Northern Territory Second Reading Speeches

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CONSTRUCTION INDUSTRY LONG SERVICE LEAVE AND BENEFITS BILL 2004

Bill presented and read a first time.

Mr STIRLING (Employment, Education and Training): Madam Speaker, I move that the bill be now read a second time.

I am pleased to introduce this legislation today. It fulfils a commitment made to Territory workers some 10 years ago. The purpose of the bill is to introduce legislation that provides for a scheme for long service leave and benefits for building and construction industry workers in the Northern Territory. Let me provide some background to the introduction of this bill.

In most industries, long service leave is provided either directly by Commonwealth, state or territory legislation or through federal and state awards. In normal circumstances, entitlement to the full benefit falls due after a minimum continuous period of employment, generally of 10 years, and pro rata provisions are available under certain circumstances.

However, this situation is different for the building and construction industry where the itinerant project-based nature of the industry means that workers have to move from employer to employer, often interstate, to find work. The situation prevents workers from accruing sufficient continuous work with the one employer to become eligible under normal long service leave provisions.

In recognition of this phenomenon, all states and territories, with the exception of the Northern Territory, have established schemes that provide for the portability of long service leave benefits for workers in the industry.

Given the very welcome expansion of major infrastructure projects in the Territory, the government has been examining what role it can play in attracting skilled labour. One key factor is working conditions, both in remuneration and the working environment. Recognising the need to make Territory working conditions more competitive, in March this year, Cabinet directed the establishment of the Construction Industry Reference Group or CIRG. The CIRG has been tasked with coordinating a raft of reforms within the industry. Specific reforms being considered by the CIRG that have been adopted by government include: builders licensing; building indemnity insurance; general regulatory building reforms; contractor payments; and the subject of this second reading speech, portable long service leave arrangements.

The bill presented to the Assembly has been developed to suit the Territory's construction environment, and follows extensive consultation with industry stakeholders. We have also sought specialist advice from scheme administrators in other states, together with a number of independent actuarial reports. For ease of reference, I will go briefly through the key features of the scheme as detailed in the bill.

The introductory part of the bill contains a number of essential definitions, including 'construction worker' and 'construction work'. In this respect, emphasis has been placed on aligning, as far as practicable, the provision of this bill with the proposed Construction Contract Security of Payments Bill, the existing Northern Territory Long Service Leave Act and the Building and Construction Industry Northern Territory Award 2002.

It is also worth noting that the scheme and benefits will apply only to registered construction workers. People working in a managerial, clerical, administrative or professional capacity will be excluded. A key feature of the bill is that, where there is any doubt over coverage issues, the board will have the power to make determinations to rule on the issue.

Part 2 of the bill then goes on to discuss worker registration requirements. The bill requires the registrar of the scheme to set up a Construction Workers Register that will contain the worker's employment details, including details of days worked and normal pay. Employees and contractors will be eligible to apply for registration under the scheme, and eligible service from 1 January 2005 will be counted towards the accrual of a long service leave benefit. Part 2 also includes provisions covering the deregistration of a person under the scheme.

Part 2 of the bill also details conditions for the accrual of long service leave credits. Subject to any determinations made by the board, the registrar will credit a registered worker with 6.5 days for each 260 days of qualifying service. After a period equivalent to 10 years of service, registered workers will be entitled to 65 days of long service leave. Thereafter, the worker will be entitled to 32.5 days leave after each five years of service. Special arrangements will apply to employees who die, retire or cease to perform construction work.

Part 3 of the bill addresses the requirement for the registrar of the scheme to establish a Construction Employers Register. Construction employers must register under the scheme and provide information to the registrar. Penalties apply to those who fail to register or provide information. This part also requires every registered employer, after the end of each six months reporting period, to provide a report to the registrar that includes the name of each employee, the number of days of service of each employee, and any long service leave granted by the employer during the current reporting period. This is necessary to assist in maintaining the viability of the scheme, particularly in regard to the integrity of data and employment records.

I turn to Part 4 of the bill. This part deals with the funding of the scheme. I should point out, at this stage, existing schemes in other states are financed and funded through two distinctly different methods: a levy on building projects over a certain size, with payment made at the time of registering the project by the prime developer or permit holder; or direct payment by the employer of an actuarially determined amount of the employee's ordinary or normal pay.

