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ANNUAL REPORT 2015–16

FAIR WORK BUILDING AND CONSTRUCTION

FWBC HOTLINE

1800 003 338

FWBC WEBSITE

www.fwbc.gov.au

EMAIL

[email protected]

STATE OFFICES

Australian Capital Territoryi

from October 2016Level 812 Moore StreetCanberra ACT 2601

GPO Box 9927Canberra ACT 2601

New South Wales

Level 8111 Elizabeth StreetSydney NSW 2001

GPO Box 9927Sydney NSW 2001

Northern Territory

Jacana HouseLevel 339 to 41 Woods StreetDarwin NT 0800

GPO Box 9927Darwin NT 0801

Queensland

Level 25400 George StreetBrisbane QLD 4000

GPO Box 9927Brisbane QLD 4001

South Australia

Level 3148 Frome StreetAdelaide SA 5000

GPO Box 9927Adelaide SA 5001

Tasmania

Level 12188 Collins StreetHobart TAS 7000

GPO Box 9927Hobart TAS 7001

Victoria

Level 4509 St Kilda RoadMelbourne VIC 3004

GPO Box 9927Melbourne VIC 3001

Western Australia

Level 2863 Hay StreetPerth WA 6000

GPO Box 9927Perth WA 6001

i Previously: Level 5, 140–180 City Walk, Canberra, ACT 2601, GPO Box 9927 Canberra ACT 2601

www.fwbc.gov.au

mailto:?subject=

COMMENTS AND ENQUIRIES

Fair Work Building and Construction (FWBC) welcomes comments and enquiries. Please contact:

Annual Report Contact OfficerFWBCGPO Box 9927Melbourne VIC 3001

Telephone: 1800 003 338Email: [email protected]: www.fwbc.gov.au

DISTRIBUTION

The report is available from FWBC, and via the FWBC website, at:http://www.fwbc.gov.au/about/accountability-and-reporting/fwbc-annual-report-2015-16

ACKNOWLEDGEMENTS

Annual Report Coordinator: Kate Brookes

Thank you to all FWBC employees who contributed to this report.

Design and typeset by: WHH Pty Ltd

Printed by: Prinstant

© Commonwealth of Australia 2016

With the exception of the Commonwealth Coat of Arms, and where otherwise noted, all material presented in this document is provided under a Creative Commons Attribution 3.0 Australia (https://creativecommons.org/licenses/by/3.0/au/) licence.

The details of the relevant licence conditions are available on the Creative Commons website (accessible using the links provided), as is the full legal code for the CC BY 3.0 AU licence (https://creativecommons.org/licenses/by/3.0/legalcode).

The document must be attributed as the FWBC Annual Report 2015–16.

mailto:?subject=

www.fwbc.gov.au

http://www.fwbc.gov.au/about/accountability-and-reporting/fwbc-annual-report-2015-16

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LETTER OF TRANSMISSION

ABN 68 003 725 098

GPO Box 9927Melbourne VIC 3001

fwbc.gov.auHotline 1800 003 338

16 September 2016

Senator the Hon Michaelia CashMinister for EmploymentParliament HouseCANBERRA ACT 2600

Yours sincerely

Nigel HadgkissDirectorFair Work Building & Construction

Dear Minister

Pursuant to section 14 of the Fair Work (Building Industry) Act 2012, I am pleased to submit the Annual Report of the Office of the Fair Work Building Industry Inspectorate for the financial year ending 30 June 2016.

The annual report has been prepared for the purposes of section 46 of the Public Governance, Performance and Accountability Act 2013 and reflects the requirements, including outlining the agency's performance and includes audited financial statements.

As the accountable authority of the Office of the Fair Work Building Industry Inspectorate, pursuant to rule 17AG of the Public Governance, Performance and Accountability Rule 2014, I certify that: fraud risk assessments and fraud control plans have been prepared; appropriate mechanisms for prevention of, dealing with and recording or reporting fraud are in place; and all reasonable measures have been taken to deal appropriately with fraud. Additional information is found on page 59 of the Annual Report.

CONTENTS

Letter of transmission viiReader’s guide xi

PART 1: FWBC DIRECTOR’S FOREWORD 1

Year in review – highlights 2Director’s Foreword 4

PART 2: AGENCY OVERVIEW 7

FWBC at a glance 8Role of FWBC 10Corporate and operational planning 11Organisational structure 12Business groups 14

PART 3: REPORT ON PERFORMANCE 17

Overview 18Key developments during 2015–16 18Annual performance statements 20Education activities 28Investigations 35The Building Code for the construction industry 37Compliance powers 40

FAIR WORK BUILDING & CONSTRUCTIONviii

Penalty proceedings 43Significant litigation outcomes 46Injunctions 50Applications, submissions and interventions 50Significant submissions and applications – Fair Work Commission 53

PART 4: MANAGEMENT AND ACCOUNTABILITY 55

Corporate governance and accountability 56Financial result 62Accountability 65Human resources 66

PART 5: FINANCIAL STATEMENTS 73

7477

Independent auditor’s report Financial statements table of contents

PART 6: APPENDICES 121

Appendix 1: FWBI Act annual report requirements 122Appendix 2: Compliance index 126Appendix 3: List of acronyms and abbreviations 134Appendix 4: Glossary 136

PART 7: INDEX 141

ANNUAL REPORT 2015–16 ix

TABLES

FAIR WORK BUILDING & CONSTRUCTIONx

Table 1: Number and method of enquiries 29

Table 2: Issues raised by enquiries 30

Table 3: Enquiry outcomes 31

Table 4: Presentations and attendee numbers 33

Table 5: National site visits 33

Table 6: Media activity 34

Table 7: Summary of investigations 35

Table 8: State breakdown of new investigations 35

Table 9: Types of contraventions investigated 36

Table 10: Building Code site inspections and audits 37

Table 11: Notices issued 41

Table 12: Examinations conducted 41

Table 13: Type of examinee 42

Table 14: Outcomes of examination – based on the year examination conducted 42

Table 15: Results of proceedings as at 30 June 2016 43

Table 16: Penalties imposed as at 30 June 2016 44

Table 17: Venue of proceedings commenced by FWBC 45

Table 18: Nature of allegations in proceedings commenced by FWBC 45

Table 19: Submissions and applications in 2015–16 51

Table 20: List of applications and submissions commenced in 2015–16 51

Table 21: Audit Committee members as at 30 June 2016 57

Table 22: People Committee members as at 30 June 2016 57

Table 23: Workplace Health and Safety Committee members as at 30 June 2016 58

Table 24: FWBC Resource Statement 2015–16 62

Table 25: Expenses and Resources for Outcome 1 63

Table 26: Classification and salary ranges 68

Table 27: Staff numbers within the broadband classification groups at FWBC 69

Table 28: Type of employment as at 30 June 2016 70

Table 29: Gender comparison as at 30 June 2016 70

Table 30: Gender comparison at Executive and SES Level as at 30 June 2016 70

Table 31: FWBC staff locations as at 30 June 2016 70

Table 32: Comcare premium rates 71

READER’S GUIDE

The Fair Work Building and Construction (FWBC) Annual Report 2015–16 has been prepared in accordance with the Department of Finance’s Resource Management Guide No. 135: Annual Reports for Non-Corporate Commonwealth Entities issued in July 2016.

This year’s annual report has been prepared to inform the Australian Parliament about FWBC’s performance and activities in 2015–16.

The report is available in hard copy and online at www.fwbc.gov.au.

The report is divided into seven parts.

PART 1: FWBC DIRECTOR’S FOREWORD

A snapshot of the year’s activities, together with Director Nigel Hadgkiss’ foreword.

PART 2: AGENCY OVERVIEW

An overview of FWBC, including its role and functions, organisational structure and outcome and program structure.

PART 3: REPORT ON PERFORMANCE

A summary of FWBC’s performance in relation to the key performance indicators set out in the agency’s Portfolio Budget Statements 2015–16 and Corporate Plan 2015–16, and financial performance, including the total resources of FWBC and payments made by FWBC in 2015–16.

PART 4: MANAGEMENT AND ACCOUNTABILITY

Information about FWBC’s corporate governance, external scrutiny, human resources, asset management, purchasing, consultants, Australian National Audit Office access clauses, exempt contracts and procurement initiatives to support small business.

PART 5: FINANCIAL STATEMENTS

This section includes FWBC’s 2015–16 financial statements and a report by the Auditor-General.

PART 6: APPENDICES

This section includes the Public Governance, Performance and Accountability Rule 2014 requirements for annual reports, an alphabetical index, a glossary and a list of requirements.

PART 7: INDEX

Comprises an alphabetical index.

ANNUAL REPORT 2015–16 xi

PART 1 FWBC DIRECTOR’S FOREWORD

Year in review – highlights 2

Director’s Foreword 4

YEAR IN REVIEW – HIGHLIGHTS

At least insofar as the CFMEU is concerned, it and those who control it, seemingly consider that, when the circumstances suit the ends of that organisation, threats, coercion and unlawful action are the preferable alternative to compliance with the industrial laws of this country. Judge Jarrett, 8 April 2016

2014–15 2015–16

TOTAL PENALTIES AWARDED

$1.8 MILLION

$1.39 MILLION

30%

INC

REA

SE >

2014–15 2015–16

ENQUIRIES RECEIVED BY FWBC

3,5643,035

17%

INC

REA

SE >

2014–15 2015–16

PRESENTATIONS ABOUT INDUSTRY PARTICIPANTS’ RIGHTS AND RESPONSIBILITIES

122 187

53%

INC

REA

SE >

2014–15 2015–16

OCCASIONS WHERE COMPLIANCE POWERS WERE USED

1714

21%

INC

REA

SE >

ATTENDEES AT INDUSTRY PARTICIPANTS’ RIGHTS AND RESPONSIBILITIES PRESENTATIONS

2014–15 2015–16

1,793 2,984

66%

INC

REA

SE >

2 FAIR WORK BUILDING & CONSTRUCTION

$8 Million

$1 Million

82%

3PART 1 | DIRECTOR’S FOREWORD

THE MINISTER FOR EMPLOYMENT INTRODUCED NEW DRUG AND ALCOHOL REQUIREMENTS TO THE BUILDING CODE

October 201534 Legal

Proceedings

2ND HIGHEST NUMBER OF LEGAL PROCEEDINGS COMMENCED IN THE HISTORY OF FWBC AND ITS PREDECESSOR AGENCIES

97%

PERCENTAGE OF ENQUIRIES TO THE 1800 HOTLINE ANSWERED WITHIN 60 SECONDS

THIS IS THE FIFTH YEAR IN THE HISTORY OF FWBC AND ITS PREDECESSOR AGENCIES THAT PENALTIES AWARDED IN THE REPORTING YEAR HAVE EXCEEDED $1 MILLION

NEARLY $8 MILLION IN PENALTIES HANDED DOWN AGAINST THE CFMEU IN CASES BROUGHT BY FWBC AND ITS PREDECESSOR AGENCIES OVER THE YEARS

95%$1.7 Million

PERCENTAGE OF THE FINANCIAL YEAR’S TOTAL PENALTIES HANDED DOWN AGAINST THE CFMEU AND ITS REPRESENTATIVES

FWBC MADE 24 APPLICATIONS OR SUBMISSIONS RELATING TO FEDERAL RIGHT OF ENTRY PERMITS

26 May 2016

FWBC ASSUMED RESPONSIBILITY FOR ASSESSING ENTERPRISE AGREEMENTS FOR COMPLIANCE WITH THE BUILDING CODE 2013 FROM THE DEPARTMENT OF EMPLOYMENT

82% OF EXAMINATIONS WERE MANAGEMENT PERSONNEL

DIRECTOR’S FOREWORD

Australia’s construction industry has arguably never been more important to the national economy than it is today, in terms of generating employment and wealth. While the mining industry has cooled, construction continues to be the third largest contributor to Australia’s

gross domestic product and employs nearly one in ten working Australians. Unfortunately, these workers continue to be exposed to alarming rates of unlawfulness in the workplace.

The previous financial year of 2014–15 saw a 44% increase in the number of legal proceedings commenced by FWBC, with a total of 36 new matters initiated in the courts. This high rate of litigation has continued with 34 new matters initiated in 2015–16. Of the 22 proceedings finalised in 2015–16, FWBC was successful in all but one of them (95%). The penalties awarded in cases brought by FWBC exceeded $1.8 million; more than $1.7 million of which was awarded against the CFMEU and its officials.

To achieve these results in the courts, FWBC continues to rely heavily upon its compulsory examination powers throughout the course of its investigations. The agency’s investigations have become increasingly protracted and complex in both the type and the nature of the contraventions being investigated. Compulsory examinations are used as a last resort and have proven to be an invaluable tool in terms of gathering the evidence required to determine whether to initiate a legal proceeding or discontinue an investigation and redeploy resources elsewhere. Since I commenced as FWBC Director in October 2013, 75% of the matters in which compulsory examinations that have been conducted have demonstrated grounds for ongoing investigation or are currently before the courts.


Contrary to much public commentary, FWBC is far more likely to require the attendance of managers of construction companies at an examination than it is to require the attendance of an employee or a union official. In fact, 14 of the 17 attendees at FWBC’s compulsory examinations during the reporting period were members of management. Two examinees were employees and one was a union official. Also contrary to public commentary, all examinees may choose to have a legal representative. This year, the majority of examinees chose to have a legal representative and all chose who that lawyer would be. FWBC was also able to reimburse costs incurred for attendance, including legal costs.

All alleged breaches of the Fair Work Act 2009 (FW Act) are treated seriously and investigated accordingly. Legal proceedings are only instituted when external lawyers provide independent advice that the requisite evidence exists and when it is deemed to be in the public interest to proceed.

Disappointingly, as in previous years, the majority of FWBC’s proceedings were against the CFMEU and its officials (27 of the 34 cases initiated in 2015–16). Moreover, throughout the reporting period, FWBC consistently had more than 100 individual CFMEU officials before the courts, with the CFMEU and its officials consistently facing in excess of 1,800 alleged contraventions of the FW Act.

Causing frustration by breaches of the law is not an act confined to the CFMEU. In 2015–16, FWBC initiated six new matters involving employers. At the end of the reporting period, a total of eight cases, involving seven different contractors, were before the courts as a result of FWBC actions. These latest figures are almost double those of last year, when at 30 June 2015, there were four employers facing four cases. Of grave concern is that most of these eight matters relate to either discrimination against subcontractors for failing to have CFMEU enterprise agreements, or for discrimination against workers who were not members of the CFMEU.

Despite FWBC continuing to achieve overwhelmingly successful outcomes before the courts, with penalties exceeding $1 million for the second year in a row, the agency is having little effect on changing the unlawful culture that clearly prevails within the building and construction industry. When it comes to the culture of the CFMEU and the conduct of its officials, FWBC finds itself regularly placing the same officials before the courts, for contraventions equivalent or similar to those which have previously been proven. This demonstrates that the repercussions for breaches of the law are falling far short of those required to bring about change in the industry and to restore the rule of law on the nation’s construction sites.

This concern is repeatedly reflected in the increasing numbers of statements made by numerous judges who preside over FWBC’s cases. For instance:

“The Third Respondent (CFMEU) does have an unenviable history of breaching the FW Act. It seems to treat being caught conducting such breaches as the present one simply as occupational hazards in the way in which they conduct their business.” — Judge Vasta, March 2016

“It is difficult to resist the conclusion that the CFMEU views the penalties imposed upon it for breaches of industrial legislation as just that —the cost of doing business.” — Judge Jarrett, April 2016

“The conduct occurs so regularly, in situations with the same kinds of features, that the only available inference is that there is a conscious and deliberate strategy employed by the CFMEU and its officers to engage in disruptive, threatening and abusive behaviour towards employers without regard to the lawfulness of that action.” — Justice Mortimor, May 2016

In addition to regulating construction industry adherence to the FW Act, FWBC is responsible for monitoring contractor compliance with the Commonwealth’s Building Code 2013 (Building

Code). In recent times, the Building Code has been a central element of FWBC’s core business as the agency endeavours, in the spirit of the Building Code, to encourage productive workplace relations on building sites.

During the reporting period, the Minister announced two changes to the Building Code. Firstly, in October 2015, new requirements for the management of drugs and alcohol were introduced. Secondly, in May 2016, the Government announced that the responsibility for assessing enterprise agreements against the Building Code 2013 would transfer from the Department of Employment to the Director, FWBC. FWBC is pleased to report that the transition to new arrangements has progressed well with independent stakeholder survey results indicating that over the reporting period, 83% of stakeholders reported being either satisfied or highly satisfied with the quality and timeliness of the advice provided by the agency.

A total of 74 Building Code audits were finalised in 2015–16. Regrettably, 59 of those audits uncovered issues of concern. While rectification was promised by all contractors, a small number of contractors failed to adequately rectify issues raised during the audits. At the end of the reporting period, consideration was being given to the making of recommendations to the Minister that a sanction be imposed.

The results delivered by FWBC in the 2015–16 financial year demonstrate that while the agency is winning many battles, it is still failing to gain adequate traction to win the war and achieve productive and harmonious building and construction workplaces. All building industry participants, including employers, unions and their officials, have an important role to play in this. FWBC merely expects that all industry participants respect the rule of law.

Nigel Hadgkiss Director

5PART 1 | DIRECTOR’S FOREWORD

PART 2 AGENCY OVERVIEW

FWBC at a glance 8

Role of FWBC 10

Corporate and operational planning 11

Organisational structure 12

Business groups 14

AGENCY OVERVIEW

FWBC AT A GLANCE

OUR VISION

That all Australian building and construction workplaces are productive and harmonious.

OUR MISSION

To ensure that the Rule of Law prevails in the Australian building and construction industry.

OUR ROLE

Fair Work Building and Construction (FWBC) regulates workplace relations laws in the building and construction industry.

AUTHORITY

FWBC is an independent statutory agency established by the Fair Work (Building Industry) Act 2012 (FWBI Act). FWBC commenced operations on 1 June 2012, replacing its predecessor, the Office of the Australian Building and Construction Commissioner (ABCC).


RESPONSIBLE MINISTERS AND PORTFOLIO

FWBC sits within the portfolio of the Department of Employment. The FWBC Director is an independent Public Office Holder who reports to the Minister for Employment.

OUR OUTCOME

FWBC has a single outcome and program as set out in the Portfolio Budget Statement:

Enforce workplace relations laws in the building and construction industry and ensure compliance with those laws by all participants in the building and construction industry through the provision of education, assistance and advice.

OUR STAFF

As at 30 June 2016, FWBC had 133 ongoing staff, 11 non-ongoing staff, and one statutory appointment.

LOCATION

FWBC has offices in all six Australian states and two Australian territories. The agency’s head office is located in Melbourne.

9PART 2 | AGENCY OVERVIEW

ROLE OF FWBC

FWBC enforces workplace relations laws in the building and construction industry through the provision of education, advice and compliance activities. This is in accordance with the FWBI Act and the Building Code 2013 (Building Code), and aligns with FWBC’s purpose as described in the 2015–16 Corporate Plan.

The object of the FWBI Act as set out in section 3 is to provide a balanced framework for cooperative, productive and harmonious workplace relations in the building industry by:

(a) ensuring compliance with workplace relations laws by all building industry participants;

(b) providing information, advice and assistance to all building industry participants about their rights and obligations;

(c) providing an effective means of enforcing those rights and obligations;

(d) providing appropriate safeguards on the use of enforcement and investigative powers; and

(e) improving the level of occupational health and safety in the building industry.

As stated in section 5 of the Building Code 2013:

This code of practice has been developed to:

(a) promote fair, cooperative and productive workplace relations in the building and construction industry; and

(b) assist industry stakeholders to understand the Commonwealth’s expectations and requirements in relation to entities that tender for Commonwealth-funded construction-related work, are awarded Commonwealth funded construction-related work, or both; and

(c) promote workplace reform.

In order to achieve the object of the FWBI Act and the Building Code in 2015–16, FWBC:

• provided ready access to information on relevant workplace laws;

• provided education, assistance and advice to industry participants;

• conducted site visits, inspections and audits to monitor compliance with workplace laws and the Building Code;

• assessed enterprise agreements for compliance with the Building Code;

• conducted investigations into alleged breaches of workplace laws and the Building Code;

• undertook enforcement action, including civil penalty litigation; and

• intervened in court proceedings and made submissions in matters before the Fair Work Commission.


CORPORATE AND OPERATIONAL PLANNING

FWBC’s corporate and operational planning framework reflects the Enhanced Commonwealth Performance Framework, with the publicly published Portfolio Budget Statements, Corporate Plan and annual performance statements, supported by the internal Business Plan.

The FWBC Corporate Plan 2015–16 (the Corporate Plan) was published on the FWBC website on 31 August 2015. The Corporate Plan was prepared in accordance with section 35(1) (b) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act). It expands on the information in Portfolio Budget Statements and covers the financial years 2015–16 to 2018–19.

In line with the requirements under the PGPA Act, the Corporate Plan is the principal planning document of FWBC. FWBC will report against the Corporate Plan in the annual performance statements, which are published each year in the Annual Report.

The agency’s Business Plan is an internal living document that is updated to reflect changes in the agency’s operating environment and the consequent evolution of business priorities. The Business Plan is structured around FWBC’s goals and sets out the key activities, targets, timeframes and individuals responsible.

SERVICE CHARTER

FWBC is held accountable through parliament, the courts, tribunals and the Commonwealth Ombudsman.

The FWBC Service Charter sets out the standards of service to which the organisation is committed. It explains FWBC’s role, the standard of service the public can expect, and what steps may be taken if these standards are not met.

The Service Charter outlines the procedure for contact, communication, feedback and complaint. The FWBC Service Charter is available on the FWBC website.

FWBC PROVIDES A BALANCED FRAMEWORK FOR COOPERATIVE, PRODUCTIVE AND HARMONIOUS WORKPLACE RELATIONS IN THE BUILDING INDUSTRY.


ORGANISATIONAL STRUCTURE

CHIEF EXECUTIVE OFFICER

Nigel Hadgkiss has held the position of FWBC Director since October 2013.

The Director’s functions are set out in section 10 of the FWBI Act and include:

• promoting harmonious, productive and cooperative workplace relations in the building industry;

• providing information, assistance and advice; promoting and monitoring compliance; and

• inquiring into and investigating any suspected contraventions of a designated building law or a safety net contractual entitlement.

