Existing framework is imposing cost, complexity and legal risk, argues HIA
The Housing Industry Association (HIA) has warned that current workplace laws are hampering the residential construction sector’s capacity to meet Australia’s housing targets, after lodging submissions to both the Closing Loopholes Review and the National Employment Standards (NES) Inquiry this week.
Across the two submissions, HIA argues that the existing framework is imposing cost, complexity and legal risk on small builders and subcontractors, undermining the industry charged with lifting new housing supply.
In its submission to the first comprehensive review of the NES, HIA contends that the current minimum standards framework has not worked as intended for residential building. In its separate submission to the Closing Loopholes Review, HIA argues that recent reforms have not met their stated aims and have instead created additional uncertainty for genuine contracting models commonly used in housing construction.
“Homes that should be built are not,” said Stuart Collins (pictured right), senior executive director of compliance and workplace relations at the Housing Industry Association. “Builders are leaving the industry and small business owners who should be hiring aren’t. If Australia’s 1.2 million homes target is not met, it will be in part due to the country’s workplace laws.
“The residential building sector’s productivity issues are the direct result of a workplace relations system that drives up compliance costs, removes flexibility, and fuels dispute risk - all of which discourage the employment decisions needed to build more homes.
“The surge in Fair Work Commission matters - which President Justice Adam Hatcher has described as ‘unsustainable’ - is further proof of a system creating, rather than resolving disputes.”
Proposed changes: sector-specific treatment for residential building
HIA has put forward a series of recommendations aimed at reshaping how workplace laws apply to the residential building industry, including:
- A statutory presumption of independent contractor status for licensed residential trade contractors holding an ABN
- A sector-specific employment standards framework, or explicit NES carve-outs, to reflect project-based hours, project-cycle leave arrangements and project-completion redundancy provisions
- Amendments to criminal wage theft provisions so that they apply only to deliberate, repeated underpayments, with safe harbour protections for employers who make good faith errors in complex systems
- Adjustments to right-of-entry rules and sham contracting tests so that enforcement focuses on genuine misconduct rather than technical breaches
- Civil penalties that are scaled according to business size, with reductions and caps for small enterprises
- A mandatory small business impact test for all future workplace reforms, as well as a cumulative review of changes introduced since 2022
“The most effective corrective action - short of the repeal of the recent reforms - is the establishment of separate legislative treatment and explicit statutory carve-outs for the residential building sector,” Collins concluded.
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