With the Federal Government threatening to deny contracts to builders if they do “cozy deals” with unions on one side, and the CFMEU wanting to prove they are still the tough guys controlling the industry on the other, commercial builders in Australia are caught between a rock and a hard place.
A new EBA (Enterprise Bargaining Agreement) for the Victorian commercial building sector is due for replacement by March 31, 2015. Discussions between the industrial parties can commence six months earlier and can continue until a new one is agreed. Protected industrial action (strikes and lockouts) may also begin in March 2015. Neither government nor union will back down.
The traditional pattern for negotiations is that the CFMEU works with a handful of building companies that see no merit in having a prolonged and harmful industrial dispute and offer to help develop an agreement. The outcome is traditionally a wage increase of between 5-6 per cent per annum, plus this, plus that. Once this deal is done, the rest of the industry throws up their hands and laments the fact that they can’t all stand together. Shortly after, they capitulate as well.
The CFMEU’s leadership know that margins are tight and projects are struggling to be viable, but they feel they cannot appear to be weak to their own shop stewards by either surrendering a more sustainable increase, or by giving real productivity increases in exchange for improved remuneration. Negotiating such an outcome is not in their DNA. If they tried, they would be thrown out of office. Never mind the fact that they are playing chicken with the livelihood of their members and thousands of employers. In the building industry, it is more about testosterone than intelligence.
The majority of builders welcome the fact the current system makes them “competitively neutral” where wages/conditions are concerned. “Learned helplessness” is how one industry figure describes the situation. The end result of this ‘purchased peace’ however, is a union led wage surge which cannot be justified on productivity grounds and sits far above what average workers would responsibly negotiate.
Unions routinely scoff at increases in building costs through new EBAs and say you can’t tow a 20 storey building in from overseas. They assert that developers have always made a fortune off the back of workers and they simply want a fair share for their members.
Any student of history can tell you that this whole sorry mess is heading for a crisis. Sadly though, there is an absence of maturity to do anything about it.
What makes this Victorian EBA round even more challenging is that John Setka, the Victorian CFMEU Secretary, with his credentials well established through criminal convictions and a solid determination to ignore any “unjust” law, is up against the Abbott Government’s determination to bring the union’s lawless nature to account. While the public and media have clearly turned against the building unions, the CFMEU in particular, the endgame is far from clear.
Cultural change takes time. Commonsense says that it should happen. Experience says that a major conflict is brewing and is about to erupt. The Labor Party ought be worried. Whether at a state or federal level, the battle that will unfurl is much more likely to harm them than the Coalition.
But what of the hapless souls that populate the building industry? Who is looking after their best interests? The resounding answer is no-one. Politics and stupidity are combining to create an atmosphere that will change the face of the industry and how it operates forever. Ask the militant ship builders in Glasgow, or the coal miners in the UK if their ruthless tactics were really worth it in the end. We have been exporting our jobs in the building industry for years. Another surge is about to happen. It is not the kind of export any of us should like.