SENIOR EXECUTIVE SERVICE (SES) OFFICERS

At the close of the 2015–16 financial year, the Director was supported by four business group managers. They are required to provide high-level policy and strategic advice, and to report on matters relating to their specific business group, to the Director and the FWBC Executive Team.

Figure 1.1 shows the structure of FWBC at senior executive level as at 30 June 2016.

FWBC SES OFFICERS LISTED BY BAND

SES BAND 2

Executive Manager, Operations

Heather Hausler

Chief Counsel

Brian Corney

SES BAND 1

National Manager, Building Code

Cathy Cato

Chief Operating Officer (and Chief Financial Officer)

Bernie O’Keeffe

General Manager, Legal (Eastern)

Tim Honey

General Manager, Legal (Central/West)

Cliff Pettit

General Manager, Operations (Eastern)

Murray Gregor

General Manager, Operations (Central/West)

Jeff Radisich


Figure 1: FWBC Executive Organisational Chart as at 30 June 2016

Director

Nigel Hadgkiss

General Manager Legal (Central/

West)

Cliff Pettit

Chief Counsel

Brian Corney

National Manager Buildling Code

Cathy Cato

Chief Operating Officer

Bernie O’Keeffe

Executive Manager Operations

Heather Hausler

General Manager Operations (Eastern)

Murray Gregor

General Manager Legal (Eastern)

Tim Honey

General Manager Operations

(Central/West)

Jeff Radisich


BUSINESS GROUPS

FWBC has five business groups that deliver components of the agency’s strategies and services. Aside from the Office of the Director, each business group is led by a senior executive who reports to the Director.

OFFICE OF THE DIRECTOR

Reporting to FWBC’s Director, Nigel Hadgkiss, the Office of the Director performs a variety of functions, including media and stakeholder engagement, strategic planning, governance, parliamentary support, professional standards and internal audit.

BUILDING CODE

Led by the National Manager, Building Code, Cathy Cato, the Building Code Group (BCG) is responsible for ensuring compliance with the Building Code. The Building Code is a driver of behavioural change on construction projects. Comprising specialist operations, legal and education officers, the BCG supports and trains FWBC investigators to conduct Building Code inspections and audits. The BCG is responsible for assessing enterprise agreements for compliance with the Building Code. The BCG also undertakes educational and stakeholder engagement activities to help the industry comply with the Building Code.

OPERATIONS

FWBC’s Operations Executive Manager, Heather Hausler, is supported by General Managers, Murray Gregor (Eastern) and Jeff Radisich (Central/West), in directing the activities of the agency’s ‘frontline’ employees – our investigators.

The Operations Group has a presence in all FWBC state and territory offices. The Operations Group promotes the Rule of Law on building and construction sites by providing assistance and advice to industry participants on their rights and responsibilities under the Fair Work Act 2009 (FW Act) and the Building Code. The group is also responsible for investigating suspected breaches of the legislation and preparing briefs of evidence for review by FWBC’s Legal Group.

LEGAL

FWBC’s Legal Group is led by Chief Counsel, Brian Corney, who is supported by General Managers, Tim Honey (Eastern) and Cliff Pettit (Central/West).

The Legal Group is primarily responsible for the assessment and litigation of alleged or suspected breaches of building and construction industry workplace laws. The Legal Group also briefs external counsel to seek advice on prospects of success for potential civil penalty proceedings and manages the conduct of agency proceedings, submissions and interventions. The Legal Group also provides internal legal advice to FWBC’s Director and the Executive Team and manages freedom of information requests to the agency.


CORPORATE

In September 2015, Bernie O’Keeffe commenced as Chief Operating Officer and head of Corporate. The Corporate Group supports the agency through the delivery of human resources, information technology, performance and planning, finance, and business support services.

The Human Resources (HR) Team manages workplace health and safety, recruitment and induction of staff, learning and development activities, workforce planning, and performance management. Payroll is outsourced to the Fair Work Ombudsman.

The Finance Unit support provides financial governance and monthly and annual reporting, and monitors procurement and the agency budget. The majority of the finance function is outsourced to the Fair Work Ombudsman.

The Information Technology Unit ensures that the agency has the systems and tools required to support the agency’s business. The technology infrastructure and services are provided by the Shared Services Centre through a memorandum of understanding and fee for service.

Data reporting and analysis is provided by the agency’s Planning and Performance Team. This team maintains and develops FWBC’s case management system which records the agency’s investigative activity and produces reports on cases and agency performance for the Director and Executive Team.

The Business Services Unit is responsible for records management, accommodation, fleet management and security.

FWBC Director and Executive Team: (left to right) Tim Honey, Heather Hausler, Brian Corney, Nigel Hadgkiss, Cliff Pettit, Bernie O’Keeffe, Murray Gregor, Cathy Cato and Jeff Radisich.


PART 3 REPORT ON PERFORMANCE

Overview 18

Key developments during 2015–16 18

Annual performance statements 20

Education activities 28

Investigations 35

The Building Code for the construction industry 37

Compliance powers 40

Penalty proceedings 43

Significant litigation outcomes 46

Injunctions 50

Applications, submissions and interventions 50

Significant submissions and applications – Fair Work Commission 53

PART 3: REPORT ON PERFORMANCE

OVERVIEW

Fair Work Building and Construction (FWBC) is responsible for enforcing workplace relations laws in the building and construction industry, and ensuring compliance with the Building Code 2013 (the Building Code). FWBC meets this responsibility through the provision of education, assistance and advice and, where necessary, by undertaking civil penalty litigation in the courts. FWBC also intervenes in court proceedings and makes submissions in matters before the Fair Work Commission (FWC).

The agency’s primary focus is on four key areas of concern within the building and construction industry:

• coercion;

• freedom of association;

• unlawful industrial action; and

• right of entry.

KEY DEVELOPMENTS DURING 2015–16

During the reporting period, FWBC continued to commit resources to identifying, investigating, and pursuing core business matters related to coercion, freedom of association, unlawful industrial action, and right of entry in the building and construction industry. The agency further consolidated the work undertaken in the previous reporting period, with a continued focus on the Building Code, particularly with regard to educating the industry on rights and responsibilities and proactively monitoring compliance.

There were a number of significant changes to the scope of the work undertaken. These changes included new drug and alcohol requirements for contractors and the transfer of the role of assessing enterprise agreements for compliance with the Building Code 2013 from the Department of Employment to FWBC.

In October 2015, the Minister for Employment introduced new drug and alcohol requirements into the Building Code 2013. The changes require all building contractors covered by the Building Code to ensure that their management of drugs and alcohol in the workplace is reflected in their workplace health, safety and rehabilitation management system. This approach aims to ensure that no person attending a site to perform building work does so under the influence of alcohol or other drugs. On projects with Commonwealth funding of a particular threshold, building contractors must also have a fitness-for-work policy that includes drug and alcohol testing. FWBC took a staged approach to implementing these changes with the industry, focusing initially on education, then on feedback and voluntary rectification, before proceeding to auditing contractors for compliance.


On 6 May 2016, the Minister for Employment rescinded the previous practice of deeming registered enterprise agreements compliant with the Building Code 2013 by the Department of Employment, and transferred this role to FWBC. This new role resulted in a large increase in workload for FWBC’s Building Code Group, as the assessment of registered and draft agreements for compliance with the Building Code became a key priority for the agency.

The changes to FWBC’s responsibilities, along with an increase in proactive engagement with the industry through site visits and presentations, saw an increase in the overall number of enquiries it received. There was an increase in the number of Building Code compliance activities undertaken on building and construction work sites across Australia, and there continued to be a high level of complexity in the matters investigated and pursued by the courts.

IN 2015–16 FWBC CONTINUED TO FOCUS ON THE BUILDING CODE AND INVESTIGATING ALLEGATIONS OF COERCION, FREEDOM OF ASSOCIATION, UNLAWFUL INDUSTRIAL ACTION AND RIGHT OF ENTRY.

Legislation extending the sunset clause of the agency’s compliance powers, which passed in the 2014–15 financial year, enabled FWBC to continue to conduct compulsory examinations during 2015–16. In the reporting period, FWBC’s compulsory examination powers were exercised on 17 occasions, compared to 14 in the previous financial year. In both reporting periods the examination attendees were predominantly management personnel, as opposed to workers, union officials and government employees.

Of proceedings finalised in the financial year, FWBC was successful in 21 out of 22 (95%) of matters. Penalties awarded in FWBC-initiated cases exceeded $1.8 million in the financial year, marking the fifth reporting period in which penalties handed down in cases initiated by FWBC and its predecessor agencies exceeded $1 million. Of the penalties awarded, $1,732,725 (95%) were awarded against the CFMEU and its representatives.

19PART 3 | REPORT ON PERFORMANCE

ANNUAL PERFORMANCE STATEMENTS

INTRODUCTORY STATEMENT

I, Nigel Hadgkiss, as the accountable authority of the Office of the Fair Work Building Industry Inspectorate, present the 2015–16 annual performance statements of the Office of the Fair Work Building Industry Inspectorate, as required under paragraph 39(1)(a) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act). In my opinion, these annual performance statements are based on

properly maintained records, accurately reflect the performance of the entity, and comply with subsection 39(2) of the PGPA Act.

ENTITY PURPOSE

The purpose of the Office of the Fair Work Building Industry Inspectorate (Fair Work Building and Construction) is to enforce workplace laws in the building and construction industry through the provision of education, assistance and advice and, where necessary, civil penalty litigation in the courts. In addition, Fair Work Building and Construction (FWBC) ensures compliance with the Building Code.

RESULTS

Objective 1: Enforcement and compliance

Performance criterion

A target of 75% of legal proceedings in court within 12 months of the complaint being lodged.

Criterion source

• 2015–16 Corporate Plan KPI 1.1

• Program 1.1, 2015–16 Portfolio Budget Statements, p. 192

Results against performance criterion

Of the 34 legal proceedings that FWBC commenced during 2015–16, 35% were commenced within 12 months of the complaint being lodged. The reporting period of 2015–16 was a transition year under this criterion and saw the 18 months performance measure decrease to 12 months.

In the 2014–15 year, FWBC had exceeded the previous performance criterion with 94% of matters filed in court within 18 months of the complaint being lodged.

FWBC did not expect to meet the 2015–16 criterion with the transition to the 12-month timeframe, because of the number of ongoing legacy investigations at the start of the year. Many of the matters filed in 2015–16 were complex, and there is expected to be an increase in the complexity of these investigations.



A target of 75% of clients ‘satisfied’ or ‘highly satisfied’ with the quality and timeliness of advice and assistance provided.

Criterion source




Of the FWBC clients who were independently surveyed about the quality and timeliness of advice and assistance provided by FWBC, 83% reported being ‘satisfied’ or ‘highly satisfied’.


A target of 300 compliance activities to improve compliance with the Building Code 2013.

Criterion source



FWBC had a renewed focus on Building Code 2013 compliance following the establishment of a Senior Executive Level National Manager, Building Code in June 2015. During 2015–16, the FWBC undertook 489 activities to improve compliance with the Building Code 2013, achieving 163% of the performance target.


Objective 2: People


A target of 95% of staff meeting or exceeding performance targets.

Criterion source



For the 2015–16 year, 98% of FWBC staff were assessed as meeting the performance targets outlined in their performance agreements. In October 2015, the rating scale was changed from a five-point scale to a two-point scale (meets expectations/does not meet expectations), and therefore no staff were assessed as exceeding their performance targets. There was a continued focus on regular individual feedback to staff on performance.


The development of a new workforce plan by 30 June 2016.

Criterion source



FWBC’s draft workforce plan was developed by 30 June 2016.


Objective 3: Information and analysis


A target of the FWBC investigations and legal management system, AIMS, being operational for 95% of business days.

Criterion source



For the 2015–16 year, AIMS was operational for 100% of the time on business days.


A target of 100% of updates made to case records following the quality assurance program.

Criterion source



For the 2015–16 year, 100% of case records were updated, following identification, as part of the quality assurance program auditing.


Objective 4: Stakeholders


A target of 125 formal presentations delivered to stakeholders during the 2015–16 year.

Criterion source



For the 2015–16 year, 187 formal presentations were delivered to stakeholders. These presentations were delivered to a total of 2,984 attendees. This exceeds the number both of presentations delivered and of stakeholders attending during 2014–15 and 2013–14.


A target of 75% of surveyed industry participants reporting that they are either ‘satisfied’ or ‘highly satisfied’ with contact by FWBC aimed at promoting appropriate standards of conduct.

Criterion source




For the 2015–16 year, 100% of industry participants who were surveyed (at 178 presentation sessions) were either satisfied or highly satisfied with the contact by FWBC.


Objective 5: Finance


A target of +/- 10% expenditure matched to budget (year to date).

Criterion source



FWBC expenditure matched to budget for the year was 0.7% over budget. This slight increase was predominantly due to more complex litigation throughout the year.


A target of +/- 5% total revenue matched to budget (year to date).

Criterion source



FWBC revenue matched to budget for the year was $0.533 million, or 1,134% over budget. The increase was due to operating lease rental revenue of $0.185 million, which was not included in the original budget, and court-awarded costs exceeding budget by $0.348 million.


Objective 6: Governance


Annual Performance Statement to be submitted to the Minister by 31 October 2016.

Criterion source



The annual performance statements were submitted to the Minister for Employment in September 2016. This is prior to the 15 October requirement outlined in section 46 of the PGPA Act.


Risk Management Framework in place and Enterprise Risk Register reviewed by 30 June 2016.

Criterion source



The Enterprise Risk Register was completely revised in April 2016. A new FWBC Risk Management Framework was developed and is expected to be endorsed by the FWBC Executive in August 2016.


ANALYSIS OF PERFORMANCE AGAINST THE PURPOSE

In the 2015–16 year, FWBC filed 34 matters, compared to 36 in 2014–15, including a number of complex matters that had been subject to lengthy investigations. An increase in complexity in the type of conduct being investigated by FWBC is expected to continue in the current operating environment. In addition to the investigatory work of the agency, FWBC continued to provide a high volume of high-level advice and assistance to industry. The number of industry participants contacting FWBC for information through the hotline, online options or direct contact continued to grow.

The quality of the advice provided by FWBC did not diminish: 83% of FWBC clients were either ‘satisfied’ or ‘highly satisfied’ with the quality and timeliness of the advice and assistance provided. This is noteworthy, as during the year there were several significant changes to the scope of the work undertaken by FWBC, including new drug and alcohol requirements for contractors, and the transfer, from the Department of Employment to FWBC, of the role of assessing enterprise agreements for compliance with the Building Code 2013. That the satisfaction of FWBC clients remained high despite the changing scope of FWBC’s responsibilities demonstrates that the changes were well communicated both internally and externally and that FWBC staff were able to respond effectively.

The renewed focus of the agency on the Building Code was reflected in the number of Building Code audits that were conducted during the 2015–16 reporting year. FWBC also enhanced its organisational capacity with an increase in the number of investigators who are trained to undertake Building Code activities. The increase reflected a broader focus on building capability within the agency to achieve a culture of high performance. This focus was underpinned by a

revised FWBC Workforce Plan centred on the multiskilling of staff to ensure that FWBC is an agile agency with the capability to readily respond to future challenges in its operating environment.

During 2015–16, FWBC made changes to its performance management by adopting a simpler rating categorisation. The five-point categorisation scale was replaced with a simpler ‘meets expectations/does not meet expectations’ categorisation, consistent with recommendation 22.5 of The Independent Review of Whole-of-Government Internal Regulation (Belcher Red Tape Review). These changes were reflected in the FWBC Performance and Development Framework, which continues to emphasise the importance of regular performance feedback.

Throughout the 2015–16 year, FWBC continued to develop and refine systems to plan and monitor agency performance. FWBC has a robust quality assurance program that allows it to learn from experiences and ensures a focus on continuous improvement. An analysis of future needs was undertaken in the reporting year to inform a tender for a new case management system that is expected to be implemented across the agency in 2016–17.

Engagement with stakeholders continued to be a core part of FWBC activities, with an increased focus on targeted and information-driven engagement during the 2015–16 year. The significant changes to Building Code obligations led to increased engagement with stakeholders on Building Code related matters. Further, reflective of the multiskilled and agile nature of the workforce, FWBC operational staff exceeded the target for formal presentations delivered to stakeholders: 100% of those stakeholders were either ‘satisfied’ or ‘highly satisfied’ with their interactions with FWBC.


FWBC delivered against the corporate KPI targets while ensuring prudent financial management. FWBC net cost of services for the 2015–16 reporting period was marginally better than budget. Agency expenditure continued to be focused in areas that ensured the delivery of high-quality advice and the achievement of planned outcomes. This better-than-budget result was assisted throughout the year by a renewed focus on efficiency and, in particular, cost reductions in the agency’s leased premises. In the second half of the reporting year, FWBC began to recruit in line with the 2016–19 FWBC Workforce Plan and will continue to do so in 2016–17. Revenue exceeded the target range when matched to budget, driven largely by court-awarded costs and operating lease revenue.

The revision of the FWBC Risk Management Framework complemented the strategic planning of the agency and will continue to inform the Director’s and Executive’s decision-making. It is intended that this will develop into a more widespread use of risk management approaches through all levels of the agency. Our improvement is measured through overall increased maturity levels, as assessed in the annual Comcover Risk Management Benchmarking Survey.

EDUCATION ACTIVITIES

ENQUIRIES

During 2015–16, FWBC received 3,564 enquiries. This is an increase of 17% on the number of enquiries in the previous reporting year, which continues the increasing trend in overall requests for information.

The majority of enquiries FWBC receives come through the 1800 hotline service. The hotline is promoted throughout the industry and widely known. Of the calls received in the reporting period, 97% were answered within 60 seconds. There was a marked increase in the number of enquiries received through online channels, continuing the trend in 2014–15.

Table 1 shows the number of enquiries and the method by which they were received.

FWBC’S EDUCATION ACTIVITIES INCLUDE RESPONDING TO ENQUIRIES, REFERRING MATTERS, PROVIDING PRESENTATIONS, CONDUCTING SITE VISITS, AND COMMUNICATING WITH THE INDUSTRY.


Table 1: Number and method of enquiries

Method of enquiry 2014–15 2015–16

FWBC hotline 2,243 2,285

Direct enquiry to FWBC investigator 390 421

FWBC website 121 197

Email – Building Code reporting inbox 15 104

Email – other 97 355

Referrals from other agencies 113 98

Mail 15 48

Fax 3 0

Other 38 56

Total 3,035 3,564

Issues raised by enquiries

Table 2 (overleaf) shows a breakdown of the issues that were raised through enquiries during the year. Where an enquiry involves more than one type of issue, only the issue most central to the enquiry is recorded, meaning that each enquiry is counted only once.

The Building Code was the most common topic in 2015–16, with these enquiries more than doubling the number in the previous reporting period. This increase reflects the effectiveness of FWBC’s renewed focus on educating the

industry about the Building Code, the newly introduced drug and alcohol requirements, and FWBC’s new responsibility for assessing enterprise agreements for compliance with the Building Code – a role formerly undertaken by the Department of Employment.


Table 2: Issues raised by enquiries

Issue raised 2014–15 2015–16

Building Code or Code compliance 656 1,344

Right of entry 330 397

FWBC information and activities 330 212

Industrial action 200 180

Coercion 124 126

Freedom of association 61 95

Contractual disputes 71 59

Strike pay 12 17

Criminal 20 8

Discrimination 10 0

Other workplace laws 619 501

Other laws 408 386

Other 194 239

Total 3,035 3,564


Activities generated by enquiries

Table 3 sets out the outcome of enquiries. As with previous years, in most cases the outcome of an enquiry is the provision of information.

Table 3: Enquiry outcomes

Enquiry outcome 2014–15 2015–16

Information provided 1,221 1,909

Referred to Federal agency 854 742

Referred to State agency 338 338

Information recorded – no further action 196 268

Upgrade to investigation 266 197

Referred to other agency 53 37

Unable to provide assistance 68 22

Upgrade to Building Code activity 7 22

Presentation requested 21 21

Upgrade to legal 11 8

Total 3,035 3,564


REFERRALS

FWBC can refer enquirers to other agencies in respect of matters that are either clearly outside FWBC’s jurisdiction or are better suited for response by another agency. These enquiries are recorded as informal, as no detailed follow-up is anticipated beyond the original referral to the relevant agency.

Informal referrals demonstrate the contribution that FWBC makes to assisting industry participants with various enquiries. Of the enquirers referred to federal agencies, 354 referrals were made to the Fair Work Ombudsman and 285 to the Department of Employment, in respect of Building Code assessments. Of the enquirers referred to state agencies, 206 were referred to relevant state domestic building and licensing agencies, and 46 referrals were made in respect of WHS or WorkCover issues. The rate of informal referrals to the Department of Employment in respect of Building Code assessments is expected to decrease in the next financial year now that the role of assessing agreements against the Building Code 2013 has been transferred to FWBC.

Formal referrals are made where FWBC has no jurisdiction on a matter, or where another agency is better placed to address issues identified in the course of FWBC work. These referrals are more detailed than informal referrals, in that information already gathered in the course of FWBC work is provided to the receiving agency. FWBC referred one potential wages and entitlements breach to FWO and one suspected illegal immigration matter to the Department of Immigration and Border Protection in the 2015–16 reporting period. A further two referrals, of potential safety breaches, were made to the relevant state WHS authority.

Royal Commission into Trade Union Governance and Corruption

A total of 16 matters were referred to FWBC by the Royal Commission into Trade Union Governance and Corruption in accordance with section 6P of the Royal Commissions Act 1902. Each of these referrals was assessed to determine whether any breaches of the Fair Work Act 2009 (FW Act) had been committed. At the end of the reporting year, six referrals remained under investigation, with the remainder closed.

PRESENTATIONS

In 2015–16, FWBC conducted 187 presentations to a total of 2,984 attendees. The number of presentations and attendees increased from 2014–15 by 65 presentations and almost 1,200 attendees. The numbers are given in Table 4.

FWBC investigators and senior executives regularly deliver presentations to industry participants, including industry associations, employers, lawyers and workers. The presentations include information about participants’ rights and responsibilities, including those under the Building Code. FWBC conducts general presentations, as well as specifically tailored presentations as requested. In the reporting year, presentations delivered by investigators focused particularly on new entrants to the industry, through cooperation with TAFEs and registered training organisations. The aim was to educate the industry at the first opportunity, and provide information and sources of advice for the future.


