Ensuring integrity bill a workplace game changer

The failure by the Senate to pass the Ensuring Integrity bill is a significant setback for the nation’s workplace relations and a blow to the Morrison government’s productivity strategy. The proposed reform would have restored the industrial balance, with the new regime applying equally to unions and employer bodies. It would have strengthened the rule of law in key parts of the economy, especially the construction sector, where renegade unions have racked up penalties and imperilled key projects for years. The building and construction industry is the second largest contributor to GDP and employs 1.2 million people. Master Builders Australia has estimated that taxpayers have been slugged an extra 30 per cent for schools, hospitals and roads because of union lawlessness.

The bill had been before parliament since 2017. Blocked in the Senate, it has had a tortuous path through Canberra. Concerns unions would be deregistered for simply failing to lodge paperwork were addressed. The overall intention was to make industrial organisations fully accountable for their actions, to ensure top union and employer officials met community standards of being a “fit and proper person” in their duties. The bill also tried to introduce a public interest test for amalgamations and instant disqualification of registered bodies for serious criminal offences.

Like it or not, the bill became a political and policy test over the serial misbehaviour of the Construction Forestry Maritime Mining and Energy Union and the antics of John Setka, the Victorian secretary of its construction division. Since 2004, the CFMEU has breached industrial law on 2164 occasions. In that time, as of July, more than $65m in fines and legal fees had been levied against it, including $28.6m in Victoria. A Federal Court judge once described the CFMEU as the biggest corporate offender in Australian history. Virtually every dollar in penalties imposed in Australian Building and Construction Commission actions in recent times involves the militant union. Mr Setka finally was forced out of the Labor Party last month after a bitter battle with Anthony Albanese and ACTU chief Sally McManus.

Before his removal, however, the renegade union boss had warned crossbench senators Jacqui Lambie and Rex Patrick of the “consequences”of supporting the bill; they complained of intimidation. In the end, Senator Lambie’s proposed changes to soften the bill were rejected and the Coalition was relying on the support of One Nation to pass the bill on Thursday. In the end, the vote was tied 34-34, with Pauline Hanson and Malcolm Roberts siding with Labor and the Greens to negate the bill. In the lead-up to the vote Senator Hanson refused to declare her hand but had claimed the Coalition had “one rule for white-collar crime and much harsher rules for blue-collar crime”. Attorney-General Christian Porter is calling on the One Nation leader to explain why she voted against a bill that met every requirement she sought through extensive consultation.

Mr Porter must regroup and keep up the dialogue with the crossbench. He said registered organisations must obey the law and that he would “reintroduce the bill at an appropriate time”. It won’t be this year. That’s understandable, given the political temperature and sitting timetable, but a pity. Workplace reform is one of the missing ingredients in Australia’s productivity equation. The wage bargaining system is in dire trouble. Employers want changes to the Fair Work Act they claim would increase agreement coverage. The Business Council of Australia argues the so-called “better off overall” test is a “productivity killer”. The BCA wants it replaced by a test that ­requires groups of employees only to be better off than the award minimum, rather than every individual employee. This is in line with calls from the Productivity Commission to reform the system. But unions see it as weakening the bargaining power of workers and lowering their wages. The way we work and set pay is too rigid. The integrity bill and reforming unfair dismissal laws would make the nation more productive, the best way to higher wages and better living standards.