ACCC to tackle work collusion

Employers who cave to pressure to shut out non-union labour face prosecution under competition laws for the first time.

Employers who cave to pressure to shut out non-union labour face prosecution under competition laws for the first time, after the consumer watchdog signalled it was finally willing to use its powers more widely in the industrial arena.

Australian Competition & Consumer Commission chairman Rod Sims said last night he would pursue firms that restricted themselves to union-friendly labour after the Heydon royal commission into trade union corruption last month “exposed” allegations of widespread collusion.

“Unions have been given a clear role under the law to repre­sent their members and take action­ seeking improved wages and conditions,’’ Mr Sims said in a speech to the Law Council of Australia. “However, this does not give them or businesses co-operating with them a licence to seek to regulate markets.”

Businesses could fall foul of competition laws “if they seek to determine which firms may operate within markets, what prices they charge or how bids for work will be determined”, he said in the speech backed by the government last night.

Mr Sims admitted the ACCC could do more, addressing the longstanding accusation that the regulator overused exemptions in competition law that protect industrial issues such as wages and conditions.

“It is possible that in the past the ACCC has not looked suffic­iently into such additional restrict­­ive behaviour that … has the purpose or effect of substantially lessening competition, thinking such matters were covered by the carve-outs and exemptions,” he told the council’s business law competition and consumer committee.

The “revolutionary” change in approach was “inspired” by the criticism of the ACCC, and the royal commission, Mr Sims told The Weekend Australian. “Normally these are closed worlds you can’t get to. To see it exposed opens up the opportunity.”

Evidence given to the royal commission alleged Canberra sub-contractors were forced to sign agreements with the construct­ion union or miss out on contracts, alongside allegations of bullying and coercion. “This isn’t good for the community … it’s not good for society to have allegations of this sort of nature. The ACCC’s role is pretty small, but I think it is important that they be looked at,” Mr Sims said.

After the hearings, the ACCC announced a special unit would look at price-fixing alleg­ations.

However, last night Mr Sims went further, saying he would probe deals between employers and unions to use certain labour if there was “widespread” evidence.

“Markets should be allowed to work properly, not through arti­ficial means where either companies or unions are controlling who can do what,” he said.

The executive director of Independent Contract­ors Australia Ken Phillips said the announcement was “a very substantial shot across the bow to unions but more importantly to companies (that) if company executives want to engage in behaviour that could be argu­ably interpreted as anti-competitive and they were to do that in conjunction with the union, they’re now going to have to make sure they talk to their lawyers very, very closely”.