00:02
Welcome back, Tim, to another tricks of your trade Podcast. Today for our listeners benefit we've got Tim Dive from Workplace advisory specialists on today to talk to us about unions and what non EBA subbies can do to protect themselves from mishaps on job sites, and involvement with unions that affects their relationship with their builder and so on and so forth. So, thanks very much for coming along. Again, Tim, we had you on earlier this
00:31
year. Yeah, my pleasure. Thanks for having me again.
00:34
So if anyone's interested, you can look back on our earlier podcasts and see Tim's earlier podcast with me talking about ABA and workers and subcontracts, baby and workers. But without further ado, Tim, I'll just get you to give us a recap on your background a little bit for any new listeners.
00:52
Yeah, so I'm originally from Sydney, and I left school at a reasonably young age around 14 and started working and I fell right into the construction sector back then, Sydney was getting ready to to develop and build for the 2000 Olympic Games. So there was a lot of construction work around back then. So I naturally fell into that world. And initially, I was an ABN holder as a laborer, as a laborer, and was looking for apprenticeships and things like that, and didn't happen. So, but I ended up staying in that game for a fairly long time about about 12 years or so, and develops skills and capability in plastering and all aspects of plastering but also working for builders long that way I was done frames and trusses and landscaping concrete in tiling all that sort of stuff. And so I was really well versed in construction generally moved to Queensland, though in about 2005. And for a couple of years thereafter, there was still in the building game and construction game and I was building residential properties mostly. And then after a couple of years of that, I decided that it'd be time for for a change for me, I wasn't really loving it that much anymore. And I decided to go to Brisbane and look for a new opportunity and take whatever fell in my lap 100% and push it as far as I could go. So that was Geez, that was almost 17 or 18 years ago now. And so here I am. Now later on, I fell into the HR world in the industrial relations world. And I've had some experience in mining, construction engineering, oil and gas and all that sort of stuff. And had some exposure to some pretty, pretty hostile union driven environment. So over the years, which is great experience. So hopefully that can help. Some some listeners you got to that. Yeah,
02:47
I would say so definitely the IR stuff in the oil and gas background would have given you a baptism baptism of fire, I'd say,
02:57
Yeah, it's pretty, pretty full on, you know, the union unions had, back then the enterprise agreements that I was working with, and I'll leave these these businesses nameless, I won't, I won't put anyone in any, any, any fire here. But, you know, the unions became so strong in some of those industries that they were embedded in the enterprise agreement so that they were embedded in the operations of the organization. So even hiring employees, you couldn't hire anyone that will be covered by an EBA. Without without the CFMEU being present in the interview. And so I would have to also train union delegates on how to interview and what was acceptable to talk about in interviews and all that sort of stuff. So they were really embedded in the organization, the fabric of the business's operations, which meant, of course, that they disputed everything that you did. So it was a constant daily battle, to try and get anything done. But it was it was awesome experience nonetheless.
03:58
Yeah. So I think there's two things that our clients talk about struggling with. The first one is whether they want to play in the big game and whether they want to become a union savvy. And some of them have even got two businesses, one non union one union business. And the other thing I struggle with is not ABA, some contractors at the moment are really feeling the pinch with winning new work, because obviously, changes in government, the union sort of have a little bit more Paul, and some of our clients late last year one one jobs for a builder they were already working for on another job. And then the union got wind that they'd won this new job, and they're upset about it and they would go to site and ping them on some kind of bogus or minor safety problem. And they can't them, pick on them with the view that that might stop them from being awarded the contract on the new job so that an union somebody could get New job. So and then I suppose there is a third thing as well, where some contractors are so concerned that even though they're not EBA, se, if it becomes a union job, will they have to pay their staff union wages? Yeah.
