A ‘watchdog with bite’ needed for construction sector

This article was originally published by Kace O'Neill for HR Leader (31 July 2024).

With the turmoil surrounding the revelations of the Construction, Forestry and Maritime Employees Union (CFMEU) being a toxic cesspool, some are of the opinion that a watchdog with some real bite is needed to fix the troubled sector.

Real means to speak up are needed to police the troubled construction sector, which has been all over the headlines recently due to the shocking allegations of criminal misconduct and bikie links within the CFMEU’s construction arm.

Bartier Perry’s workplace and culture partner, James Mattson, has called for a watchdog rather than further royal commissions or inquiries to instead clean up the corruption that he has seen throughout his endeavours.

Mattson said the recent media revelations about the behaviour within the construction sector were like “history repeating”, and calls for royal commissions or more inquiries risked achieving little.

“As a lawyer, it’s very easy to say we can go to court to address the unlawful conduct when a business is being targeted. The reality, however, is there is no reward for businesses to enforce their legal rights as they are then shunned from the industry and future work,” Mattson said.

At the moment, Minister for Employment and Workplace Relations Tony Burke has announced that Fair Work Commission general manager Murray Furlong will be tasked as the independent administrator who will oversee the investigation into the CFMEU’s allegations.

“Given the construction sector makes up around 10 per cent of the Australian economy, and that the problems that have emerged are well known, there is a strong case for a dedicated body that can investigate and deal with corruption and unlawful conduct,” Mattson said.

“You need a structure where businesses can confidentially and confidently blow the whistle on inappropriate conduct and not fear this will cost them work or indeed their business and livelihoods of their staff.”

Mattson spoke about the corruption and the massive power imbalance that puts pressure on SMEs throughout the sector.

These smaller or family-run businesses, in particular, are often told that if they don’t toe the CFMEU line, then they’ll be shut out of a project, a work site or further work, showing the intimidation tactics that the CFMEU have deployed in the past.

“I’ve heard repeated stories of businesses [that] have been hauled into CFMEU offices and effectively told – ‘it’s our way or the highway.’ Businesses are forced into enterprise agreements to keep their business going; there are no negotiations,” Mattson said.

Minister Burke believes that Furlong can properly stamp out this seemingly rampant corruption within the sector, and the government has put its resounding support behind Furlong to do the job, even warning the CFMEU against fighting the application in court.

“If any of those actions taken by [Furlong] are opposed ... on the basis of some of the legal complexity of appointing an administrator, then the government will introduce legislation when Parliament returns to remove any barriers,” Minister Burke said.

“If it is opposed and there are barriers and this is not resolved by the time Parliament returns, then those barriers will be removed by government legislation.”

Mattson believes it’s more about standing up for the small businesses that are being exploited, by giving them an avenue to speak without that fear of repercussion or intimation from the likes of the CFMEU.

“We know what the problem is. If you really want to shine a light on this behaviour, we need to give businesses the forum where they can confidentially and confidently speak up, akin to a whistleblower regime, to drive meaningful change and compliance in the construction sector,” Mattson said.