SITE VISITS

In 2015–16, FWBC investigators conducted 1,372 site visits.

The site visits were predominantly initiated by FWBC for the purposes of explaining to industry participants the agency’s role and the assistance it can provide, and to promote better understanding of industry participants’ rights and responsibilities.

The number of site visits in the 2015–16 reporting year is comparable to levels across recent years, increasing by 82 on the previous financial year.

Table 5 provides a national overview of site visits. During 2015–16, Western Australia remained the state with the most site visits, accounting for almost a third. Significant increases in site visits also occurred in the Northern Territory and Queensland. Site visits decreased in Tasmania, following an increased focus on undertaking investigations, and also in South Australia as investigations undertaken in the previous financial year reached court, and local resources were directed accordingly.

Pursuant to a memorandum of understanding between FWBC and the Department of Immigration and Border Protection, FWBC investigators monitor compliance with a number of requirements for Temporary Work (Skilled) (subclass 457) visa holders who work in the commercial building and construction industry. Investigators perform this function in the course of regular compliance activities such as site visits. In the reporting year, FWBC referred outcomes of subclass 457 visa monitoring to the Department of Immigration and Border Protection on 19 occasions.

Table 4: Presentations and attendee numbers

Presentations/Attendees

2014–15 2015–16

Presentations 122 187

Attendees 1,793 2,984

Table 5: National site visits

State 2014–15 2015–16

NSW 150 194

VIC 180 196

QLD 18 123

WA 325 413

SA 205 99

TAS 257 84

ACT 41 65

NT 114 198

TOTAL 1,290 1,372


COMMUNICATING TO INDUSTRY

Media activity

FWBC recognises the vital role the media plays in informing industry participants of FWBC’s activities, explaining key outcomes, and improving understanding of Australian workplace laws.

FWBC issues media releases detailing allegations contained in statements of claim for new legal proceedings, as well as for finalised litigation. FWBC also provides media statements and E-Alerts on current issues in the building and construction industry, and information on new FWBC initiatives. All FWBC media releases are available on the agency’s website in the ‘News and Media’ section. E-Alerts are short, issue-specific articles on emerging and topical matters in the building and construction industry, sent to industry participants on FWBC’s subscriber list.

FWBC distributes Industry Update, a free e-newsletter available to subscribe to via FWBC’s website. Subscribers are kept up to date with FWBC’s latest activities and are provided with information about industry trends and issues, including workplace disputes and industrial action.

In this financial year, FWBC issued 58 media releases, seven E-Alerts and sent out six Industry Update newsletters.

Table 6 shows the number of media activities compared with the previous reporting period.

Table 6: Media activity

Type of activity 2014–15 2015–16

Media releases issued 40 58

E-Alerts not reported 15

Industry Update newsletters issued 7 6


INVESTIGATIONS

During 2015–16, FWBC commenced 130 new investigations into suspected breaches of workplace laws. Table 7 (below) sets out the summary of investigations. Of investigations commenced or ongoing from previous periods, 167 were finalised and 48 remained ongoing as at 30 June 2016. The number of new investigations reflects the agency’s continued focus on investigating core business matters of coercion, freedom of association, unlawful industrial action and right of entry.

Table 8 (right) sets out the breakdown of new investigations on a state-by-state basis and shows that Queensland remains the jurisdiction with the highest number of investigations.

Table 7: Summary of investigations

Investigation status 2014–15 2015–16

New investigations commenced during reporting period 197 130

Investigations finalised 213 167

Investigations continuing 1051 48

1 The number of investigations continuing was incorrectly reported in FWBC’s 2014–15 Annual Report as 124. The correct number of investigations continuing was 105.


Table 8: State breakdown of new investigations

State 2014–15 2015–16

NSW 39 27

VIC 39 28

QLD 78 35

WA 18 9

SA 6 7

TAS 0 10

ACT 14 4

NT 3 10

Total 197 130

Types of contraventions investigated

During 2015–16, FWBC investigated 551 alleged contraventions of Commonwealth workplace laws.

The significant types of contraventions continue to reflect core agency business, with right of entry contraventions representing the largest

portion of matters, at 31%. Coercion, freedom of association and unlawful industrial action made up the other significant areas of investigation.

Table 9 sets out the types of contraventions investigated.

Table 9: Types of contraventions investigated

Type of contravention 2014–15 2015–16

Right of entry 382 179


Coercion 149 104

Unlawful industrial action 142 92

Strike pay 49 23

Wages and entitlements 9 1

Sham contracting 6 0

Total 948 551


THE BUILDING CODE FOR THE CONSTRUCTION INDUSTRY

The Building Code promotes fair, cooperative and productive workplace relations on building sites. It sets out the Commonwealth Government’s expected standards on Commonwealth funded construction projects. The Building Code applies to building industry participants who have submitted an expression of interest or tender for Commonwealth-funded building work. Once a building contractor becomes subject to the Building Code, they are required to comply with it at all times when undertaking building work, regardless of whether the project they are working on has received Commonwealth Government funding.

FWBC has primary responsibility for monitoring compliance with the Building Code and providing advice and information to the industry.

BUILDING CODE COMPLIANCE ACTIVITIES

In the 2015–16 financial year, FWBC continued to build on the foundations of the previous reporting period with regard to the Building Code. For the greater part of 2014, FWBC conducted voluntary Building Code audits as part of an education and engagement program with the industry. Throughout this voluntary program, where potential breaches of the Building Code were identified, FWBC undertook that there would not be a consequence of sanctions. Rather, contractors were given advice and assistance to rectify the potential breaches and the necessary reform was initiated.

After establishing its expectations of the industry, FWBC commenced compulsory Building Code compliance activity in January 2015 on construction sites across Australia. Since then, where breaches of the Building Code are identified through a site visit, inspection or audit, sanctions may be sought if the failure is not, or cannot be, voluntarily rectified to the satisfaction of the Director.

During the 2015–16 financial year, FWBC initiated 503 Building Code compliance activities, including 112 audits and 391 site inspections nationally. This is an increase of nearly 300% on the previous period. Of the 74 concluded Building Code audits, 59 identified potential issues which were voluntarily rectified. FWBC will continue to audit projects during the 2016–17 financial year to ensure that voluntary rectification measures are being satisfactorily implemented. Failure to implement such measures could result in the Director making a recommendation to the Minister for sanction.

Table 10 sets out the Building Code site inspections and audits nationally.

Table 10: Building Code site inspections and audits

State 2014–15 2015–16

NSW 19 98

VIC 40 126

QLD 7 58

WA 21 50

SA 7 25

TAS 18 48

ACT 6 67

NT 10 31

TOTAL 128 503


COMMUNICATIONS AND CAPABILITY

FWBC has developed a suite of educational material to assist industry stakeholders to understand their rights, responsibilities and obligations under the Building Code. These include:

• e-tools such as the FWBC On Site mobile application, which was updated to include a questionnaire on Building Code compliance and drug and alcohol requirements;

• fact sheets and educational material, such as industry alerts and media releases regarding important information about the Building Code;

• direct responses to enquiries from industry participants via the 1800 hotline, Building Code mailbox and web enquiries facility; and

• educating industry participants on the requirements of the Building Code when conducting activities such as site visits, inspections and audits.

Investigators and senior executives regularly present to stakeholders on a variety of topics, including the Building Code.

FITNESS FOR WORK – DRUG AND ALCOHOL REQUIREMENTS

Since 16 October 2015, all building contractors covered by the Building Code have been required to ensure that their management of drugs and alcohol in the workplace is reflected in their workplace health, safety and rehabilitation management system. This requirement helps to ensure that no person attending a site to perform building work does so under the influence of alcohol or other drugs. On projects with Commonwealth funding of a particular threshold, building contractors must also have a fitness-for-work policy that includes drug and alcohol testing.

Following the introduction of the drug and alcohol requirements, FWBC undertook a three-stage approach to auditing the drug and alcohol testing requirements.

Stage 1 – Education

FWBC focused on educating the building and construction industry by disseminating information and helping contractors to understand the implications of the drug and alcohol policy. Educational material included the launch of a Building Code section in the FWBC On Site mobile application with a compliance questionnaire on drug and alcohol requirements, presentations to industry stakeholder and voluntary FWBC reviews of principal contractors’ drug and alcohol policies.

EDUCATING THE INDUSTRY AND MONITORING COMPLIANCE WITH THE BUILDING CODE WAS A KEY FOCUS FOR FWBC IN 2015–16.


Stage 2 – Feedback and voluntary rectification

FWBC provided feedback on contractors’ compliance with the drug and alcohol requirements. During this stage, FWBC assisted contractors to voluntarily rectify issues to achieve compliance.

Stage 3 – Audits

On 1 February 2016, FWBC began the final stage of its implementation of the drug and alcohol requirements. The agency moved to auditing contractors’ fitness-for-work policies and the practical implementation of drug and alcohol testing on site.

The new requirements promote higher workplace safety standards for construction sites.

ENTERPRISE AGREEMENT ASSESSMENTS

Following a decision by the Minister for Employment on 6 May 2016, FWBC’s role expanded to include the assessment of new enterprise agreements made on or after 18 May 2016 for compliance with the requirements of the Building Code 2013, a role previously undertaken by the Department of Employment. This means that FWBC is now the central agency to assist the building and construction industry in applying the Building Code 2013. On 6 May 2016, the Minister rescinded the previous practice of deeming registered enterprise agreements automatically compliant with the Building Code 2013.

FWBC assesses enterprise agreements made on or after 18 May 2016 against the requirements of the Building Code 2013 and also assesses draft agreements at the request of industry.

FWBC highlights to the industry that building contractors covered by existing enterprise agreements, awards and other workplace arrangements can continue to bid for Commonwealth-funded work, while contractors covered by enterprise agreements made on or after 18 May 2016 that contain clauses inconsistent with the Building Code 2013 are ineligible to express interest in, or tender for, Commonwealth-funded building work.

In 2015–16, to help industry participants understand its new role in assessing enterprise agreements, FWBC:

• published comprehensive information for industry stakeholders on the FWBC website, media releases and industry E-Alerts;

• developed fact sheets, including frequently asked questions from industry participants and a flow chart outlining the enterprise agreement assessment process;

• established an email inbox enabling industry participants to submit their enterprise agreement assessment questions;

• created a simplified online submission process for enterprise agreements;

• engaged additional staff to respond to stakeholder enquiries and assess enterprise agreements; and

• conducted presentations nationally to ensure industry participants have a clear understanding of their obligations.


COMPLIANCE POWERS

BACKGROUND

When investigating a complaint, investigators will use all avenues available to them to obtain information voluntarily.

If an investigator exhausts all avenues available to obtain information voluntarily, the Director may consider using compulsory examination powers under the Fair Work (Building Industry) Act 2012 (FWBI Act).

FWBC EXAMINATION POWERS

On 20 May 2015, the Construction Industry Amendment (Protecting Witnesses) Act 2015 received royal assent, extending FWBC’s compulsory powers until 1 June 2017. The legislation means FWBC can continue to conduct compulsory examinations as part of its investigations.

When exercising compulsory examination powers, the Director may seek to have a person:

• attend before the Director to answer questions;

• provide information to the Director; and

• produce documents to the Director.

The Director is required to make an application to a Presidential Member of the Commonwealth Administrative Appeals Tribunal in order to exercise the examination powers. The powers can be used where the Director believes on reasonable grounds that a person:

• has information or documents relevant to an investigation; or

• is capable of giving evidence relevant to the investigation.

Under section 54A(3) of the FWBI Act, the Commonwealth Ombudsman is required to review the exercise of examination powers by the Director and any person assisting the Director. Section 54A(6) requires the Commonwealth Ombudsman to report to parliament after the end of each financial year on the examinations conducted by the Director and the results of reviews carried out by the Commonwealth Ombudsman during that year.

USE OF COMPLIANCE POWERS IN 2015–16

During 2015–16, FWBC exercised its compulsory examination powers on 17 occasions. Of the persons examined, 11 chose to have legal representation.

Table 11 outlines the notices issued for examinations nationally.

Table 12 sets out examinations conducted nationally.

Table 13 (on p. 42) shows that of the 17 examinations conducted in 2015–16, the vast majority were of individuals in management positions.

Table 14 (on p. 42) shows that as at 30 June 2016, six investigations where compliance powers were used remain ongoing, nine matters had progressed to the courts and two investigations were closed.


Table 11: Notices issued

State 2014–15 2015–16

NSW 8 0

VIC 5 6

QLD 1 9

WA 0 0

SA 0 0

TAS 0 2

ACT 0 0

NT 0 0

Total 14 17

Table 12: Examinations conducted

State 2014–15 2015–16

NSW 6 1

VIC 6 6

QLD 2 7

WA 0 0

SA 0 1

TAS 0 2

ACT 0 0

NT 0 0

Total 14 17


Table 13: Type of examinee

Type of examinee 2014–15 2015–16

Management 10 14

Employee 3 2

Union official/delegate 0 1

Government 1 0

Total 14 17

Table 14: Outcomes of examination – based on the year examination conducted

Outcome 2014–15 2015–16

Proceedings commenced, cases currently before the courts 4 9

Investigation ongoing 9 6

Investigation closed with no proceedings commenced 1 2

Total 14 17


PENALTY PROCEEDINGS

In 2015–16, FWBC commenced 34 proceedings and maintained a very high success rate for litigation. Total penalties imposed as a result of FWBC litigation amounted to $1,826,175. This financial year marks the fifth occasion that penalties have exceeded the $1 million mark in the history of FWBC and its predecessor agencies.

This high level of litigation reflects FWBC’s focus on ensuring legislative compliance within the building and construction industry, despite the continued culture of lawlessness within the industry – a fact which continued to be emphasised by the judiciary in 2015–16.

The primary allegations in proceedings continue to relate to FWBC’s core business areas of coercion, freedom of association, unlawful industrial action and right of entry. Freedom of association breaches increased from zero to eight in the reporting year.

Table 15 details the results of proceedings as at 30 June 2016.

Table 16 (overleaf) details the penalties imposed as at 30 June 2016, by allegation type. Right of entry and coercion attracted the majority of penalties handed down during 2015–16.

Table 17 (on p. 45) shows the court in which FWBC has brought proceedings, listed by the year proceedings commenced.

Table 18 (on p. 45) shows the nature of allegations in proceedings commenced by FWBC.

Table 15: Results of proceedings as at 30 June 2016

Result 2014–15 2015–16

Successful 12 211

Unsuccessful 1 1

Discontinued 1 0

Total 14 22

1 Of the 21 proceedings in which FWBC achieved a successful outcome, five matters were under appeal at the end of the 2015–16 financial year.


Table 16: Penalties imposed as at 30 June 2016

Type of penalty 2014–15 $

2015–16 $

Right of entry 359,700 915,0501

Coercion 665,500 599,7752

Unlawful industrial action 22,000 146,600

Freedom of association 7,500 133,500

Wages and entitlements3 147,500 19,250

Sham contracting 39,600 -

Other 155,000 12,000

Total 1,396,800 1,826,175

Suspended - 98,000

1 Of the $915,050 awarded in right of entry penalties, $483,200 was under appeal at the end of the 2015–16 financial year.2 Of the $599,775 awarded in coercion penalties, $166,650 was under appeal at the end of the 2015–16 financial year.3 Responsibility for all new wages and entitlements matters was transferred to FWO at the end of 2013. FWBC finalised its

last wages and entitlements matter, initiated prior to the transfer of responsibility to FWO, in December 2015.


Table 17: Venue of proceedings commenced by FWBC

Venue 2014–15 2015–16

Federal Court 27 25

Federal Circuit Court 9 9

Total 36 34

Table 18: Nature of allegations in proceedings commenced by FWBC1

Nature of allegation 2014–15 2015–16

Coercion 9 11

Right of entry 20 8


Unlawful industrial action 7 7

Total 36 34

1 Each case is counted only once. Where a case involves more than one type of allegation, the type most central to the proceedings is selected.


SIGNIFICANT LITIGATION OUTCOMES

The following examples of significant cases are illustrative of the continuing serious unlawful conduct within the building and construction industry.

DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE V BAULDERSTONE PTY LTD & ORS

[2015] FCCA 2129

This matter related to the employment of Tama Teariki as a Safety Officer employed by Baulderstone Pty Ltd on a construction site in the ACT known as the “SA3” site, being the construction of student accommodation at the Australian National University. Mr Teariki was a member of the Construction, Forestry, Mining and Energy Union (CFMEU) until he resigned while employed on the SA3 site on 17 February 2010.

Prior to working on the SA3 site, Mr Teariki had been employed by Baulderstone on the Edmund Barton Building site in Canberra (EBB site). Mr Teariki commenced employment on the EBB site in May 2008. Mr Teariki was employed as a construction worker.

On the EBB site, Mr Teariki was employed to carry out the tasks of the Safety Officer and also assisted with construction duties. The enterprise agreement (EA) did not classify the Safety Officer position, but Mr Teariki was also elected the Chairman of the Safety Committee, which the EA classified as a CW5 level construction worker.

In January 2009, at Mr Teariki’s request, Baulderstone agreed that Mr Teariki’s employment as Safety Officer would be regulated by an employment contract and he would be paid a salary rather than in accordance with the EA. Mr Teariki asked for salaried employment

because he wanted the security of regular income payments and did not want to work overtime on weekends due to having a young family living in Sydney he wished to see and the desire to observe his religion on Sundays.

In February 2010, Mr Teariki was harassed by the CFMEU about membership fee payments. He decided to exercise his right to resign from the union, which he did on 17 February 2010 by sending a facsimile transmission to the union’s offices. Shortly after his resignation from the CFMEU Mr Teariki’s contract was terminated by Baulderstone.

The court found that Baulderstone, Nicole Kidman, Baulderstone Human Resources Manager, and Raz Razzlog, Baulderstone Employee Relations Manager, had taken adverse action against Mr Teariki for reasons that included as a substantial and operative factor Mr Teariki’s not being, or having ceased to be, a member of the union.

The Court found that Baulderstone’s:

… contravening conduct… merits a high level of punishment. Baulderstone engaged in the contravening conduct deliberately and concertedly. The conduct was the product of the decision of a senior manager, and was implemented by two subordinate, but, nevertheless, senior managers. It was directed to coercing an employee to abandon a contract of employment the employee freely negotiated with Baulderstone. And the conduct was accompanied by the concealment of the reason or reasons for which Baulderstone engaged in the conduct.

The Court found that Baulderstone, Ms Kidman and Mr Razzlog had contravened section 346 of the FW Act and imposed the following pecuniary penalties:

• $25,000 on Baulderstone, and

• $3,500 on each of Ms Kidman and Mr Razzlog.


http://www.austlii.edu.au/au/legis/cth/consol_act/fwa2009114/s346.html

http://www.austlii.edu.au/au/legis/cth/consol_act/fwa2009114/

COMMONWEALTH OF AUSTRALIA V DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE; CONSTRUCTION FORESTRY MINING AND ENERGY UNION V DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE

[2015] HCA 46

The matter of the Director of the Fair Work Building Industry Inspectorate v CFMEU and CEPU was filed on 23 May 2013 in the Federal Court in Queensland, alleging the two respondent unions had contravened the Building and Construction Industry Improvement Act 2005 (Cth) on three government-funded projects in Queensland on 24, 25 and 26 May 2011:

1. The Queensland Children’s Hospital Project was the construction of the hospital now known as the Lady Cilento Children’s Hospital, in South Brisbane. The project was the construction of a multistorey building, consisting of four levels of carpark, eight levels of hospital facilities and four levels of ward facilities associated with the hospital. The construction project was worth approximately $800 million and was to be completed by the end of 2013. The principal contractor was Abigroup.

2. The Brisbane Convention and Exhibition Centre project (BCEC Project) was an extension to the existing Brisbane Convention and Exhibition Centre at Southbank, Brisbane. The BCEC Project was worth approximately $120 million, and was to be completed by the end of 2013. The principal contractor for the BCEC Project was Laing O’Rourke.

3. The Queensland Institute of Medical Research Project (QIMR Project) was located at the Royal Brisbane Hospital, Brisbane. The principal contractor was Watpac. The QIMR Project was funded by a philanthropic foundation, together with the Queensland

Government and the federal government. The project consisted of construction of a 15-storey medical research centre made up of administration, education and research facilities. The construction, which was worth approximately $167 million, occurred in three phases, with the relevant second stage to be completed by the end of February 2012.

The matter was originally listed for a penalty hearing on 31 March 2014; however, on 10 April 2014, the Chief Justice directed the Full Court of the Federal Court, exercising the Court’s original jurisdiction, to consider whether the reasoning in the High Court’s decision in Barbaro v The Queen (2014) 253 CLR 58 (Barbaro), applied to civil penalty proceedings. The Commonwealth was granted leave to intervene to make submissions.

On 1 May 2015, the Full Federal Court found that Barbaro did apply to civil penalty proceedings. On 18 June 2015, the Commonwealth was granted special leave to appeal the decision to the High Court. On 9 December 2015, the High Court unanimously allowed the appeal. The joint judgment (French CJ, Kiefel, Bell, Nettle and Gordon JJ) held that the decision in Barbaro did not apply to civil penalty proceedings and that a court can receive and accept an agreed or other civil penalty submission. The decision held that there is a principled basis for distinguishing between criminal prosecutions and civil penalty proceedings and that there is an important public policy involved in promoting the predictability of outcomes in civil penalty proceedings.

Given the importance of the appeal to a number of Commonwealth Regulators, the costs of arguing the appeal before the High Court was shared among five different agencies, including FWBC.

The original proceeding was remitted back to the Full Federal Court for determination in accordance with the High Court’s decision. On 17 May 2016, the matter was heard before


Dowsett, Greenwood and Wigney JJ in which submissions were made by the parties concerning the penalties that should be imposed for the admitted contraventions. The Court has reserved its decision.

DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE V CFMEU (NO. 2)

[2015] FCA 1462 (The Red & Blue case)

This case involved the President of the Victorian and Tasmanian Branch of the CFMEU threatening to coerce a scaffolding company to employ a person as a CFMEU shop steward. The President made it clear that he had the power to put the company out of business if the demand was not complied with.

