On 20 July, the Victorian Building Industry Disputes Panel issued majority site allowance determinations in relation to the Melbourne Metro Tunnel and Westgate Tunnel projects, with application to a number of subcontractors. The majority awarded a site allowance of $8.50 per hour from 1 March 2018, rising to $9.20 per hour from 1 August 2018 on the Melbourne Metro Tunnel; and a site allowance of $8.90 per hour on the Westgate Tunnel. These outcomes are more than double the current standard City of Melbourne site allowance for new projects of $4.15 per hour.

An appeal against the Westgate Tunnel determination has been lodged with the Fair Work Commission by one of the affected subcontractors. It is understood that subject to the outcome of a jurisdictional challenge by the CFMMEU, that the hearing will occur in early November.

Master Builders is not aware of any appeal against the Melbourne Metro Tunnel determination. As such, subcontractors named in that determination have an obligation to pay in accordance with the determination as applicable under their enterprise agreement.

“Members should note that these determinations are highly contentious,” said CEO Master Builders, Radley de Silva.

“These sorts of site allowance outcomes, on top of already extraordinarily high EBA wages, are contributing to cost-blow outs that are costing taxpayers and the Victorian community.”

“Back in 2016, Master Builders expressed considerable concern over the general CFMMEU EBA agreement to continued compounding annual 5 per cent EBA wage increases in the commercial construction sector, given the already very high wages that those employees were receiving.”

“Deloitte research conducted for Master Builders showed that the combined impact of continued 5 per cent wage increases would have cost taxpayers an increase of $806 million to deliver the Government’s 4 year infrastructure plan – representing a lost opportunity to Victorians of ten schools and three hospitals.”

“Deloitte research conducted for Master Builders in 2016 also showed that union EBA carpenters and entry-level laborers are paid far more than other employees across the economy. At that time, unskilled labourers were earning around $144,506 per year and carpenters around $155,961 per year – more than double the average police officer, fire fighter, soldier, teacher or nurse – and this has only increased since then.”

“Adding an extra $9.20 or $8.90 per hour on top of these wage rates on projects where the Victorian taxpayer is the ultimate client, should be unacceptable to the Victorian community.”

“As a result, site allowance is likely to be a major focal point for any future industry-led negotiations leading to a successor to the current CFMMEU Pattern EBA 2016-2018,” Mr de Silva said.

Members seeking further information are encouraged to contact the IR Department on 9411 4560.

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