05:18
Yeah, it's a, it's a very interesting environment, the ABA versus non ABA. So the the whole range of scenarios which your anyone listening would be well versed with, you know, you might have a, an ABA covered site, itself. So the whole site is covered by the ABA, at which point, so are you if you're on there, and you're paying those rates, and you've got no job, no other alternative but to deal with the union on that job, because they're a part they're a party to the to the agreement. You've got non ABA projects, where the union may have a marquee or an area set up on site, and they might be there or title, a large project, like, for example, an airport expansion project or something like that. We are, you know, hundreds of contractors and a principal contractor. And, you know, that's the only way I saw it, but the eight unions are on site each day. And in that scenario, it's it's a bit different, you know, a union to walk onto a site has to be permitted to do so. Only certain people from that union or that organization, are authorized permit holders, they have to be approved to be a permit holder. And they have to give notice for entry, and they have to give a reason why they're entering and all that sort of thing has to take place before they even set foot near the place. And these, these are applications that have to go through the commission most most of the time to so there's a really robust system of how they get access to workers on sites. Most businesses that I go to and deal with have no idea what that what that is, they've got no idea that they should, then they can ask for the person's permit to say they're even authorized to be there. They have no idea how to challenge if they haven't received a seven day notice or whatever the notice period might be. And this is why you'll often see unions walk on site and site a safety issue as a reason why they're there, because that's the only time that they can go on to a site where they're given that notice is that if there's a if well, there's that's a pretty simplistic way to say that. And then there's the risk that they've been there has been reported to them by someone that site about a safety matter has to be so severe, that if they were to give notice that they were coming on site poses that people are at risk, because you you cover it up and you'd have time. So that's a significant claim to make the to walk on site. But citing that that's that's the situation, that's why they're there. But that's why they'll always typically get in that path, because it avoids them having to give notice and that sort of thing. So yeah, it's a fairly, it's a fairly challenging thing for employees on a worksite to go through as well. In my experience, from what I'm working with, with clients, I'll I'll get a random phone call. And I'd be a panicked employee on a site who's just been ordered to down tools and stop when they've been threatened and all sorts of things. They've got a principal contractor that's kicking them in the in the bomb every day to get things going and get things moving. Their Own Boss is is giving them the same instructions, but they've got this union delegate on site threatening violence, even sometimes, you know, if they were to continue. So it's, it's a really, really harsh situation to be in sometimes. Some unions are notoriously hostile, and others aren't. But yeah, it's a hard one to navigate. So you understand why people don't really know how to handle it and where they might be a bit hesitant to to challenge and fight back.
09:02
Yeah, definitely. I think in a lot of instances, too. When there's a safety issue, the subbies a bit embarrassed as well, or feel like they've got some level of culpability, or they've done something wrong. And so they're on the backfoot, rather than feeling like they're on the front foot from a position of strength where they can sort of stand up for themselves. But in those instances, oftentimes when the slide is shut down, even if the builder decides to direct somebody to stop work, as opposed to the union, they'll often be the builder will often come after them for delay costs, and particularly if other trades have been stood down or if other trades have been taken away. And one of the things that I often find very interesting is that when you look at a builders subcontract, or commercial builders subcontract, I should qualify. It's very difficult to get to a costs as a subcontractor, so if the builders come into you and saying, hey, I want you to pay me back these delay costs, we had a call recently, and there was a claim from a builder, who was claiming about 10 grand and delay costs for a day shut down. They were saying that was something like 40, or something electricians who were stood down for three hours. And they wanted all that money. And when we actually looked into the contract, from the builder, we unraveled that knot and worked out that the delay cost per day for this particular builder in their standard form contract is $1 per day. So if the electrician had exactly the same contract our guy did, which was likely the most they could possibly have gotten damages, or paid out in damages would have been $1 a day. So the damages claim against our guy was no more than $1. I find that really amusing and poetic, when the builders really unfair contract term twisted back against them means that they get the dodgy end of the deal as well.
