Building and Construction, Employment

A busy week for wage theft: record penalties imposed and two class actions launched

19 May, 2020

The new Australian Government has wasted no time in moving to follow through on its promises to dismantle the Australian Building and Construction Commission (ABCC).

Over the weekend Tony Burke, Minister for Employment and Workplace Relations, issued a media release indicating the Government’s intentions for the building and construction industry this week.

As foreshadowed, effective yesterday, 26 July 2022, a new look Building Code is in place.

The Government has introduced the Code for the Tendering and Performance of Building Work Amendment Instrument 2022 (Amended Code) which amends the Code for the Tendering and Performance of Building Work 2016, more commonly known as the Building Code.

The Explanatory Statement to the Amended Code reaffirms the Government’s intention to imminently abolish the ABCC, and to repeal the Building and Construction (Improving Productivity) Act 2016 (BCIIP Act), and the Building Code.

The Building Code, however, cannot be repealed until the BCIIP Act is repealed – which is expected to happen later this year.

So, as an interim measure the Amended Code streamlines the Building Code to remove the majority of the requirements it imposed, leaving only those required by the BCIIP Act.

What’s changed?

The Building Code covers code covered entities; those building contractors or building industry participants that have submitted an expression of interest or tender for Commonwealth funded building work after 2 December 2016 (Code Covered Entities).

Some of the more significant changes for Code Covered Entities we set out below.

Content of enterprise agreements

The Amended Code repeals section 11 of the Building Code, which imposed additional requirements in relation to the content of enterprise agreements, compared to those in other industries, restricting the content of enterprise agreements.

The changes now mean that employers that are Code Covered Entities may see a resurgence of enterprise agreement claims from workers that may seem a distant memory for many employers.  The changes opening the door for influential unions like the CFMMEU to push for enterprise agreements that give workers, and the union, greater influence over operational decisions of employers.

For example, the Building Code expressly prohibited the inclusion of provisions that limited the right of an employer to manage its business or improve productivity.

Such prohibited provisions included any that:

  • required an employer to consult or seek the approval of an officer, delegate or other union representative about the engagement of employees or subcontractors
  • limited an employer’s right to make decisions about the allocation of work or things like redundancy or redeployment of employees based on operational requirements
  • required union logos or mottos to be included on company property or equipment

It remains to be seen how unions like the CFMMEU will manoeuvre during the next bargaining cycle now the prohibitions have been removed.

Whilst employers will not have to agree to any such provisions pushed, it may be practically more difficult for an employer to reject them during bargaining now that those provisions no longer fall foul of the Building Code.

Freedom of association

The Amended Code repeals section 13 of the Building Code, which imposed additional requirements in relation to freedom of association compared to those in other industries.

The changes now mean that the Amended Code no longer includes an obligation that Code Covered Entities must adopt and implement policies and practices that ensure persons are free to be or not be members of a union, represented by a union, or to participate or not participate in industrial activities.

For example, the Building Code obligated Code Covered Entities to ensure that:

  • ‘no ticket, no start’ signage or similar was not displayed, that such arrangements were not implemented and that ‘show card’ days did not occur
  • signs intended to vilify or harass employees who participate, or do not participate, in industrial activities were not displayed
  • union logos, mottos or indicia were not applied to clothing, property or equipment supplied by employers which implied that membership of a union was anything other than an individual choice
  • requirements were not imposed on Code Covered Entities or subcontractors engaged by the Code Covered Entities to employ a non-working job delegate, or hire an individual nominated by a union

The removal of those obligations may work to give unions greater flexibility on building sites to advance union interests and promote union membership amongst workers, using measures that have formerly not been allowed under the Building Code.

The general protections provisions of the Fair Work Act will, however, continue to make coercion and misleading representations about workplace rights unlawful.

Entry to premises

The Amended Code repeals section 14 of the Building Code, which set out requirements relating to right of entry.

True, the Fair Work Act and applicable state-based work health and safety legislation contain strict right of entry requirements for permit holders.

The Building Code, however, also contained additional obligations that effectively meant Code Covered Entities were in breach of the Building Code if they allowed a union official onto a site for a reason other than as permitted under right of entry requirements.

With that obligation no longer there, it will be important for Code Covered Entities to ensure that their managers do not become lax with right of entry, where union officials may seek to enter sites at the invitation of occupiers, without having to strictly comply with right of entry requirements.

