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Fewer hours means costs up for builders

A UNION claim for a 36-hour week and a 6 per cent a year pay rise is expected to cause a number of sub contractors in the commercial building industry to go out of business.

The Construction Forestry Mining and Energy Union’s claim could increase building industry labour costs by 30 per cent, meaning a builder’s labourer’s hourly wage bill would rise from $19.86 to $25.81.

The claim is part of a national CFMEU campaign for the 36-hour week and the new three-year deal is likely to start being negotiated around company board tables in November, when the current agreement expires.

It is understood the new EBA could increase labour costs by 25 per cent but an unknown factor involving the income protection insurance clause could lift that further. The current EBA income protection policy is run by Dexta, but that insurer is understood to be keen to get out of the building industry insurance market, which could lift insurance costs.

There is also the 1 per cent increase to the Superannuation Guarantee Charge that came into effect on July 1.

Master Builders Association industrial relations manager Kim Richardson said the union’s proposed EBA would “cost a lot of commercial subcontractors a place in the construction industry”.

“When the CFMEU’s EBA was introduced in 1997 labour costs went up 25 per cent. When that was renewed in 1999 that increased labour costs by between 18 and 20 per cent,” he said.

“The union also wants a $500 bargaining fee for each non-union worker.”

BGC Construction general manager Gerry Forde said the new EBA would “mess up” the building industry.

“The market can’t sustain it,” Mr Forde said.

“The business of 36 hours is just ludicrous. People don’t work any less on building sites. It’s just a way of hiking up the money because the shorter week will create more overtime.”

CFMEU assistant secretary Kevin Reynolds could not be contacted.

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