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Member Letter – Industrial Relations Minimum Conditions

Dear QMCA Member,

I am writing to make you aware of a proposed new policy that the State Government is considering implementing – the Industrial Relations Minimum Conditions. QMCA is extremely concerned at the likely consequences of such a policy – both intended and otherwise.

As an ‘enhancement’ of the Best Practice Principles, these Minimum Conditions would apply to all Government Civil Infrastructure Projects valued in excess of $100M and would stipulate the minimum conditions for engagement of labour on these projects.

To provide some background:

Best Practice Principles (BPP)

One year ago, the Qld Government expanded the Queensland Procurement Policy (QPP) to include the concept of BPP in respect of Workplace Health and Safety, Industrial Relations  and Training.

This enables Government agencies to include a non cost assessment weighting of up to 40% for compliance with the BPP and pre-existing local content requirements, in respect of tenders for Government projects greater than $100M or specially designated projects.

At the time, QMCA raised significant concerns regarding potential ambiguity and transparency of the BPP. These concerns remain as there is no requirement for the respective government agencies to clearly spell out what they consider to be industry best practice or how they have evaluated a contractor’s perceived performance in respect of industry best practice. Accordingly there is the potential for this policy to be abused in order to award work to favoured contractors.

More information on the policy can be found here: https://www.hpw.qld.gov.au/SiteCollectionDocuments/QualitySafeWorkplaces.pdf

Ethical Supplier Mandate

The Govt later followed this up with something they euphemistically call the Ethical Supplier Mandate.

Under the mandate they are able to ‘award’ demerit points to contractors if they don’t comply with the BPP. If a contractor accumulates 20 demerit points in any given year they could be excluded from bidding Govt projects. QMCA again raised concerns with the State Govt regarding the potential for abuse of this policy through the targeting of contractors by unions. We cited recent examples of frivolous safety improvements notices, following union visits to sites, each of which, under the proposal, could accrue 2 demerit points.

Officials from The Department of Housing and Public Works (the Department responsible for the Qld Procurement Policy) noted our concerns but said that the release of the policy could not be delayed  and so instead commenced work with representatives of industry associations (including QMCA) on the preparation of a ‘Guidance Note’ to address these concerns.

We have been advised that the Guidance note is being reviewed by Crown Law.

More information on the policy can be found here: https://www.hpw.qld.gov.au/SiteCollectionDocuments/EthicalSupplierMandate.pdf

Minimum Conditions.

As we have now reached the one year anniversary of the Best Practice Principles, the Government is undertaking a review of their operation and is considering the introduction of IR Minimum Conditions to be applied to all projects over $100M. This follows the attempt to impose an EBA agreement on the project to build the Townsville stadium. This was not viewed as a success with the Government having to pay a sizeable variation to the Contractor and there were still a number of industrial actions taken during the project.

They have asked for industry’s view on this proposal and have provided a Minimum Conditions Document currently being negotiated as part of the contract award for a project to expand the Cairns Convention Centre by way of example.

I am not able to divulge details but the minimum conditions are very prescriptive (they run to over 100 pages) and include details on wage rates, superannuation and overtime.

The aim of the Minimum Conditions appears to be to set the recently negotiated Queens Wharf agreement as a benchmark agreement across the State. If this were to happen we estimate that labour costs on government civil infrastructure projects would increase in the region of 75 -100 %. This at a time when nurses, teachers and fire service personnel are all receiving low single digit pay rises, We question who will pay for this largesse given most large infrastructure projects receive a significant funding contribution from the Federal Government.

If this were not bad enough, we have obtained legal advice that Contractors applying the minimum conditions could fall foul of Commonwealth legislation such as the Fair Work Act.

Suffice to say, QMCA has written to the Department and objected to the introduction of the Minimum Conditions in the strongest possible terms. You may also have noticed that we have voiced our concerns both through the traditional media and our Social Media channels.

I would be grateful for your support in spreading awareness of this important matter and you can rest assured that QMCA will continue to actively campaign until this proposal is taken off the table.

Regards

Jon Davies

CEO

Queensland Major Contractors Association

Our members.

Acciona Infrastructure Australia
BMD Constructions
Clough
CPB Contractors
Decmil Group Limited
Fulton Hogan
Ghella
John Holland
Laing O’Rourke
Lend Lease
McConnell Dowell
Monadelphous
Seymour Whyte Constructions