During the hearing of the case the court highlighted the CFMEU’s poor record of law-breaking, posing the question, ‘Has there ever been a worse recidivist in the history of the common law?’

In handing down its penalty decision, the Court observed the President’s conduct `could not have been a clearer instance of a contravention’ and the threat to put the company out of business `was as prejudicial an outcome as any that might be suffered by a trading entity’.

The Court further commented that, ‘… penalties … imposed upon the Union have been inadequate to provide the specific deterrence which is so conspicuously required in this area of the law.’

The Court imposed significant penalties of $245,000 on the union and the union President.

In addition, the decision referenced judicial observations on the culture of unlawfulness displayed. A summary of comments related to matters from the reporting period follows.

• On 3 July 2015, Justice Gilmour observed:

The CFMEU’s long history of its officials conducting themselves unlawfully ... calls for a significant component of specific deterrence.

Director of the Fair Work Building Industry Inspectorate v Upton [2015] FCA 672

• On 14 August 2015, Justice Mansfield observed:

There is clearly, as other judges have recorded, a strong record of non-compliance on the part of the Union through its officers with provisions of industrial relations legislation, although that does not mean that a disproportionate penalty can or should be imposed. I note that significant past penalties have not caused the Union to alter its apparent attitude to compliance with the entry provisions and restrictions under the FW Act.

There is clearly an ongoing need for an order to be made for a pecuniary penalty which has a deterrent effect upon the Union and signals to others who may consider engaging in such conduct or like conduct that it is inappropriate to do so.

Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 3) [2015] FCA 845

• On 4 November 2015, Justice Jessup observed:

As has become customary in cases such as this, the applicant has placed before the court a schedule of the Union’s previous contraventions of civil penalty provisions in the FW Act, and of corresponding provisions in the Building and Construction Industry Improvement Act 2005 (Cth). The pattern of contravention which emerges from material such as this has been the subject of comment


by the court on a number of occasions. The schedule paints, one would have to say, a depressing picture. But it is more than that. I am bound to say that the conduct referred to in the schedule bespeaks an organisational culture in which contraventions of the law have become normalised.

Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 1173 (The Mitcham Rail Case)

• On 11 November 2015 the judgment of Tracey J included:

They, nonetheless, bespeak a deplorable attitude, on the part of the CFMEU, to its legal obligations and the statutory processes which govern relations between unions and employers in this country. This ongoing willingness to engage in contravening conduct must weigh heavily when the need for both specific and general deterrence is brought to account.

… Their continued willingness to engage in contravening conduct supports the view that earlier penalties, some of them severe, had not had a deterrent effect. … The longer such recidivism continues the more likely it is that this consideration will carry greater weight than the principle that the maximum available penalty must be reserved for the worst possible offending.

Director of Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 1213

DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE V SCOTT VINK & ANOR

[2016] FCCA 488

Mr Vink entered the Pacific Fair site purportedly for safety purposes. However, he went to the site sheds and removed workers’ belongings, including taking their lunches from the fridge and leaving them outside on the ground. When approached by a subcontractor’s health and safety manager, Vink launched into an obscenity-laced tirade, claiming workers should not use site amenities unless they were CFMEU members.

In penalising the near-maximum amounts against the official ($9,000) and the CFMEU ($48,000), the Court said the only reason for Mr Vink’s behaviour was ‘to intimidate the employees and to reinforce to others at the building site the notion that non−union membership (was) not going to be tolerated’.

Vink’s behaviour was described by the court as ‘sheer thuggery’.

Following the court’s decision, the Gold Coast Bulletin (10 March 2016) reported that Mr Vink claimed he did nothing wrong stating, ‘It’s a political witchhunt and I’m not concerned about it at all.’

DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE V ROBINSON

[2016] FCA 525

Penalties totalling $94,600 were ordered against the CFMEU, the CEPU and three union officials following unlawful industrial action relating to the $45 billion Ichthys LNG development, one of the world’s most significant oil and gas projects.


The Court found a CFMEU organiser had organised unlawful industrial action by taking action that led to workers that attended one of the projects ‘park-and-ride’ locations failing to board their transport and attend work for the day; at another site a CFMEU and a CEPU organiser organised unlawful industrial action by taking similar action.

In handing down penalty orders, the Court noted, ‘In all of the circumstances, I regard the mental attitudes accompanying the contraventions [of the organisers] as defiant and serious’.

INJUNCTIONS

Injunctions are discretionary orders of courts. FWBC sought and was granted one injunction in 2015–16.

APPLICATIONS, SUBMISSIONS AND INTERVENTIONS

The FWBI Act provides the Director of FWBC with the power to intervene in court proceedings and make applications or submissions in matters before the Fair Work Commission (FWC). The Director will consider intervening or making applications or submissions in proceedings that involve building work or building industry participants. The Director will use these powers as part of his function to promote a culture of lawful behaviour and ensure standards of conduct in the industry.

In 2015–16, FWBC made 13 submissions on permit applications, 11 applications for revocation of a permit and exercised the power to intervene in an FWC matter on one other occasion.

Table 19 shows the number of submissions and applications made over the reporting period. In 2015–16, FWBC made 13 submissions to the FWC relating to permit applications and 11 applications to the FWC to revoke, suspend or impose conditions on right of entry permits.

Table 20 outlines FWBC’s permit applications and permit submissions to the FWC made in 2015–16, by state, venue and category.

In the tables below, a ‘permit application’ means that FWBC applied to the FWC to revoke, suspend or have conditions imposed on the existing permit of a union official. A ‘permit submission’ means that FWBC provided additional information or an opinion (or both) to the FWC, to be considered when the FWC is deciding whether to issue a permit, having received an application from a union official.


Table 19: Submissions and applications in 2015–16

Category 2013–14 2014–15 2015–16

Submissions on permit application 8 12 13

Applications for revocation of permit 0 14 11

Total 8 26 24

Table 20: List of applications and submissions commenced in 2015–16

State Matter – name Venue Category

VIC Permit Submission – Robert Graauwmans FWC s. 512

VIC Permit Submission – Gerard Benstead FWC s. 512

QLD Permit Submission – Jade Anthony Ingham FWC s. 512

VIC Permit Submission – Mike Davis FWC s. 512

VIC Permit Submission – Alex Tadic FWC s. 512

QLD Permit Submission – Edward Bland FWC s. 512

QLD Permit Submission – William Kane Lowth FWC s. 512

SA Permit Submission – Jacobus Merkx FWC s. 512

VIC Permit Submission – Bill Beattie FWC s. 512

VIC Permit Submission – Fergal Doyle FWC s. 512

Continued overleaf


State Matter – name Venue Category

VIC Permit Submission – Mark Travers FWC s. 512

VIC Permit Submission – Drew MacDonald FWC s. 512

QLD Permit Submission – Anthony Kong FWC s. 510

WA Permit Application – Joshua Kennedy, Walter Molina, Troy Smart, Doug Heath and Brendan Kerkvliet

FWC s. 508

QLD Permit Application – Michael Haire and Michael Robinson FWC s. 507

NT Permit Application – Adam Olsen FWC s. 510

QLD Permit Application – Scott Vink FWC s. 510

SA Permit Application – Jim O’Connor FWC s. 510

SA Permit Application – David Kirner FWC s. 510

SA Permit Application – Mark Gava FWC s. 510

VIC Permit Application – Moe Kalem FWC s. 510

VIC Permit Application – Stephen Long FWC s. 510

ACT Permit Application – Johnny Lomax FWC s. 510

SA Permit Application – Darren Roberts FWC s. 510

Table 20: List of applications and submissions commenced in 2015–16 (cont’d)


SIGNIFICANT SUBMISSIONS AND APPLICATIONS – FAIR WORK COMMISSION

APPLICATIONS TO THE FAIR WORK COMMISSION (FWC) FOR RIGHT OF ENTRY PERMITS

Right of entry permits are granted by the FWC where an applicant is able to satisfy the FWC that they meet the range of statutory requirements under the FW Act to be granted a permit. A permit is an important instrument, as it allows entry to workplaces for inspection and discussions that would not otherwise be permitted without the occupier’s consent. Permit holders must conduct themselves appropriately in the workplace and conscientiously meet FW Act requirements.

Against this background, FWBC has maintained a focus on reviewing permit applications and making submissions to the FWC. FWBC scrutinises all permit applications to ensure full disclosure, as required under the FW Act. Where the agency believes this has not occurred, or further information should be provided to the FWC, a submission will be made.

FWBC aims to ensure that the FWC is aware of all relevant facts and that submissions on applicable legal principles are made to ensure that permit holders are properly entitled to have, or retain, a right of entry permit. Contested matters raised by FWBC are considered by a Presidential Member of the FWC.

The FWC notifies FWBC when an application for a new permit or permit renewal is received from a union official.

Fair Work Commission (FWC) proceedings to suspend or revoke permits following right of entry penalty matters

Section 510 of the FW Act provides that, where a permit holder has been ordered to pay a civil penalty for a contravention of the Right of Entry Part of the FW Act, FWC must revoke or suspend their right of entry permit, unless it is harsh or unreasonable to do so. Generally, FWBC will make submissions to the FWC about a union official’s right of entry permit if civil penalties are imposed by the Court against the official for a breach of the Right of Entry Part of the FW Act.

Fair Work Building & Construction v Scott Vink [2016] [FWC] 2512

A contravention of the Right of Entry provisions of the FW Act requires the FWC to suspend or revoke a permit holder’s right of entry permit and ban the issue of a further permit for a period of not fewer than three months. FWBC advised the FWC of the court’s findings in the Vink matter and made submissions for revocation and a substantial ban period. On 20 April 2016 the FWC revoked Vink’s permit and banned him from obtaining a new permit for two years.

The FWC decision stated:

The current Right of Entry Permit was misused in an act of deception in order to achieve entry to the construction site for an ulterior purpose. Mr Vink entered the site for the ulterior purpose, which was to demonstrate a particular industrial objective.

The decision went on to note:

The capacity to maintain civility is an important attribute in relation to achieving the necessary balance between representational rights and the rights of occupiers of premises and employers under the Part.


PART 4 MANAGEMENT AND ACCOUNTABILITY

Corporate governance and accountability 56

Financial result 62

Accountability 65

Human resources 66

MANAGEMENT AND ACCOUNTABILITY


CORPORATE GOVERNANCE AND ACCOUNTABILITY

Fair Work Building and Construction (FWBC) uses a corporate governance framework comprising the agency’s enabling legislation, the Fair Work (Building Industry) Act 2012 (FWBI Act), and other relevant legislative instruments, policies, strategies, and managerial procedures and practices.

FWBC’s corporate governance framework determines how the agency exercises authority and delivers outcomes, initiatives, and programs. The framework promotes and upholds the Australian Public Service (APS) Values and Code of Conduct.

FWBC has corporate governance practices that ensure clear lines of accountability and well-defined, effective management of its performance. These practices are overseen and supported by the following boards and committees.

ADVISORY BOARD

The FWBC Advisory Board is established by section 23 of the FWBI Act. Its role is to provide recommendations to the FWBC Director on:

• policies to guide the performance of the Director’s functions and the exercise of the Director’s powers;

• the priorities of, and programs to be implemented by, the Director; and

• any matter that the Minister requests the Advisory Board to consider.

To date, no recommendations have been made.

EXECUTIVE TEAM

The FWBC Executive Team is the peak decision-making body of FWBC. It comprises the FWBC Director and all SES officers. Executive Level 2 officers are invited to attend the monthly meetings on a rotational basis. Outcomes of the meetings are made available to staff through the intranet.

REGULATOR PERFORMANCE FRAMEWORK

The Regulator Performance Framework (RPF) measures the performance of regulators against a common set of six key performance indicators. As a Commonwealth entity with a statutory responsibility to administer, monitor, or enforce regulation, FWBC is subject to the RPF. FWBC will publish its self-assessment report against the RPF for the 2015–16 reporting period on its website by 31 December 2016.

AUDIT COMMITTEE

The FWBC Audit Committee provides independent assurance and assistance to the Director and the Executive Team on the agency’s financial and performance reporting responsibilities, risk oversight and management, and systems of internal control.

The Audit Committee reviews and advises on:

• risk management;

• control frameworks;

• external accountability;

• legislative compliance;

• internal audit; and

• external audit.

The Audit Committee is also responsible for endorsing the annual financial statements, including facilitating resolution of any issues in a timely manner.

Table 21 outlines the membership of the Audit Committee. Representatives from the Australian National Audit Office are invited to attend each Audit Committee meeting as observers. Along with FWBC’s Director and Chief Operating Officer, other FWBC officers may be invited to attend Audit Committee meetings.

Table 21: Audit Committee members as at 30 June 2016

Chair Jon Isaacs (External)

Members Lyn Baker (External)

Ben Vallence (Internal)

Secretariat Kathryn Scully

PEOPLE COMMITTEE

The People Committee provides a forum for employees to contribute to developing strategies that address people matters within the agency. The People Committee was re-established during the 2015–16 financial year.

The People Committee’s role is to find innovative solutions to resolve any issues relating to people management and to proactively improve agency engagement and performance through initiatives developed in consultation with the FWBC Executive Team. The People Committee met on four occasions during 2015–16.

Major achievements include:

• development and implementation of a Recognition Framework;

• development and implementation of a Red Tape Reduction Committee;

• review, development and promotion of multiple internal policies and guides;

• introduction of a New Manager’s Toolkit; and

• promotion of key internal systems and resources that aid staff development.

Table 22: People Committee members as at 30 June 2016

Chair Cathy Cato

Secretariat

Eddie Malkin

Stephanie Fry

Members

Jess Stirling

Sam Borazio

Damien Cravino

Angeliek Peters

Kate Brookes

Liz Rakitovsky

Matt Barr

Stephen Pemberton

57PART 4 | MANAGEMENT AND ACCOUNTABILITY

WORKPLACE HEALTH AND SAFETY COMMITTEE

The Workplace Health and Safety Committee (WHSC) advises the Director and Executive Team on policy matters concerning the health and safety of agency workers. The WHSC reviews and reports on the implementation of relevant legislation, policies and practices.

The WHSC consists of four management representatives, including the chair appointed by the Director, and nine employee representatives elected by staff. The WHSC met four times in the reporting year.

Major achievements of the WHSC:

• development of a new Work Health and Safety Policy covering:

— arrangements for the management, promotion and development of measures to ensure the health, safety and welfare of workers;

— principles and safety arrangements for FWBC workers to ensure compliance with the Work Health and Safety Act 2011;

• proposal for a Health and Wellbeing Program, including:

— health checks and skin checks;

— on-site educational seminars;

— a monthly newsletter about relevant health and wellbeing issues; and

• implementation of sit–stand workstations in all new office fit-outs.

Table 23: Workplace Health and Safety Committee members as at 30 June 2016

Chair Tim Honey

Management representatives

Murray Gregor

Liz Hayes

Graeme Hogan

Employee representatives

Chris Stanley

Kelvin Mooney

Sam Borazio

Neale Smith

Adam Pascoe

Yehia Ahmed

Julie Siciliano

Seamus Flynn

Jeffrey Wong

Secretariat Carole Griffin


SECURITY AND RISK MANAGEMENT

FWBC maintains a number of security and risk management plans. These plans are reviewed and updated regularly to take account of changes in the business activities and risk profile of FWBC.

During the reporting year FWBC maintained the following security and risk management instruments:

• Security Plan

• Security Policy

• Security Classification and Information Handling Guidelines

• Physical Security Policy

• Designated Security Assessed Positions and Positions of Trust Guidelines

• Business Continuity Plans

• Fraud Control Plan and Fraud Risk Assessment

FWBC’s approach to fraud prevention and compliance with the Commonwealth Fraud Control Framework 2014 includes the Fraud Control Plan and Fraud Risk Assessment for strategic fraud risk management. Embedded in the approach is ongoing education in fraud prevention and reporting.

FWBC has appropriate procedures in place for recording and reporting fraud. All reports must be forwarded to the Agency Security Adviser (ASA). An officer can make such reports by completing the fraud reporting form or by email, and can receive the protections (such as identity protection) under the Public Interest Disclosure Act 2013 by making the disclosure to an Authorised Officer.

Should a matter of suspected fraud require investigation, the FWBC ASA is suitably qualified to investigate alleged incidences of fraud. Alternatively, FWBC has an inter-agency agreement with the Shared Services Fraud Investigation Unit to conduct investigations. The appropriate law enforcement agency will be notified in the event of serious or complex fraud against the Commonwealth.

There were no incidents of fraud reported at FWBC in 2015–16.

• Internal Audit Plan

The agency has appointed the Manager of the Professional Standards Unit (PSU) as Head of Internal Audit to manage the internal audit function and report to the FWBC Audit Committee. Areas of significant operational, reputational or financial risk are identified in consultation with the Audit Committee and the Director. FWBC has adopted a ‘mixed approach’ to internal audits: some are carried out by external service providers, while others are conducted by PSU staff as appropriate. A program of quality assurance reviews is also conducted by PSU staff, and results are passed to the Audit Committee for consideration.

• Intellectual Property (IP) Policy and IP Register

The IP Policy and IP Register comply with the Australian Government IP Principles and are regularly reviewed and updated to take account of any significant changes to FWBC’s IP.

• Records Management Policy

Regular checks are undertaken to ensure compliance with the policy and guidelines for handling information within FWBC.


• Commonwealth Protective Security Policy Framework

During the reporting year, FWBC continued to monitor compliance with the Commonwealth Protective Security Policy Framework. Policies and procedures to protect employees, information and assets are in place, and a Security Awareness Strategy has been implemented to improve staff understanding of security risks and procedures.

• Risk Management Framework and Strategic Risk Register

FWBC maintains a Strategic Risk Register that allows the Executive Team and Audit Committee to monitor the agency’s risk environment. A comprehensive revision of the FWBC Risk Management Framework is underway to ensure ongoing compliance with legislative and policy obligations. This will embed better practice risk management in planning, governance and operational processes. The Comcover Risk Management Benchmarking Programme 2016 has assessed FWBC’s risk maturity levels against the Commonwealth Risk Management Policy 2014 as having improved from ‘Developed’ in 2015 to ‘Systemic’ in 2016.

Additionally, FWBC’s Agency Security Adviser reports to the Director and Executive Team as required.

ETHICAL STANDARDS

In line with the Public Service Act 1999 (PS Act), all FWBC staff are expected to comply with the APS Values and Code of Conduct to maintain high standards of ethical conduct.

The APS Values and Code of Conduct are published on the FWBC website and intranet and are included in job information kits provided to prospective employees. New staff are made aware of the APS Values and Code of Conduct, and this policy underpins the FWBC Business Plan and a number of internal policies and procedures. These include:

• determining breaches of the APS Code of Conduct;

• email and internet use protocol;

• conflict of interest policy; and

• hospitality and gifts.

FWBC provides staff with ongoing information and training in the APS Values, Code of Conduct and Workplace Diversity program.

FWBC is represented on the Australian Public Service Commission’s Ethics Contact Officer Network by Murray Gregor, General Manager Operations (Eastern). This network focuses on enhancing ethics and accountability in the APS.

RECONCILIATION ACTION PLAN

FWBC is committed to working collaboratively with other government agencies and departments to improve opportunities for Aboriginal and Torres Strait Islander peoples – as staff and for those within the building and construction industry.


https://www.fwbc.gov.au/

FWBC’s 2013–15 Reconciliation Action Plan (RAP) identifies the steps taken to progress reconciliation and learn from Aboriginal and Torres Strait Islanders in the building and construction industry.

FWBC’s RAP was designed to be accessible and achievable, and involve as many people across the agency as possible. Key actions relate to relationships, respect and opportunities. There is a Reconciliation Portal on the intranet that contains a range of resources to promote awareness.

A review of the RAP will be carried out during 2016–17.

CHANGES TO DISABILITY REPORTING IN ANNUAL REPORTS

Since 1994, non-corporate Commonwealth entities have reported on their performance as policy adviser, purchaser, employer, regulator and provider under the Commonwealth Disability Strategy. In 2007–08, reporting on the employer role was transferred to the APSC’s State of the Service Report and the APS Statistical Bulletin. These reports are available at www.apsc.gov.au. From 2010–11, entities have no longer been required to report on these functions.

The Commonwealth Disability Strategy was overtaken by the National Disability Strategy 2010–2020, which sets out a 10-year national policy framework to improve the lives of people with disability, promote participation and create a more inclusive society. A high-level biennial report will track progress against each of the six outcome areas of the strategy and present a picture of how people with disability are faring. The first of these progress reports was published in 2014, and can be found at www.dss.gov.au.

ECOLOGICALLY SUSTAINABLE DEVELOPMENT AND ENVIRONMENTAL PERFORMANCE

Australian Government agencies are required to report on their performance in regard to the environment and ecologically sustainable development, in line with section 516A of the Environment Protection and Biodiversity Conservation Act 1999.

FWBC implements best practice in environmental management and ecological sustainability to ensure the most efficient use of energy resources practicable.

Energy-efficient lighting systems are installed in all new FWBC offices. In existing offices, when light globes malfunction they are replaced with low-energy lighting. Standalone office suites are fitted with light switches that are independent of the automated lighting so that power can be switched off when the office is not in use.

FWBC purchases office equipment with low-energy use and power-saving modes. The agency uses multifunction devices for copying, printing and scanning. The devices are set by default to duplex printing and use print-on-demand facilities so that uncollected prints are automatically deleted, reducing paper usage and unnecessary toner costs. All print toner cartridges are recycled.

FWBC offices participate in paper and plastic recycling programs and use office paper with 100 per cent recycled content. When placing stationery orders, FWBC staff preference environmentally friendly options.

FWBC procures vehicles in accordance with the environmental efficiency requirements of Australian Government policies. Bicycle parking is available at FWBC’s Melbourne, Sydney, Canberra and Perth offices.


http://www.apsc.gov.au/

FINANCIAL RESULT

FWBC had total income of $34.175 million for 2015–16 which included appropriation funding of $33.559 million and incurred total expenses of $34.228 million. As result FWBC recorded an operating loss of $0.053 million in 2015–16.

Refer to Part 5 of this report for the FWBC financial statements.

Table 24 summarises the total resources in comparison to the total payments made during the year.

Table 25 summarises expenses and resources required for FWBC to achieve its outcome.

