The Construction, Forestry, Maritime, Mining and Energy Union (CFMEU) is calling for the Fair Work Ombudsman (FWO) to be scrapped and replaced by a regulator that is focused on the real issues affecting workers, as industrial relations issues come to a head across the nation.

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.

Smith suggested the FWO’s priorities were all wrong and failed to protect workers.

“Australia’s industrial watchdog is more like a toothless chihuahua than any serious workplace regulator,” Smith said.

Wage theft on the rise

The comments follow a year that has seen wage theft on the rise and anti-union sentiments increase.

“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.”

Smith says 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.”

Under Smith’s proposal, a 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 per cent workers’ representatives.

Smith says the current system, which relies on companies to self-report incidents and wage theft, is fraught with flaws.

“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 per cent 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,” Smith said.

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,”  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.”

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