The Senate has blocked the passage of a bill to reintroduce the Howard-era building industry watchdog, in a development overshadowed by the dispute over the future of the royal commission into trade unions.
The bill failed on Monday because the Senate vote was tied at 33 in favour and 33 against. The government continued, however, to push ahead with a separate bill to toughen penalties for union officials who breach their duties.
The Senate has previously blocked the latter bill, known as the registered organisation legislation, and if the upper house does so a second time it would create a trigger for a potential double-dissolution election.
Senators debated the registered organisations bill on Monday evening and a vote was expected to occur some time on Tuesday.
The government’s efforts to put the spotlight on union conduct – which it had wanted to use to apply pressure on the Labor party – have been undermined by the scrutiny of the former high court judge heading the royal commission, Dyson Heydon, over his initial willingness to speak at a Liberal party fundraiser.
The release of correspondence surrounding the invitation dominated question time in both houses of parliament on Monday, and Heydon has foreshadowed a possible hearing on Friday to discuss union complaints about an alleged appearance of bias.
The government won support from four crossbench senators – Bob Day, David Leyonhjelm, John Madigan and Nick Xenophon – to proceed to the next stage of debate on its bill to reinstate the Australian Building and Construction Commission (ABCC).
But three other crossbenchers – Jacqui Lambie, Glenn Lazarus and Ricky Muir – sided with Labor and the Greens to block the move, while the Palmer United party senator, Dio Wang, abstained. Because the supporters of the bill did not have a majority in the Senate, “the question was negatived”.
The bill would have brought back building industry-specific provisions relating to unlawful action and coercion and restore higher penalties for contraventions. Unions have repeatedly argued the ABCC’s extraordinary powers were unfair on the basis they affected workers in one industry differently to those in other industries.
The government’s Senate leader, Eric Abetz, said the Coalition would “re-engage with the crossbench” to seek support for the reintroduction of the ABCC bill.
Abetz said no objective observer could deny there was “an endemic problem of industrial unlawfulness in this industry given the litany of court judgments and fines against the CFMEU for repeated and unrepentant breaches of the law”.
“Labor and the Greens today voted against re-establishing the only regulator that had kept the CFMEU to account,” he said in a statement.
“It is unfortunate that the Senate did not take the opportunity today to send a strong message to the construction industry that it has to comply with the law just like everyone else and that not all senators – especially those from South Australia, Victoria, Queensland and Western Australia – chose to overlook the rampant unlawfulness in the construction industry their home states.”
The CFMEU, which represents construction workers, argued the government was trying to discriminate against its members by subjecting them to harsher laws that did not apply to any other workers.
The Greens MP Adam Bandt said the rejection of the ABCC bill was a win “for democracy and the rule of law”. “The Senate has made it clear that people won’t have fewer rights at work just because of the industry they work in,” he said.
But the chief executive of the Australian Industry Group, Innes Willox, said the rejection of the ABCC bill was disappointing because it contained “vital provisions to protect the community against unlawful conduct”.
“The government should reintroduce the bill as soon as possible and redouble its efforts in engaging with the crossbench senators to secure their agreement to the passage of the bill,” he said.
The Australian Mines and Metals Association, which is a resources industry employer group, said it was “beyond belief” that the Senate had voted against a more effective industrial watchdog for the construction industry.
The association’s chief executive, Steve Knott, said the decision sent “a very bad signal that our parliament is not interested in cleaning up the unlawfulness and thuggery bringing down one of Australia’s most important industries”.
Lambie said she had offered to support the reintroduction of the ABCC if the government agreed to give crossbench senators access to the confidential volume of Heydon’s interim report, which was completed in 2014.
The independent Tasmanian senator also called on the government to deregister the CFMEU.
Lambie accused the government of bringing on the registered organisations bill “as a political stunt” to give it the option of calling a double-dissolution election, even though it would be “political suicide” for Abbott to do so in the current climate. “They want it to fail,” she said of the workplace legislation.
The latest Fairfax-Ipsos poll suggests Labor holds a lead over the Coalition of 54% to 46% based on preference flows at the last election.
The government wants to increase civil penalties and introduce criminal offences for serious breaches of the duties of registered organisation officers, similar to those applicable under the Corporations Act.
The Queensland Labor senator Joe Ludwig said registered organisations were not companies. He told the Senate on Monday the government wanted to use the legislation “as a trojan horse to bash unions”.
The Victorian Nationals senator Bridget McKenzie said the government was simply seeking support for measures it had promised voters before the 2013 election.
McKenzie said the registered organisations bill would restore confidence of members that officials were acting in their best interests.