Table 24: FWBC Resource Statement 2015–16

Actual Available Appropriations

for 2015–16

$’000

(a)

Payments Made

2015–16

$’000

(b)

Balance Remaining

2015–16

$’000

(a–b)

Ordinary annual services1

Departmental appropriation2 104,179 39,248 64,931

Total Ordinary Annual Services 104,179 39,248 64,931

Total Available Annual Appropriations 104,179 39,248 64,931

Total Net Resourcing for the Office of the Fair Work Building Industry Inpectorate 104,179 39,248 64,931

1 Appropriation Act (No. 1) 2015–16. This may also include prior-year departmental appropriation and section 74 retained revenue receipts.

2 Includes an amount of $1.601 m in 2015–16 for the departmental capital budget. For accounting purposes, this amount has been designated as ‘contributions by owners’.


Table 25: Expenses and Resources for Outcome 1

Outcome 1: Enforce workplace relations law in the building and construction industry and ensure compliance with those laws by all participants in the building and construction industry through the provision of education, assistance and advice.

Budget

2015–16 $’000

(a)

Actual Expenses

2015–16 $’000

(b)

Variation

2015–16 $’000

(a–b)

Programme 1.1: Education Services and Compliance Activities

Departmental Expenses

Ordinary Annual Services (Appropriation Act No.1) 33,905 33,612 293

Revenue from independent sources (Section 74 of PGPA Act) 103 616 (513)

Total for Program 1 34,008 34,228 (220)

Total Expenses for Outcome 1 34,008 34,228 (220)

2015–16

Average staffing level (number) 132

Note: Budget information reflects budgets as set out in the Portfolio Budget Statements 2015–16 (Table 3.2.1).


FINANCIAL MANAGEMENT

Financial services are provided to the FWBC on an outsourced arrangement by the Fair Work Ombudsman (FWO) under the Payroll and Finance Services memorandum of understanding between FWBC and FWO.

ASSETS MANAGEMENT

FWBC’s main asset types are leasehold improvements/fit-outs, computer equipment, internally developed software, and office furniture and equipment. Assets management is given regular and appropriate attention.

PROCUREMENT

FWBC’s procurement policies reflect the principles of the Commonwealth Procurement Rules 2014 (CPRs).

FWBC applies the following criteria to all procurement activities:

• represents value for money;

• encourages competition;

• makes efficient, effective, and ethical use of resources; and

• is accountable and transparent.

FWBC’s primary strategy for obtaining value for money is to access existing Australian Government panels or coordinated contract arrangements when procuring goods and services.

All open approaches to the market are advertised on the AusTender website. All purchases greater than $10,000 (including GST) are reported in AusTender.

FWBC supports small business participation in the Australian Government procurement market. Small and Medium Enterprise and Small Enterprise participation statistics are available

on the Department of Finance’s website. FWBC’s procurement and tender practices allow small and medium sized businesses to compete fairly for FWBC procurement requirements. FWBC’s approach to market and tender requirements are such that small and medium businesses are not unduly burdened with costs in any submission to FWBC. FWBC procures from a broad range of small, medium and large businesses.

FWBC has an annual procurement plan outlining expected major procurement activity. This is published on the Austender website.

All FWBC procurements with an estimated value greater than $80,000 (including GST) are subject to an open approach to the market (in line with CPR mandatory requirements) unless these procurements meet CPR conditions for direct sourcing.

FWBC also lists contracts valued at $100,000 or more that have not been fully performed or that had been entered into during the previous 12 months on FWBC’s website, in accordance with the Senate Order of 20 June 2001.

Annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website, www.tenders.gov.au.

CONSULTING SERVICES

During 2015–16, 12 new consultancy contracts were entered into involving total actual expenditure of $344,121 (including GST). No ongoing consultancy contracts carried over from 2014–15.

FWBC engages consultants where it lacks specialist expertise or when independent research, review or assessment is required. Consultants are typically engaged to:

• investigate or diagnose a defined issue or problem;


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• carry out defined reviews or evaluations; and

• provide independent advice, information or creative solutions to assist FWBC’s decision-making.

Prior to engaging consultants, FWBC takes into account the skills and resources required for the task, the skills available internally, and the cost-effectiveness of engaging external expertise. The decision to engage a consultant is made in accordance with the Public Governance and Accountability Act 2013 and related regulations, including the CPRs and relevant internal policies.

CONTRACTS

Contracts greater than $100,000

No contract of $100,000 or more (including GST) was let during the reporting year by FWBC that did not provide for the Auditor-General to have access to FWBC’s premises.

Exempt contracts

There was no contract in excess of $10,000 (including GST) or standing offer during 2015–16 that was exempt from being published in AusTender on the basis that it would disclose exempt matters under the Freedom of Information Act 1982.

GRANT PROGRAMS

FWBC does not administer any grant programs and no grants were made during 2015–16.

ADVERTISING AND RESEARCH

No advertising or promotional campaigns were undertaken by FWBC during 2015–16.

No suppliers provided advertising and market research services during 2015–16.

ACCOUNTABILITY

EXTERNAL SCRUTINY

Reports by the Auditor-General, Parliamentary Committees or Commonwealth Ombudsman

As at 30 June 2016, no reports had been made by the Auditor-General regarding FWBC for 2015–16.

No reports by the Commonwealth Ombudsman had been issued under s 54A(6) FWBI Act for the reporting year.

JUDICIAL REVIEW

During the reporting year two judicial review applications were made. No judicial decisions or decisions by administrative tribunals or the Australian Information Commissioner had a significant effect on the operations of FWBC.

FREEDOM OF INFORMATION

Agencies subject to the Freedom of Information Act 1982 (FOI Act) are required to publish information to the public as part of the Information Publication Scheme (IPS). This requirement is in Part II of the FOI Act and has replaced the former requirement to publish a section 8 statement in an annual report. Each agency must display on its website a plan showing what information it publishes in accordance with the IPS requirements.

FWBC has published an agency plan which describes how FWBC proposes to implement and administer the IPS. The agency plan is available on the FWBC website at www.fwbc.gov.au/IPS.

Statistics

FWBC received 15 FOI requests during the reporting period.


https://www.fwbc.gov.au/

HUMAN RESOURCES

FWBC’s Human Resources Team is responsible for the delivery of a wide range of people services, including workforce planning, recruitment, pay and conditions, performance management, learning and development, workplace health and safety, and workplace diversity. The effective management and development of FWBC’s employees is evidenced by the continued achievement of the agency’s objectives. Employee management and development is strongly linked through the agency’s key organisational planning processes and its effectiveness is assessed through an internal communication framework that includes a People Committee, annual staff survey, staff performance management and monthly executive reporting. Where there are gaps in capabilities identified, FWBC addresses these through a range of Human Resource strategies as outlined below.

WORKFORCE PLANNING

The FWBC Workforce Plan details the specific actions required to ensure the organisation has the resources to achieve its goals and objectives.

By identifying current workforce capabilities and considering its future needs, the agency positions itself to deliver objectives to reduce the risks associated with reactive workforce decisions.

The Workforce Planning Committee meets monthly to ensure strategies are in place to meet agency requirements.

Recruitment and retention

FWBC is committed to employment decisions based on merit, legislative compliance, a competitive selection process, fairness, and transparency.

In the reporting year, FWBC undertook 39 external recruitment exercises. All FWBC vacancies are advertised in APS Jobs and selected online/print media, as the most cost-effective way to reach and engage with the target audience.

FWBC uses a range of strategies to retain staff, including opportunities for advancement through flexible working arrangements, access to purchased leave provisions, salary packaging, reward and recognition initiatives, and learning and development opportunities.

Flexible working arrangements

The agency’s flexible working arrangements aim to provide a balance between employees’ work and personal lives, and opportunities for improved organisational productivity. The following working arrangements are available under the agency’s enterprise agreement (EA):

• flex time and compressed working patterns;

• part-time work;

• job-sharing;

• working from home;

• generous leave provisions, including Christmas closedown and access to purchased additional annual leave; and

• individual flexibility arrangements.

Salary sacrificing

FWBC provides a range of items that can be salary-sacrificed through the agency’s selected provider, including superannuation and car leases.


LEARNING AND DEVELOPMENT

FWBC is committed to developing:

• a work environment that attracts and retains employees, has a positive culture, and supports delivery of service;

• people who are committed to FWBC’s strategic direction, work well in their team, and are engaged in building their capability and skills; and

• respected leaders who model FWBC’s culture and guide employees in delivering objectives of the agency.

Employees can also address individual development needs through:

• on-the-job experience to develop specific skills and capabilities;

• coaching provided through team leaders and more experienced team members;

• attendance at internal and external courses, programs or events; and

• temporary secondments to other agencies.

In 2015–16 FWBC continued to develop and implement a coordinated approach to learning and development for the effective development of staff.

In addition to a broad range of existing training courses, in 2015–16 FWBC launched a new suite of internal technical training programs, including ‘Investigative interviewing’, ‘Statement-taking’ and ‘Building code field training’. Following the success of the FWBC Leadership Program, the first cohort of staff undertook the FWBC Aspiring Leaders Program, which focused on developing the core leadership skills of aspiring leaders.

FWBC also sponsors staff to attain relevant qualifications through accredited courses such as Government (Investigations) – Certificate IV and Diploma – and the Public Sector Management Program. In 2015–16, 10 staff participated in the Diploma of Government (Investigations) and one staff member completed the Public Sector Management Program, with seven expected to commence in 2016–17. All staff in the Professional Standards Unit completed Certificate IV in Risk Management Essentials. Financial and workplace support is also available for individual employees who undertake approved university study through the FWBC’s Study Assistance Scheme.

Investment in people through learning and development continues to be a priority at FWBC to ensure that staff have the skills and knowledge to fulfil their roles.

WORKPLACE ARRANGEMENTS

All staff, with the exception of the FWBC Director, are employed under the Public Service Act 1999.

The agency EA 2011–2014 commenced on 11 October 2011. As at 30 June 2016, the replacement FWBC agreement was under negotiation; terms and conditions under the pre-existing EA will continue until it is replaced.

All Senior Executive Service (SES) officers’ terms and conditions of employment are covered by Common Law Agreements.

As at 30 June 2016, FWBC employed 136 employees under the 2011–2014 EA, eight SES officers by common law contracts and one Public Office Holder (POH).


SALARIES AND CLASSIFICATIONS

Table 26: Classification and salary ranges

Classification FWBC broadband FWBC Government lawyer broadband

Salary Range ($) (includes Individual

Flexibility Agreements where relevant)

SES NA NA 185,000 – 225,500

EL2 3.2 3.2 117,221 – 152,188

EL1 3.1 3.1 101,665 – 123,268

APS6 2.3 2.4 79,862 – 101,665

APS5 2.2 2.3 73,738 – 78,148

APS4 2.1 2.2 66,144 – 78,148

APS3 1.3 2.1 59,407 – 64,063

APS2 1.2 1.2 52,792 – 57,815

APS1 1.1 1.1 46,546 – 48,384

As at 30 June 2016, 11 APS staff were covered by an Individual Flexibility Agreement (one at APS3, two at APS4, two at APS6, four at EL1, two at EL2).

NON-SALARY BENEFITS

FWBC provides for a range of non-salary benefits, including a mobile phone or iPad for work use, work-related professional association membership fees and airline lounge membership if 12 or more return trips are planned for the year.


Table 27: Staff numbers within the broadband classification groups at FWBC

FWBC broadband

Staff numbers (Column A)

FWBC Government

lawyer broadband

Staff numbers (Column B)

Totals (Column A plus

Column B)

APS classification

POH 1 1 POH

SES2 2 2 SES 2

SES1 6 6 SES 1

3.2 15 15 EL 2

3.1 29 29 EL 1

2.3 33 2.4 2 35 APS 6

2.2 22 2.3 2 24 APS 5

2.1 20 2.2 20 APS 4

1.3 9 2.1 9 APS 3

1.2 4 4 APS 2

1.1 0 0 APS 1


STAFFING STATISTICS

As at 30 June 2016, FWBC employed 145 staff. One employee identified as Indigenous.

Table 28: Type of employment as at 30 June 2016

Type of employment Staff numbers

Statutory Appointment 1

Ongoing full time 118

Ongoing part time 15

Non-ongoing full time 5

Non-ongoing casual 6

Total 145

Table 29: Gender comparison as at 30 June 2016

Gender 2015–16

Female 72

Male 73

Total 145

Table 30: Gender comparison at Executive and SES Level as at 30 June 2016

Gender Executive Level 1

Executive Level 2

SES & POH

Female 11 6 2

Male 18 9 7

Total 29 15 9

Table 31: FWBC staff locations as at 30 June 2016

FWBC office Staff numbers

Sydney 25

Melbourne 63

Brisbane 19

Perth 19

Adelaide 9

Hobart 2

Canberra 4

Darwin 4

Total 145


WORK HEALTH AND SAFETY

Executive commitment

FWBC places a high priority on work health and safety (WHS). FWBC recognises the importance of developing and maintaining safe working conditions and practices, and the importance of following current policies and maintaining standards.

All employees are responsible for maintaining a safe work environment. This is achieved through the cooperation of staff, FWBC Health and Safety representatives, and the Work Health Safety Committee.

Work health and safety policy

FWBC launched a new WHS policy in June 2016. This policy replaced Health and Safety Arrangements 2012–15. The new policy enables FWBC to move forward with a focus on its own people, allowing a more targeted approach to the promotion and development of health, safety and welfare for FWBC employees.

Initiatives

FWBC supports a number of initiatives to improve and maintain the overall health of the FWBC workforce:

• subsidised flu vaccinations for all staff;

• six-monthly WHS inspections in all state FWBC offices;

• workstation assessments conducted by an external occupational therapist for all employees with a reported health concern;

• ongoing intranet articles focused on the promotion of workplace health and safety in the workplace i.e. Employee Assistance Program;

• implementation of an online WHS Training Module for staff and managers;

• relocation of office, initiating sit–stand desks in all new office fit-outs, accompanied by ergonomic assessments with an occupational therapist;

• procurement of a Health and Wellbeing Program to commence in August 2016; and

• training delivered by Comcare to SES on their roles and responsibilities under the Work Health and Safety Act 2011 (WHS Act).

Comcare premiums

FWBC’s average Comcare workers compensation premium rate decreased slightly from 2.52 per cent in 2014–15 to 2.44 per cent in 2015–16.

Table 32: Comcare premium rates

2014–15 2015–16

2.52% 2.44%

Incident reporting

Under the WHS Act, FWBC is required to report any notifiable incidents which arise from FWBC’s undertaking. There were no notifiable incidents reported to Comcare during the 2015–16 year.

Investigations conducted

Under part 10 of the WHS Act, FWBC is required to report details of any investigations that have taken place, including details of all notices given to the entity during the year.

During the reporting period no health and safety investigations were conducted by Comcare and no notices were issued to the agency.


PART 5FINANCIAL STATEMENTS

Independent auditor’s report 74

Financial statements table of contents 77

INDEPENDANT AUDITOR’S REPORT


75PART 5 | FINANCIAL STATEMENTS

FINANCIAL STATEMENTS TABLE OF CONTENTS

CONTENTS

Certification 74

Primary financial statement 78Statement of Comprehensive Income 78Statement of Financial Position 79Statement of Changes in Equity 80Cash Flow Statement 81Administered Schedule of Comprehensive Income 83Administered Schedule of Assets and Liabilities 84Administered Reconciliation Schedule 85Administered Cash Flow Statement 86

Notes to the financial statements 87

Overview 871. Financial Performance 88

1.1 Expenses 881.2 Own-Source Revenue and Gains 89

2. Income and Expenses Administered on Behalf of Government 902.1 Administered - Expenses 902.2 Administered - Income 91

3. Financial Position 923.1 Financial Assets 923.2 Non-Financial Assets 943.3 Payables 98

4. Assets and Liabilities Administered on Behalf of Government 994.1 Administered - Financial Assets 99

5. Funding 1015.1 Appropriations 1015.2 Net Cash Appropriation Arrangements 1045.3 Cash Flow Reconciliation 105

6. People and Relationships 1066.1 Employee Provisions 1066.2 Senior Management Personnel Remuneration 108

7. Managing Uncertainties 1097.1 Contingent Assets and Liabilities 1097.2 Financial Instruments 1107.3 Administered - Financial Instruments 1137.4 Fair Value Measurement 115

8. Other Information 1188.1 Reporting of Outcomes 118


Statement of Comprehensive Incomefor the period ended 30 June 2016

Original 2016 2015 Budget

Notes $’000 $’000 $’000

NET COST OF SERVICES

Expenses

Employee benefits 1.1A 16,713 15,971 19,139 Suppliers 1.1B 16,646 16,470 14,523 Depreciation and amortisation 3.2A 869 805 346

Total expenses 34,228 33,246 34,008

Own-Source Income

Own-Source RevenueRental income 1.2A 185 524 - Other revenue 1.2B 395 363 47

Total own-source revenue 580 887 47

GainsOther gains 1.2C 36 46 56

Total gains 36 46 56

Total own-source income 616 933 103

Net (cost of) / contribution by services (33,612) (32,313) (33,905)

Revenue from Government 1.2D 33,559 33,859 33,559

Surplus / (Deficit) (53) 1,546 (346)

OTHER COMPREHENSIVE INCOME

Total other comprehensive income - - -

Total comprehensive income (53) 1,546 (346)

The above statement should be read in conjunction with the accompanying notes.

Budget Variance Commentary

Statement of Comprehensive Income for FWBIIEmployee Benefits

Suppliers

Other RevenueThe FWBII received additional revenue from sub-leasing excess office space (in the first half of the year) and costs awarded to the FWBII from court actions.

The staffing level reached 132 full time equivalent employees (FTE) compared with a budgeted level of 155 FTE. It is expected that the FTE will increase throughout 2016-17 in line with the agency workforce plan.

FWBII had continued agency-wide focus on enhanced compliance and litigation activities. Legal expenses are up 5.9% on prior year driven by the increase in litigation in the Federal Court and Fair Work Commission.


Statement of Financial Positionas at 30 June 2016


Notes $’000 $’000 $’000

ASSETS

Financial AssetsCash and cash equivalents 3.1A 314 202 341 Trade and other receivables 3.1B 45,540 48,617 44,168

Total financial assets 45,854 48,819 44,509

Non-financial AssetsLeasehold improvements 3.2A 5,742 365 4,750 Plant and equipment 3.2A 452 518 568 Intangibles 3.2A - - 655 Other non-financial assets 3.2B 321 506 614

Total non-financial assets 6,515 1,389 6,587

Total assets 52,369 50,208 51,096

LIABILITIES

PayablesSuppliers 3.3A 2,652 1,457 1,528 Other payables 3.3B 363 1,340 1,026

Total payables 3,015 2,797 2,554

ProvisionsEmployee provisions 6.1A 4,034 3,639 3,495

Total provisions 4,034 3,639 3,495

Total liabilities 7,049 6,436 6,049

Net assets 45,320 43,772 45,047

EQUITY

Contributed equity 4,484 2,883 6,779 Retained earnings 40,836 40,889 38,268

Total equity 45,320 43,772 45,047



Statement of Financial Position for FWBIINon-Financial Assets

Payables

Employee Provisions

The timing of expenditure in the capital plan changed. Leasehold improvements completed in 2015-16 included elements originally planned in 2014-15. The replacement of case management application software included in the intangibles 2015-16 budget was delayed and the implementation is now to be undertaken in 2016-17.

Suppliers: Increase reflects litigation work undertaken in last quarter accrued but not paid for by 30 June 2016.Other Payables: One off payment to Department of Employment in 2014/15 not repeated in 2015-16. Salary and Wages accrual less than prior year owing to timing of last pay date.

While the staff numbers for FWBII did not reach the budgeted levels, many of the new staff included transfers from other Commonwealth agencies and their leave liability was included with the transfer and taken up by FWBII. In addition, the lower discount rate used in the calculation of long service leave liability resulted in a higher than budgeted provision.


Statement of Changes in Equityfor the period ended 30 June 2016


Notes $’000 $’000 $’000

CONTRIBUTED EQUITYOpening BalanceBalance carried forward from previous period 2,883 4,736 5,178 Opening balance 2,883 4,736 5,178

Comprehensive IncomeContributions by owners

Repeal of capital appropriation - (2,295) - Departmental capital budget 1,601 442 1,601

Total transactions with owners 1,601 (1,853) 1,601 Closing balance as at 30 June 4,484 2,883 6,779

RETAINED EARNINGSOpening BalanceBalance carried forward from previous period 40,889 39,343 38,614 Opening balance 40,889 39,343 38,614

Comprehensive IncomeSurplus/(Deficit) for the period (53) 1,546 (346)Total comprehensive income (53) 1,546 (346)Closing balance as at 30 June 40,836 40,889 38,268

TOTAL EQUITYClosing balance as at 30 June 45,320 43,772 45,047


Accounting Policy

Equity Injections

Restructuring of Administrative Arrangements


Contributed Equity

Retained Earnings

Amounts appropriated which are designated as 'equity injections' for a year (less any formal reductions) and Departmental Capital Budgets (DCBs) are recognised directly in contributed equity in that year.

Net assets received from or relinquished to another Government entity under a restructuring of administrative arrangements are adjusted at their book value directly against contributed equity.

Undrawn appropriations greater than 3 years old were repealed by the Omnibus Repeal Day (Autumn 2014) Act 2014 requiring an unbudgeted adjustment to the equity of the FWBII.

The opening retained earnings balance varied from budget as result of the operating surplus in 2014-15.


