CFMEU’s 5pc a year demand ‘unsustainable’: industry

The militant construction union in Victoria is demanding a 5 per cent-a-year wage rise as part of a deal with contractors.

The militant construction union in Victoria is demanding a 5 per cent-a-year wage rise as part of a deal with contractors branded “unsustainable” yesterday by the Master Builders Association.

The Construction Forestry Mining and Energy Union struck a deal with individual builders, bypassing the usual bargaining process with the MBA, which nego­tiated previous pattern agreements with the union.

Under the deal, which is likely to be signed off by powerful Victorian CFMEU secretary John Setka, members win a 5 per cent wage, outstripping inflation, and the union will commit to “potential productivity improvements”.

“The proposed deal is therefore likely to be contrary to Master Builders’ position that any successor to the current industry EBA be sustainable with over-CPI wage increases offset by prod­uctivity improvements that are actually available in practice,” Master Builders Victoria said yesterday.

“Unless that deal is in our broader membership’s best interest, Master Builders will not endorse­ (it), nor … provide agree­ment-related assistance to that group.”

The CFMEU’s previous four-year deal, which expired last year, also provided a 5 per cent annual pay rise. However, this deal must be deemed compliant with the 2013 building code, as part of an approval process by the Fair Work building industry inspectorate, before it is considered legal and valid for government work.

The power to approve deals was transferred from the Department of Employment to the inspectorate under changes announced this month and critic­ised yesterday by the CFMEU.

Master Builders Victoria said it was finalising a new template agreement based on the last enterp­rise agreement that would be a “sustainable, code-compliant alternative for negotiations”.

Another industry-wide 5 per cent annual pay rise would add $737 million to the cost of public construction over the next four years, or the equivalent cost of building 40 new schools, according to Deloitte Access Economics data provided to the Productivity Commission’s inquiry into workplace relations.

A spokesman for the union confirmed “the CFMEU is on the verge of signing an in-principle agreement that will deliver major productivity gains”.