What’s next for enforcement in the industry?

Provisions of the BCIIP Act empowering the ABCC and others to commence proceedings for contraventions of the BCIIP Act for things like unlawful industrial action, picketing, and coercion remain, for the time being.

Those contraventions can attract significant penalties.

Although, the ABCC bringing such proceedings is perhaps unlikely, given its looming demise.

The repeal of the BCIIP Act and the Building Code is expected later this year, sometime after the expected October 2022 budget update, which is expected to significantly reduce funding for the ABCC.

In the meantime, Minister Burke has indicated that consistent with other industries, in the building and construction industry, the Fair Work Ombudsman (FWO) will be tasked with enforcing compliance with the Fair Work Act.

The FWO will also step into the shoes of the ABCC in ongoing proceedings, most of which are against the CFMMEU.

Master Builders Australia has signalled its discontent with the changes, referencing modelling from EY it commissioned earlier this year, which found that abolishing the ABCC could cost the Australian economy $47.5 billion by 2030.

If you require practical advice in relation to the changes, please feel free to get in touch for expert industrial relations law advice from the McCabes Lawyers Employment, Workplace Relations and Safety Team.

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Litigation and Dispute Resolution

Canadian Court elevates thumbs-up emoji to signature status

In June 2023, a Canadian Court in South-West Terminal Ltd v Achter Land and Cattle Ltd, 2023 SKKB 116, held that the "thumbs-up" emoji carried enough weight to constitute acceptance of contractual terms, analogous to that of a "signature", to establish a legally binding contract.   Facts This case involved a contractual dispute between two parties namely South-West Terminal ("SWT"), a grain and crop inputs company; and Achter Land & Cattle Ltd ("ALC"), a farming corporation. SWT sought to purchase several tonnes of flax at a price of $17 per bushel, and in March 2021, Mr Mickleborough, SWT's Farm Marketing Representative, sent a "blast" text message to several sellers indicating this intention. Following this text message, Mr Mickleborough spoke with Mr Achter, owner of ALC, whereby both parties verbally agreed by phone that ALC would supply 86 metric tonnes of flax to SWT at a price of $17 per bushel, in November 2021. After the phone call, Mr Mickleborough applied his ink signature to the contract, took a photo of it on his mobile phone and texted it to Mr Archter with the text message, "please confirm flax contract". Mr Archter responded by texting back a "thumbs-up" emoji, but ultimately did not deliver the 87 metric tonnes of flax as agreed.   Issues The parties did not dispute the facts, but rather, "disagreed as to whether there was a formal meeting of the minds" and intention to enter into a legally binding agreement. The primary issue that the Court was tasked with deciding was whether Mr Achter's use of the thumbs-up emoji carried the same weight as a signature to signify acceptance of the terms of the alleged contract. Mr Mickleborough put forward the argument that the emoji sent by Mr Achter conveyed acceptance of the terms of the agreement, however Mr Achter disagreed arguing that his use of the emoji was his way of confirming receipt of the text message. By way of affidavit, Mr Achter stated "I deny that he accepted the thumbs-up emoji as a digital signature of the incomplete contract"; and "I did not have time to review the Flax agreement and merely wanted to indicate that I did receive his text message." Consensus Ad Idem In deciding this issue, the Court needed to determine whether there had been a "formal meeting of the minds". At paragraph [18], Justice Keene considered the reasonable bystander test: " The court is to look at “how each party’s conduct would appear to a reasonable person in the position of the other party” (Aga at para 35). The test for agreement to a contract for legal purposes is whether the parties have indicated to the outside world, in the form of the objective reasonable bystander, their intention to contract and the terms of such contract (Aga at para 36). The question is not what the parties subjectively had in mind, but rather whether their conduct was such that a reasonable person would conclude that they had intended to be bound (Aga at para 37)."   