Cash Flow Statementfor the period ended 30 June 2016


Notes $’000 $’000 $’000

OPERATING ACTIVITIES

Cash receivedAppropriations 36,092 31,361 32,444 Sales of goods and rendering of services 649 1,014 10 Net GST received 1,830 1,290 -

Total cash received 38,571 33,665 32,454

Cash usedEmployees 16,791 15,729 18,890 Suppliers 16,598 16,538 11,168 Section 74 receipts transferred to the Official Public Account 1,027 1,467 -

Total cash used 34,416 33,734 30,058

Net cash from (used by) operating activities 5.3A 4,155 (69) 2,396

INVESTING ACTIVITIES

Cash receivedProceeds from sales of property, plant and equipment 12 14 -

Total cash received 12 14 -

Cash usedPurchase of non-financial assets 6,185 707 4,750

Total cash used 6,185 707 4,750

Net cash from (used by) investing activities (6,173) (693) (4,750)

FINANCING ACTIVITIES

Cash receivedContributed equity 2,130 707 2,436

Total cash received 2,130 707 2,436

Net cash from (used by) financing activities 2,130 707 2,436

Net increase in cash held 112 (55) 82

Cash and cash equivalents at the beginning of the reporting period 202 257 259

Cash and cash equivalents at the end of the reporting period 3.1A 314 202 341




Employees

Suppliers

Sales of goods and rendering of services

Purchase of non-financial assets and Contributed Equity

The staffing level reached 132 full time equivalent employees (FTE) compared with a budgeted level of 155 FTE. It is expected that the FTE will increase throughout 2016-17 in line with the agency workforce plan.

FWBII had continued an agency-wide focus on enhanced compliance and litigation activities. Legal expenses are up 5.9% on prior year driven by the increase in litigation in the Federal Court and Fair Work Commission.

The FWBII received additional revenue from sub-leasing excess office space and costs awarded to the FWBII from court actions.

The timing of items in the capital plan changed. Leasehold improvements completed in 2015-16 included elements originally planned in 2014-15. The replacement of case management application software included in the intangibles 2015-16 budget was delayed and the implementation is now to be undertaken in 2016-17.


Administered Schedule of Comprehensive Income

Original2016 2015 Budget

Notes $ (*) $ (*) $ (*)

NET COST OF SERVICES

Expenses

Write-down and impairment of assets 2.1 225,270 78,300 -

Total Expenses 225,270 78,300 -

Income

Non-taxation revenueCourt-awarded penalties 2.2A 1,675,575 1,500,400 - Interest 2.2B 9,611 - -

Total revenue 1,685,186 1,500,400 -

Net (cost of)/ contribution by services 1,459,916 1,422,100 -

Surplus/(Deficit) 1,459,916 1,422,100 -

Total Comprehensive Income 1,459,916 1,422,100 -



for the period ended 30 June 2016

(*) These amounts are rounded to the nearest dollar, as required by the Resource Management Guide No. 125 "Commonwealth Entities Financial Statements Guide"

Administered activities relate to court awarded activities and due to their nature are not budgeted.


Administered Schedule of Assets and Liabilities

Original2016 2015 Budget

Notes $ (*) $ (*) $ (*)

ASSETS

Financial assetsReceivables 4.1A 661,850 752,020 - Other financial assets 4.1B 61,000 113,566 -

Total financial assets 722,850 865,586 -

Total Assets Administered on Behalf of Government 722,850 865,586 -

LIABILITIESTotal Liabilities Administered on Behalf of Government - - -

Net Assets/(Liabilities) 722,850 865,586 -

The above schedule should be read in conjunction with the accompanying notes.


as at 30 June 2016


Administered activities relate to court awarded activities and due to their nature are not budgeted.


Administered Reconciliation Schedule

2016 2015$ (*) $ (*)

Opening assets less liabilities as at 1 July 865,586 507,113 Net contribution by services:

Administered income 1,685,186 1,500,400 Administered expenses (225,270) (78,300)

Transfers (to) / from Australian Government:Transfers to Official Public Account (1,249,527) (707,127)Transfers to Official Public Account by other agencies (353,125) (356,500)

Closing assets less liabilities as at 30 June 722,850 865,586

The above schedule should be read in conjunction with the accompanying notes.

Accounting Policy

Administered Cash Transfers to and from the Official Public Account

as at 30 June 2016


Revenue collected by the FWBII for use by the Government rather than the FWBII is administered revenue. Collections are transferred to the Official Public Account (OPA) maintained by the Department of Finance. Conversely, cash is drawn from the OPA to make payments under Parliamentary appropriation on behalf of Government. These transfers to and from the OPA are adjustments to the administered cash held by the FWBII on behalf of the Government and reported as such in the schedule of administered cash flows and in the administered reconciliation schedule.


Administered Cash Flow Statement

2016 2015Notes $ (*) $ (*)

OPERATING ACTIVITIES

Cash receivedCourt-awarded penalties 1,249,527 707,127

Total cash received 1,249,527 707,127

Net cash from / (used by) operating activities 1,249,527 707,127

Net increase in cash held 5.3B 1,249,527 707,127

Cash and cash equivalents at the beginning of the reporting period - - Cash from the Official Public Account

Appropriations - -

Cash to the Official Public AccountAdministered receipts (1,249,527) (707,127)

Cash and cash equivalents at the end of the reporting period - -


for the period ended 30 June 2016



NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS for the period ending 30 June 2016

Overview

Objectives of the Office of the Fair Work Building Industry Inspectorate

The Office of the Fair Work Building Industry Inspectorate (FWBII) is an independent Australian Government controlled entity established by the Fair Work (Building Industry) Act 2012 and is a not-for-profit entity.

FWBII is structured to meet a single outcome:

Outcome 1: Enforce workplace relations laws in the building and construction industry and ensure compliance with those laws by all participants in the building and construction industry through the provision of education, assistance and advice.

FWBII activities contributing toward the outcome are classified as either departmental or administered. Departmental activities involve the use of assets, liabilities, income and expenses controlled or incurred by the FWBII in its own right. Administered activities involve the management or oversight by the FWBII, on behalf of the Government, of items controlled or incurred by the Government.

The continued existence of the FWBII in its present form is dependent on Government policy and on continuing funding by Parliament for the FWBII's administration.

Basis of Preparation of the Financial Statements

The financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act).The financial statements have been prepared in accordance with:

· Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR) for reporting periods ending on or after 1 July 2015; and· Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

The financial statements have been prepared on an accruals basis and in accordance with the historical cost convention, except for certain assets that are stated at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.

The financial statements are presented in Australian dollars and values are rounded to the nearest thousand dollars unless otherwise specified.

New Australian Accounting Standards

Adoption of new Australian Accounting Standard Requirements

No accounting standard has been adopted earlier than the application date as stated in the standard in the current reporting period.All other new, revised, amending standards and/or interpretations that were issued prior to the sign-off date and are applicable to the current reporting period did not have a material effect, and are not expected to have a future material effect, on the FWBII's financial statements.

Future Australian Accounting Standard requirements

All new, revised, amending standards and/or interpretations that were issued prior to the sign-off date and are applicable to future reporting periods are not expected to have a future material impact on the FWBII's financial statements.

Taxation

The FWBII is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).

Reporting of Administered Activities

Administered revenues, expenses, assets, liabilities and cash flows are disclosed in the administered schedules and related notes.

Except where otherwise stated below, administered items are accounted for on the same basis and using the same policies as for departmental items, including the application of Australian Accounting Standards.

Events After the Reporting PeriodDepartmental

Administered

No significant events have occurred after the reporting date that are likely to affect either the ongoing structure or financial activities of the FWBII.

No significant events have occurred after the reporting date that are likely to affect either the ongoing structure or financial activities of the FWBII.


Financial Performance

1.1 Expenses

2016 2015$’000 $’000

1.1A: Employee BenefitsWages and salaries 12,237 11,403 Superannuation:

Defined contribution plans 1,091 1,168 Defined benefit plans 1,376 1,247

Leave and other entitlements 1,996 2,126 Separation and redundancies 13 27 Total employee benefits 16,713 15,971

Accounting Policy

Accounting policies for employee related expenses are contained in the People and relationships section.

1.1B: SuppliersGoods and services supplied or rendered

Information and communications technology 951 1,191 Legal 8,381 7,917 Travel 1,228 1,141 Other 2,524 2,319

Total goods and services supplied or rendered 13,084 12,568

Goods supplied 249 380 Services rendered 12,835 12,188 Total goods and services supplied or rendered 13,084 12,568

Other suppliersOperating lease rentals in connection with

Minimum lease payments 3,211 3,568 Workers compensation premiums 351 334

Total other suppliers 3,562 3,902 Total suppliers 16,646 16,470

Leasing commitments

Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:

Within 1 year 1,980 2,396 Between 1 to 5 years 6,032 5,791 More than 5 years 5,326 6,838

Total operating lease commitments 13,338 15,025

Accounting Policy

Operating lease payments are expensed on a straight-line basis which is representative of the pattern of benefits derived from the leased assets.


This section analyses the financial performance of the Fair Work Building Industry Inspectorate for the year ended 2016.

The FWBII in its capacity as lessee holds office accommodation leases for varying periods up to ten years. Lease payments are subject to increases in accordance with fixed amounts in the lease agreement or market rental reviews. The FWBII may exercise option clauses in accordance with the terms of the lease.


2016 2015$’000 $’000

1.2A: Rental IncomeOperating lease rentals 185 524 Total rental income 185 524

Subleasing rental income commitments

Commitments for sublease rental income receivables are as follows:

Within 1 year - 182 Between 1 to 5 years - - More than 5 years - -

Total sublease rental income commitments - 182

1.2B: Other RevenueCourt-awarded costs 232 250 Other 163 113 Total other revenue 395 363

1.2C: Other GainsResources received free of charge - remuneration of auditors 29 35 Gains from sale of assets

Proceeds from sale of assets 12 14 Carrying value of assets sold (5) (3)

Total other gains 36 46

Accounting Policy

Resources Received Free of Charge

Sale of AssetsGains from the disposal of assets are recognised when control of the asset has passed to the buyer.

1.2D: Revenue from GovernmentAppropriations

Departmental appropriations 33,559 14,544 Revenue from Portfolio Department - 19,315

Total revenue from Government 33,559 33,859

Accounting Policy

Revenue from Government

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS for the period ending 30 June 20161.2 Own-Source Revenue and Gains

Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as Revenue from Government when the FWBII gains control of the appropriation, except for certain amounts that relate to activities that are reciprocal in nature, in which case revenue is recognised only when it has been earned. Appropriations receiveable are recognised at their nominal amounts.

The FWBII in its capacity as lessor sublets office accommodation leases for varying periods up to ten years. Lease receipts are subject to increases as specified in the leases/memorandum of understandings. These sub leasing arrangements ended during the year when FWBII moved to new premises.

Resources received free of charge are recognised as gains when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of these resources is recognised as an expense. Resources received free of charge are recorded as either revenue or gains depending on their nature.


2016 2015$ (*) $ (*)

Write-Down and Impairment of AssetsImpairment of financial instruments 225,270 78,300 Total write-down and impairment of assets 225,270 78,300



This section analyses the activities that the Fair Work Building Industry Inspectorate does not control but administers on behalf of Government. Unless otherwise noted, the accounting policies adopted are consistent with those applied for departmental reporting.

Income and Expenses Administered on Behalf of Government

2.1 Administered - Expenses


2016 2015$ (*) $ (*)

Revenue

Non-Taxation RevenueAccounting Policy

2.2A: Fees and FinesCourt-awarded penalties 1,675,575 1,500,400 Total fees and fines 1,675,575 1,500,400

Accounting Policy

2.2B: InterestPenalty interest 9,611 - Total interest 9,611 -


All administered revenues are revenues relating to ordinary activities performed by the FWBII on behalf of the Australian Government. As such, administered appropriations are not revenues of the FWBII.

The FWBII can receive monies for court-awarded penalties under the Fair Work (Building Industry) Act 2012 , the Independent Contractors Act 2006 and the Fair Work Act 2009 . Court awarded penalties are recognised when the court rules in favour of any claims initiated by the FWBII. Collectability of debts is reviewed at the reporting date. Impairment allowances are made when the collectability of the debt is judged to be less, rather than more, likely.

2.2 Administered - Income



Financial Position

3.1 Financial Assets

2016 2015$’000 $’000

3.1A: Cash and Cash EquivalentsCash on hand or on deposit 314 202 Total cash and cash equivalents 314 202

Accounting Policy

Cash is recognised at its nominal amount. Cash and cash equivalents includes:a) cash on hand; orb) demand deposits in bank accounts with an original maturity of 3 months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value.

3.1B: Trade and Other ReceivablesGoods and services receivableGoods and services 17 7 Total goods and services receivables 17 7

Appropriations receivableAppropriation receivable 45,295 48,357

Total appropriations receivable 45,295 48,357

Other receivablesGST receivable from the Australian Taxation Office 159 117 Other 69 136

Total other receivables 228 253 Total trade and other receivables (gross) 45,540 48,617

Total trade and other receivables (net) 45,540 48,617

Trade and other receivables (net) expected to be recoveredNo more than 12 months 45,540 48,617 More than 12 months - -

Total trade and other receivables (net) 45,540 48,617

Trade and other receivables (gross) aged as followsNot overdue 45,540 48,617 Overdue by

0 to 30 days - - 31 to 60 days - - 61 to 90 days - - More than 90 days - -

Total trade and other receivables (gross) 45,540 48,617

No indicators of impairment were identified for trade and other receivables.

Credit terms for goods and services were within 30 days (2015: 30 days).


This section analyses the Fair Work Building Industry Inspectorate assets used to conduct its operations and the operating liabilities incurred as a result.Employee related information is disclosed in the People and Relationships section.


Accounting Policy

Loans and Receivables

Impairment of Financial Assets

Accounting Judgements and EstimatesNo other significant accounting judgements or estimates have been identified that have a significant risk of causing a material adjustment to carrying amounts of assets and liabilities within the next reporting period.

Trade receivables, loans and other receivables that have fixed or determinable payments and that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest rate.

Financial assets are assessed for impairment at the end of each reporting period.


3.2 Non-Financial Assets

3.2A: Reconciliation of Opening and Closing Balances of Property, Plant and Equipment and Intangibles

Reconciliation of the opening and closing balances of property, plant and equipment and intangibles for 2016

Property, Intangibles Leasehold plant and (Computer

Improvements equipment Software) Total$’000 $’000 $’000 $’000

As at 1 July 2015Gross book value 2,949 702 157 3,651 Accumulated depreciation (2,256) (184) (157) (2,440)Accumulated impairment (328) - - (328)Total as at 1 July 2015 365 518 - 883

AdditionsBy purchase 6,087 97 - 6,184

Depreciation (710) (159) - (869)Disposal of assets - (4) - (4)Total as at 30 June 2016 5,742 452 - 6,194

Total as at 30 June 2016 represented byGross book value 6,241 717 - 6,958 Accumulated depreciation (499) (265) - (764)Accumulated impairment - - - - Total as at 30 June 2016 5,742 452 - 6,194

No indicators of impairment were found for leasehold improvements, property, plant and equipment and intangibles.

No other property, plant and equipment and intangibles are expected to be sold or disposed of within the next 12 months.

Revaluations of non-financial assetsAll revaluations were conducted in accordance with the revaluation policy stated at Note 7.4. No revaluation of leasehold assets occurred in 2015-16 due to FWBII replacing all leasehold assets during the current reporting period.


The Fair Work Building Industry Inspectorate has one property where a new leasehold and associated leasehold improvements are to commence within the next 12 months.


Reconciliation of the opening and closing balances of property, plant and equipment for 2015

Property, Intangibles Leasehold plant and (Computer

Improvements equipment Software)1 Total$’000 $’000 $’000 $’000

As at 1 July 2014Gross book value 2,795 311 157 3,263 Accumulated depreciation (1,578) (216) (157) (1,951)Accumulated impairment (328) - - (328)Totals as at 1 July 2014 889 95 - 984

AdditionsBy purchase 154 553 - 707

Depreciation (678) (127) - (805)Disposal of assets - (3) - (3)Totals as at 30 June 2015 365 518 - 883

Total as at 30 June 2015 represented byGross book value 2,949 702 157 3,808 Accumulated depreciation (2,256) (184) (157) (2,597)Accumulated impairment (328) - (328)Total as at 30 June 2015 represented by 365 518 - 883

1. The carrying amount of computer software included nil internally generated software and nil purchased software.

Accounting Policy

Asset Recognition Threshold

Revaluations

Depreciation

Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and income at their fair value at the date of acquisition, unless acquired as a consequence of the restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor's accounts immediately prior to the restructuring.

Purchases of leasehold improvements, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than $20,000 for leasehold improvements (2015: $20,000) and $2,000 for all other classes (2015: $2,000), which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).

The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to 'make good' provisions in property leases taken up by the FWBII where there exists an obligation to restore the property to its original condition at the end of the lease term. These costs are included in the value of the FWBII's land and buildings (leasehold improvements) assets with a corresponding provision for the 'make good' recognised.

Following initial recognition at cost, leasehold improvements, plant and equipment were carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets did not differ materially from the assets’ fair values as at the reporting date. The regularity of independent valuations depends upon the volatility of movements in market values for the relevant assets.

Revaluation adjustments are made on an asset class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reversed a previous revaluation decrement of the same asset class that was previously recognised in the surplus / deficit. Revaluation decrements for a class of assets are recognised directly through the surplus / deficit except to the extent that they reversed a previous revaluation increment for that class.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset is restated to the revalued amount.

Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the FWBII using, in all cases, the straight-line method of depreciation. Land and buildings (leasehold improvements) are depreciated on a straight-line basis over the lesser of the estimated useful life of the improvements and the unexpired period of the lease.

Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken.

Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.


Depreciation rates applying to each class of depreciable assets are based on the following useful lives:2016 2015

Leasehold improvements Lesser of term and useful life Lesser of term and useful lifePlant and equipment 1-10 years 1-10 years

Impairment

Derecognition

Accounting Judgement and EstimateNo accounting judgements or estimates have been identified that have a significant risk of causing a material adjustment to carrying amounts of assets and liabilities within the next financial period.

All assets were assessed for impairment at 30 June 2016. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount.

The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if the FWBII were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

An item of land and buildings (leasehold improvements), property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.


2016 2015$’000 $’000

3.2B: Other Non-Financial AssetsPrepayments 321 506 Total other non-financial assets 321 506

Other non-financial assets expected to be recoveredNo more than 12 months 321 447 More than 12 months - 59

Total other non-financial assets 321 506

No indicators of impairment were found for other non-financial assets.


3.3 Payables

2016 2015$’000 $’000

3.3A: SuppliersTrade creditors and accruals 2,652 1,457 Total suppliers 2,652 1,457

Suppliers expected to be settledNo more than 12 months 2,652 1,457 More than 12 months - -

Total suppliers 2,652 1,457

Settlement is usually made net 30 days.

3.3B: Other PayablesSalaries and wages 50 451 Superannuation 9 82 Lease incentives 48 155 Operating lease rentals 219 113 Appropriation payable to Department of Employment - 360 Other 37 179 Total other payables 363 1,340

Other payables expected to be settledNo more than 12 months 100 1,160 More than 12 months 263 180

Total other payables 363 1,340



4.1 Administered - Financial Assets

2016 2015$ (*) $ (*)

4.1A: Trade and Other ReceivablesOther receivables

Court-awarded penalties 887,120 752,020 Total trade and others receivables (gross) 887,120 752,020 Less Impairment allowance

Other receivables - Court-awarded penalties (225,270) - Net Receivables 661,850 752,020

Trade and other receivables (gross) aged as followsNot overdue - 691,000 Overdue by:

0 to 30 days - - 31 to 60 days 101,500 - 61 to 90 days 548,350 - More than 90 days 237,270 61,020

Total trade and others receivables (gross) 887,120 752,020

Impairment allowance aged as followsNot overdue - - Overdue by:

0 to 30 days - - 31 to 60 days - - 61 to 90 days - - More than 90 days (225,270) -

Total impairment allowance (225,270) -

All receivables are expected to be settled within 12 months

Reconciliation of the Impairment Allowance

Movements in relation to 2016Other

receivables Total$ (*) $ (*)

As at 1 July 2015 - - Impairment allowance received from restructuring - -

Amounts written off (225,270) (225,270)Amounts recovered and reversed - - Increase recognised in net surplus - -

Total as at 30 June 2016 (225,270) (225,270)

Movements in relation to 2015Other

receivables Total$ (*) $ (*)

As at 1 July 2014 - - Impairment allowance received from restructuring - -

Amounts written off - - Amounts recovered and reversed - - Increase recognised in net surplus - -

Total as at 30 June 2015 - -


Assets and Liabilities Administered on Behalf of the GovernmentThis section analyses the financial performance of the Fair Work Building Industry Inspectorate for the year ended 2016.


Accounting Policy

Receivables

Accounting Judgements and Estimates

4.1B: Other Financial AssetsAccrued revenue 61,000 113,566 Total other financial assets 61,000 113,566

All other financial asstes are expected to be settled within 12 months


The receivables amount shown as being overdue for more than 90 days relates to court penalties for which an impairment allowance of $225,270 has been made.

Where receivables are not subject to concessional treatment, they are carried at amortised cost using the effective interest method. Gains and losses due to impairment, derecognition and amortisation are recognised through profit or loss.


Fund

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2016 2015 $'000 $'000

Appropriation Act (No. 1) 2012-13 - 5,194 Appropriation Act (No. 1) 2013-14 - 23,205 Appropriation Act (No. 3) 2013-14 - 4,971 Appropriation Act (No. 1) 2014-151 31,058 34,509 Appropriation Act (No. 1) 2015-16 33,873 - Total 64,931 67,879

Notes:

5.1B: Unspent Annual Appropriations ('Recoverable GST exclusive')

Authority

1. Unspent Appropriation Act (No. 1) 2014-15 includes quarantined appropriation under Section 51 of $19,322,000.


5.2 Net Cash Appropriation Arrangements

2016 2015$'000 $'000

Total comprehensive income less depreciation / amortisationexpenses previously funded through revenue appropriations1 816 2,351 Plus: depreciation / amortisation expenses previously funded through revenue appropriation (869) (805)


Total comprehensive income - as per the Statement of Comprehensive Income (53) 1,546

1. From 2010-11, the Australian Government introduced net cash appropriation arrangements, whererevenue appropriations for depreciation / amortisation expenses ceased. Entities now receive a separate capital budget provided through equity appropriations. Capital budgets are to be appropriated in the period when cash payments for capital expenditure is required.


