Definitive Report - Report No 248, March 1987

Case No 1371 (Australia) - Complaint date: 28-MAY-86 - Closed

1. 228. The Australian Building Construction Employees' and Builders Labourers' Federation (BLF) submitted a complaint of violations of trade union rights in a communication dated 28 May 1986. The Government sent its reply in a communication dated 29 January 1987.
2. 229. Australia has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No.87) and the Right to Organise and Collective Bargaining Convention, 1949 (No.98).

A. The complainant's allegations

1. 230. In its communication of 28 May 1986, the BLF refers to the proclamation of certain sections of the BLF (De-recognition) Act, 1985 which led to further action by the Victorian Government against the de-registered complainant union. (The BLF (De-recognition) Act was the subject of an earlier BLF complaint: see 244th Report, Case No. 1345, paras. 157 to 193, May 1986).
2. 231. First, the BLF mentions the Victorian Government's order-in-council called "The Code of Conduct and Financial Assistance" which came into operation on 20 November 1985. According to the BLF, the legal status of this order is uncertain but the Government has regarded it as the law of the land and immediately began forcing employers to sign documents embodying the criteria set out in the Code of Conduct. These criteria include paragraph 2.3 (f) which reads: "Firms in the Victorian building industry are required under the Code of Conduct to agree to refuse to deal with the BLF where it does not have coverage of work under the Conciliation and Arbitration Act." Under paragraph 2.4 the Code of Conduct becomes a fundamental term of all Victorian Government building contracts and paragraph 2.6 imposes a penalty of exclusion from further Government work of those found to have committed a fundamental breach of undertakings and/or the Code of Conduct. The BLF points out that the rest of the Code (a copy of which is supplied) deals with financial assistance to firms whose losses or delays are incurred as a result of industrial action in support of the BLF position.
3. 232. The BLF states that sustained pressure was put on a number of companies to sign the Code of Conduct; e.g. threats were made that essential services like gas and electricity would be cut off on sites where builders had not signed. The BLF encloses a copy of a press release of the State Minister of Employment and Industrial Relations dated 13 February 1986 which lists sanctions against non-signatory firms such as a prohibition on any dealings with Government departments. Another press release of 14 February from the same source refers to "embargos" on non-signatory building contractors.
4. 233. The BLF claims that the existence and use of the Code of Conduct is contrary to Articles 2 and 8(2) of Convention No. 87 since it is a disincentive to members of the BLF to remain in the union of their own choice, and since it makes membership of the BLF detrimental to workers in securing and maintaining employment.
5. 234. Secondly, the BLF refers to the Victorian Government's "Official Forms for Builders Labourers" which were circulated as from April 1986 among building sites to enable BLF members to simultaneously resign from that union and join another union to obtain work. Referring to a copy of one such standard form supplied by the complainant union, it points out that it contains the phrase "to keep your job in the building industry, you are now required to resign from the BLF".
6. 235. According to the complainant, government officials and the police were on several sites to ensure that the forms were completed i.e. if labourers did not resign from the BLF, dismissals would take place. The BLF states that dismissals did in fact occur on a number of sites, including dismissals of direct employees of the Government's Public Works Department. As a result of this, several BLF members took legal action in the courts but the complainant alleges that they are no longer protected by the anti-union dismissal legislation because of the de-registration proceedings at the Federal level examined by the Committee in the context of Case No. 1345 (244th Report, paras. 157 to 193, approved by the Governing Body at its 233rd Session, May-June 1986). Thus the legal actions are proceeding under the trade practices legislation and the common law. According to the BLF, some dismissed workers successfully obtained from the Victorian Supreme Court an Order restraining the State Minister of Labour from publishing any statement - until the trial - which asserts that the Code of Conduct requires employers who are parties to it not to employ BLF members.
7. 236. The BLF alleges that the Victorian Government's action, both in dismissing its own employees for refusal to resign from the BLF and in pressuring employers in the building industry to dismiss BLF members in their employ, is a breach of Article 1 of Convention No. 98 and challenges the Government's stance that it is not requiring workers to relinquish all union membership but rather to join "appropriate" unions.

