Government Bill abolishing ABCC and establishing new watchdog goes through Parliament

The House of Representatives on 16 February 2012 passed the Government introduced bill abolishing the existing building industry watchdog – the Australian Building and Construction Commissioner (ABCC) and replaced it with the new watchdog – the Fair Work Building Industry Inspectorate.

The Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2011 makes the following amendments to the existing regime:

  • removes the higher penalties and broader prohibitions for construction industry participants
  • the new watchdog will be prohibited from intervening in settled or discontinued proceedings
  • the new watchdog will be prohibited from instituting proceedings or continuing proceedings in settled or discontinued proceedings
  • the new watchdog is likely to retain the same coercive powers requiring witnesses to answer questions or produce documents, however a number of safeguards and oversight mechanisms have been introduced.

Many in the industry will lament this move, given the ABCC's proven track record in prosecuting unions, particularly when undertaking unlawful action in breach of relevant industrial relations legislation. The ABCC's 2010-11 annual report outlined that it had commenced 22 penalty proceedings and nine interventions for the year, which resulted in more than A$2.5 million in penalties. Rather than decreasing (a sign that perhaps a watchdog was now unnecessary), the prosecutions have increased over the past two years. There is no evidence in the detail of these cases that would suggest that the ABCC has been successful in reducing the incidence of lawlessness throughout the industry.

More recently, the ABCC has been criticised both by the Court and others for its legal tactics and perceived lack of responsiveness to urgent matters. In particular, tactics such as intervening in cases, which had been discontinued or settled by the parties, to seek penalties as in the Woodside Pluto proceedings and the controversy of a "loss" of evidence relating to alleged criminal acts by Victorian union officials have perhaps not helped the regulator's fate.

The ABCC and powers given to the watchdog have always been opposed by the unions but many in the industry have claimed the watchdog improved productivity and reduced lawlessness on construction sites.

Only time will tell whether the new body will be effective in enforcing compliance and undertakings prosecutions with the same frequency as the ABCC.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.