imposed extra conditions for enterprise agreements to be approved in the construction industry, thus slowing down workers’ enjoyment of negotiated new standards.

The employers are the winners.

Unions supporting or turning a blind eye to this situation are making a very serious mistake of historic proportions.

50,000 construction workers and their supporters who rallied against the intervention in Melbourne, and big numbers in other states, can’t be totally wrong. They are not naïve or silly; they know their industry well.

The media allegations are a hodge-podge

Outsiders like me and most others have little idea how true the media reporting is. Some of us might have some direct experience that informs our thinking. We know that mainstream media reporting of any defiant unionism (no matter how competent) is rarely accurate or sympathetic. We know previous Inquiries have not found widespread union corruption because it was not there. And we know one case is working its way through due process and a couple of other investigations are underway.

The allegations seem to fall into 3 categories: breaches of the law that are or may be criminal and corrupt; breaches that are civil and industrial; and personal and group behaviour, including misogyny, that reproduces discrimination that is sexist and threatening.

The government’s Scheme and takeover lumps all three into a common and dominant problem.

“Criminal-type allegations” can and should be investigated internally, as they are, and separately by police authorities. Any union worried that “criminal activity” is penetrating their ranks can and should take it on to stop it. That’s been done before, successfully, with and without police help.

“Civil–type allegations” involve breaches of the industrial law, that is both Fair Work Acts, and anti-discrimination law. Current industrial law and anti-discrimination laws are not soft on such breaches and can be used vigorously.

The industrial law is so tough most unions are unwilling to defy it, even when it is in their members’ interests to work out how to do so. Most Australian unions remain deferential to unjust laws, just 4 years ago described as “broken rules”.

Yet, the history of union growth is founded on episodes of effective union defiance of unjust laws.

Employers make threats and the industrial law favours them.

For all construction workers on a building site with a dozen (more or less) separate employers, some doing the same or similar work, it makes sense their unionism ensures sub-contractors with union standard enterprise agreements win the employer v employer competition for a contract.

It’s called taking wages and conditions out of competition. Its why and how workers spread the reach of unionism that started in acts of combination before unions were formed. It’s core union activity.

When workers have a problem on the job that can’t be dealt with by the job delegate(s) or themselves, except by breaching the law, they can seek support from a union official or officer. Employers make threats and the industrial law favours them.

The members (potential members) will want their rep to be tough, determined and smart. There is no point in weakness, especially if it’s a matter of life and death, common on construction sites.

The employer advantage: conflict and corruption

Every industry develops within a framework of conflict that starts with each employer seeking enough profit by winning the contract against other employers. Competitive advantage requires sub-standard safety, pay and conditions, and exploitation of the workers.

In construction, the competition conflict has specific features created in the first instance by the employers, especially the biggest. Starting with the principal contract, every project is a cascade of sub-contracts with any number of employers competing to get one.

The big corporations do not have a problem with this. They get their competitive advantage and profits from the dog-eat-dog relationships between competing employers at all levels.

The Scheme and its rationale ignore this.

The workers must find continuity of work inside that framework. Everything their unionism does seeks continuity of wages and safety at work against the main tendency of the contract system.

Their unionism develops within the context of the contracting system, as the antithesis of the employers who own and control the industry, in interaction with government.

Protecting and improving employment standards is not just extra difficult but also very different relative to workers and their unions in most other industries. Other workers and their union leaders whose industry does not work in this way should be careful not to jump to conclusions about the source of any corruption.

Construction workers’ wages and conditions  are formed by minimum award rates, enterprise bargaining above the minimum award rates, and one to one bargaining.

Minimum award rates in construction have held up relatively well even though the union has complied with making enterprise bargaining its priority approach.

Enterprise bargaining relative to industry-wide award bargaining entrenches the problem.

In the 3 years to March 2024 enterprise bargaining in the construction industry was busier than any other industry. Tables 7 and 8 in the link show that.

But these agreements covered only 80,500 workers, a big fall from 108,200 just 12 months before, and somewhat less than the reach of enterprise agreements in several other industries.

