The Construction Forestry and Mining Union now has no choice but to accept an administrator after the federal government struck an agreement with the Coalition to pass legislation legally enforcing the troubled union’s takeover.
The deal comes after weeks of debate, with the opposing parties coming to terms after the government agreed to insert a series of Coalition demands.
The arrangement saw the insertion of a three-year minimum administration period, potential permanent bans, and bi-annual administrator questioning inserted into the legislation.
The CFMEU will also be prohibited from making political donations or collecting any election campaign expenditure while under administration.
The Senate has already approved the bill and now awaits the pre-agreed official ratification within the lower house before it becomes law.
Minister for Employment and Workplace Relations Murray Watt said the agreement could see a strategy of administration ready in just a matter of days.
“An administrator will return the union to focusing on its members,” he said.
“The days of organised crime infiltrating the union & industry are coming to an end.”
“I would certainly be hopeful we will finalise a scheme of administration in the next few days.”
The Fair Work Commission has already done its due diligence in identifying the government’s top choice for the administrator job, requesting the federal court appoint Victorian barrister Mark Irving KC to take command of the union.
Under his command, the clean-up could lead to the removal of around 270 officials.
Meanwhile, he will also have complete control over CFMEU’s finances.
CFMEU slams cross-party legislation deal
The developments come less than two months after a 60 Minutes exposé alleged the union was in cahoots with outlaw motorcycle gangs and members of the criminal underworld amid further claims of bullying, intimidation and corruption.
In a statement, CFMEU national secretary Zach Smith said the government’s course of action was a “targeted attack on construction workers” that dug a hole under fair judicial proceedings.
“The media have a right to expose issues, but they are not a court and, until allegations have been tested by the legal system, people and organisations are entitled to a fair process,” Mr Smith said.
“The allegations put by the media are very concerning and have been taken seriously by the union, with an independent investigation already launched, a governance review commissioned, and individuals either removed from the union or stood down pending the investigation.
“These allegations remain exactly that – allegations – completely untested in the legal system.”
“Until allegations have been tested by the legal system, people and organisations are entitled to a fair process.”
Mr Smith said the legislation would fail to stamp out corruption within the construction industry and expose workers to further criminality.
“The deal cut by Labor and the coalition is as shameful as it is unnecessary – an act of political expediency at the expense of fundamental tenets of Australian democracy and our legal system.”
“It also fails to address the real issues of criminality and corruption that affect all of us in the industry instead of targeting the union. In doing so, these laws increase the danger faced by construction workers, leaving them exposed to the criminality and corruption the laws purport to stamp out.”
“The CFMEU has been steadfastly focussed on getting an outcome that is in the best interests of our members. A forced administration through this legislation, devoid of real consultation with construction workers and isolated from their elected representatives, does not achieve this.”
Industry bodies declare time for change
However, the rest of the construction sector did not share the CFMEU’s objections, with many industry bodies vocalising their determination to see broader cultural change at the recent Australian Constructors Association’s Foundations and Frontiers (FF24) forum.
ACA CEO Jon Davies said the agreement was a welcome first step forward for the industry after the revelations of the last few weeks.
“Law-abiding unions have an important role to play in the construction industry, and the sooner the administrator is able to address all allegations of criminal and coercive behaviour within the CFMEU, the better,” Mr Davies said.
“The ACA is committed to working closely with the administrator to ensure the bill is effectively implemented, but this is only a necessary first step.”
“There will be significant work required by the government, industry, clients, the administrator and the unions to make these new arrangements work and to prevent this situation happening again.”
Mr Davies says he hoped the union overhaul would rebalance blown-out construction costs across the industry, such as those seen on CFMEU infrastructure projects.
“We shouldn’t be looking at this simply as a problem that needs to be fixed but rather an opportunity that must be realised,” he said.
“This is an opportunity to create an industry that is able to construct the infrastructure Australia needs, when it needs it and for a price it can afford.”
The ACA’s sentiment was also shared by peak body Master Builders Australia, who agreed the CFMEU overhaul would provide an opportunity for change within the wider construction industry.
Master Builder’s CEO, Denita Wawn, says the legislation’s approval enabled the construction industry to finally get on the road towards meaningful change.
“The industry has been at a standstill with a great cloud of uncertainty on the current operating environment and the future of the CFMEU,” she said.
“Our members are intimately familiar with the ingrained culture of lawlessness and thuggery that has plagued the sector for decades.”
“Permanent and lasting change requires long-term regulatory reform. The Federal Government must now move to establish a dedicated building and construction industry watchdog with real teeth.”
“We continue to call for increased protections for businesses so they can come forward and provide evidence to the Fair Work Commission without fear of CFMEU retaliation.”
Ms Wawn said Master Builders backed The Coalition’s calls to reintroduce a construction industry watchdog, such as the formerly abolished Australian Building Construction Commission, to help monitor industry bodies.
“Master Builders strongly opposed the abolition of the ABCC in 2022, knowing it would give the CFMEU and other building unions the green light for thuggery, bullying and intimidation on worksites,” Ms Wawn said.
“An industry-specific regulator makes sure that everyone on building and construction sites has to play by the rules so that workers and small businesses are protected.
“Countless Royal Commissions and inquiries have told us that building and construction needs an industry-specific regulator and laws.”
“If we don’t learn from history, we will be doomed to repeat it.”
“The regulator needs to be home to a dedicated cross-jurisdictional police unit to oversee and coordinate a strong law enforcement presence in the building and construction industry.”
