Union at centre of jobs code political heat wants to make it even stronger

A union at the centre of a corruption investigation that cost a deputy chief minister her spot in cabinet has launched a major defence of the ACT's "two-gate" procurement system critics say hands too much influence over tenders to unions.

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The Construction, Forestry and Maritime Employees Union wants the "best practice" Secure Local Jobs Code to be strengthened and said it stopped ethical companies from having to race to the bottom on price to secure government work.

The ACT's two-gate procurement system is best practice and needs to be strengthened, the CFMEU says. Picture by Karleen Minney

A tougher code could do more to mandate jobs for women and apprentices on building sites, give more support to migrant workers and more power to investigate breaches of the rules, the union said.

"By assessing labour standards separately from price, the model prevents social criteria - such as limits on insecure work, union representation rights, gender equity plans, wages, apprenticeships and safety - from being outweighed by the lowest bid," the union's ACT branch told a parliamentary inquiry.

"The two-gate process prevents government green lighting unscrupulous entities and cutting out ethical businesses who provide good, productive and secure employment."

Companies need to be certified under the code before bidding for large government contracts in the ACT to demonstrate they pay workers fairly and comply with labour laws, including allowing unions to represent their workers.

The findings against a former top political staffer and public service head prompted then deputy chief minister and education minister Yvette Berry to resign from cabinet. No findings were made against Ms Berry.

Integrity Commissioner Michael Adams KC's findings centred on the attempted circumvention of procurement rules.

Mr Adams later said the Secure Local Jobs Code "does seem to be a reasonable approach to a difficult problem".

The CFMEU told the inquiry the code's substantive requirements should already be met by any lawful, ethical employer.

"These are not onerous obligations for a business that already treats its workers fairly. For a business whose model depends on underpayment, sham contracting or unsafe work, they are a barrier, and that is the Code working as intended," the union's submission said.

The CFMEU said the code had meant greater union engagement on the Canberra Hospital expansion project, preventing tilers and plasterers from being illegally employed under "sham contracting arrangements".

"The head contractor Multiplex was able to rely on the expertise of the CFMEU delegate and quickly act to prevent this exploitation occurring on site. This is an example of how the SLJC allows unions and businesses to work together to compliance check and prevent contraventions from occurring in the first place," the union's submission to the parliamentary inquiry said.

The CFMEU said code obligations meant a sub-contractor paid workers overdue superannuation entitlements before the company was liquidated. "If they were on a private sector job, the likely outcome would have been they never received their superannuation and when the entity was liquidated they would have lost their entitlements, missing out on thousands of dollars of their superannuation," the union said.

The Master Builders Association told the inquiry the code was neither necessary nor effective and there was no value-for-money case to keep it running.

"Abolishing the Code will not, by itself, ensure that local businesses receive genuine opportunities to participate in ACT government work," the association said.

"Master Builders ACT has identified broader procurement barriers, including limited tenders, aggregation of work into packages beyond local [small to medium enterprise] capacity, insufficient transparency, and reliance on interstate or multinational head contractors."

The Property Council said the code should be dropped unless an "independent evaluation demonstrates, with transparent evidence, that it produces additional and proportionate public value beyond existing law and ordinary procurement practice".

The property development industry group also called for a whole-of-government overhaul of procurement and said the code had done little to ensure the creation or retention of genuine local jobs.

The Canberra Business Chamber also called for the abolition of the code and enforceable contract requirements to be used to ensure companies were behaving instead.

"We support fair employment, safe workplaces and compliance with employment law. We also want procurement to deliver value for money and give capable Canberra businesses a fair opportunity to compete," the chamber's chief executive, Greg Harford, told the inquiry.

"Our concern is that the code adds cost and duplicates other requirements without a sufficiently clear account of the additional outcomes it delivers. Removing it should simplify procurement, not reproduce the same processes under a different name."

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