WA’s peak infrastructure construction industry body has urged the State Government to reconsider a new industrial relations policy that will significantly increase construction costs and reduce productivity right across the state.

The new Western Australian Best Practice Industrial Conditions (WABPIC) policy will be implemented on the Tonkin Highway Extension and Thomas Road Upgrade project.

In an unprecedented move for government procurement in this state, WABPIC will stipulate the pay and conditions for construction workers employed on the project. It will effectively force construction contractors and subcontractors into signing a government-endorsed, union-approved pattern agreement that would override their existing arrangements.

The WABPIC rates will be about 55% higher than the award (Building and Construction General On-site Award 2020), and 25-30% higher than the rates in most construction contractors’ enterprise agreements. The WABPIC rates will automatically increase by 5% each year, which is likely to widen those gaps even more.

WABPIC will also require employers to meet restrictive conditions including mandatory consultation with unions on a range of matters from employee inductions to the engagement of labour hire companies, and mandatory payments for various employee redundancy and insurance schemes.

Civil Contractors Federation CEO Andy Graham said WABPIC was an unjust and unnecessary intrusion into employer-employee relations. “As a matter of principle, we believe governments should honour and respect Australia’s independent IR system,” he said. “It’s the role of the Fair Work Commission, not government agencies, to set workers’ pay and conditions.

“We also ask why any government would insist on higher labour costs for its projects. The Government has said it wants to ensure the most skilled and experienced workers are on its projects, but that’s already happening. Pay rates for construction workers are already high by community standards, and those rates tend to be the highest on major government infrastructure projects.”

Mr Graham said the WABPIC rates and conditions had been presented to industry without any consultation. “We don’t know if the unions were consulted, but there’s no doubt they will get great benefit from this policy,” he said. “Some of the WABPIC conditions will effectively force employers to consult with unions, whether their workforces include union members or not.”

Mr Graham said it was not just those government contractors and subcontractors who could be directly affected by WABPIC that were worried. “Our members who work for land developers and for local governments are dismayed, because they know this policy will cause wages to increase and costs to escalate right across the civil construction sector,” he said.

“In fact, all Western Australians should be concerned that this policy will mean we can afford less of the infrastructure this state needs to sustain population and economic growth.

“Make no mistake, WABPIC will directly compromise our ability to respond to the state’s housing crisis. Before houses and apartments can be built, civil construction has to happen first – roads, water, power, parks and communications. WABPIC will increase the cost of civil construction and therefore the cost of housing.”

Mr Graham said a similar government policy in Queensland, also known as BPIC, was estimated to have increased construction costs in that state by 20-30% while reducing productivity and causing more industrial unrest.

“What they've also found in Queensland is that a lot of subcontractors are simply opting out of government major project works,” he said. “They’re preferring to avoid the cultural and administrative headaches of dealing with different rates and conditions on different projects. Given the choice, they’re deciding on more industrial harmony and less paperwork.

“The same thing would be likely to happen under WABPIC, reducing competition for government works subcontracts and further contributing to higher costs.

“The more we look at WABPIC, the harder it is to see anything at all that’s ‘best practice’ about this policy.”