Justice Keene considered several factors including: The nature of the business relationship, notably that Mr Achter had a long-standing business relationship with SWT going back to at least 2015 when Mr Mickleborough started with SWT; and   The consistency in the manner by which the parties conducted their business by way of verbal conversation either in person or over the phone to come to an agreement on price and volume of grain, which would be followed by Mr Mickleborough drafting a contract and sending it to Mr Achter. Mr Mickleborough stated, "I have done approximately fifteen to twenty contracts with Achter"; and   The fact that the parties had both clearly understood responses by Mr Achter such as "looks good", "ok" or "yup" to mean confirmation of the contract and "not a mere acknowledgment of the receipt of the contract" by Mr Achter.   Judgment At paragraph [36], Keene J said: "I am satisfied on the balance of probabilities that Chris okayed or approved the contract just like he had done before except this time he used a thumbs-up emoji. In my opinion, when considering all of the circumstances that meant approval of the flax contract and not simply that he had received the contract and was going to think about it. In my view a reasonable bystander knowing all of the background would come to the objective understanding that the parties had reached consensus ad item – a meeting of the minds – just like they had done on numerous other occasions." The court satisfied that the use of the thumbs-up emoji paralleled the prior abbreviated texts that the parties had used to confirm agreement ("looks good", "yup" and "ok"). This approach had become the established way the parties conducted their business relationship.   Significance of the Thumbs-Up Emoji Justice Keene acknowledged the significance of a thumbs-up emoji as something analogous to a signature at paragraph [63]: "This court readily acknowledges that a thumbs-up emoji is a non-traditional means to "sign" a document but nevertheless under these circumstances this was a valid way to convey the two purposes of a "signature" – to identify the signator… and… to convey Achter's acceptance of the flax contract." In support of this, Justice Keene cited the definition of the thumbs-up emoji: "used to express assent, approval or encouragement in digital communications, especially in western cultures", confirming that the thumbs-up emoji is an "action in an electronic form" that can be used to allow express acceptance as contemplated under the Canadian Electronic Information and Documents Act 2000. Justice Keene dismissed the concerns raised by the defence that accepting the thumbs up emoji as a sign of agreement would "open the flood gates" to new interpretations of other emojis, such as the 'fist bump' and 'handshake'. Significantly, the Court held, "I agree this case is novel (at least in Skatchewan), but nevertheless this Court cannot (nor should it) attempt to stem the tide of technology and common usage." Ultimately the Court found in favour of SWT, holding that there was a valid contract between the parties and that the defendant breached by failing to deliver the flax. Keene J made a judgment against ALC for damages in the amount of $82,200.21 payable to SWT plus interest.   What does this mean for Australia? This is a Canadian decision meaning that it is not precedent in Australia. However, an Australian court is well within its rights to consider this judgment when dealing with matters that come before it with similar circumstances. This judgment is a reminder that the common law of contract has and will continue to evolve to meet the everchanging realities and challenges of our day-to-day lives. As time has progressed, we have seen the courts transition from sole acceptance of the traditional "wet ink" signature, to electronic signatures. Electronic signatures are legally recognised in Australia and are provided for by the Electronic Transactions Act 1999 and the Electronic Transactions Regulations 2020. Companies are also now able to execute certain documents via electronic means under s 127 of the Corporations Act. We have also seen the rise of electronic platforms such as "DocuSign" used in commercial relationships to facilitate the efficient signing of contracts. Furthermore, this case highlights how courts will interpret the element of "intention" when determining whether a valid contract has been formed, confirming the long-standing principle that it is to be assessed objectively from the perspective of a reasonable and objective bystander who is aware of all the relevant facts. Overall, this is an interesting development for parties engaging in commerce via electronic means and an important reminder to all to be conscious of the fact that contracts have the potential to be agreed to by use of an emoji in today's digital age.

Published by Foez Dewan
29 August, 2023

Venues NSW ats Kerri Kane: Venues NSW successful in overturning a District Court decision