B. The Government's reply

1. 237. The Government's communication of 29 January 1987 contains the detailed reply of the Victorian Government which essentially denies that either the Code of Conduct or the "Official Forms" issued to members of the BLF contravene Conventions Nos. 87 and 98.
2. 238. As regards the allegation that the Code of Conduct breaches Articles 2 and 8(2) of Convention No. 87, the Government states that the Code must be considered in the context of the unprecedented industrial situation existing at the time of its introduction, as set out in paragraphs 169 and 170 of the Committee's 244th Report in which it examined the previous BLF complaint (contained in Case No. 1345). Briefly, the BLF had its registration under the federal Conciliation and Arbitration Act cancelled in 1974 after persistently engaging in serious industrial misconduct, and its re-registration was challenged again in 1981. When the BLF did not abide by the commitments it undertook on signing the 1984 Memorandum of Understanding between building industry employers and unions, the Federal Government, faced with the extraordinary problems caused by the BLF in the building industry, enacted the Building Industry Act 1985. This provided, among other things, for a hearing by the Australian Conciliation and Arbitration Commission into the industrial conduct of the BLF which, in April 1986, gave its decision against the BLF. Subsequently, the Australian Parliament passed legislation to deregister the BLF and the Victorian Government proclaimed the BLF (De-recognition) Act - except for sections 4, 5 and 7. These sections have since been proclaimed in order to keep the Act in operation but sections 4 and 5 are not to come into operation until 1 January 2000.
3. 239. The Government points out that the Code of Conduct is not primarily concerned with the BLF, but is a continuation of previous attempts (most notably the 1984 Memorandum of Understanding) designed to improve the industrial and economic climate in the building industry and to eliminate practices inconsistent with that objective. Four Governments in Australia have issued broadly similar Codes of Conduct in further attempts to address the industrial problems existing in the building industry. It stresses that the Code is simply an agreement between the Victorian Government and those builders who are prepared to abide by its terms, and builders who do not wish to abide by it are not legally obliged to do so. The consequence is, however, that the Victorian Government will not enter into contractual relations with those builders.
4. 240. According to the Government, the Code of Conduct sets down six criteria with which employers in the building industry are expected to comply. Of these criteria, only one directly concerns the BLF, viz, that firms "agree to refuse to deal with BLF where it does not have coverage of work under the Conciliation and Arbitration Act". The Government explains what coverage of work means under the federal industrial relations system (which applies to most of the building industry in Victoria): registered unions have - for the purposes of participation in the formal conciliation and arbitration system and to ensure that employers are able to negotiate with unions which have appropriate coverage of work - the right to represent workers who are engaged in the kinds of work specified in the registered rules of those unions. Following the deregistration of the BLF, coverage of certain work previously coming within the federally registered rules of the BLF was allocated as an interim measure to other federally registered unions with their consent. This does not prevent the operation of the normal system of registered unions seeking the consent of the Industrial Registrar to the alteration of their rules to cover such work.
5. 241. As regards the alleged coercion of builders to abide by the Code, the Government points out that representatives of the principal building industry employer organisations and individual contractors have all expressed their support for the Code and have recognised the need for it. According to the Government, no employer group has criticised the Code since its release in November 1985 and the BLF's allegation of the withdrawal of gas, etc. made against non-signatory builders should be viewed against the background of the serious problems which had been caused in the past by a small group of employers who had constantly made unjustifiable deals with the BLF so as to avoid industrial disruption on their worksites. The Government states that lawful action might have been necessary in relation to three or four employers in these exceptional circumstances to induce them to accept arrangements for achieving those objectives which have been voluntarily accepted by other employers and building unions other than the BLF. The Victorian Government's preparedness to withdraw certain services from non-complying employers should be regarded as a response to be used in an extreme situation, but the Government stresses that it has not been necessary for any such action to be taken.
6. 242. The Government adds that the Code does not deny workers the right to join organisations of their own choosing; it provides only that employers are not to deal with the BLF where the BLF has no coverage under the Conciliation and Arbitration Act. The Victorian Government has taken the view that, if an employee belongs to the BLF, that does not constitute dealing between his employer and the BLF contrary to the Code of Conduct. Thus no employer would be acted against simply for employing BLF members.
