The Code for the Tendering and Performance of Building Work 2016 (‘Code’) is part of the new Australian Building and Construction Commission laws (‘ABCC laws’) which commenced on 2 December 2016.

From the first time you submit an expression of interest or tender for Commonwealth funded building work you become subject to the Code. From this point, you and your related entities must comply with the Code on all new projects, including ensuring Enterprise Agreements (EAs) are compliant.

Originally, the ABCC laws were passed through the senate with allowances for a two year transitional period for compliance. However, following key amendments being passed in February 2017, the construction industry will need to comply with Building Code 2016 by 1 September 2017. This change means that companies that have not achieved Code compliant EAs by 31 August 2017 will not be eligible to perform Commonwealth funded work.

Building Code 2013 continues to apply to building work tendered for prior to 2 December 2016.

What does this mean for employers?

If you are seeking to win contracts for Commonwealth funded building work you must have Code compliant EAs in place by 31 August 2017.

Commonwealth funded building work includes Public Private Partnerships and many projects that are indirectly funded by the Government.

Examples of non-Code compliant EA clauses

Clauses which prohibit or restrict casual employment or labour hire;
Clauses which prescribe the number of employees or subcontractors that may be employed or engaged;
Clauses which require union consultation or approval in relation to the type of employees employed;
Clauses which require union consultation or approval in relation of the engagement of subcontractors or the terms of their engagement; or
Clauses which limit the right of an employer to make decisions about redundancy, demobilisation or redeployment of employees based on operational requirements.

How do employers show that they are compliant?

If you are Code compliant the ABCC will issue you with a Letter of Compliance. This letter is required if you wish to undertake Commonwealth funded building work. To be issued a Letter of Compliance you will need to submit a Building Code 2016 Assessment Request/Letter of Compliance Form.

ABCC enforcement

The ABCC has responsibility for monitoring compliance with the Code. The ABCC’s monitoring role includes education, advice, site visits, site inspections and compliance audits.

As well as the compliance of EAs, the Code contains many other requirements that may affect your business. For example, if you don’t pay the correct wage or entitlements or comply with WHS (such as on right of entry) or security of payment laws you could miss out on Commonwealth funded contracts. You will also need a drugs and alcohol plan. A Workplace Relations Management Plan (WRMP) is required if the Commonwealth contribution to the project is at least $5 million and represents at least 50% of the total, or the Commonwealth contribution to the project is at least $10 million. A WRMP must detail how you will comply with the Code and deliver the project on time and on budget. There are also requirements related to freedom of association. For example, contractors must not refuse to employ an individual because of their union status.

Further help:

If you’d like to discuss these changes with one our business advisors, please contact us on 07 3023 4800 or at mail@marshpartners.com.au

Share this article on LinkedIn: