Federal small business minister Craig Laundy has sought urgent advice over ACT laws that could force companies to choose between working for the ACT government or the Commonwealth, as industry groups say the legislation could drive up the cost of public projects.
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ACT workplace relations minister Rachel Stephen-Smith introduced draft legislation on Thursday that would force all companies that want to tender for ACT government work to undergo an audit to prove they had not ripped off workers.
Companies that passed the audit would also have to comply with a new jobs code, or risk being locked out of tendering for territory work for one year.
According to the draft code, bosses will have to give new starters a membership form for the union, and allow union fees to be directly debited.
Companies may also have to provide a registrar with the name of every subcontractor they use, as well as the addresses, work hours, and contact details for a contact person on each of their work sites.
Unions can then request those details in order to exercise right of entry.
Mr Laundy said he was concerned the code may have a significant impact on construction businesses in the ACT as it may not be consistent with the federal government's building code.
While the ACT's code enshrines an employee's right to associate, the Federal Building Code also gives employees the right not to associate.
"I’m seeking urgent advice from my department on whether this is in fact the case and whether the bill is consistent with the Federal Building Code," Mr Laundy said.
"I have been approached by numerous stakeholders raising concerns with the bill, telling me that it will effectively halve the number of construction jobs available to them - that many small Canberra businesses would have to choose between Commonwealth or ACT-funded work. This would likely have a significant impact on the ACT economy."
The Canberra Business Chamber and Master Builders Association ACT are also concerned the code may not comply with federal workplace laws.
The Master Builders Association said giving unions a role in inductions could put employers in danger of receiving exclusion sanctions, that would stop them tendering for Commonwealth-funded building work for up to a year.
"We would say there are still a number of questions that are not fully answered to satisfy construction businesses and the conflict with the federal code hasn't been resolved," its chief executive Michael Hopkins said.
Mr Hopkins said that conflict would likely force companies to choose between working for the ACT or the Commonwealth, making the pools of potential contractors in both sectors even smaller.
"Less competition means one thing for the taxpayer - the cost of public infrastructure increases," Mr Hopkins said.
Canberra Business Chamber workplace relations manager Lucie Hood said while they supported the principle of the legislation, they worried it would deter small businesses from tendering for government work.
Ms Hood said 97 per cent of the ACT private sector was small businesses with fewer than 20 staff, and these businesses were "significant contributors" to the local economy and community.
"The introduction of the proposed legislation may be a deterrent to small-to-medium enterprise participation in government tender processes," Ms Hood said.
"Any resultant reduction in competition may lead to escalation in project tender bids, thus not delivering best value for money to the ACT government or the community."
Ms Hood said larger national or multi-national companies who were unlikely to reinvest their profits back into Canberra, stood to benefit from the new code.
However an ACT government spokesman downplayed the impact it would have on small businesses.
The spokesman said businesses with fewer than 200 employees held 48 per cent of territory contracts last financial year.
He said the cost to businesses would be limited - about $600 every 18 months - provided the company complied with workplace safety and industrial relations laws.
"While there will be a cost associated with certification, there is no evidence that this has been a disincentive for small and medium sized businesses in the building and construction sector, which are currently required to hold an IRE certificate. Around 1500 entities currently hold IRE certificates," the spokesman said.
