Work Arrangements on Large Capital City Building Projects

193 Pages·1999·0.72 MB·English

Work
Arrangements on
Large Capital City
Labour Market
Building Projects
Research
August 1999
ª Commonwealth of Australia 1999
ISBN 1 74037 000 7
This work is subject to copyright. Apart from any use as permitted under the
Copyright Act 1968, the work may be reproduced in whole or in part for study or
training purposes, subject to the inclusion of an acknowledgment of the source.
Reproduction for commercial use or sale requires prior written permission from
AusInfo. Requests and inquiries concerning reproduction and rights should be
addressed to the Manager, Legislative Services, AusInfo, GPO Box 1920, Canberra,
ACT, 2601.
Publications Inquiries:
Media and Publications
Productivity Commission
Locked Bag 2
Collins Street East
Melbourne VIC 8003
Tel: [phone]
Fax: [phone]
Email: [email protected]
General Inquiries:
Tel: [phone] or [phone]
An appropriate citation for this paper is:
Productivity Commission 1999, Work Arrangements on Large Capital City Building
Projects, Labour Market Research Report, AusInfo, Canberra.
The Productivity Commission
The Productivity Commission, an independent Commonwealth agency, is the
Government’s principal review and advisory body on microeconomic policy and
regulation. It conducts public inquiries and research into a broad range of economic
and social issues affecting the welfare of Australians.
The Commission’s independence is underpinned by an Act of Parliament. Its
processes and outputs are open to public scrutiny and are driven by concern for the
wellbeing of the community as a whole.
Information on the Productivity Commission, its publications and its current work
program can be found on the World Wide Web at www.pc.gov.au or by contacting
Media and Publications on [phone].
Foreword
Building and construction is a major industry. In 1997-98, it employed nearly
600 000 people (7 per cent of total Australian employment) and accounted for 6 per
cent of GDP. The industry is also diverse, comprising residential, commercial and
civil engineering sectors.
The Commission’s early public consultations and assessment of existing research
soon revealed that the greatest concerns about work arrangements in building and
construction related to large capital city building projects. This study accordingly
focuses on such projects, which account for up to 20 per cent of employment in the
industry.
The study describes how work arrangements on large capital city building projects
affect workplace performance, evaluates changes in work arrangements since the
late 1980s, and assesses the impediments to further necessary change.
The study has drawn on information obtained through detailed discussions with
industry parties (including representatives from several building sites). The
Commission is grateful for the time given by participants, including those who read
and responded to the issues brief and the work-in-progress report.
This is the final in a series of four reports requested by the Treasurer on work
arrangements in key sectors of the economy. Previous studies examined the black
coal, container stevedoring and meat processing industries.
Consistent with its objective of improving the information base on key issues
affecting Australia’s economic performance and living standards, the Commission
welcomes further feedback on this report.
Gary Banks
Chairman
August 1999
FOREWORD I
.