7. 243. As regards the alleged infringement of Article 1 of Convention No. 98 because certain employees were dismissed for being members of the BLF, the Government points out that some workers simultaneously have membership of the BLF and other unions: those workers have not been dismissed because they are members of the BLF. What employers have insisted upon is that employees be members of a registered trade union. To clarify this point, the Government refers briefly to the history of union security in the building industry stating that traditionally, employment in the industry has been very tightly controlled to ensure the maximum degree of unionisation amongst employees. It is thus accepted in the industry that persons working on a site covered by the rules of a particular union must belong to that union. Since the BLF's deregistration leaves it without coverage on work sites in Victoria, it cannot represent workers within, or offer them the benefits of the existing industrial relations system. Therefore, the refusal to employ workers who do not join an "appropriate" trade union capable of working within the system is consistent with past practice in the industry.
8. 244. The Government recalls with regard to certain Victorian Government statements and the "Official Forms" (which stated that to keep their jobs in the building industry, workers had to resign from the BLF and join other unions), that the BLF has a very bad record of militant enforcement of the building industry's union security arrangements in its own favour to the extent that this has produced considerable resentment and opposition in other industry unions provoking serious industrial disruption. The Victorian Government was seriously concerned about the potential for further disruption by a continuing BLF presence on building sites after its deregistration. At the time of federal deregistration and de-recognition at the State level, employers were being subjected to intense and protracted industrial action by the BLF over a variety of industrial and non-industrial issues, and some had decided that an appropriate response would be the termination of the employment of BLF members. Some dismissals occurred prior to the BLF's deregistration, but after legal proceedings employers agreed to re-employ the workers concerned.
9. 245. In the event, states the Government, following the reallocation of work coverage to other registered unions after the BLF had its registration cancelled, nearly all BLF members agreed to join those unions. Among those unions, there was, for the reasons mentioned above, an apprehension that continuing membership of the BLF in these circumstances would prove industrially unworkable. In fact, one major union, the Building Workers' Industrial Union of Australia (BWIU) initially imposed a condition that admission to membership was subject to resignation from the BLF. This condition has subsequently been dropped and BLF membership is no longer a barrier to joining the BWIU.
10. 246. As regards the Supreme Court action brought under the Victorian Fair Trading Act 1985, the Government indicates that it has not been finally disposed of. It explains that the action relates in particular to the BLF claim that it was misleading to state in the "Official Forms" that under the Code of Conduct continuing employment in the building industry required resignation from the BLF. The Victorian Government undertook in May 1986, at a preliminary stage of the proceedings, to stop the distribution of the forms. As the Supreme Court proceedings are not completed, the Victorian Government does not consider that it would be appropriate to comment further on this aspect of the complaint.
11. 247. As regards the allegation of police presence on sites to ensure the completion of forms, the Government states that such presence was a measured response, and solely the result of continuing acts of violence by the BLF and was intended to prevent further violence or intimidation. The BLF's continuing record of behaving outside accepted industrial standards since its deregistration and de-recognition in April 1986 has justified these concerns. Examples of its recent actions include: the storming and occupation of the offices of the Victorian Minister for Employment and Industrial Affairs in October 1986; the charging of BLF members with assault and resisting arrest; disruption of concrete pours and arrests for trespass on building sites.
12. 248. Lastly, the Government refers to the lack of support for the BLF with the Australian Council of Trade Unions and the principal employee bodies in other States. It also points out that recruitment of builders' labourers by other unions has been extremely successful. In Victoria, the BWIU estimates that 80 per cent of builders' labourers are now its financial members and in New South Wales, it is estimated that at least 10,000 former BLF members now belong to other registered unions.
13. 249. The Government also wishes to recall that the BLF will be able to apply to the Conciliation and Arbitration Commission for federal registration again five years from the date of commencement of the Builders Labourers' Federation (Cancellation of Registration) Act 1986, that is, 14 April 1986. The consequences for the BLF of deregistration thus need not be permanent. Of course, states the Government, whether any such application is successful depends significantly on the conduct of the BLF in the intervening period.

