Notification under section 130 by Unions NSW of a dispute with Multiplex NSW Pty Ltd and others re award for construction project at Long Bay Correctional Centre [2006] NSWIRComm 115

HEARING DATES: 21/2/06, 6/3/06, 14/3/06, 20/3/06, 22/3/06

NOTIFIER: Mr C Christodoulou Unions NSW

RESPONDENT: Mr J Oakes, Solicitor Clayton Utz LEGAL REPRESENTATIVES: MINISTER FOR INDUSTRIAL RELATIONS: Mr A Searle, of counsel

PPP SOLUTIONS (LONG BAY) NOMINEE PTY LTD (INTERVENING) Mr G Fredericks, Solicitor Freehills

• 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: Walton J, Vice-President

NOTIFICATION UNDER SECTION 130 BY UNIONS NSW OF A DISPUTE WITH MULTIPLEX NSW PTY LTD AND OTHERS RE AWARD FOR CONSTRUCTION PROJECT AT LONG BAY CORRECTIONAL CENTRE

1 On 15 February 2006, Unions NSW notified the existence of an industrial dispute with Multiplex NSW Pty Ltd (Multiplex). The question, dispute or difficulty then identified was "a failure to consult over a decision not to proceed with a project award to cover construction at Long Bay Correctional Centre". A number of entities were served with the dispute including the Department of Corrective Services. 2 The notification of dispute was subsequently amended so as to refine the question, dispute or difficulty as follows: A claim by Unions NSW and its affiliates for a project award to cover the construction of a forensic hospital at Long Bay Correctional Centre. 3 The matter was the subject of four private conferences chaired by the Commission in which attempts were made to resolve the dispute between the parties by conciliation. 4 Those conferences served to identify that the dispute was more properly characterised by the amended notification. In essence, the dispute concerns a failure to reach an agreement for the making of a project award and not the refusal to consult or negotiate over that question. As it will become clear from this Statement, however, the real impediment to the making of the project award may, in fact, not lie with any resistance by Multiplex to the merits of entering into a project award on suitable terms, but rather its capacity presently to enter into such arrangements. 5 At the final report back in relation to this matter on 22 March, Mr Chris Christodoulou, who appeared for Unions NSW, indicated that agreement could not be reached at that time as to the making of a project award. He sought that the matter be adjourned generally to enable the Union to explore options which might result in the settlement of the dispute. In doing so he emphasised, however, that historically there had been good industrial relations between building and construction unions and Multiplex based on the establishment of the project awards and that Multiplex's present position represented a departure from that position. 6 Mr Christodoulou then identified some "particular circumstances" which he considered had "influenced the Company" to reject a project award as follows:

1. The "lack of leadership" by the New South Wales Government to "require a major infrastructure project of this type to have industrial application by award". He submitted that the New South Wales Government had not acted in accordance with its own policies.
2. By its "National Code of Practice" in the building industry the Federal Government was "forcing companies out of a co-operative approach" in order to protect their commercial interests (i.e. to avoid the loss of building contracts with the Federal Government). He indicated that he believed the National Code of Practice was designed "explicitly to minimise the way the Union can operate to represent their members in the construction industry".
3. The Workplace Relations Amendment (Workchoices) Act 2005 may have restricted the capacity to have project awards of the type hitherto applying in New South Wales made or enforced. 7 In seeking the adjournment, Mr Christodoulou indicated that it was the intention of Unions NSW to continue negotiations with Multiplex and the New South Wales Government for a project award and, in so doing, to raise questions as to the "longer term [implications] of not having a co-ordinated industrial relations approach". He then made the following statement: I also wish to place on public record that the Unions I represent will still endeavour through every lawful means available to take action as necessary to protect and enhance the interests of their members and construction members generally on major construction projects. Our preference is to do this wherever possible with the co-operation of the employers as we have done in the last decade in New South Wales. The benefits of having a co-operative approach have been widely acknowledged by the industry and indeed this Commission. Having said that, we make it clear on this and other projects where such co-operation is not forthcoming by employers and where there is no willingness by the client to promote such co-operation we cannot be held responsible for any negative outcomes that might occur with respect to workers morale, productivity or indeed the incidents of lawful action that might take place. 8 Neither Mr J Oakes, solicitor, who appeared for Multiplex, or Mr A Searle, of counsel, who appeared for the Minister for Industrial Relations, wished to make any submissions in relation to the matters raised by Mr Christodoulou at that time. 9 As conciliation has not concluded, it would be inappropriate to further comment upon the respective positions of the parties in this matter at this stage. However, it is appropriate to make some brief observations about the possible implications of the present impasse both for the project, and more broadly, for major building and construction projects in New South Wales. These are as follows:

1. If this matter does not settle, this would represent the first occasion where the parties to a major building and construction project in this State have not been able to reach an agreement as to a project award or enterprise agreement for such projects in the modern era of industrial relations in building and construction industry in this State.
2. The possible implications of such an outcome are best demonstrated by reference to the significant utility of such awards and agreements as described in re Lend Lease Hotel Intercontinental (State 1) Project Award and anor (unreported, Walton J, Matters No IRC 3881 and 3896 of 2003, 26 September 2003) at [5] and [6] as follows: [5] The proposed awards are in a form now well familiar to the Commission in relation to major building and construction projects. The provisions of those awards are intended to produce an optimal climate for the undertaking of the project which involves the maximisation of efficiency and productivity combined with fair and safe workplace conditions. Such awards typically provide clauses concerning productivity initiatives, dispute resolution, occupational health and safety and basic workplace conditions and standards. From submissions received in this matter and within the knowledge of the Commission, these objectives have by and large been met in projects which have been the subject of these modern building and construction project awards. A more detailed overview of that history would no doubt be available as a matter of evidence and may in due course be a desirable accompaniment to further applications of this kind. [6] The awards met the requirements of the Industrial Relations Act 1996 and the wage fixing principles as enunciated in the State Wage Case 20032 [2003] NSWIRComm 174. In the light of the present experience, the provisions of these instruments are wholly desirable as a matter of industrial merit.
3. Subsequent experience in New South Wales has confirmed those observations. These type of awards and agreements have produced relatively stable and harmonious industrial relations in the building and construction industry in New South Wales and prosperous outcomes for developers and builders by the achievement of timely outcomes for building projects without untoward industrial difficulties.
4. Thus, the present impasse raises real concerns not merely because of failure of the parties to reach an agreement in relation to this particular project, but because the factors identified by Mr Christodoulou as impeding that negotiation process, if correct, may indicate that there is a potential for a widespread breakdown of these successful arrangements with the consequential erosion of good industrial relations and prosperity in the building industry in this State. This raises serious public interest issues for the State of New South Wales. They are matters which are directly relevant to the Commission's dispute resolution functions under the Industrial Relations Act 1996. 10 The Commission is required by the Industrial Relations Act 1996 to avoid such adverse outcomes both in the interests of the immediate parties to the dispute (by the resolution of that dispute) and in the public interest, and will clearly do so within its jurisdiction. 11 With these considerations in mind, I do not consider it is appropriate to stand the matter over generally. Subject to Development Approvals, the project will most likely commence in late April or early May. In those circumstances, it is appropriate that the Commission requires a Report Back by the parties some time shortly after the engagement of employees on the site and provide liberty to apply in the event that any difficulties arise at an earlier time. 12 I make the following Orders and Directions:
5. The parties are directed to confer.

2. The matter will be listed for Report Back before the Commission at 9.30 am, Monday, 22 May 2006.
3. There is Liberty to Apply by any party at short notice.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.