For The Labourer is Worthy of His Hire
The Troubleshooters Case
- "I am satisfied, in the light of all the evidence,
that the two respondent unions, along with others in
the building industry, have adopted a policy of trying
to prevent the applicant from operating in the industry
as it presently does."
- The Hon Mr Justice Woodward 24 August
In May 1988, Troubleshooters Available commenced Court
action against building unions and officials seeking
protection of its right to trade without union interference.
After succeeding before Sir Edward Woodward in the
Federal Court and in appeals against his judgment to
the Full Federal Court and the High Court of Australia,
Troubleshooters was vindicated.
The Judgments found that Troubleshooters lawfully
traded, was entitled to lawfully trade, and was entitled
to do so free from union conduct which had been taken
for the purpose of causing it substantial loss and
The Court actions which took over 40 hearing days
over three years, are recorded in thousands of pages
of transcript and over 250 pages of Judgment. Newspapers
reported the somewhat hyperbolic view of the BWIU Secretary
that it "....could be the most significant development
in Australian industrial relations history".
But now it appears the story did not end with the
High Court decision of 7th June 1991 ruling out further
appeals. The union movement has another appeal under
way, and this time the Judge is not impartial. The
Judge is the Federal Labor Government.
The Nature of the Building Industry
The building industry in Australia can be divided
into two sectors. One is the residential building sector,
and the other the commercial/industrial sector. Residential
building is almost totally performed on a contract
basis. A bricklayer will contract to lay the walls,
a carpenter will contract to erect the frame, a tiler
will contract to lay roof tiles, and so on. The bricklayer,
the tiler, the landscape gardener, contract to perform
the job for an agreed price. They do not regard themselves
as employees but as independent contractors.
There are contractors in the commercial/industrial
building sector. An owner may contract a project manager.
A project manager may contract a consulting engineer.
A scaffolder may be contracted, an electrical contractor
contracted to perform electrical work, and a plumber
contracted to perform plumbing work. But as far as
unions are concerned, only employees are allowed to
actually do work on a commercial building site. The
electrical contractor must employ electricians to do
the work, the builder must employ the carpenters. The
person who touches the wires, the person who picks
up the trowel, the person who picks up the hammer on
a commercial/industrial building site must be an employee.
Of course, they must also be a member of a registered
trade union. The practice "no ticket, no start" means
that no one without a ticket can work on a building
The Troubleshooters case had nothing to do with union
membership. Every person who worked through Troubleshooters
held a union ticket. It is impossible to get on to
a building site without one.1
The Troubleshooters case was all about whether men
were entitled to work as independent contractors on
commercial/industrial building sites. All (including
unions) accepted the right of independent contractors
to work in the residential building sector. The question
was whether they should be quarantined to that sector.
Employee v. Independent Contractor
The difference between an employee and an independent
contractor is and always has been recognised by Australian
The modern law of employment is descended from the
law of master and servant. An employee undertakes to
serve an employer in a particular capacity. The agreement
between them is sometimes described as a "contract
of service" as distinct from a "contract for services".
An independent contractor agrees to supply services.
He contracts to produce a result - for example, to
fix the wiring in your house or to lay concrete on
your driveway. He does not agree to serve you or become
your employee. He wishes to remain independent.
Most people are familiar with independent contractors
in the building industry. If you ask an electrician
to put some lights in your home you expect him to be
self-employed or an independent contractor. You do
not expect to become his employer when he walks into
your home. If you did become his employer you would
be liable to remit group tax out of the earnings, pay
a workers' compensation premium, pay according to the
Award, pay superannuation and a whole host of other
obligations which are now attached to the employment
With an independent contractor the contractor has
the obligation to perform the job, he is paid accordingly,
and the relationship ceases once the job is completed.
Troubleshooters' Mode of Operation
Troubleshooters established a register of self-employed
tradesmen and labourers. Before admitting people to
the register they were interviewed, and the status
of being an independent contractor was carefully explained
to them. The concept is well understood in the building
industry, where tradesmen routinely work as contractors
in the residential sector.
Builders who required tradesmen or labourers could
ring Troubleshooters, which would undertake to supply
a suitably qualified person at a particular price.
Troubleshooters would contact men on the register.
An agreement to do the job would be struck between
Troubleshooters and an available contractor.
For the builder Troubleshooters provided the service
of locating qualified people. If there was fault in
the work they had recourse against Troubleshooters.
The builder could secure tradesmen and labourers for
Although building workers are notionally employed
by the day under the Award, in practice it is very
difficult to terminate employment. Evidence in the
trial was that employees in the industry can only be
sacked for theft and assault. Incompetence, laziness,
insolence, and even drunkenness will not suffice at
least until a number of warnings have been given. It
is also risky for builders to employ if the nature
of the job is short-term. If there is a downturn in
work the employer finds himself over-staffed with no
easy means of reducing numbers. Troubleshooters filled
a valuable role in providing qualified contractors
who could be retained short-term.
For Troubleshooters the arrangements had obvious benefits.
It derived income in generating orders from builders,
and obtaining jobs for contractors.
For the contractors there were obvious benefits. Once
on the Troubleshooters register there was an organisation
referring jobs to them. Troubleshooters effectively
marketed the services of contractors in the building
The fact that builders, Troubleshooters, and contractors
were happy with this arrangement did not mean that
all could go about their work in peace. The building
unions from the outset opposed the operation of Troubleshooters.
One of the principals of Troubleshooters, Peter Bosa,
first commenced business in 1973. After harassment
led by the Builders' Labourers Federation, he was put
out of business within two years.
In 1976 he re-established the business. He experienced
union opposition from the outset, but it was not until
May 1988 that the business commenced proceedings in
the Federal Court to stem union interference.
For nearly twelve years the building unions and Troubleshooters
played cat-and-mouse games as the unions tried to identify
men working through Troubleshooters, and, after identifying
them, take action. This cat-and-mouse game had its
lighter moments. For example, the plasterer retained
to fit out BWIU offices engaged Troubleshooters, so
its contractors ended up plastering the very BWIU offices
from which the union campaign was directed!
It was not an easy matter to identify contractors
on site. Union officials commonly ask for a show of
union tickets on site but since Troubleshooters contractors
were members of the union, this did not disclose they
had obtained the job through Troubleshooters.
Union officials later began to use the Building Unions'
Superannuation Scheme as a means of identifying those
working through Troubleshooters. Those working through
Troubleshooters were enrolled in that scheme, and Troubleshooters
paid amounts into the superannuation scheme on their
behalf. The payments, however, were made by companies
associated with Troubleshooters. Union officials could
therefore get the man's BUSS number, check with the
scheme to find the company which made payments in respect
of him, and identify him as associated with Troubleshooters.
This is an interesting point because it illustrates
how occupational superannuation schemes can be used
for industrial purposes. The Building Union Superannuation
Scheme was used to identify members of building unions
who were not working in a way approved by union officials.
The superannuation scheme allowed union officials to
identify the targets they wanted to put out of the
After people working through Troubleshooters had been
identified, union officials would visit the builder
or chief contractor on site. The builder's contract
with Troubleshooters would be brought to an abrupt
end. Troubleshooters would lose the contract, and
the man would lose the job.
Of course only the builder and union officials knew
what was said at their meetings. The union officials
denied making threats. The builders often had trouble
recollecting the conversations. But the sequence was
invariably the same. Before the meeting Troubleshooters
had a contract, and after it didn't. A large part of
the legal case was spent trying to prove that the unions
induced builders to cease contracting with Troubleshooters.
No one in the industry doubted that the unions wanted
to rid the industry of Troubleshooters. One witness
remarked: "You would have to be blind if you could
not see that or hear that".
The unions admitted, yes, they vehemently opposed
Troubleshooters and wanted it out of the industry,
but strenuously denied they had ever had its contractors
thrown off building sites.
Troubleshooters never had difficulty with union members.
It was never a worker who raised the cry against the
contractors on building sites. Difficulties only arose
after the visits by union officials.
The unions were open about throwing Troubleshooters
off building sites in the late '70s and early '80s.
A change occurred around the mid '80s when the first
successful common law and Trade Practices Act court
actions were taken against trade unions. Union officials
became much more careful in dealing with builders and
were obviously conscious of incurring liability for
ruining the business of Troubleshooters. Great pains
were taken to make it clear that Troubleshooters should
be thrown off building sites without actually saying
Mr Justice Woodward's Judgment recounts how one builder
- "was informed in graphic language that he was in a
lot of trouble."
- "Is that because of Troubleshooters?"
- And Bingham [union official] replied:
- "You said that, not me."
"But you can fix it."
Pomeroy [builder] said:
"You mean get rid of Troubleshooters off the job?"
Bingham again said:
"You said that, not me."
Bingham went on to say:
- "You won't have a problem in the world if you fix
Sometimes union officials used code words to indicate
Building unions have developed highly technical rules
about safety on building sites. To the degree they
protect safety, they are welcome, but since the rules
are complex and vary according to who interprets them,
they can cover every available situation. No self-respecting
union official would ever be unable to find a safety
breach on a building site if he wanted to do so.
On a site in Glen Iris a union official found a Troubleshooter.
Rather than instruct the builder to remove him he spoke
in code---a code well understood by the builder
who gave evidence he was told:
- ".....if I did not abide by the building industry
agreement, exactly as it says, he will make an example
of the project; it will be the safest one in Melbourne."
Why the Campaign?
The curious question was why the building unions engaged
in a campaign to drive Troubleshooters out of the commercial/industrial
building industry. Two justifications were that Troubleshooters
under-cut awards and the contractors were "tax bludgers."
Contractors to Troubleshooters had tax deducted under
the prescribed-payments scheme. This scheme was introduced
to prevent tax avoidance in the building industry.
It was Parliament's scheme to prevent "tax bludging".
From the evidence in the Troubleshooters case it worked
very well. Troubleshooters fully complied with the
income tax requirements. The claim was nothing more
The other aspect of the propaganda war was that Troubleshooters
under-cut awards. During the course of five weeks of
evidence, a number of union officials gave evidence
to the effect they opposed Troubleshooters because
they undercut awards. Yet none of these union officials
had ever calculated the remuneration paid to Troubleshooters
and compared it to the relevant award! None of the
union officials had ever asked any one else to do the
comparison. The comparison was done for the first time
at the end of the legal action.
For twelve years unions opposed Troubleshooters for
allegedly under-cutting awards. In those twelve years
they had never taken steps to verify whether this was
As a result of the Court action they were asked to
do such a calculation. They retained accountants for
the task. Troubleshooters paid contractors an hourly
rate for hours worked. This was higher than the ordinary
weekly wage for ordinary hours. But employees under
an award had the value of different overtime rates,
different work allowances, sick leave, and various
other conditions. It is a difficult calculation to
do and involves making assumptions as to how much overtime
is to be worked, how many days' work will be stopped
by rain and the like.
A great deal of complicated accounting evidence was
given to the Judge on this question. The evidence was
prepared for the purposes of the case, not for the
campaign which preceded it. The trial Judge's finding
on the evidence was as follows :
- "I would say that the Troubleshooters carpenter would
earn rather more than the award-wages carpenter, and
that two labourers would earn about the same in years
when the industry was busy. In a downturn of activity,
the results would be difficult to predict."
The twelve-year campaign was based on calculations
which were never done. When they were done, far from
proving that Troubleshooters was under-cutting awards,
it proved that for tradesmen at least, contractors
were paid more than they would be paid under the award.
Bear in mind that the men who the building unions
wanted to prevent from working through Troubleshooters
were members of the union. They paid dues to the union
leaders who sought to prevent them working. They received
rates which were equal to or above rates under the
award. Yet their own union officials embarked on a
campaign to stop them working.
The union officials took the view that men who work
for themselves are a threat to unionism, even if they
are union members.2 As self-employed people they make
decisions about how and how hard to work and are less
likely to accept union directives on such questions.
They also undermine union propaganda. Troubleshooters
negotiated the rate for its contractors. It got better
rates than the union had secured under the award. Whatever
the award did, it did not lead to higher pay. The award
made the way in which people worked on building sites
more complicated and less productive, but it did not
secure better pay. Personally I think this is why contractors
working through Troubleshooters did undermine unionism.
They undermined the propaganda which says that unionism
is the only thing that stands between modern society
and children in the coal mines etc. Contractors on
a negotiated rate were not the victims of exploitation.
In fact they did better than awards. Contractors proved
that freely-negotiated rates could increase productivity
and increase pay. Since unions devote so much time
to stopping freely-negotiated agreements, they were
hostile to Troubleshooters. But the last thing unions
want is evidence that freely-negotiated contracts can
achieve better results for workers than unions and
The argument with Troubleshooters was also an argument
about control. It was an argument about whether people
should be allowed to choose how they worked on commercial/industrial
sites. Could they choose to work as contractors if
they wished to? The union said no. As far as the union
was concerned, all people working on these building
sites had to work in ways approved by the union and
the Industrial Relations Commission. The argument was
whether unions and the Commission should control the
way in which people worked, or whether people would
be free to choose their own working arrangements.