The McCabes Government team are pleased to have assisted Venues NSW in successfully overturning a District Court decision holding it liable in negligence for injuries sustained by a patron who slipped and fell down a set of steps at a sports stadium; Venues NSW v Kane [2023] NSWCA 192 Principles The NSW Court of Appeal has reaffirmed the principles regarding the interpretation of the matters to be considered under sections5B of the Civil Liability Act 2002 (NSW). There is no obligation in negligence for an occupier to ensure that handrails are applied to all sets of steps in its premises. An occupier will not automatically be liable in negligence if its premises are not compliant with the Building Code of Australia (BCA). Background The plaintiff commenced proceedings in the District Court of NSW against Venues NSW (VNSW) alleging she suffered injuries when she fell down a set of steps at McDonald Jones Stadium in Newcastle on 6 July 2019. The plaintiff attended the Stadium with her husband and friend to watch an NRL rugby league match. It was raining heavily on the day. The plaintiff alleged she slipped and fell while descending a stepped aisle which comprised of concrete steps between rows of seating. The plaintiff sued VNSW in negligence alleging the stepped aisle constituted a "stairwell" under the BCA and therefore ought to have had a handrail. The plaintiff also alleged that the chamfered edge of the steps exceeded the allowed tolerance of 5mm. The Decision at Trial In finding in favour of the plaintiff, Norton DCJ found that: the steps constituted a "stairwell" and therefore were in breach of the BCA due to the absence of a handrail and the presence of a chamfered edge exceeding 5mm in length. even if handrails were not required, the use of them would have been good and reasonable practice given the stadium was open during periods of darkness, inclement weather, and used by a persons of varying levels of physical agility. VNSW ought to have arranged a risk assessment of the entire stadium, particularly the areas which provided access along stepped surfaces. installation of a handrail (or building stairs with the required chamfered edge) would not impose a serious burden on VNSW, even if required on other similar steps. Issues on Appeal VNSW appealed the decision of Norton DCJ. The primary challenge was to the trial judge's finding that VNSW was in breach of its duty of care in failing to install a handrail. In addition, VNSW challenged the findings that the steps met the definition of a 'stairwell' under the BCA as well as the trial judge's assessment of damages. Decision on Appeal The Court of Appeal found that primary judge's finding of breach of duty on the part of VNSW could not stand for multiple reasons, including that it proceeded on an erroneous construction of s5B of the Civil Liability Act 2002 and the obvious nature of the danger presented by the steps. As to the determination of breach of duty, the Court stressed that the trial judge was wrong to proceed on the basis that the Court simply has regard to each of the seven matters raised in ss 5B and 5C of the CLA and then express a conclusion as to breach. Instead, the Court emphasised that s 5B(1)(c) is a gateway, such that a plaintiff who fails to satisfy that provision cannot succeed, with the matters raised in s 5B(2) being mandatory considerations to be borne in mind when determining s 5B(1)(c). Ultimately, regarding the primary question of breach of duty, the Court found that: The stadium contained hazards which were utterly familiar and obvious to any spectator, namely, steps which needed to be navigated to get to and to leave from the tiered seating. While the trial judge considered the mandatory requirements required by s5B(2) of the CLA, those matters are not exhaustive and the trial judge failed to pay proper to attention to the fact that: the stadium had been certified as BCA compliant eight years before the incident; there was no evidence of previous falls resulting in injury despite the stairs being used by millions of spectators over the previous eight years; and the horizontal surfaces of the steps were highly slip resistant when wet. In light of the above, the Court of Appeal did not accept a reasonable person in the position of VNSW would not have installed a handrail along the stepped aisle. The burden of taking the complained of precautions includes to address similar risks of harm throughout the stadium, i.e. installing handrails on the other stepped aisles. This was a mandatory consideration under s5C(a) which was not properly taken into account. As to the question of BCA compliance, the Court of Appeal did not consider it necessary to make a firm conclusion of this issue given it did not find a breach of duty.  The Court did however indicated it did not consider the stepped aisle would constitute a "stairway" under the BCA. The Court of Appeal also found that there was nothing in the trial judge's reasons explicitly connecting the risk assessment she considered VNSW ought to have carried out, with the installation of handrails on any of the aisles in the stadium and therefore could not lead to any findings regarding breach or causation. As to quantum, the Court of Appeal accepted that the trial judge erred in awarding the plaintiff a "buffer" of $10,000 for past economic loss in circumstances where there was no evidence of any loss of income. The Court of Appeal set aside the orders of the District Court and entered judgment for VNSW with costs. Why this case is important? The case confirms there is no obligation in negligence for owners and operators of public or private venues in NSW to have a handrail on every set of steps. It is also a welcome affirmation of the principles surrounding the assessment of breach of duty under s 5B and s 5C of the CLA, particularly in assessing whether precautions are required to be taken in response to hazards which are familiar and obvious to a reasonable person.

Published by Leighton Hawkes
18 August, 2023
Litigation and Dispute Resolution

Expert evidence – The letter of instruction and involvement of lawyers

The recent decision in New Aim Pty Ltd v Leung [2023] FCAFC 67 (New Aim) has provided some useful guidance in relation to briefing experts in litigation.

Published by Justin Pennay
10 August, 2023