5.3 Cash Flow Reconciliation

5.3A: Cash Flow Reconciliation2016 2015

$’000 $’000

Reconciliation of cash and cash equivalents as per statement of financial position and cash flow statement

Cash and cash equivalents as perCash flow statement 314 202 Statement of financial position 314 202

Discrepancy - -

Net cost of services (33,612) (32,313)Revenue from Government 33,559 33,859

Depreciation and amortisation 869 805 Repeal of appropriation - (2,295)Gain on disposal of assets (7) (11)

Assets(Increase)/Decrease in net receivables 2,548 (81)(Increase)/Decrease in prepayments 185 108

LiabilitiesIncrease/(Decrease) in employee provisions 395 144 Increase/(Decrease) in other payables (977) (179)Increase/(Decrease) in suppliers payables 1,195 (106)

Net cash from / (used by) operating activities 4,155 (69)

5.3B: Administered - Cash Flow Reconciliation2016 2015$ (*) $ (*)

Reconciliation of cash and cash equivalents as per administered schedule of assets and liabilities to administered cash flow

Cash and cash equivalents as perAdministered cash flow statement - - Administered schedule of assets and liabilities - -

Discrepancy - -

Net contribution by services 1,459,916 1,422,100

Transfers to Official Public Account by other agencies (353,125) (356,500)

Assets(Increase)/Decrease in net receivables 90,170 (254,907)(Increase)/Decrease in other financial assets 52,566 (103,566)

Net cash from/(used by) operating activities 1,249,527 707,127


Adjustments for non-cash items

Movements in assets and liabilities

Reconciliation of net cost of services to net cash from operating activities


Reconciliation of net cost of services to net cash from operating activities

Adjustments for non-cash items

Movements in assets and liabilities


People and relationships

6.1 Employee Provisions

2016 2015$’000 $’000

6.1A: Employee ProvisionsLeave 4,034 3,639 Other - - Total Employee Provisions 4,034 3,639

Employee provisions are expected to be settledNo more than 12 months 1,983 2,026 More than 12 months 2,051 1,613

Total employee provisions 4,034 3,639

Accounting Policy

Leave

Separation and redundancy

Superannuation


The FWBII makes employer contributions to the employee's defined benefit superannuation schemes at rates determined by an actuary to be sufficient to meet the current cost to the Government. The FWBII accounts for the contributions as if they were contributions to defined contribution plans.

The liability for superannuation recognised as at 30 June represents outstanding contributions.

The estimate of the present value of the long service leave liability takes into account attrition rates and pay increases through promotion and inflation using the shorthand method prescribed in the FRR.

Provision is made for separation and redundancy benefit payments. The FWBII recognises a provision for termination benefits when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.

The FWBII's staff are members of either the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), the PSS Accumulation Plan (PSSap) or other superannuation funds held outside the Australian Government.

The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme.

The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance's administered schedules and notes.

This section describes a range of employment and post employment benefits provided to our people and our relationships with other key people.

Liabilities for short-term employee benefits and termination benefits expected to be settled within twelve months of the end of reporting period are measured at their nominal amounts.

Other long-term employee benefits are measured as net total of the present value of the defined benefit obligation at the end of the reporting period minus the fair value at the end of the reporting period of plan assets (if any) out of which the obligations are to be settled directly.

The liability for employee benefits includes provision for annual leave and long service leave. No provision has been made for personal leave as all personal leave is non-vesting and the average personal leave taken in future years by employees of the FWBII is estimated to be less than the annual entitlement for personal leave.

The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will be applied at the time the leave is taken, including the FWBII’s employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination.


Accounting Judgements and EstimatesIn the process of applying the accounting policies listed in this note, the FWBII has made the following judgements that have the most significant impact on the amounts recorded in the financial statements:

the Australian Government shorthand method has been used to estimate the present value of long service leave liabilities.


6.2 Senior Management Personnel Remuneration

2016 2015$'000 $'000

Short-term employee benefitsSalary 1,714 1,448Motor vehicle and other allowances 325 281

Total short-term employee benefits 2,039 1,729

Post-employment benefitsSuperannuation 338 288

Total post-employment benefits 338 288

Other long-term employee benefitsAnnual leave 167 151Long service leave 75 68

Total other long-term employee benefits 242 219

Termination benefitsTermination benefits - -

Total termination benefits - -

Total 2,619 2,236

Notes:The total number of senior management personnel that are included in the above table are 9 (2015: 9)



Managing Uncertainties

7.1A Contingent Assets and Liabilities

Quantifiable Contingencies

Unquantifiable Contingencies

Accounting Policy

7.1B: Administered - Contingent Assets and Liabilities

Quantifiable Administered Contingencies

Unquantifiable Administered Contingencies

At 30 June 2016, the FWBII has 14 unquantifiable administered contingent assets relating to matters before the courts that are considered more likely than not to lead to a penalty order. (2015: 8)

At 30 June 2016, the FWBII has no unquantifiable administered contingent liabilities. (2015: nil)


The following information relates to potential court-awarded penalties in respect to matters to which the FWBII is / will be a party.

At 30 June 2016, the FWBII has no quantifiable administered contingent assets. (2015: Nil)

At 30 June 2016, the FWBII has no quantifiable administered contingent liabilities. (2015: nil)

This section analyses how the Fair Work Building Industry Inspectorate manages financial risks within its operating environment

Contingent liabilities and contingent assets are not recognised in the statement of financial position but are reported in the notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when the likelihood of settlement is greater than remote.

At 30 June 2016, the FWBII had no quantifiable contingent liabilities (2015: nil).

There are no quantifiable contingent assets in respect to court matters settled at 30 June 2016 that include an amount for costs in favour of the FWBII but for which the court has yet to issue a decision (2015: Nil).

At 30 June 2016, the FWBII had 3 unquantifiable contingent assets relating to matters before the court that are considered more likely than not to lead to costs in favour of the FWBII (2015: 1). It was not possible to estimate the amounts of any eventual receipts that may be required in relation to these claims. These are not included in the above table.

At 30 June 2016, the FWBII had 5 unquantifiable contingent liabilities relating to matters before the court that are considered more likely than not to lead to costs against the FWBII (2015: 1). It was not possible to estimate the amounts of any eventual payments that may be required in relation to these claims. These are not included in the above table.

7.1 Contingent Assets and Liabilities


2016 2015$'000 $'000

7.2A: Categories of Financial InstrumentsFinancial AssetsLoans and receivables

Cash and cash equivalents 314 202 Goods and services receivables 17 7 Other receivables 69 136

Total loans and receivables 400 345 Total financial assets 400 345

Financial LiabilitiesFinancial liabilities measured at amortised cost

Suppliers 2,652 1,457 Total financial liabilities measured at amortised cost 2,652 1,457 Total financial liabilities 2,652 1,457

The FWBII has no net income or expenses from financial instruments.

Accounting Policy

Financial Assets

Impairment of Financial Assets

Financial Liabilities

Other Financial Liabilities

7.2B: Fair Value of Financial InstrumentsThe carrying amount of all financial assets and liabilities as at 30 June 2016 approximates their fair value.

Suppliers and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

7.2 Financial Instruments

The classification of financial assets depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. The FWBII only holds financial assets in the category of loans and receivables. Financial assets are recognised and derecognised upon trade date.

Financial assets are assessed for impairment at the end of each reporting period.


Financial assets held at amortised cost - if there is objective evidence that an impairment loss has been incurred for loans and receivables, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate. The carrying amount is reduced by way of an impairment allowance account. The loss is recognised in the Statement of Comprehensive Income.

Financial liabilities are classified as other financial liabilities. Financial liabilities are recognised and derecognised upon 'trade date'.


7.2C: Credit Risk

The following table illustrates the FWBII's gross exposure to credit risk.2016 2015

$’000 $’000

314 202 Goods and services receivables 17 7

69 136 400 345

Credit quality of financial assets not past due or individually determined as impairedNot past due nor impaired

Not past due nor impaired

Past due or

impaired

Past due or

impaired2016 2015 2016 2015

$’000 $’000 $’000 $’000

314 202 - - Goods and services receivables 17 7 - -

69 136 - - 400 345 - -

0 to 30 days

31 to 60 days

61 to 90 days

90+ days Total

$’000 $’000 $’000 $’000 $’000

- - - - - - - - - -

0 to 30 days

31 to 60 days

61 to 90 days

90+ days Total

$’000 $’000 $’000 $’000 $’000

- - - - - - - - - -

Ageing of financial assets that are past due but not impaired for 2015

Financial AssetsOther receivablesTotal

The FWBII is exposed to minimal credit risk through trade and other receivables. The maximum exposure to credit risk is the risk that arises from potential default of a debtor. The FWBII's debtors are generally limited to other Australian Government agencies and FWBII employees. The FWBII has policies and procedures that guide the recovery of employee debts.

The FWBII holds no collateral to mitigate against credit risk.

Total


Financial AssetsCash and cash equivalents

Other receivables

Other receivablesFinancial Assets

Total

Financial AssetsCash and cash equivalents

Other receivablesTotal


7.2D: Liquidity RiskLiquidity risk is the risk that the FWBII will not be able to meet its obligations as they fall due.

Maturities for non-derivative financial liabilities - 2016

On within between 1 between 2 more thandemand 1 year to 2 years to 5 years 5 years Total

$’000 $’000 $’000 $’000 $’000 $’000

- 2,652 - - - 2,652 - 2,652 - - - 2,652

Maturities for non-derivative financial liabilities - 2015On within between 1 between 2 more than

demand 1 year to 2 years to 5 years 5 years Total$’000 $’000 $’000 $’000 $’000 $’000

- 1,457 - - - 1,457 - 1,457 - - - 1,457

7.2E: Market RiskThe FWBII holds basic financial instruments that do not expose it to currency, interest rate or other price risks.

The FWBII's financial liabilities are payables. The exposure to liquidity risk is based on the notion that the FWBII will encounter difficulties in meeting its obligations associated with financial liabilities. This is highly unlikely due to appropriation funding and internal policies and procedures in place to ensure the FWBII has access to appropriate resources to meet its financial obligations as and when they fall due.

Financial LiabilitiesSuppliersTotal

Financial LiabilitiesSuppliersTotal

The maturities for all financial liabilities are within one year (2015: within one year).


2016 2015$ (*) $ (*)

7.3A: Categories of Financial InstrumentsFinancial Assets

Receivables 661,850 752,020 Other financial assets 61,000 113,566

Total financial assets 722,850 865,586

7.2B: Net Income and Expense from Financial AssetsFinancial Assets

Write-down and impairment of assets (225,270) - Net Loss From Financial Assets (225,270) -

7.3C: Fair Value of Financial Instruments

7.3 Administered - Financial Instruments

The carrying amount of all financial assets and liabilities as at 30 June 2016 approximates their fair value.



7.3D: Credit Risk

The following table illustrates the Agency's gross exposure to credit risk.

2016 2015$ (*) $ (*)

Financial Assets887,120 752,020

61,000 113,566 Total 948,120 865,586

Credit quality of financial instruments for 2016:

Not Past Not Past Past due Past dueDue Nor Due Nor or or

Impaired Impaired impaired impaired2016 2015 2016 2015$ (*) $ (*) $ (*) $ (*)

Financial Assets - 691,000 887,120 61,020

61,000 113,566 - - Total 61,000 804,566 887,120 61,020


0 to 30 31 to 60 61 to 90 90+days days days days Total$ (*) $ (*) $ (*) $ (*) $ (*)

Financial Assets - 101,500 548,350 12,000 661,850

Total - 101,500 548,350 12,000 661,850


0 to 30 31 to 60 61 to 90 90+days days days days Total$ (*) $ (*) $ (*) $ (*) $ (*)

Financial Assets - - - 61,020 61,020

Total - - - 61,020 61,020

7.3E: Market Risk

The maximum exposure to credit risk at the reporting date in relation to each class of recognised financial assets is the carrying amount of those assets.

The maximum exposure to credit risk is the risk that arises from the potential default of a debtor. This amount is equal to the total amount of receivables and other financial assets. The FWBII has assessed the risk of default on payment and has allocated $225,270 in 2015-16 to an allowance for impairment account.

The FWBII is not in a position to manage its credit risk as the administered debtors are recognised following court proceedings and not through a trade relationship.

The FWBII has no significant exposures to any concentrations of credit risk and holds no collateral to mitigate against credit risk.

ReceivablesAccrued revenue

ReceivablesAccrued revenue

Receivables

Receivables


The FWBII holds basic financial instruments that do not expose it to currency, interest rate or other price risks.


7.4

Fair

Valu

e M

easu

rem

ent

Leve

l 1:

Quo

ted

pric

es (u

nadj

uste

d) in

act

ive

mar

kets

for i

dent

ical

ass

ets

and

liabi

litie

s th

at th

e FW

BII c

an a

cces

s at

mea

sure

men

t dat

e.

Leve

l 2:

Inpu

ts o

ther

than

quo

ted

pric

es th

at a

re in

clud

ed w

ithin

Lev

el 1

and

whi

ch a

re o

bser

vabl

e fo

r the

ass

ets

or li

abilit

ies,

eith

er d

irect

ly o

r ind

irect

ly.

Leve

l 3:

Uno

bser

vabl

e in

puts

for t

he a

sset

s or

liab

ilitie

s.

Acco

untin

g Po

licy

Phys

ical

non

-cur

rent

ass

ets

are

valu

ed in

acc

orda

nce

with

AAS

B 13

Fai

r Val

ue M

easu

rem

ent.

Fair

valu

e m

easu

rem

ents

– h

ighe

st a

nd b

est u

se d

iffer

s fr

om c

urre

nt u

se fo

r non

-fina

ncia

l ass

ets

(NFA

s)

Uno

bser

vabl

e in

puts

NOTE

S TO

AND

FO

RM

ING

PAR

T O

F TH

E FI

NAN

CIAL

STA

TEM

ENTS

for t

he p

erio

d en

ding

30

June

201

6

The

diffe

rent

leve

ls o

f the

fair

valu

e hi

erar

chy

are

defin

ed b

elow

.

The

follo

wing

tabl

es p

rovi

de a

n an

alys

is o

f ass

ets

and

liabi

litie

s th

at a

re m

easu

red

at fa

ir va

lue.

The

rem

aini

ng a

sset

s an

d lia

bilit

ies

disc

lose

d in

the

stat

emen

t of f

inan

cial

pos

ition

do

not a

pply

the

fair

valu

e hi

erar

chy.

The

FWBI

I's a

sset

s ar

e he

ld fo

r ope

ratio

nal p

urpo

ses

and

not h

eld

for t

he p

urpo

ses

of d

eriv

ing

a pr

ofit.

The

cur

rent

use

of a

ll co

ntro

lled

asse

ts is

co

nsid

ered

thei

r hig

hest

and

bes

t use

.

The

sign

ifica

nt u

nobs

erva

ble

inpu

ts u

sed

in th

e fa

ir va

lue

mea

sure

men

t of t

he A

genc

y's le

aseh

old

impr

ovem

ents

and

pro

perty

, pla

nt a

nd e

quip

men

t ass

et

clas

ses

rela

te to

the

cons

umed

eco

nom

ic b

enef

it / a

sset

obs

oles

cenc

e. A

sig

nific

ant i

ncre

ase

(dec

reas

e) in

this

inpu

t wou

ld re

sult

in a

sig

nific

antly

lowe

r (h

ighe

r) fa

ir va

lue

mea

sure

men

t.

The

asse

ts in

clud

e of

fice

equi

pmen

t, co

mpu

ters

and

offi

ce fi

t-out

of l

ease

d pr

emis

es.

The

asse

ts a

re d

eem

ed to

be

“Non

-spe

cial

ised

”. Th

e FW

BII d

oes

not

cons

ider

that

it h

as a

ny u

niqu

e as

sets

. Non

-spe

cial

ised

ass

ets

with

sho

rt us

eful

live

s ar

e m

easu

red

at d

epre

ciat

ed re

plac

emen

t cos

t, as

a s

urro

gate

for f

air

valu

e. A

n an

nual

ass

essm

ent i

s un

derta

ken

to d

eter

min

e wh

ethe

r the

car

ryin

g am

ount

of t

he a

sset

s is

mat

eria

lly d

iffer

ent f

rom

the

fair

valu

e. F

or a

ll Le

aseh

old

Impr

ovem

ent a

sset

s, th

e co

nsum

ed e

cono

mic

ben

efit

/ ass

et o

bsol

esce

nce

dedu

ctio

n is

det

erm

ined

bas

ed o

n th

e te

rm o

f the

ass

ocia

ted

leas

e.


7.4A

: Fai

r Val

ue M

easu

rem

ent

Fair

valu

e m

easu

rem

ents

Cat

egor

yat

the

end

of th

e re

port

ing

perio

d(L

evel

2016

2015

1, 2

or 3

)$’

000

$'00

0Va

luat

ion

Tech

niqu

es a

nd In

puts

Use

d1

Non

-fina

ncia

l ass

ets

Land

and

bui

ldin

gs (l

ease

hold

impr

ovem

ents

)5,

742

365

Leve

l 3

Prop

erty

, pla

nt a

nd e

quip

men

t45

2 51

8 Le

vel 3

Tota

l fai

r val

ue m

easu

rem

ents

of a

sset

s in

th

e St

atem

ent o

f Fin

anci

al P

ositi

on6,

194

883

1. T

here

is n

o si

gnifi

cant

cha

nge

in th

e va

luat

ion

tech

niqu

e si

nce

the

prio

r yea

r.

Valu

atio

n te

chni

que

is b

ased

on

the

depr

ecia

ted

repl

acem

ent c

ost.

Inpu

ts u

sed

incl

ude

repl

acem

ent

cost

, tot

al u

sefu

l life

and

rem

aini

ng u

sefu

le li

fe.

Valu

atio

n te

chni

que

is b

ased

on

the

depr

ecia

ted

repl

acem

ent c

ost.

Inpu

ts u

sed

incl

ude

repl

acem

ent

cost

, tot

al u

sefu

l life

and

rem

aini

ng u

sefu

le li

fe.


2016

2015

2016

2015

2016

2015

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

As a

t 1 J

uly

365

889

518

95

883

984

Tota

l los

ses

reco

ngis

ed in

net

cos

t of s

ervi

ces1

(710

)(6

78)

(163

)(1

30)

(873

)(8

08)

Purc

hase

s6,

087

154

97

553

6,18

4 70

7 To

tal a

s at

30

June

5,74

2 36

5 45

2 51

8 6,

194

883

1. T

hese

loss

es a

re re

pres

ente

d in

the

Stat

emen

t of C

ompr

ehen

sive

Inco

me

as d

epre

ciat

ion

expe

nses

.

FWBI

I's p

olic

y fo

r det

erm

inin

g wh

en tr

ansf

ers

betw

een

leve

ls o

f the

fair

valu

e hi

erar

chy

are

deem

ed to

hav

e oc

curre

d ca

n be

foun

d in

Not

e 7.

4.

Non

-fina

ncia

l ass

ets

Land

and

Bui

ldin

gs (L

ease

hold

Im

prov

emen

ts)

Prop

erty

, Pla

nt a

nd E

quip

men

tTo

tal

7.4B

: Rec

onci

liatio

n fo

r Rec

urrin

g Le

vel 3

Fai

r Val

ue M

easu

rem

ents


Other information8.1 Reporting of Outcomes

Outcome 1 & Total1

Outcome 1 & Total1

2016 2015$’000 $’000

DepartmentalExpenses2 34,228 33,246 Own-source income2 616 933

AdministeredExpenses3 225 78 Own-source income3 1,685 1,500

Net Cost of Outcome Delivery 32,152 30,891


The FWBII has a single outcome and single program. The outcome is: Enforce workplace relations laws in the building and construction industry and ensure compliance with these laws by all participants in the building and construction industry through the provision of education, assistance and advice.

1. Outcome 1 is described in the Overview. Net costs shown include intra-Government costs that are eliminated in calculating the actual budget outcome. Refer to Expenses and Resources for Outcome 1 table in Part 4 of the Annual Report

2. The major classes of departmental expenses and income that contribute to the FWBII's outcome are as shown in the Statement of Comprehensive Income and Statement of Financial Position.

3. The major classes of administered expenses, income, assets and liabilities that contribute to the FWBII's outcome are as shown in the Administered Schedule of Comprehensive Income and Administered Schedule of Assets and Liabilities.


PART 6 APPENDICES

Appendix 1: FWBI Act annual report requirements 122

Appendix 2: Compliance index 126

Appendix 3: List of acronyms and abbreviations 134

Appendix 4: Glossary 136

APPENDIX 1

FWBI ACT ANNUAL REPORT REQUIREMENTS

Section 14 of the Fair Work (Building Industry) Act 2012 (FWBI Act) stipulates that mandatory information be included in the FWBC Annual Report. The requirements that have not been addressed in the body of this annual report are detailed below.

SECTION 14(2)(A)

Details of directions given by the Minister under section 11 or 12

In the period of this report no directions were given by the Minister under section 11 or 12 of the FWBI Act.

SECTION 14(2)(B)

Details of delegations by the Director under section 13

In the period of this report, on 14 October 2015, the Director delegated his powers and functions under section 13 of the FWBI Act. The detailed list of the delegations made is set out below.

Table of functions and powers

Function and/or power Delegate(s)

1 Monitor compliance with designated building laws and the Building Code by building industry participants in accordance with paragraph 10(b) of the FWBI Act.

Fair Work Building Industry Inspectors

General Manager – Building Code

2 Inquire into, and investigate, any act or practice by a building industry participant that may be contrary to a designated building law, a safety-net contractual entitlement or the Building Code, in accordance with paragraph 10(c) of the FWBI Act.


3 Notify the Commonwealth Ombudsman that an examination notice has been issued and provide the copies as required by section 49 of the FWBI Act.

Chief Counsel

General Manager – Legal (Central/West)

General Manager – Legal (Eastern)

4 Give an examination notice to the person in relation to whom it is issued in accordance with subsection 50(1) of the FWBI Act.

All members of staff of the Office


Function and/or Power Delegate(s)

5 If a notice under subsection 50(3) or 50(4) of the FWBI Act is given to a person, give a copy of that notice to the Commonwealth Ombudsman in accordance with subsection 50(7) of the FWBI Act.

Chief Counsel



6 Conduct an examination of a person in accordance with subsection 51(2) of the FWBI Act.

Chief Counsel



7 Require information or answers given by a person at an examination to be verified by, or given on, oath or affirmation, either orally or in writing and, for this purpose, administer the oath or affirmation in accordance with subsection 51(4) of the FWBI Act.

Chief Counsel



8 Give the Commonwealth Ombudsman a report, video recording and transcript of an examination of a person in accordance with subsection 54A(1) of the FWBI Act.