The Outcome of the Case
The Building Workers' Industrial Union of Australia
and the Victorian State Building Trades Union and various
officials were found liable at common law, and pursuant
to Section 45D of the Trade Practices Act.
They were liable for taking action to prevent builders
honouring their contracts with Troubleshooters and
for preventing Troubleshooters supplying services to
builders in the commercial/industrial building industry.
The union has been ordered to pay around $420,000
for Federal Court legal costs to Troubleshooters. Of
course, in addition it will have to pay its own legal
costs which would be far in excess of that.
Troubleshooters is now seeking damages for the losses
it suffered as a result of the union's unlawful conduct.
On 14th February 1992, the Victorian State Secretary
of the BWIU wrote to members in the following terms:
- You will notice there is an increase in your account
for this half year. This has been made necessary by
a decision of the Federal Court of Australia which
has ordered our union and the Victorian State Building
Trade Union to pay legal costs incurred by the bodyhire
company Troubleshooters Available.
- As has been reported in the unions [sic] journal
we have been fighting to protect our hard won wages
and conditions of employment in opposition to the all-in
payments and other award destroying devices used by
- This resulted in Troubleshooters taking us to the
- Unfortunately, the Court ruled against us and ordered
us and the VSBTU to pay Troubleshooters legal costs
- This makes it necessary for each member throughout
Australia to contribute an extra $5.00 for the next
two six months period [sic], a total of $10.00.
- BWIU Shop Stewards have voted to defer their shop
stewards commission fees to assist the union financially.
- These costs do not include over $300,000 legal fees
already met by the union. The action taken by our union
in defence of our awards was supported by the ACTU
and our own membership.
- We have also been vindicated by the fact that the
Federal Government has announced its intention to pass
legislation making the Troubleshooters Available type
arrangements illegal by changing the Federal Industrial
- Finally, I wish to thank you for your past support
in helping our union achieve the benefits our members
enjoy today and look forward to your continued support
in the future in our efforts to defend and improve
the living standards and working conditions for our
members and their families.
(Signed) Vince Raffa
BWIU State Secretary"
Raising $420,000 for the BWIU is not all that difficult.
All it takes is a $10 levy on the union fee. No building
worker can work without paying the union fee, and therefore
without paying the levy. Every building worker in the
building industry, including those who worked through
Troubleshooters, will now pay a levy to reimburse the
BWIU for its campaign against Troubleshooters.
Note the tone of the letter of 14 February 1992. No
apology is made. There is no contrition shown by the
union or its officials for being found liable for breaking
the law in the Federal Court. There is no acknowledgment
at all of the Court finding that Troubleshooters did
not under-cut awards. Indeed, the union still maintains
that its campaign against Troubleshooters was based
on its "award-destroying devices".
The language of this letter is the language of power.
It exhibits a complete disregard for the Court's findings
and disregard for the members' interests. There is
no apology for spending what must be at least $1 million
of members' funds on fruitless litigation.
The next Chapter
Unfortunately, the story does not close there. Senator
Cook, currently Minister for Industrial Relations,
and former BWIU union official, has announced that
he intends to introduce legislation on the
question of contractors.
Within 24 hours of the Full Court judgment, this Minister
of the Crown pronounced "the law is an ass".
He wants to achieve, through legislation, what the
building unions could not achieve through industrial
action. He wants to reverse the effect of the Federal
and High Court decisions. He proposes to restrict the
rights of individuals to control their own working
lives as independent contractors.
After vindication in the Courts, after obtaining declarations
that it had the right to trade, Troubleshooters risks
seeing it all taken away by government legislation.
The unions always had the ear of those with the ability
to write the law. The unions always had one last appeal
Ä an appeal to a biased judge---the Labor
The battle to reform Australian industrial relations
is beyond the Courts. It is a battle that has to be
fought in the Parliament and in national and state
- 1. Indeed, as part of "restructuring and efficiency"
in the building industry, if someone is found on a
building site without a ticket he is sent home, and
all members of the union to which he should belong
are entitled to stop work for 24 hours on full pay
[See "No Ticket No Start No More" - Address to the
H R Nicholls Society - Canberra, February 1989]
- 2. In a letter to the ACTU Secretary of 4th May 1990,
BWIU Secretary, Tom McDonald complained: "Past experience
shows that where workers work as self-employed sub-contractors,
it is impossible to effectively unionise and organise