C. The Committee's conclusions

1. 250. The Committee notes that this case concerns certain action taken against BLF members by the Victorian Government as a consequence of the entry into force of the BLF (De-recognition) Act, 1985 which was examined in the context of Case No. 1345 in May 1986. Although it was stated by the Government during the examination of the earlier case that certain sections of the Act would not be proclaimed "in any circumstances", thereby leading the Committee to understand that the Act in question would automatically expire on 30 July 1986 (see 244th Report, paragraph 172), the Committee notes that the Government now declares that the provisions impugned have been proclaimed for technical reasons, i.e. in order to keep the Act in operation, but are not to be enforced until the year 2000.
2. 251. Despite the apparent non-operation of these penalty provisions of the Act, the complainant claims that two texts - the Code of Conduct introduced in November 1985 and the Government's "Official Forms" circulated on building sites between April and May 1986 - discourage BLF members from remaining in the union of their own choosing and discriminate against BLF members in their employment because of their union affiliation.
3. 252. First, the Committee observes that the Code of Conduct is not a legislative enactment or a binding prerequisite to receiving government building contracts in Victoria; although it contains a penalty of loss of governmental contracts for non-signatory builders. Indeed, on the contrary, the Government stresses that representatives of all major employer groups support the Code. Even the alleged coercion of employers to sign the Code by threatened withdrawal from sites of certain services within the Government's control has not been resorted to.
4. 253. It appears to the Committee that the BLF's current status, i.e. de-recognised within the Victorian industrial relations system and thus incapable of applying for coverage of work on government building sites, explains why, in practical terms, the criterion was included in the Code of Conduct requiring signatory building firms to refuse to deal with the BLF where it does not have coverage of work. Moreover, since the Committee has already accepted that the de-recognition of the BLF was justified in the circumstances (see 244th Report, paragraph 185), it is not in a position to criticise a document which, from its clear wording, does not exclude BLF members from public works contracts, but merely requires the employer to deal with a union legally entitled to represent the workers employed on that worksite. The Committee considers that the Code is not contrary to Convention No. 87 since workers are at no time obliged to relinquish membership of the union of their choice - in this case the BLF. In reaching this conclusion, the Committee has kept in mind the fact that the BLF can apply for federal re-registration - and therefore coverage of work - as from April 1991. The Code of Conduct simply makes it clear to a worker who chooses to remain a member of or join only the BLF on a site where it does not, at the present time, have coverage that his employment relationship may suffer certain consequences.
5. 254. The situation of the "Official Forms" is, however, in the Committee's opinion, quite different. These forms stated clearly that to keep their job in the building industry, workers were "required to resign from the BLF". Such a requirement is not acceptable under Article 1 of Convention No. 98. The Government's description of the BLF's past and continuing militancy and poor relations with other unions does not change this. It appears to the Committee that the Government acknowledged this violation of the BLF members' rights when, in the context of legal proceedings, it ceased circulation of the forms on public works sites one month after they had appeared. The Government has also stated that some dismissals of BLF members have taken place, but that the employers have re-employed all the workers concerned. More over, the Committee notes that the BLF was successful in applying to the Supreme court for an order restraining the State Minister of Labour from publishing any statement concerning an alleged obligation to dismiss BLF members.
6. 255. The Committee trusts that the Supreme Court proceedings initiated by the BLF against the contents of the "Official Forms" will be terminated and that account will be taken of the principle, accepted by Australia when it ratified Convention No. 98, that no worker should be dismissed or otherwise prejudiced in his employment by reason of his union membership.
7. 256. On this last point, the Committee recalls its comments on sections 4 and 5 of the 1985 Act, which permit rescission of public works contracts if BLF members are engaged or continue to be engaged on work covered by such contracts (see 244th Report, paragraphs 187 and 188). It had stated that, if proclaimed and applied, these provisions could cause unfair prejudice to BLF members in their employment solely because of their union membership, contrary to Article 1 of Convention No. 98. In the opinion of the Committee the wording of the "Official Forms", like these provisions, went too far in penalising all BLF members for the industrial and criminal misconduct within various levels of the BLF hierarchy. The Committee therefore hopes that these sections of the 1985 Act will be repealed before they enter into force in the year 2000.

The Committee's recommendations

1. 257. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • a) The Committee draws the Government's attention to the importance of protection against anti-union discrimination set out in Article 1 of Convention No. 98 and trusts that sections 4 and 5 of the 1985 State Act, proclaimed in 1986, being contrary to this principle, will be repealed before they enter into force in the year 2000.
   • b) It expresses the hope that the Supreme Court proceedings concerning the "Official Forms" will be terminated and that account will be taken of the principle that no worker should be dismissed because of his union membership.