Geocon has used a government coronavirus measure to help it scrap a 5 per cent pay increase for staff, a decision upheld by the Fair Work Commission this week despite claims of coercion by the construction union.
The change means that construction workers will lose a 5 per cent increase they received in February from this week, June 15, and won't get the 5 per cent increase due in February 2021. Their base rates of pay have reverted to February 2019 levels and are frozen there till February 2022.
In April, the government reduced the notice period for votes on changes to pay agreements from seven days to one. It has already announced it will scrap the short-lived measure introduced in April, but Geocon's changes stand.
Asking staff to take the pay cut in a letter on May 11, Geocon told them it had closed almost half its hotel business as a result of the economic downturn and stood down most of its hotel staff. It had also cut staff numbers by 30 per cent in its head office.
It had been hit by "a considerable decrease in market demand and activity", the firm told staff.
Geocon has since told The Canberra Times that the fall in demand is for its hotels, with the three planned for this year now postponed - Garema Place, the Belconnen Adobe, and the heritage West Block in the Parliamentary Triangle.
In August last year, a new enterprise agreement was signed, giving staff a 5 per cent pay increase from February 1 this year, with another increase from February 2012.
But after work on Monday May 11, construction manager Damon Smith wrote to the 41 construction workers covered by the agreement, telling them that before work two days later, on May 13, they would be asked to vote by show of hands on changes to the agreement.
The next day, staff asked for a private ballot instead of show of hands. The company agreed, but when staff arrived on Wednesday morning for the ballot, they found each form had their name printed at the top, according to evidence given to the Fair Work Commission. Of the 43 votes, 35 voted in favour of the change and eight against.
Geocon says it is a non-union workplace, so no construction workers are in the union, but the Construction, Forestry, Maritime, Mining and Energy Union took Geocon to the commission nevertheless, arguing staff had been coerced and some felt intimidated by being identified on the ballots, fearing retribution. The union also claimed Geocon hadn't given workers proper notice and hadn't fully explained the change.
Sean McInerney from the Grand Central Towers site in Woden told the commission that staff heard at a meeting on the day before the vote that if they didn't vote yes, job cuts would follow. Others said they had misunderstood the extent of the pay cut. The union said staff had been told at meetings on May 12 that if they didn't vote yes, more redundancies were likely.
Geocon countered that staff were aware of what they were voting on, none had raised concerns about the process at the time and none had been coerced, and there had been no need under the law for a secret ballot.
The case was heard by Fair Work Commissioner Leigh Johns, who upheld the pay cut, saying the law did not require an employer to be perfect but to take all reasonable steps to give sufficient notice about a vote and to ensure workers understood its effect. He was satisfied Geocon had complied and made it clear that staff would not get the 5 per cent pay increase next year and their pay would revert to February 2019 rates. If pay reverted to February 2019 levels, it followed they would also lose their February 2020 increase, the commissioner said.
He was concerned about Geocon's decision to put names on each ballot, saying, "It seemed to me an unnecessary thing to do as an administrative measure aimed at ensuring that employees only voted once." But identifying people did not affect the genuineness of the vote or the result, he said.
Geocon took advantage of a change to industrial relations laws in April that reduced the notice period to staff from seven days to one, when a company wants a vote to change a pay agreement. The measure was strongly opposed by Labor, which says businesses have been arguing for the change for a long time as a way of preventing union involvement and stopping staff organising before votes.
After reaching a deal with One Nation for a one-year sunset clause on any changes made under the change, last Thursday, Attorney-General Christian Porter announced the change would be scrapped altogether, and it would revert to seven-day notice periods - although it is unclear when.
Mr Porter said the provision had been used 23 times, with about two thirds of the new agreements allowing three or more days for changes to be considered. Employers had not misused it, he said.
Geocon head Nick Georgalis said Geocon was "preparing for the potential of adverse market conditions here in Canberra".
"Above all, we aim to keep as many people employed as possible should working conditions deteriorate further. This has required us to investigate extraordinary employment arrangements for staff," he said.
"There are challenging times ahead, but fortunately Geocon, as a private company, is able to continue to grow in size.
"We, unlike other developers, are in a good position to commence more projects this year than the general market expectation. We have made multiple acquisitions this year to maintain our workload for the next few years."
Geocon is responsible for many of the big residential construction projects underway in Canberra, including the Grand Central Towers and Wova being built in Woden.
In the city, it is building the apartment blocks replacing public housing on Cooyong Street and a hotel in Garema Place, has just finished the Midnight apartment building on Northbourne Avenue in Braddon, and has bought another large site off London Circuit.
In Belconnen, it is building the towering Republic apartments and the High Society apartments in a precinct near the Belconnen centre, and the company has a series of projects also in Gungahlin. On the strength of its projects in Canberra, it was ranked Australia's fourth biggest builder in 2018.
Labor's industrial relations spokesman, Tony Burke, said the economy needed people to spend, but the Geocon workers would have less money in their bank accounts every payday for the next two years.
"This is exactly what Labor warned about when Christian Porter brought in this dangerous regulation: an employer using it to lock in pay cuts that endure for years to come," he said.
"We're pleased the government capitulated and ditched this regulation last week. Sadly, many of the changes that were made while the regulation was in place will persist - and have left workers worse off."