CFMEU calls for Fair Work Ombudsman to be abolished, replaced with worker-focused regulator

The CFMEU has called for the Fair Work Ombudsman to be abolished and replaced with a regulator that is focused on the real issues affecting workers. Incoming CFMEU National Secretary Zach Smith said the FWO had failed to tackle wage theft, sham contracting and corporate insolvency – three of the biggest issues in the construction industry “Australia’s industrial watchdog is more like a toothless Chihuahua than any serious workplace regulator,” Mr Smith said. “The Fair Work Ombudsman’s priorities are all wrong. It is fundamentally broken beyond repair. “Australian construction workers are facing endemic corporate insolvency, wage theft and sham contracting. But the ombudsman is prioritising the anti-worker ideological fights of the previous Coalition government. “We need to scrap the Fair Work Ombudsman and start again. It’s time to start from scratch with a body that puts workers first. “The new workplace watchdog must have a serious focus on the real issues plaguing workers across the economy. “A new workplace watchdog must drop the anti-union, anti-worker hangover from a decade of corrosive Coalition industrial relations policy. “Workers deserve nothing less than a watchdog with teeth that is focused on them, not playing nice with businesses who do the wrong thing.” The new regulator would: * Not commence or continue prosecutions against unions and their members for activity that is protected under the relevant ILO conventions. * Be armed with the power to effectively address security of payment issues * Make compliance and enforcement activity a priority including protecting workers’ rights and the recovery of unpaid wages and entitlements * Be supervised by a board including at least 50% workers’ representatives According to PwC’s 2019 estimate, construction workers are underpaid $320 million each year. Nearly two thirds of the money the FWO has recovered for workers in the past five financial years has come from self-reported wage theft from large corporates rather than enforcement actions. “Wage theft is rife in construction but we simply don’t have a watchdog which is pulling its weight,” Mr Smith said. “The FWO is relying heavily on large corporates self-reporting wage theft despite being the regulator for 13 million Australian workers “If we want to properly address wage theft we need a tough cop on the beat not a regulator that needs bosses to tell them when workers have been ripped off.” In the 2019/2020 Budget, the FWO received $9.8 million to establish a Sham Contracting Unit. In the three financial years since then, the unit has recovered $812,893, which represents 0.1% of FWO’s total recoveries. “Sham contracting is a massive issue which rips off construction workers but it’s clearly not a priority for the Fair Work Ombudsman,” Mr Smith said. At least two major builders (EQ Constructions and PBS Building) have gone under since the FWO assumed the responsibilities of the ABCC, with contractors and workers owed at least $75 million. The 2017 Murray Review recommended harmonised national security of payments laws that give subcontractors and workers the real prospect of getting money owed to them Independent Senator David Pocock has backed the CFMEU’s calls for the federal government to implement the recommendations of the review including creating statutory trusts which would make it easier for money to be recovered when companies collapse “We’re seeing Australian builders collapsing regularly. Only last week PBS went under with millions still owed to contractors and workers. But we haven’t heard a peep from the FWO,” Mr Smith said. “Either the FWO doesn’t care or they don’t have the power to act – neither is good enough and workers and businesses in the construction industry are suffering as a result. “There is no federal government agency there to support small business and workers when these catastrophic corporate failures occur.”