10:54
Yeah, yeah, that's right. And you know, there's, there's platforms, you can stand on to a scenario. So let's say that process that our union has to go through to enter a site. It was just a routine site visit where they're, they're allowed to do this, they're allowed to go on site, and they the site they're entering the worker, or the company on that site has to provide a place where the unit can go in and meet their workers if the workers are interested in meeting them, and all that sort of stuff. So it's, it's all, it's all legitimate. But when a union comes on site, without showing a permit without having given notice, or maybe they gave notice to another company, they didn't give notice to you. But they while they're there visiting another company that they may, they may have said to them all with a safety reason as well, we're here, but then they walk down the on a construction site and see you working, and they make you pull up. You really want to be telling them to go away, you know, Where's where's your right of entry? Where's your where's your complaint for safety? Where's your permit? Where's this and just start asking those questions. Because more often than not, they're going to try this on, you know, that they're trained antagonists, that they they don't really follow the rules, and they're supposed to follow and they've got no intention to do so most of the time. And you can see that it's evidenced by the enormous amount of penalties as unions paid for breaching employment law and the Fair Work Act. If they are that concerned with companies complying with the act, then they did the heaviest breaches of it. So you really should feel secure and safe to stand on, on your own processes, your own practices, your own risk assessments and stand on them and say, No, where's your permit? We've done the right thing. Now you show me that you're doing the right thing. And then we're going to talk and that can hopefully stop some delays in claims coming.
12:53
Yeah. So interesting question and tell me if I'm navigating towards you're not comfortable talking about. But we all hear these rumors about brown paper bags worth of cash. And it just made sprang to mind when you were talking about unions paying lots in fines and penalties. Is there any data around how much the unions make versus how much they pay out? I'd be so interested to know one of the ways in which unions make money.
13:24
Very good question. Very good question. And it's a it's a gray area, you know, declining union numbers, the membership number has been declining for a number of years rapidly. And some of these unions are growing stronger and stronger and stronger. It would seem, you know, in terms of their earnings, these are businesses that have gone and started up superannuation companies and all kinds of other other businesses outside of the Union itself. So they're making a lot of money. They're making bulk dollars on investments, they're they're managing through funds and superannuation and all kinds of things and the Labour government, they're tied to the Labour government as well. So who knows what that connection is, and whether whether money comes through between those those bodies, but it's such a gray area to really put your finger on and say they are this much and they spend that much in penalties. But you know, there was a I've been completely unprepared for this question. If I if there was a period of time that I read about, from a very reliable source not too long ago, where the union said the CFMEU, for example, before their merger had paid in excess of $10 million in penalties for breaches of the act. They were paying those fines on behalf of their members. So there were their members were encouraged. They were trained and encouraged to break the break the rules, yes, the disrupt organizations and In return for doing that the union would pay the personal fines. There's been some movements to try and stop that and prevent unions being able to do that. I I've got no I don't believe that that's that's happening. I think that they'll they'll still find ways to pay those fines. But you know, we've all we've all seen, we've all seen the brown paper bag deals in the in the, in the news, you know, the heads of unions have been rubbished all through media for for having houses built and very expensive gifts and lavish, lavish expenses covered.
15:38
You know, I won't name names, but it exists in the in the news all over the place. So
15:46
there's bad eggs everywhere. There's a bunch of them in the union. So no doubt about that.
15:51
Yeah, they say, first year law student the first thing one of my contract law professors said was this follow the money. Best case management strategies is follow the money. So in terms of subcontractors who are non EBA, subbies, it can be a really daunting thing, wondering what your future is going to be like in the industry, because particularly now when we're looking at unions having more legs or more leash with the current government, and particularly in terms of in Queensland with Project trust accounts and things like that, it seems like there's likely to be a movement towards more tier one contractors getting a lot of big jobs. And if I think back to my really early years in construction working for builders was when they called the the burrs, this sports halls for schools days, when the tier ones would get the contract with the government. And they would subcontract the entire job to a tier two builder. And there was so much more of a union stronghold back then. But a lot of the subbies and builders started to wonder whether there was going to be a place for them whether it had to actually become, you know, unionized, or whether they could still play in the sandpit and get away with it. What are your thoughts in terms of I should, maybe I should ask, what are some of the things that the subcontractor should know about? If they're thinking about becoming a an ABA, or a union sub contracting business? How would their business change? What what are the types of things like overheads running the business hiring stuff? What would happen differently for a union subby versus a non union Sunday?
