Australian Construction Law Newsletter

10. THE ART OF NEGOTIATIONSo far as is possible, negotiation is the preferredmethod of resolving disputes.

In Issue #6 of the Newsletter, the comment was madethat a lack of negotiation skills in the industry oftenhampers the resolution of disputes. Consequently, itcould be expected that benefits would accrue fromtraining staff in negotiation techniques.

This article, from Colin Biggers + Paisley's News, is asuccinct and well expressed outline of some of the keyfeatures of negotiation and contains a checklist ofthings to bear in mind when commencing negotiations.

Negotiation is a part of life. It is the alternative to thelaw of the jungle. It provides a method by which conflictcan be resolved other than by fighting or running away.

The art of negotiation is an acquired ability. Theprocess starts from the early years. The five year old asks,"Can I have astory if!eat up my peas?" The parents reply,"Yes, butonly ifyou put away your toys". The negotiationis thus concluded, satisfactorily - it meets the desires ofallparties.

Negotiation is the antithesis ofthe application offorce.It involves assent. It is directed to amalgamating divergentinterests into a common cause.

The nature ofany negotiation cannot be divorced fromthe context in which it occurs. A number offactors shouldalways be borne in mind in this respect.

Negotiation is often competitive. An analogy with asporting contest is not inappropriate. One side wins; theother side loses. That approach is often reflected in thenegotiating process. People are concerned to "protect"their position. They are loathe to "give things away". Theoverriding concern of some is to establish the correctnessof their position, and conversely, the wrongfulness of theactions of the other party.

It is therefore sometimes difficult for parties to ac­knowledge that negotiation involves co-operation. It isessential to stand aside from the adversarial position inorder to contemplate the possibility of a victory for bothsides.

A further factor relevant to the nature of a negotiationconcerns the power of the respective parties. Ifone partyis in a position of dominance, it is often the case that asettlement is imposed rather than negotiated. In thesesituations, the negotiation factor is often limited to asalvage operation, and then only in relation to compara­tively minor matters. .

It is always essential to guard against the negotiatorwho is simply on a "fishing expedition". In such cases, itis often advisable to bring the discussion to an end beforetoo many tactical advantages are conferred on the otherside.

The following check list may be of assistance ifnego­tiations are to be opened:

• Identify the underlying problem, rather thansimply trying to negotiate a demand. The

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demand may well not be consistent with thereal issue.Assess long term objectives against the possi­bility of short term gains. The latter can oftenprejudice the former.Ensure that complete and accurate informa­tion is at hand. Shoddy preparation can se­verely handicap the presentation of a claimand weaken bargaining power.

• Project a confident image. Nerves, inexperi­ence and the like should be concealed.Listen carefully to what has been said. Thespoken word often contains a veiled meaning.It is a serious fault to say too much.Ask relevant questions, but in doing so avoid(if possible) antagonising the other party orraising offensive allegations (for example, asto integrity).Pay close attention to the answers. Everyword counts.Anticipate the objections which will be raisedby the other party.Remain objective, so far as possible. Anemotional presentation can often do moreharm than good.Keep quiet when there is nothing more to besaid. An off-hand comment can often undohours of painstaking discussion.Be wary of the "bulldozer" approach. The"final offer" or the "deadline" is often a ploy.Patience is essential to the protection of longterm interest. If, however, the offer genuinelyis final, do not take it for its own sake. A badbargain is akin to an unwanted pregnancy ­both are to be avoided.Be prepared to call the other side's bluff. Donot ignore, however, the fact that emotions areinvolved - always consider giving the otherparty an escape route. Embarrassment, with­out an opportunity to escape, often reinforcesthe resolve to fight.

-Reprinted with permission from Colin Biggers+ Paisley, Solicitors, News.

11. AFFIRMATIVE ACTIONFurther to the article on Affirmative Action And The

Construction Industry in Issue #2 of the Newsletter,employers may be interested to know that the AffirmativeAction Agency has issued a monograph by Chris Ronaldsentitled "Principles of Affirmative Action and Anti-Dis­crimination Legislation", which is available from theAustralian Government Publishing Service for $4.95.