Here is a snapshot of the current rate of exploitation – using wages as the primary measure. (Death, injury, and accident rates in the industry relative are other indicators.)

It appears that construction unionism works hard in the enterprise bargaining stream but struggles to overcome the restrictions imposed, even harsher than other unions, to push agreement outcomes beyond a minority of the workforce.

Overall most construction workers seem to depend on the Annual Wage Review for pay increases. The Construction Division does not seem busy in the annual effort to win a decent increase in award minimum rates. If true, that matches most other unions.

Union density is a serious strategy problem

The Australian Bureau of Statistics (ABS) reports that union density in the construction industry is about 10%. In 2014 it was 15%.

That means the union’s enterprise bargaining effort does not reach many, probably most, construction workers. How far does the union’s justifiably renowned effort on health and safety standards reach? How big is the gap between the standards on “union sites” and the majority? This is union members’ business.

It is also fertile ground for systemic lawbreaking by construction employers and the emergence of criminal influence.

This should not be accepted and poses a question about whether the current version of “militancy” and leadership is up to the challenge posed by the 21st-century “troubles”.

Harsh industrial laws did not stop the emergence or growth and consolidation of building industry unionism.

The assumption that current construction industry unionism is all ok is not justified.

The Scheme is not intended to solve this problem, quite the opposite because it aims to defeat defiance in principle. There is a strong argument that workers need a more effective strategy that includes more and better defiance.

We can assume that the tens of thousands of construction workers and their families who rallied and marched just a couple of weeks ago will want to work out such issues as they strategize for the short and longer term.

The ACTU and union solidarity relationships

The Construction Division’s suspension from the ACTU is also a big deal.

The repair and improvement of inter-union solidarity should extend to those unions who have not worked out that it is wrong to turn away from the Construction Division. And the path back to effective multi-union solidarity must be 2 ways.

Unions on the outer have paved the way before but that was when their union density was at or above 50%.

In mid-July The Weekend Australian ran a sympathetic feature story with a group of union leaders about the decline and now terrible state of union density, helping to marginalise the construction union. The construction union’s problem is common almost across the board.

Rational excuses for the decline were presented. The “good” and growing union leaders featured nurses and teachers who had stitched the professional and social issues into winning their industrial battles about pay and conditions. These are indeed significant achievements built out of intelligent union leadership over several decades. In the case of nurses, the militant and defiant industrial unionism of the mid-1980s was not mentioned. And the Construction Division’s effort on skills and development in the industry was ignored.

The composition of the workforce has changed dramatically since the mid-80s and, associated with that, the rise of women’s leadership in unions and the profound numerical growth of unions with big women’s membership is a welcome and major achievement.

However, this should not diminish the importance of unionism in industries like manufacturing, construction, mining, and utilities, including their significance for workers in the public service and the “care industries”.

Notwithstanding modest improvements to the FWA09 from the Labor government most of the “broken rules”, as the ACTU and the movement described them, remain, including the right to strike.

Union defiance is not the same as corruption.

Strategy and tactics: put the members in command

It is no surprise that those who have had their union stolen from them are resisting, nor that many within the union movement are willing to help them.

How that struggle develops requires a strategy based on classic union principles.

The big questions might include:

·      How should Construction Division members drive decisions about the analysis of what is happening and the strategy to deal with it?

·      What mistakes, if any, has the controlling leadership of the union been making?

·      How should the new “external” organization interact with the internal strategy to assert membership control of the union against both corruption and the Administrator?

·      Is 10% and falling union density acceptable? How can non-union construction workers be brought into the struggle that continues to protect, advance and extend established safety, wages and conditions standards?

·      How should employer-led law-breaking be brought to the fore?

·      How much is discrimination against women and general boorishness a problem? What, if needed, can be learned from other unionists and the union’s history about how to tackle these problems? What kind of political education might make a difference?

·      How do we win in the court of public opinion?

·      How can the spirit of defiance and militancy be re-made so that it is more effective?

Some of these questions, and others like them, are relevant to other unions who accept or remain agnostic about the government’s new interference in the Construction Division.