Contents
Foreword I
Abbreviations VII
Glossary XI
Key Findings XV
Overview XVII
CHAPTERS
1 Introduction 1
1.1 Overview of output and employment 2
1.2 Focus of workplace level analysis 4
1.3 Research methods 5
2 Market characteristics 11
2.1 The contractual chain from clients to producers 11
2.2 Vulnerability to industrial action 15
2.3 Contractor characteristics 16
2.4 Workforce profile 18
2.5 Role of governments and collective organisations 20
2.6 Work arrangements in the late 1980s 28
2.7 The reform process of the early 1990s 30
2.8 Changes in performance 31
2.9 Summary 36
3 Negotiation processes and outcomes 39
3.1 Institutional framework 39
3.2 Overview of agreement structure 42
3.3 Industry/trade level negotiations 43
3.4 Project level negotiations 52
CONTENTS III
.
3.5 Enterprise level negotiations 54
4 Workplace communication, training and safety 57
4.1 Workplace communication 58
4.2 Skills and training 65
4.3 Workplace health and safety 72
5 Work hours and hiring arrangements 85
5.1 Work hours 85
5.2 Types of employment 93
5.3 Recruitment, termination and redundancy 99
5.4 Performance effects 102
6 Wages and on-costs 105
6.1 Direct remuneration 105
6.2 On-costs 115
6.3 Performance effects of direct remuneration and on-costs 122
6.4 Alternative pay schemes 126
6.5 Performance effects of alternative pay schemes 130
7 Conclusions 133
7.1 Overall assessment of work arrangement changes 133
7.2 Scope for further improvements 137
7.3 Role of the parties in further workplace change 140
APPENDIXES
A Organisations visited
B Responses to research issues brief and work-in-progress report
References
BOXES
2.1 Relationships between clients and contractors 13
2.2 Employer and industry associations in building and construction 23
2.3 Building and construction unions 25
2.4 Examples of inefficient work arrangements in the late 1980s 29
IV CONTENTS
4.1 Types of training for employees 68
6.1 Selected VBIA and NECA-ETU Victorian pattern agreement hourly
site allowances 113
6.2 Redundancy payments by Incolink, the Victorian building and
construction industry redundancy fund 119
FIGURES
1.1 Real value of building and construction work done, by sector 3
1.2 Building and construction employment 4
2.1 Stylised representation of a traditional tender 14
2.2 Building and construction workforce by occupation, 1996 19
2.3 Rate of dispute related delays 33
3.1 Levels of negotiation for large capital city building projects 42
4.1 Incidence of injury, 1993-94 to 1996-97 74
6.1 Average annual base pay increase in building and construction, 1987-
88 to 1996-97 108
6.2 Stylised structure of components of employee remuneration on large
capital city building projects 108
6.3 Estimates of components of employee remuneration on large capital
city building projects in Victoria 115
6.4 Comparison of redundancy arrangements for non-residential building
projects 118
TABLES
2.1 Financial characteristics of enterprises 18
2.2 Rate of dispute related delays in building and construction, by state 34
3.1 Examples of overlap between different types of agreements 44
3.2 Key building and construction awards 46
3.3 Examples of pattern agreements 49
3.4 Federal Certified Agreements in building and construction 50
4.1 Workers’ compensation costs, selected industries, 1996-97 75
4.2 Workers’ compensation industry premium rates, 1998-99 76
5.1 Direct effects of work hours and hiring arrangements on workplace
performance 103
6.1 Classification margins in selected building and construction industry
awards 107
CONTENTS V
.
6.2 Building and construction award weekly wages 109
6.3 Building and construction pattern agreement wages 110
6.4 Redundancy entitlements in selected awards 117
6.5 Direct effects of wage components on workplace performance 123
7.1 Some changes to work arrangements since the late 1980s 134
7.2 Examples of remaining inefficient work arrangements 138
VI CONTENTS
Abbreviations
ABS Australian Bureau of Statistics
ACA Australian Constructors Association
ACAC Australian Conciliation and Arbitration Commission
ACCC Australian Competition and Consumer Commission
ACCI Australian Chamber of Commerce and Industry
ACIC Australian Construction Industry Council
ACIRRT Australian Centre for Industrial Relations Research and Training
ADAM Agreements Database and Monitor
AIG Australian Industry Group
AIRC Australian Industrial Relations Commission
AMCA Airconditioning and Mechanical Contractors’ Association
ANTA Australian National Training Authority
ANZSIC Australian and New Zealand Standard Industry Classification
APCC Australian Procurement and Construction Council
AQF Australian Qualification Framework
ATO Australian Taxation Office
AWA Australian Workplace Agreement
AWIRS Australian Workplace Industrial Relations Survey
AWU Australian Workers’ Union
BCA Business Council of Australia
BERT Building Employees’ Redundancy Trust
BISCO Building Industry Subcontractors Organisation
BITF (NSW) Building Industry Task Force
BLF Builders Labourers Federation
BWIU Building Workers’ Industrial Union
CA Certified agreement
ABBREVIATIONS VII
CBD Central Business District
C+BUSS Construction and Building Unions Superannuation Scheme
CCF Civil Contractors Federation
CEPU Communications, Electrical, Electronic, Energy, Information, Postal,
Plumbing and Allied Services Union
CFMEU Construction, Forestry, Mining and Energy Union
CIDA Construction Industry Development Agency
CPI Consumer Price Index
CTA Construction Training Australia
CW Construction worker classification
DEWRSB (Federal) Department of Employment, Workplace Relations and Small
Business
DISR (Federal) Department of Industry, Science and Resources
DOFA (Federal) Department of Finance and Administration
DPWS (NSW) Department of Public Works and Services
DWRSB (Federal) Department of Workplace Relations and Small Business
EBA Enterprise Bargaining Agreement
ETU Electrical Trades Union
FEDFA Federated Engine Drivers’ and Firemen’s Association (Division of the
CFMEU)
HIA Housing Industry Association
IAC Industries Assistance Commission
IC Industry Commission
INDICOS Industry Development Consultancy Services
MBA Master Builders’ Association
MOU Memorandum of Understanding
MPA Master Painters’ Australia
MTIA Metal Trades Industry Association
NatBACC National Building and Construction Committee
NBCIA National Building and Construction Industry Award 1990
NCVER National Centre for Vocational Education and Research
VIII ABBREVIATIONS