Key Takeaway
- On 14 November 2024, the newly elected LNP government temporarily lifted the requirement for Queensland government projects to adopt the controversial Best Practice Industry Conditions (the BPIC).
- Although one of the aims of the BPIC was to maximise productivity, the government has argued that they were having the opposite effect. In the wake of their suspension, unions have raised concern for the safety of workers.
- The Treasurer introduced a bill to the Queensland Parliament in November 2024, namely the Queensland Productivity Commission Bill 2024 (Bill). The Bill has since been referred to the Parliament’s Governance, Energy and Finance Committee for detailed consideration. The objective of the Bill is to re-establish the Queensland Productivity Commission (QPC) as an independent statutory body and formalise its operational independence from government.
- In a Media Statement given on 14 November 2024, the Queensland Government indicated that a review of the construction sector will be a priority on the QPC’s agenda after it is reinstated. The BPIC will be suspended at least until such review is completed and the government has responded.
Overview
The Queensland Government has suspended the application of the BPIC for new projects. The BPIC are a suite of industrial conditions introduced for construction workers on all major State projects. The rationale for the decision to suspend the BPIC draws from the perception that these conditions have increased labour costs and lowered productivity, do not align with standard industrial conditions and place an unreasonable burden on taxpayers. The suspension of the use of the BPIC will continue until a review has been issued by the QPC and the government has responded.
What is the role of the BPIC?
Through the Queensland Procurement Policy and the development of the Best Practice Principles, Queensland’s former Labor government issued the BPIC for compulsory implementation by companies successful in tendering for government construction work. The BPIC’s objective was to establish the parameters for wages and conditions for workers on projects valued at over $100 million (or declared), with a view to ensuring large Queensland Government projects conform with best practice industrial relations. The BPIC endeavoured to provide workers on government projects with safe working conditions, a comfortable standard of living, and a functional work-life balance. They also purported to establish a framework to maximise productivity and minimise lost time.
What is the issue in contention?
Labelled by the LNP as a ‘sweetheart deal’ between the former Labor government and the construction union, the BPIC mandate work, health and safety systems in addition to enabling workers to access an array of industrial entitlements. Features oft-cited as increasing costs and/or lowering productivity include:
- a $100 per week technology allowance for workers using their own mobile phone or tablet (84. Section D- Other Allowances, page 154);
- double time and a half payable where metal and engineering workers labour through an annual picnic day (Part 5- Metal and Engineering Workers, page 222);
- triple pay for working through Easter or Christmas (33. Hours of Work, pages 39-40);
- double time for doing emergency work or undertaking a concrete pour in circumstances where inclement weather conditions exist (some examples being rain, hail and extreme heat) (16. Inclement Weather, page 27); and
- a right to cease work where the temperature exceeds 35 degrees celsius or 29 degrees celsius with 75% humidity (Part 5- Metal and Engineering Workers, page 214).
The regime has also required the pre-qualification of contractors and subcontractors before they could successfully bid for major government work. For these reasons (among others), the BPIC have been criticised for their perceived contribution to distorting procurement outcomes, reducing market competition and catalysing budget blow-outs.
Yet, the BPIC aspired to minimise blow-outs, at least where they may have been attributable to industrial action. In specifying that, in the event of industrial dispute, the “pre-dispute status quo shall prevail” while such dispute is settled (9. Disputes Settlement Procedure, page 19), the BPIC sought to keep workers on the job during industrial contention, providing “a framework that seeks to maximise productivity minimise lost time through genuine communication consultation collaboration [sic]” (2. Objectives of this Policy, page 14). Success in this regard may be hard to measure, requiring the contemplation of a negative or downward counterfactual (eg could things have been worse if this framework had not been there?)
Evidently, the BPIC are seen to have fallen short, with the government citing independent modelling by the Queensland Treasury showing that project costs were expected to increase by 25% and create a net economic loss of up to $17.1 billion. Furthermore, such modelling led to the government anticipating rental cost increases of 7% over the next five years, on the basis that the construction of 22,000 homes State-wide was jeopardised (Media Statement of 14 November 2024).
In his announcement that the BPIC would be temporarily suspended, Deputy Premier Jarrod Bleijie stated that “Queenslanders shouldn’t have to bear the brunt of [cost blow-outs of government-funded construction projects], which is why we’ve ordered this pause and review”. Conversely, unions vocalised their concern, with a CFMEU spokesperson asserting to the ABC that “cancelling BPIC is a clear signal that the LNP wants to cut workers’ wages and conditions”, leading to “a dangerous deregulation of the labour market and more workers dying on construction sites”. Subsequently, on 27 November 2024, it was reported that five unions collectively protested in Brisbane’s CBD. Clearly, there is much political turmoil around this subject matter.
What is the impact of the suspension of the BPIC?
The suspension of the BPIC means that, at least for the period of the suspension, newly initiated government procurement processes need not mandate that the successful tenderer implement these conditions, Thus, Transport Minister, Brent Mickelberg has stated that the suspension enables new project participants to proceed without additional overheads (Media Statement of 14 November 2024).
Once re-established, the QPC’s review of the construction industry is anticipated to occur in early 2025. The temporary suspension of the BPIC will continue to apply throughout the review and until the government responds.
In the meantime, it is possible that concern amongst unions and workers about the removal of the BPIC will increase. This could prompt further industrial action- an outcome that may compromise the very productivity this suspension is intended to bolster.
If you are impacted by the Queensland Government’s suspension of the BPIC or require clarity around your obligations and entitlements, please contact our Commercialisation, Supply and Projects experts.