After considerable consultation and deliberation, the government has opted for a project levy model. A levy will be determined in the regulations and will apply to construction projects costing $200 000 or more. Residential construction complying with the Building Code of Australia class 1a(i), which is a single detached house, and class 10, a non-habitable building or structure - for example, a private garage, shed, fence, swimming pool, etcetera - will be exempt from the levy. The levy must be paid before the commencement of construction work of, if approved by the board, at a later time, or through instalments. Interest charges would apply for late payment.

The bill empowers the board, if necessary, to determine the point at which work commences, the cost of the construction work, and the party liable for payment of the levy, which would usually be the developer of the project. Penalties will apply where there has been a failure to notify the board of the construction work, and the levy will apply to both Territory and Commonwealth government projects. The government recognises that decisions of the board have potential significant financial implications, particularly in the case of very large projects and, for this reason, the board provides for a reconsideration and review mechanism through the board and the local court, if necessary.

The next part of the bill details the administration of the scheme and the establishment of the board. It is intended the scheme will be established as a government statutory body administered by a tri-partite board of equal numbers of employer and employee representative, with an independent chairperson and other representatives appointed by government. All members of the board will be appointed by the minister. The board's corporate name will be NT Build.

In the administration of the scheme, two of the board's critical powers will be the ability to borrow and invest money for the scheme, and the ability to make determinations that will contain all of the essential detail required for the effective and efficient operation of the scheme. It is intended, at least for the initial use of the scheme's operation, that the board would meet on a regular basis, and at least monthly. The board is not an agency within the meaning of the Financial Management Act. However, this bill will require it to comply with all normal accounting and reporting arrangements, including the preparation and submission of annual reports detailing operations and finances of the scheme.

The scheme registrar will be responsible for the day-to-day operations of the scheme and is, therefore, a critical position. For this reason, it will be a statutory appointment within the Office of the Commissioner for Public Employment. Staff may be employed under the Public Sector Employment and Management Act and made available by the Commissioner for Public Employment. The registrar will have the power to inspect construction sites and to seek information from employers and workers. When performing the registrar's inspectorial functions, he/she will be required to carry an authorised identity card. The registrar will also have the power to delegate any of his/her functions, including the duties of inspector. The Commission for Public Employment is currently responsible for the Northern Territory Long Service Leave Act and for the Public Holidays Act, both of which apply to private sector employment. It is for this reason that the registrar is based in the Office of the Commissioner. This may change as the scheme develops and matures.

An essential element of the bill is that it provides the mechanism for the minister to enter into a reciprocal agreement with the ministers responsible for the administration of such schemes in all states and the Australia Capital Territory. It is important to note that the reciprocal agreement does not actually transfer entitlements across or between jurisdictions; it simply provides for recognition of service and payment of benefits according to the different jurisdictional provisions. For example, a worker who completes a total of 10 years service of which two years was in the Northern Territory, three years was in the ACT, and an earlier five years in Tasmania, would receive a total benefit calculated by the board having regard to the monies paid by the two interstate schemes to the NT scheme, and the periods of employment.

The final division of this part of the bill goes to the issues of the board's and scheme staffs' protection from liability. This provision is similar to most legislation of this nature. The bill also requires the minister to appoint an actuary to review the scheme's administration and financial state at commencement of the scheme and every three years thereafter.

The last part of the bill, Part 6, covers transitional provisions at commencement of the scheme. During the consultation phase of this project, some employer organisations were firmly of the view that no retrospectivity provisions should apply at the schemes commencement. However, the government is strongly of the view that this would disadvantage current employees, particularly those with significant service with the same employer. Consequently, the bill makes provision for employers to pay to the board an amount that equates to the employee's previous service. It also allows employers to pay an amount to the scheme and to transfer prior service to the scheme in certain circumstances. Where an employee has already accrued an entitlement to long service leave under the existing Northern Territory Long Service Leave Act, that entitlement would not be affected by the introduction of this bill.

This scheme will place Northern Territory construction industry workers on an equal footing with their counterparts in other states, and greatly assist in the recruitment and retention of skilled workers to the Territory.

Mr Deputy Speaker, I commend the bill to honourable members.

Debate adjourned.

 

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