Union members on a winner, MBA admits

cwgorgonUnion fees are the best investment construction workers will ever make, according to MBA figures.

Startling Master Builders Association numbers published in the Australian Financial Review suggest labourers could buy an average Melbourne home, freehold, every 15 years with “profits” from their CFMEU membership dues.

According to the mathematics of MBA Victoria chief executive Radley de Silva, if construction workers viewed their union fees as an investment they would walk away with mind-blowing returns of more than 7,500% every year.

That’s a year-on-year return the world’s most successful investors could only dream about.

But, on MBA/AFR figures, it is a conservative estimate of the difference between modern award minimums, as advocated by lawyers at Tony Abbott’s trade union royal commission, and CFMEU-negotiated increases.

In a bid to argue the CFMEU is too successful, de Silva says labourers on its Victorian enterprise agreement are now earning $49 an hour.

He bases this figure on earnings from a standard 51-hour working week on Melbourne construction projects which is a bit dishonest but let’s go with him for a minute.

For the sake of reality, though, we will do our comparisons on the basis of a more routine 36 hour week. If we don’t, de Silva’s labourers will be up the front end of the plane with Pink Floyd’s “new car, caviar, four star daydream – think I’ll buy me a football team” set.

The Modern Site Award provides for a base rate for a Level 2 employee of $19.56 an hour. Add the lowest allowance in the document and you come close to $20 an hour.

Clearly, the difference between that and the MBA figure is around $29.00 an hour, or $1044 for a 36-hour week. That is a tidy earn, in anybody’s language, from a Victorian site union fee of $13.50 a week.

Over a year, in investor terms, that’s a return of $53,586 – above the modern award rate – from an outlay of $702.00 in union fees. Or, if you prefer, a net profit of $52,884 at 7633%.

If the numbers look too good to be true, CFMEU Construction Division national secretary, Dave Noonan, says that is because they are.

“Our members who negotiate collectively are reasonably well paid and so they should be,” Noonan said.

“But those figures are a nonsense. They have taken the standard Victorian 51 hourworking week and rolled all that overtime into a flat hourly rate.

“The newspaper has then compared those numbers, from a 2014 agreement, against hourly rates for people doing far less overtime on 2012 agreements, to suggest construction workers earn too much.

“It’s a dishonest attempt to paint our members as greedy and selfish. Well, they are not, they work hard, and the only reason they get good wages is that they act collectively to look after one another.

“We are not about to apologise for our results and nor are we going to change an approach that works for our members and their families.”

Tony Abbott’s royal commission has been running a similar line to the MBA.

In Canberra, Counsel Assisting Jeremy Stoljar highlighted a Claw Construction Pty Ltd claim that the union wanted it to pay “unskilled labourers” between $80,000 and $90,000 a year.

Stoljar and his witness, like the MBA, never sought to explain that this project rate was for a standard six-day, 56-hour working week in the ACT.

The Royal Commission also led evidence from a number of industry bottom feeders, with documented safety issues, to suggest union EBAs were unfair, unrealistic, or, something worse.

Stoljar, who is being paid $3.4m by the Federal Government, seemed incredulous as he asked employers why they would agree to EBA rates, or allowances, when they could get away with paying far less under the modern award.

Whether or not Stoljar understands that the modern award is a safety net document that prescribes minimum legal rates and is all-but irrelevant on union and non-union sites, across the construction sector, was never made clear.

One of his employer witnesses testified he signed the union agreement because he thought it was “the right thing to do” but counsel assisting was having none of it. He contends the only rational explanation is that employers are being bullied, stood over or coerced by a rogue union.

As he pursued this case theory for a live broadcast audience, police attached to the royal commission were arresting union organiser, Johnny Lomax, for winning a wage increase.

It is the AFP’s case, according to court documents, that Lomax caused the operators of painting contractor APN Holdings to suffer a loss by inducing them to pay enterprise agreement rates in excess of $26 an hour when they could have got away with paying only $17 an hour.

Just where they get their $17 from is unclear. If their painting contractor was hiring painters, as seems plausible, it is hard to see how it could have legally been paying less than $21.94 an hour.

It will be interesting to see if Stoljar, or the MBA which supplied most of his Canberra case theories, can serve up an adult worker, from a commercial construction site anywhere in Australia, who is being legally paid $17 an hour.

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