Most in the construction industry expect that after the Cole Royal Commission presents its report in late February a few fall guys may go to jail but over time the status quo for doing business will return. However, there are persistent indicators that the Commission could produce reverberations beyond the construction industry and affect the institutional way Australian business has traditionally operated.
This is highlighted in a late submission to the Commission from the Australian Industry Group which expresses concern that the Commission should contemplate removing or changing "employment" exemptions from the Trade Practice Act [s51(2)(a)]. AIG claims that these exemptions are, "the very foundations upon which Australia's industrial relations system is built".
At first glance the concern seems odd. After all isn't industrial relations fought over provisions in industrial relations legislation? But the AIG unmasks the real suppressed truth. Industrial relations is the mechanism by which Australian business is delivered relief from significant competition and consumer protection enforcement requirements of the Trade Practices Act.
Because of the TPA employment exemptions, it is lawful for businesses to meet collectively within and across businesses, and to organize with unions to fix prices for the largest cost element of business: labour. Similar activity with any other cost item is collusive and illegal.
Seen from this angle, industrial relations loses the charade of "bosses versus workers" and "workers rights" hype and looks more like an argument over how competitive Australia will require its businesses to be. It's an issue into which the Cole Commission was drawn.
Evidence before the Commission has uncovered the expected bully-boy tactics of unions enforcing their preferred form of labour but in addition building unions have been aggressively extending their reach into non-employment matters. For example union service fees are aggressively pushed by building unions, but are a conceptual breach of third line forcing provisions in the Trade Practices Act. It is illegal to make a condition of one contract, a requirement to enter a contract with a third party. But union service fees force a worker to enter a contract with a union, as a condition of being in an employment contract.
This one example is systemically replicated many times and in many ways in the construction industry as unions use the mask of TPA employment exemptions to advance their objectives. This suits some building companies and contractors who find the industrial relations dynamic limits competition against them in ways that would normally be illegal. Within certain bounds businesses secretly welcome union activity if the activity constrains their competitors.
The Cole Commission must have seen enough in the construction industry to become suspicious, and opened up a line of enquiry concerning the appropriateness of the TPA employment exemption, to see if the exemption institutionally underpins systemic illegality in the construction sector.
But this line of enquiry has panicked the AIG who claim the removal of the exemption would "cripple a private employers human resources activities" and "prevent employer associations and unions effectively representing the collective interests of their members". Business is clearly worried.
The AIG seems to suggest that Australian business could not function if it had to apply commercial law to labour areas. But this does not explain how the 26% of the private sector workforce who work but are not "employed," manage to earn a living while subject to the full provisions of the TPA.
As with all Royal Commissions a bigger issue has emerged than that perhaps originally contemplated. What the Cole Commission may have uncovered is that Australian industrial relations is not principally about protecting workers but is about the institutionalized protection of business from the full blast of competition law.
What now may be at stake is the concept of how business, or perhaps big business operates in Australia. Where the focus of arguments is usually on the mind numbing complexity of industrial relations law, the real debate seems to be an old, simple and familiar one, namely protection versus competition.
When the Cole Commission releases its report, what it says on this issue more than any other could perhaps have huge impact on how business is constructed and conducted in Australia. In policy terms the union story could prove a side issue.
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