Also ofinterest will be a recent survey by Price Water­house Urwick of 157 Victorian companies which employmore than 100 people. This report concludes that theFederal Government's 1986 Affirmative Action legisla­tion is not working and that the mandatory affirmative

Australian Construction Law Newsletter

action programmes which are intended to bring equality towomen employed in major companies have had littleeffect on attitudes and have aroused male resentment.Furthermore, the reportstates thatcompanies are question­ing whether there are any benefits to be derived fromaffIrmative action programmes and are paying lip serviceto their statutory requirements as employers.

In response to this report, there has been an inevitablequestioning of the Government's affirmative action pro­gramme. According to a newspaper report, the Govern­ment and the Affirmative Action Agency have targeted1992 for a major re-evaluation of the legislation.

It should be noted that the Australian legislation onlyrequires companies with 100 employees or more to lodgea return each year of their affirmative action programmesand, in effect, to indicate support for equal opportunity inemployment, whereas the American legislation requiresemployers to achieve quotas and, in effect, to some extentto positively discriminate in favour ofwomen. Neverthe­less, employers have been concerned at the additionalpaperwork required, the work and cost involved in com­plying with the regulations and some male staff resent­ment. Since attitudinal changes are required, the Govern­ment accepts that effective implementation will take time.

To positively address the problem, the AffirmativeAction Agency has announced annual awards forcommu­nication, strategy, education and achievement for compa­nies which have shown excellence in their affirmativeaction programmes.

-JT

12. AFCC - HIA RECIPROCITY AGREEMENTThe Australian Federation of Construction Contrac­tors and the Housing Industry Association have signeda reciprocity agr~ement,which sets down the nature ofproposed future co-operation between AFCC andHIA, which could have some bearing on issues such asindustrial relations in the industry and common ap­proaches to contractual issues.

The agreeement provides for a co-operative arrange-ment in the following areas:

• communication;• industry policy formation;• industrial relations;• training; and• the manufacturing sector.

Where appropriate, AFCC and HIA will undertakejoint industry representation to Federal and State Govern­ments and opposition parties.

With proper regard for sectoral variations in industrialrelations practices, AFCC andHIA will establish channelsof communication on industrial relations developments.

Due to the interdependence of manufacturing compa­nies and AFCC and HIA members, AFCC and HlA willseek close contact with national companies supplyingmaterials to the housing and construction sectors.

-JT

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13. CODE OF PRACTICE FOR THE SAFEERECTION OF STEELWORK

The Australian Institute ofSteel Construction has pub­lished a code entitled ''The Steel Construction IndustryCode OfPractice For Safe Erection OfBuilding Steel­work Part 2: Multi Storey Buildings And Structures".

This document is a voluntary Code produced with thebacking, support and commitment of companies in thesteel construction industry. It has been widely distributedby the Institute, including to unions and governmentdepartments.

The Code is available from the Institute bookshop,P.O. Box 434, Milsons Point 2061 at $20 per copy. Directinquiries to Ian Hooper on 02 929 6666.

14. USE OF AUSTRALIAN AND FOREIGNCONTROLLED DESIGN ANDCONSTRUCTION SERVICES ONMAJOR PROJECTS - A REPORT OF THECONSTRUCTION INDUSTRY COUNCIL

Prior to this survey, construction industry representa­tives had expressed concern at what seemed to besignificant foreign penetration ofthe Australian majorproject market. The issue had been raised in theConstruction Industry Council, in Industries Assis­tance Commission inquiries and other fora. There wasno comprehensive data available to confirm or rejectthese claims so the Construction Industry Councilagreed to support an investigative survey to overcomethe deficiency.

The task was carried out under the guidance of thePolicy Committee of the Construction Industry Council,Chaired by David Jackson, with substantial industry rep­resentation and actioned through the Departmentoflndus­try Technology and Commerce.

In preparing the survey, industry groups, the Austra­lian Bureau of Statistics and the Bureau of Industry Eco­nomics were consulted; they assisted in both the design ofthe questionnaire and in identifying the service compo­nents involved in the design and construction of majorprojects.

The survey was carried out during October and De-cember 1987. Its aims were to:

Provide data on the extent of involvement byAustralian controlled finns in the supply ofconstruction and consultancy services tomajor Australian projects valued at over $10million;Identify areas for further development with aview to enhancing the project capability ofAustralian controlled firms; andProvide a reference point to assess the effec­tiveness of any future actions.

The survey provides a guide to the level ofsourcing ofservices to major domestic projects and a comprehensivesnapshot of Australia's major project market during thesecond half of 1987.