Baillieu slaps ban on Lend Lease
ONE of Australia's biggest builders, Lend Lease, is to be banned from Victorian government work for up to four years after it breached the state's tough new rules on union-friendly deals.
The move could cost the company billions of dollars of work. Sources said the ban would last for the length of its four-year agreement with the Construction, Forestry, Mining and Energy Union, unless it revamps the deal.
The move will have significant ramifications for the building industry, with Lend Lease one of its biggest players alongside Leighton Holdings.
The ban is an attempt by the Baillieu government to transform Victoria's industrial relations culture and weaken the power of the state's aggressive building unions in a bid to drive down costs.
CFMEU national construction secretary Dave Noonan said on Monday night that Mr Baillieu should respect the agreement made between the union and Lend Lease under federal law.
''The Baillieu government is clearly flagging an agenda to attack workers' job security, wages and safety, and the union will be standing up for its members' rights not to have their conditions driven down,'' he said.
A Lend Lease spokesman would not comment directly on the issue, saying the company was in discussions with the government ''to ensure that all Lend Lease entities meet the requirements of the code''.
The ban is likely to knock out Lend Lease as builder for the $630 million Bendigo Hospital project. The spokesman said the company expected to be notified of a decision on the hospital project ''in due course''. It is a front-runner and the building partner for one of the two groups short-listed.
The hardline approach from the Baillieu government comes after The Age revealed in October that Lend Lease's agreement with the CFMEU was in blatant breach of the new state government code.
The government has said that, under the code, it will ban builders from bidding for government-funded work if they sign deals with unions that do not comply. The rules, which took effect from July, apply to deals signed in the private and public sectors.
A written analysis obtained by The Age at the time said the Lend Lease deal included at least half a dozen clauses that were in clear breach of the code, including restrictions on outside labour and dictating the minimum pay rates of sub-contractors.
The agreement applies to construction arm Lend Lease Project Management Construction, and under the code companies owned by Lend Lease, such as Abigroup and Baulderstone, are also ensnared. But under ''transition'' changes to the code to be announced on Tuesday, those firms will be given a temporary reprieve. Companies will now have until June 30 next year to make changes to workplace agreements before ''related entities'' also face bans.
Industry players have said banning big builders is a high-risk move that could have the perverse effect of driving up costs through less competition. In October, state Treasurer Kim Wells said other bidders could be found from overseas if builders such as Lend Lease were banned.
''Companies that want to apply for government work need to make a choice. Either abide by our code, and if they do, they can bid for the jobs, or, if they don't, then that's a choice they will have to make,'' he said.