17:36
Yeah, it depends largely on the agreements that are struck, you know, and what what that means for the organization. So, you know, first and foremost, the union will a union will typically approach you, if you're a non ABA company, and you're on a site and they become aware of you, they'll they'll approach you and say, Look, just give us one member, give us one member and we'll leave you alone. That's That's what they always say. I've had that phone calls from clients of mine, I can't tell you how many times where they say should I do this. What that means is if they've got one member of your organization, they're now entitled to come in. And at anytime, represent that person or be a part of that organization's decision making and impose their will, in some way at such time as they deem it necessary to do so for whatever means they have. Sounds very conspiratorial, but trust me it is, it really is there's, there's an intention for this union movement to to get stronger and stronger, and controls entire sectors and all that sort of stuff that does exist, we know that's real. So the very first thing they'll do is they'll, they'll often try to get the director of the company to be the member to because then that that employee is going to always be there. They're not going to leave and disappear. So that's one thing that if you decide that Yeah, okay. You know what, we're not going to do enterprise bargaining agreements with you, we're not going to do it, but I'll be a member, no worries at all. What that means is that they now have a right to access your company, at whatever point in time, they want to because they cover a member there, they represent a member. So that's one thing that businesses should be aware of that often than not. The next thing was enterprise bargaining agreements. So it's hard to tell right, and we're still very fresh with these amendments. So these amendments of the Fair Work Act, a lot of them revolve around enterprise bargaining agreements and what unions can do on what the Fair Work Commission can do. But if a union is a party to your to your EBA, they don't have to be. You can have an enterprise bargaining agreement without union involvement at all. Between you and your employees and they can just be their own representatives. But where a union is becoming involved, the agreement has them as a party to it. They can now leverage everything that the Act allows them to leverage. And the commission allows them to leverage to control how that agreement will work. Right now, if you've got, if you've got an agreement that has expired less than five years ago, there's avenues that a union can take now to impose the will to impose orders by the Commission on you to renegotiate. And if that doesn't work pretty quickly, they can now request the commission to make the rules for you. That wasn't in existence before. So this is an evolving thing. What it means for headcount and cost is your costs are gonna go up, there's no doubt about that. And you're also going to lose control of how you remunerate your people. That's the biggest thing that for me would scare me as a business owner. So if I've, if I've got a strategic plan that I've, that I'm working on, and I'm looking at three to five years ahead. And I want to incentivize certain types of work and certain behaviors and disincentivize. D incentivize others that are against that strategic plan, I can't do that, I have no way to do it. And if I try to do it, I'm gonna come up against a lot of disputes, and it's going to tie me up in the condition and it's going to be arguments and the relationship will sour. But you've got the CBA that they're a party to, and it's never gone away. You know, if you want to if you want to apply to cancel that agreement, if it's expired, then they can dispute that in the Commission against you. So it's one of those things that once you go in, you're all in you know, and you're going to be in that scenario for a while. Be ready and prepared for that. If you're deciding that you're going to go and bring a union in with enterprise bargaining agreement, yeah. Yeah, so there's, but that's, that's just, you know, some of the other things that I'll say, you know, these aren't going to sound good, and you should be aware of it, but you're going to have a divided workforce, your employees who are union covered or covered by the EBA, are going to be repeatedly communicated to, with the intention to separate them from management, and have control over that workforce. That's the intention of that relationship. That is failing somewhat these days, but it's still there. And I see that we're a go that the mistrust between good relationships that you once had before, the mistrust that gets developed once you bring a union in, and you have a union covered workforce, and others who aren't, there's there's just a separation there. You'll never get that back. It's a culture killer. You'll also find, you know, trying to handle things that should be just an issue raised between a person and their supervisor, that will go to the Union first. They'll be in the know, they'll use that to beat their chests and to get other things over the line. Yeah, I can go on and on the things that I've seen bayreuther will actually happens. But those are all real things that do and will happen. So be prepared for that if you want to go down that road.
23:09
Yeah, well, it was interesting. We saw last year, a few big union builders, doing some sneaky, suburban, non EBA. Ba projects, trying to do them with very cheap rates. And this comes from that comment you made about you have little control over what you pay people but also you need to have the flexibility and the nimbleness in your business to react in terms of the industry and the economy and the supply and demand so that you've always got work. And these builders have picked up these little sort of townhouse projects out in the burbs thinking that they could just get in some non EBA subbies. And, you know, two, three weeks after the site fence went up, suddenly the site was converted, and it was going to be a union job. And that employed all of the service trades. And those contracts were now up in the air because the subsidies were saying, Well, we're we're not paying more, we can't pay more, you're engaged us on the basis that we're giving you a discount. You knew what my price was, and this was because it was a non non EBA sabe it's the only way I can do this job. And it seems like the builders are trapped as well. It's not just the subcontractors, but the builders get trapped in this world where, you know, they're driving their Rolls Royce everywhere, wanting a better analogy. And really, you know, sort of like a high end, I guess, type job.
