Paper 13 Challenges Labour Law
Ask almost anyone involved in the Australian construction industry what outcome they expect from the Cole Royal Commission and they will reply negatively. The consensus is that the Commission will hand down its report and within a short period the industry will return to normal patterns of industrial relations thuggery and intimidation.
But something has happened suggesting a different outcome could be possible. About a fortnight ago the Commission stopped taking evidence apparently to begin writing its report. However, last week the Commission unexpectedly released yet another discussion paper with invitations for more submissions. What's going on?
The paper, the 13th, creates an entire new focus away from industrial relations perspectives to look at competition issues and asks fundamental questions about regulation in society. One interpretation is that it builds on a scenario put to the commission that the industrial relations war in the industry is in fact a charade for a complex process of market and competition destruction that is actually made legal by employment law.
Suddenly the focus has shifted from considering unions as the bad guys to looking at the behaviour of businesses who don't want competition.
On the surface, this new scenario could appear fanciful. But it transpires that the great institutional defender of competition and consumer rights, the Australian Competition and Consumer Commission has limited capacity or willingness to interfere in competition destruction where it involves industrial relations, because the Trade Practices Act prevents it from interfering in 'employment'. Further, even the National Competition Council supports a public policy position of excising labour issues from competition law.
Suddenly the problems in the construction industry look to have deeper causes than the simplistic 'good/evil employer' verses 'evil/good unions' stance that typifies the public debate.
To give a practical example; in the current 2002 round of construction industry enterprise bargaining negotiations, businesses who would normally be competitors for plumbing, formwork, concreting and other construction tasks, meet regularly with their respective unions to discuss prices, rates and work practices. The meetings are legal, because the discussions and price agreements pertain to 'employment'. But take those same meetings, remove the unions and start talking and fixing prices for tenders, concrete, wiring and other inputs, and the participants risk facing heavy fines for collusion under the Trade Practices Act.
The reality is that the legislative and policy framework of competition law has long drawn a distinction between declaring illegal market collusion on commercial matters, but making legal the same behaviours when done under employment frameworks. However, in the construction industry, labour issues constitute a large percentage of costs and dictate commercial dynamics. Here the distinction between price fixing on labour, and price fixing and competition destruction on tenders is razor fine.
Taking this perspective, unions look like partners with businesses in an exercise of market manipulation, with government the creators of opportunity. Battles between unions and employers take the appearance of elaborate smokescreens designed to fool the public and the 'non-insiders' in the industry that are the victims of the manipulation.
The Commission discussion paper seems to suggest that in the construction industry the distinction between legal and illegal market manipulation has become highly blurred and perhaps is a core cause of industry problems. Even further, the paper asks if it remains appropriate to isolate 'employment' from competition law, thus raising questions about the ethical positioning of the entire industrial relations system. Let the real debate begin!
The Commission is seeking submissions. The responses alone will be illuminating. Unions and academic labour lawyers can be expected to submit the usual posturings about ILO conventions and the immorality of regulating labour like any other commodity. But greater interest will be in business and their employer associations' responses because they have a dilemma.
If the construction industry is silent, recommendations could emerge to extend competition law into labour areas in unpredictable ways thus potentially threatening some underlying business structures. If businesses and their associations criticise the discussion paper but fail to substantiate their criticism adequately, evidence already accumulated by the Commission could expose possible complicity in market manipulation. If business agrees with the discussion paper, they could ferment change and open a new and, to some, a frightening era of competition in commercial construction.