Chief Counsel



9 Take possession of a document produced under an examination notice and keep it for as long as is necessary for the purposes of conducting the investigation to which the document is relevant in accordance with subsection 55(1) of the FWBI Act.


Members of staff of the Office

10 In the circumstances set out in subsection 55(4) of the FWBI Act, permit a person otherwise entitled to possession of a document (or a person authorised by that person) to inspect and make copies of all or part of the document.

Chief Counsel



Executive Manager – Operations

11 Make and keep copies of all or part of any documents produced under an examination notice in accordance with section 56 of the FWBI Act.

Members of staff of the Office

123PART 6 | APPENDICES


Disclosure of information

12 Disclose, or authorise the disclosure, of information in accordance with subsection 64(2)(a) the FWBI Act.

All members of staff of the Office

13 Disclose or authorise the disclosure of information in accordance with subsection 64(2)(b) the FWBI Act.

Chief Counsel



Fair Work Building Industry Inspectors engaged as Senior Executive Level Band 1 or Executive Level 2 employees

14 Disclose or authorise the disclosure of information to the Minister in accordance with subsection 64(3) of the FWBI Act.

Chief Counsel



15 Disclose or authorise the disclosure of information to the Secretary of the Department, an SES employee, or an APS employee in the Department, in accordance with subsection 64(4) of the FWBI Act.

Members of staff of the Office engaged as Senior Executive Level Band 1 or 2 employees

Members of staff of the Office engaged as Executive Level 2 employees

Senior Advisor – Office of the Director

16 Disclose or authorise the disclosure of information to the Advisory Board in accordance with subsection 64(5) of the FWBI Act.

Chief Counsel





Submissions

17 Make submissions on a matter before the Fair Work Commission in accordance with section 72 of the FWBI Act.

Chief Counsel

Consultants and assistants

18 Determine that a person may accompany a Fair Work Building Industry Inspector onto premises to assist the Fair Work Building Industry Inspector in accordance with subsection 710(1) of the FW Act.



General Manager – Operations (Central/West)

General Manager – Operations (Eastern)

Fair Work Building Industry Inspectors engaged as Executive Level 2 employees

19 On behalf of the Commonwealth, engage persons having suitable qualifications and experience as consultants to the Director in accordance with section 26M of the FWBI Act.

Chief Counsel


20 In accordance with section 26M of the FWBI Act, determine in writing the terms and conditions of a person engaged under section 26M of the FWBI Act.

Chief Counsel


SECTION 14(2)(c)

Details of recommendations made to the Director by the Advisory Board

In the period of this report no recommendations were made to the Director by the Advisory Board. See page 56 for further details on the Advisory Board.


APPENDIX 2

COMPLIANCE INDEX

Checklist of reporting requirements

Description Requirement Page reference

Letter of transmittal

A copy of the letter of transmittal signed and dated by accountable authority on date final text approved, with statement that the report has been prepared in accordance with section 46 of the Act and any enabling legislation that specifies additional requirements in relation to the annual report.

Mandatory v

Aids to access

Table of contents. Mandatory vi–vii

Alphabetical index. Mandatory 142–144

Glossary of abbreviations and acronyms. Mandatory 88–91

List of requirements. Mandatory 82–85

Details of contact officer. Mandatory iii

Entity’s website address. Mandatory iii

Electronic address of report. Mandatory iii

Review by accountable authority

A review by the accountable authority of the entity. Mandatory 4–5



Overview of the entity

A description of the role and functions of the entity. Mandatory 8–10

A description of the organisational structure of the entity. Mandatory 12–13

A description of the outcomes and programmes administered by the entity.

Mandatory 9

A description of the purposes of the entity as included in corporate plan. Mandatory 10

An outline of the structure of the portfolio of the entity. Portfolio departments - mandatory

8

Where the outcomes and programs administered by the entity differ from any Portfolio Budget Statement, Portfolio Additional Estimates Statement or other portfolio estimates statement that was prepared for the entity for the period, include details of variation and reasons for change.

If applicable, Mandatory

Not applicable

Report on the Performance of the entity

Annual performance Statements

Annual performance statement in accordance with paragraph 39(1)(b) of the Act and section 16F of the Rule.

Mandatory 20–28

Report on Financial Performance

A discussion and analysis of the entity’s financial performance. Mandatory 62–63

A table summarising the total resources and total payments of the entity. Mandatory 62–63



If there may be significant changes in the financial results during or after the previous or current reporting period, information on those changes, including: the cause of any operating loss of the entity; how the entity has responded to the loss and the actions that have been taken in relation to the loss; and any matter or circumstances that it can reasonably be anticipated will have a significant impact on the entity’s future operation or financial results.


Not applicable

Management and Accountability

Corporate Governance

Information on compliance with section 10 (fraud systems) Mandatory 59

A certification by accountable authority that fraud risk assessments and fraud control plans have been prepared.

Mandatory v

A certification by accountable authority that appropriate mechanisms for preventing, detecting incidents of, investigating or otherwise dealing with, and recording or reporting fraud that meet the specific needs of the entity are in place.

Mandatory v

A certification by accountable authority that all reasonable measures have been taken to deal appropriately with fraud relating to the entity.

Mandatory v

An outline of structures and processes in place for the entity to implement principles and objectives of corporate governance.

Mandatory 56–61

A statement of significant issues reported to Minister under paragraph 19(1)(e) of the Act that relates to non-compliance with Finance law and action taken to remedy non-compliance.


Not applicable



External Scrutiny

Information on the most significant developments in external scrutiny and the entity’s response to the scrutiny.

Mandatory 65

Information on judicial decisions and decisions of administrative tribunals and by the Australian Information Commissioner that may have a significant effect on the operations of the entity.


65

Information on any reports on operations of the entity by the Auditor-General (other than report under section 43 of the Act), a Parliamentary Committee, or the Commonwealth Ombudsman.


65

Information on any capability reviews on the entity that were released during the period.


Not applicable

Management of Human Resources

An assessment of the entity’s effectiveness in managing and developing employees to achieve entity objectives.

Mandatory 66

Statistics on the entity’s APS employees on an ongoing and non-ongoing basis; including the following:

• Statistics on staffing classification level;

• Statistics on full-time employees;

• Statistics on part-time employees;

• Statistics on gender;

• Statistics on staff location;

• Statistics on employees who identify as Indigenous.

Mandatory 68–70



Information on any enterprise agreements, individual flexibility arrangements, Australian workplace agreements, common law contracts and determinations under subsection 24(1) of the Public Service Act 1999.

Mandatory 68

Information on the number of SES and non-SES employees covered by agreements etc identified in paragraph 17AG(4)(c).

Mandatory 69

The salary ranges available for APS employees by classification level. Mandatory 68

A description of non-salary benefits provided to employees. Mandatory 68

Information on the number of employees at each classification level who received performance pay.


Not applicable

Information on aggregate amounts of performance pay at each classification level.


Not applicable

Information on the average amount of performance payment, and range of such payments, at each classification level.


Not applicable

Information on aggregate amount of performance payments. If applicable, Mandatory

Not applicable

Assets Management

An assessment of effectiveness of assets management where asset management is a significant part of the entity’s activities.

If applicable, mandatory

64

Purchasing

An assessment of entity performance against the Commonwealth Procurement Rules.

Mandatory 64



Consultants

A summary statement detailing the number of new contracts engaging consultants entered into during the period; the total actual expenditure on all new consultancy contracts entered into during the period (inclusive of GST); the number of ongoing consultancy contracts that were entered into during a previous reporting period; and the total actual expenditure in the reporting year on the ongoing consultancy contracts (inclusive of GST).

Mandatory 64

A statement that “During [reporting period], [specified number] new consultancy contracts were entered into involving total actual expenditure of $[specified million]. In addition, [specified number] ongoing consultancy contracts were active during the period, involving total actual expenditure of $[specified million]”.

Mandatory 65

A summary of the policies and procedures for selecting and engaging consultants and the main categories of purposes for which consultants were selected and engaged.

Mandatory 64

A statement that “Annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website.”

Mandatory 64

Australian National Audit Office Access Clauses

If an entity entered into a contract with a value of more than $100 000 (inclusive of GST) and the contract did not provide the Auditor-General with access to the contractor’s premises, the report must include the name of the contractor, purpose and value of the contract, and the reason why a clause allowing access was not included in the contract.


64



Exempt contracts

If an entity entered into a contract or there is a standing offer with a value greater than $10 000 (inclusive of GST) which has been exempted from being published in AusTender because it would disclose exempt matters under the FOI Act, the annual report must include a statement that the contract or standing offer has been exempted, and the value of the contract or standing offer, to the extent that doing so does not disclose the exempt matters.


64

Small business

A statement that “[Name of entity] supports small business participation in the Commonwealth Government procurement market. Small and Medium Enterprises (SME) and Small Enterprise participation statistics are available on the Department of Finance’s website.”

Mandatory 64

An outline of the ways in which the procurement practices of the entity support small and medium enterprises.

Mandatory 64

If the entity is considered by the Department administered by the Finance Minister as material in nature—a statement that “[Name of entity] recognises the importance of ensuring that small businesses are paid on time. The results of the Survey of Australian Government Payments to Small Business are available on the Treasury’s website.”


Not applicable

Financial Statements

Inclusion of the annual financial statements in accordance with subsection 43(4) of the Act.

Mandatory 74



Other Mandatory Information

If the entity conducted advertising campaigns, a statement that “During [reporting period], the [name of entity] conducted the following advertising campaigns: [name of advertising campaigns undertaken]. Further information on those advertising campaigns is available at [address of entity’s website] and in the reports on Australian Government advertising prepared by the Department of Finance. Those reports are available on the Department of Finance’s website.”


Not applicable

If the entity did not conduct advertising campaigns, a statement to that effect.


65

A statement that “Information on grants awarded by [name of entity] during [reporting period] is available at [address of entity’s website].”


Not applicable

Outline of mechanisms of disability reporting, including reference to website for further information.

Mandatory 61

Website reference to where the entity’s Information Publication Scheme statement pursuant to Part II of FOI Act can be found.

Mandatory 65

Correction of material errors in previous annual report If applicable, mandatory

Not applicable

Information required by other legislation Mandatory 122


APPENDIX 3

LIST OF ACRONYMS AND ABBREVIATIONS

AASBAustralian Accounting Standards Board

AIMSABCC Investigation Management System

APSAustralian Public Service

APSCAustralian Public Service Commission

ASAAgency Security Adviser

BCECBrisbane Convention and Exhibition Centre

BCGBuilding Code Group

CFMEUConstruction, Forestry, Mining and Energy Union

CPRCommonwealth Procurement Rules 2014

CSSCommonwealth Superannuation Scheme

DCBDepartment Capital Budget

EAEnterprise agreement

EBBEdmund Barton Building

ELExecutive Level


FBTFringe Benefits Tax

FOIFreedom of Information

FOI ActFreedom of Information Act 1982

FRRFinancial Reporting Rules

FTEFull time equivalent

FW ActFair Work Act 2009

FWBIIThe Office of the Fair Work Building Industry Inspectorate (operating as Fair Work Building and Construction)

FWBCFair Work Building and Construction (operating name of the Office of the Fair Work Building Industry Inspectorate)

FWBI ActFair Work (Building Industry) Act 2012

FWCFair Work Commission

FWOFair Work Ombudsman

GSTGoods and Services Tax

HRHuman resources

IPIntellectual property

IPSInformation Publication Scheme

ITInformation technology

KPIKey performance indicator

NFANon-financial assets

OPAOfficial public account

PBSPortfolio Budget Statements

PGPA ActPublic Governance, Performance and Accountability Act 2013

POHPublic Office Holder

PS ActPublic Service Act 1999

PSSPublic Sector Superannuation Scheme

PSSapPublic Sector Superannuation Scheme accumulation plan

PSUProfessional Standards Unit

QIMRQueensland Institute of Medical Research

RAPReconciliation Action Plan

ROERight of entry

RPFRegulator Performance Framework

SESSenior Executive Service

WHSWork health and safety

WHS ActWork Health and Safety Act 2011

WHSCWork Health and Safety Committee


APPENDIX 4

GLOSSARY

Note: Definitions in this glossary have been prepared to assist readers in understanding the FWBC Annual Report. They should not be regarded as comprehensive or legally authoritative.

accrual accounting In this system of accounting, items are brought to account and included in the financial statements as items are earned or incurred rather than as they are received or paid.

administered items These are expenses, revenues, assets and liabilities managed by agencies on behalf of the Commonwealth. Agencies do not control administered items. Administered expenses include grants, subsidies and benefits. In many cases administered expenses fund the delivery of third-party outputs.

agency The terms ‘agency’ and ‘the agency’ are used in this report to refer to Fair Work Building and Construction (FWBC).

annual appropriation Two appropriation bills are introduced into Parliament in May and comprise the budget for the financial year beginning 1 July. Further bills are introduced later in the financial year as part of the additional estimates. Parliamentary departments have their own appropriations.

APS employee – person engaged under section 22, or engaged as an APS employee, under section 72 of the Public Service Act 1999 (PS Act).

awards – documents that set out the minimum wages and conditions of employees.

In some cases awards cover a specific issue such as superannuation or long service leave. FWC oversees federal awards, while state industrial tribunals are responsible for state awards. Sometimes, both federal and state awards can apply to the one workplace, although to different classifications of employees.

Building Code 2013 – the set of rules that replaced the National Code of Practice for the Construction Industry on 1 February 2013.

The Building Code 2013 sets out the Australian Government’s expected standards for building contractors or building industry participants involved in Commonwealth-funded construction projects. It applies to building contractors and building industry participants who have submitted an expression of interest or tendered for Commonwealth funded building work.


building industry participant

Any of the following:

• a building employee, a building employer or a building contractor;

• a person who enters into a contract with a building contractor under which the building contractor agrees to carry out building work or to arrange for building work to be carried out;

• an officer, delegate or other representative of a building association;

• a building association; or

• an employee of a building association.

building work FWBC has jurisdiction over building work, in its broad definition, throughout Australia. The few exceptions encompass mining and drilling operations and operations related to single-dwelling homes. This leaves FWBC with jurisdiction over practically all other aspects of building work, ranging from off-site prefabrication to construction and repairs, through to landscaping and finishing-off. Importantly, FWBC has jurisdiction over commercial building and significant residential building projects.

coercion – the act of organising or taking action, or threatening to organise or take action against another person with intent to coerce the person, or a third person to do something they do not want to do. Certain kinds of coercion are unlawful under the general protections provisions in the FW Act.

common law contract – an individual contract of employment between an employer and an employee that is not lodged or certified under federal or state legislation but is subject to award requirements and provisions.

corporate governance – the process by which agencies are directed and controlled. It is generally understood to encompass authority, accountability, stewardship, leadership, direction and control.

employee – meaning as given by section 12 of the FW Act.

employee organisation – an organisation of employees within the meaning of section 12 of the FW Act.

employer – meaning as given by section 12 of the FW Act.

enterprise agreement – an agreement made under the FW Act (on or after 1 July 2009) between one or more employers and a group of employees in relation to terms and conditions of employment for those employees.

expense – the total value of all resources consumed in producing goods and services or the loss of future economic benefits in the form of reductions in assets or increases in liabilities of an entity.


Fair Work Act 2009 (FW Act)

The FW Act provides a comprehensive set of rules for industrial regulation in Australia. On 1 July 2009 the FW Act replaced the Workplace Relations Act 1996 (WR Act).

financial results – the results shown in the financial statements of an agency.

freedom of association The freedom of association provisions of the FW Act prohibit victimisation or discrimination on various grounds, including a person’s membership or non-membership of an industrial association, or the exercise of a person’s rights under industrial laws. The provisions abolish preference in employment and compulsory unionism.

industrial body – meaning as given by section 12 of the FW Act.

industrial instrument The instrument is an award or agreement, however designated, that:

• is made under or recognised by an industrial law; or

• concerns the relationship between an employer and the employer’s employees, or provides for the prevention or settlement of a dispute between an employer and the employer’s employees.

non-ongoing APS employee

– a person engaged as an APS employee under section 22(2)(b) or 22(2)(c) of the PS Act.

ongoing APS employee – a person engaged as an ongoing APS employee as mentioned in s.22(2)(a) of the PS Act.

organisation – meaning as given by section 12 of the FW Act.

outcomes – the results, impacts or consequences of actions by the Commonwealth on the Australian community.

Outcomes should be consistent with those listed in agencies’ PBS and Portfolio Additional Estimates Statements.

performance the proficiency of an agency or authority in acquiring resources economically and using those resources efficiently and effectively in achieving planned outcomes.

performance information

– evidence about performance that is collected and used systematically which may relate to the appropriateness, effectiveness and efficiency and the extent to which an outcome can be attributed to an intervention.

Public Governance, Performance and Accountability Act 2013 (PGPA Act)

– primary piece of Commonwealth resource management legislation, which replaced the Financial Management and Accountability Act 1997 (FMA Act) on 1 July 2014.


Portfolio Budget Statements (PBS)

– statements prepared by portfolios to explain the budget appropriations in terms of planned government outcomes.

program – an activity, or group of activities, that delivers benefits, services or transfer payments to individuals, industry/business or the community and is the primary vehicles for government agencies to achieve the results set out in their outcome statements.

Public Service Act 1999 (PS Act)

– the principal Commonwealth law providing for the establishment and management of the Australian Public Service.

right of entry The FW Act and the various state acts contain provisions regulating the right that certain individuals have to enter worksites. The exact provisions vary from state to state.

service charter A service charter is a public statement about services a department or agency will provide and what customers can expect. The service charter advises what the department or agency does, how to contact and communicate with the department or agency, the standard of service customers can expect, and their basic rights and responsibilities. It also advises how customers can provide feedback or make a complaint.

unlawful industrial action

Building industrial action is unlawful if it is:

• industrially motivated;

• not ‘excluded’ action; and

• constitutionally connected.

workplace laws – Commonwealth Acts and regulations in relation to the building and construction industry.


PART 7INDEX

INDEX

A

accountability 65

acronyms and abbreviations 134–135

advertising 65

Advisory Board 56

annual performance statement 20–28

annual report requirements 122–133

applications in proceedings 50–52

assets management 64

assistance and advice, provision of 9, 10, 12, 14, 18, 20, 63, 87, 118

Audit Committee 56–57, 59, 60

AusTender 64, 65, 68, 69, 131,132

Australian Taxation Office, GST receivable from 92

authority, FWBC’s 8

B

benefits, non-salary 68

breaches of the law 4–5, 32, 46–50— Building Code 10, 14, 37 — Freedom of association 43— FW Act 14, 32— workplace laws 10, 14, 35

Building and Construction Industry Improvement Act 2005 (BCII Act) 47, 48

Building Code for the Construction Industry, The 37–39

business groups of FWBC 14–15

Business Plan, FWBC 11, 60

C

classifications 68, 69

Code, The see Building Code for the Construction Industry, The

Comcare 71

committees 56— Audit Committee 56–57— People Committee 57, 66— Workplace Health and Safety

committee 58

Commonwealth Disability Strategy 61

compliance index 126–133

compliance powers 19, 40–42

consultancies 64–65

contact details ii, iii v

contracts 64, 65

contraventions see breaches of the law

corporate governance 56–61

corporate plan 10, 11

court proceedings 50–52

D

Director, FWBC 8, 13, 15, 56, 57, 58, 60— delegations by 122–125— foreword 4–5— functions of 12, 56— Office of 14— powers of 37, 40, 50, 56— recommendations to 125

disability strategy 61

E

ecologically sustainable development 61

education 9, 10, 18, 20— communicating to industry, media

activity 34— enquiries 28–31— referrals 32— site visits 33

enquiries to FWBC 2, 3, 28–31

environmental performance 61

ethical standards 60


Executive Team 12, 14, 15, 56, 57, 58, 60

exempt contracts 65

external scrutiny 65

F

Fair Work Act 2009, The (FW Act) 4, 5, 14, 32, 46, 48, 53, 91, 125, 137, 138, 139

Fair Work (Building Industry) Act 2012 (FWBI Act) 8, 10, 12, 40, 50, 56, 65, 87, 91, 122–125

Fair Work Ombudsman (FWO) 15, 32, 44, 64, 134

Finance 15, 25

financial result 62–65

financial statements 74–118

foreword, Director’s 4–5

fraud control 59

freedom of information 14, 65, 134

Freedom of Information Act 1982 (FOI Act) 65

G

Glossary 136–139

grants 65

H

Health and Safety Committee 58, 71

Health and Safety Representatives 58, 71— see also workplace health and safety

hotline 3, 27, 29, 38

Human Resources 15, 66–71

I

Independent Contractors Act 2006 91

information technology 15

interventions 50

investigations by FWBC 4, 10, 20, 27, 35–36, 40

K

Key Performance Indicators (KPIs) 20–26, 56

L

locations 9

litigation outcomes, significant 46–50

M

market research 65

media activity 14, 34, 38, 39

mission, FWBC’s 8

N

National Disability Strategy 61

O

organisational structure of FWBC 12–13

outcome and program of FWBC 9

overview of FWBC 8

P

penalty proceedings 14, 43–45, 47

People Committee 57, 66

Portfolio Budget Statements 9, 11, 20, 21, 24, 63, 127, 139

powers of FWBC 19, 40–42

procurement 64

prosecutions see penalty proceedings

Public Governance, Performance and Accountability Act 2013 11, 20, 87, 139

Public Office Holder 8, 67

purchasing 64

R

Reconciliation Action Plan 60–61

requirements, annual report 122–133

referrals from other agencies 29

referrals to other agencies 32

role of FWBC 8, 10

143PART 7 | INDEX

S

salaries 68

security and risk management 15, 59–60

Senior Executive Service (SES) Officers 12, 56, 67, 69, 70, 71, 124

Service Charter 11

site visits 10, 19, 28, 33, 37, 38

staff numbers 9

staffing 63, 70, 78, 82

submissions to Fair Work Commission 10, 14, 18, 5–52, 53, 125

V

vision, FWBC’s 8

W

Website address, FWBC ii

workplace health and safety— building industry, in the 10 — FWBC, at 15, 66, 71 — Work Health and Safety Act 2011 (WHS

Act) 58, 71, 135— see also Health and Safety Committee;

Health and Safety Representatives


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