24:35
Yeah, yeah, you're right, you know, and builders aren't principal contractors and builders and all these guys aren't exempt from from all that sort of stuff. They they play his game at a high level. You know, they've got long term relationships with the unions and these delegates who are in positions in place in the unions now there. They are doing deals with their own don't worry about that. You know, they're getting smooth ride In other projects, and other ones are going to go into the doghouse that that's happening. So yeah, it's a it's a messy scenario, it really is, you know that the best thing you can do in my book The best thing any any company can do is it remaining control your business as much as you possibly can enterprise bargaining agreements remove that from you. One of the good things so that everyone would have heard about multi enterprise bargaining or industry but industry wide bargaining and that sort of thing being brought into this, these new IR amendments, they're real, that you can be pulled into, to other agreements that exists in your industry that does exist in in the, in the afternoon. But if you're if you're there are exclusions for the for the construction industry is a number of exclusions. Now, if you're an employee, if you're an employer who has less than 50 employees, you're considered a small, small employer. Now, this is a different number than what the Fair Work Commission would apply to determine you as a small business employer. In their in their definition, you have 15 employees who are systematic and regular. So casuals who aren't systematic and regular wouldn't be counted. But this is just everyone's counted in this 50 number. So you'd be exempt from that multi employer bargaining that it's being imposed. But again, I think we've got to see how this rolls out in the next 12 months, 18 months to really see what unions are challenging for, or what challenges companies are winning back against them to see what it all really means in reality. Yeah, so it's gonna be an interesting, interesting time. But everyone in this just needs to be aware that unions are trained to disrupt. So be ready for the disruption, be prepared for it. And don't be caught off guard by it be ready with things in place strategies in place to control them as much as you possibly can? And keep as much control as you can in your company?
27:11
Yeah, that's really good advice. So if one of our subcontractors is on a job site, the union shows up, have you got? What should they do? Should they contact someone like you should? Is there a way they can get prepared? Is there like a checklist? Or have you got a little training they could do? Or could they contact you for some advice on that?
27:32
Yeah, yeah. Okay. Anyone can contact me at any time I'm, I'm, I'm known for just having a chat and giving as much advice as I can, you know, and I doesn't become like you're engaging me until it's really we're getting into some work and that sort of thing. So I'm always happy to have a chat and give some instructions where I can. But yeah, you should have a checklist you should have, you should have a list of one to 567 things where you want to check this delegates permit? Are you a permit holder? Do you have a permit? Did you get a right of entry? Notice what are you here? What Why are you here? Now you would have known about that right of entry seven days prior, or what I'll just I'll check that and just double check, but that might have changed, but I believe it's still seven days could be different. But that notice that then coming on site, you should have received that it should be aware of that. You know, and just talking just talking to them and not not being pulled into the threats, the the aggressive nature of their approach. Don't let that rattle you. That's the whole intention of it. The whole intention is to get on their radar you and have their free, free rein of the worksite beat their chests make everyone feel and feel and believe that they're actually doing something of value. So just calm it down, don't react, ask for their permit, ask for the right of entry, confirm whatever therefore, you know, just make sure that they're doing the right thing on site. You know, there's certain things that they are allowed to do and many things are not allowed to do on all on their site. So it'd be too difficult to run through all those things right now and explain them but just get your head around that credit or checklists or a policy for your people to have and, and that should help a lot.
29:24
That's really great. So for anyone listening to this, we'll put Tim dives details in the show notes for this episode. So if you'd like to make contact with Tim, I recommend that you do so and do it practically before you are bleeding from the neck and need this help urgently. Get on the front foot so that you know what to say when you are poked by the bear. All right. Well, thanks very much again, Tim for another great episode on our podcasts been a pleasure having you.
29:50
My pleasure. Thanks.
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