New ABCC’s building code impacting building and construction companies

If you are someone involved in the building/construction industry and are worried or confused about the new Building Code, you should be. The Australian Building Construction Commission (“ABCC”) sets out the requirements and expectations of building/construction companies in policing the Code for the Tendering and Performance of Building Work 2016 (Cth) (“Code”) which has recently came into effect. The Code, which was enacted under the Building and Construction Industry (Improving Productivity) Act 2016, creates an extensive list of requirements which can make comprehending what is expected of your building/construction burdensome. Below we provide a concise summary as to what the Code means for you.

What does the Code require?

For those involved with Commonwealth-funded building projects, as well as any other construction project, ensuring your practices are compliant with federal legislation will mean an increase in efficiency and cost savings, and a decrease in red-tape compliance headaches, for all parties involved. By ensuring that your current enterprise bargaining agreement (“EBA”) is aligned with Code requirements this reduces the likelihood of attracting the ire of regulators (ABCC) or, worse yet, being barred from tendering or working on Commonwealth-funded building sites.

The Code also regulates your relationships with subcontractors ensuring that all building participants are consistently adhering to the Code, resulting in an increased likelihood of timely and predictable delivery. Some key points to note about to the Code are:

  • ‘Building work’ as defined by the 2016 Code has been expanded to now include the supply and transport of building goods directly to building sites for subsequent use in building work;
  • Once a building contractor or building industry participant becomes subject to the terms of the Code, it and its related entities must comply with the Code on all new projects;
  • Your EBA with not only your employees but also any arrangement with subcontractors must comply with the Code;
  • You must not have any ‘side agreements’ with a trade union (such as the CFMEU) that transplants matters that are non-code compliant including an agreement you know is not going to be registered under the Fair Work Act 2009(Cth) (“FW Act”);
  • There are now strict requirements that employers must follow before employing a non-citizen/permanent resident (such as a ‘457 Visa’ holder);
  • No action by Code companies to compel contractors, subcontractors or consultants to make over-entitlement payments (such as to use a preferred union supplier or to employ a shop steward);
  • You must have adopted and implemented policies and practices that protect freedom of association in respect of building work for example, not discriminating against employees on the basis of their union membership (or lack of membership);
  • Compulsory reporting to the ABCC when it comes to actual or threatened industrial action on behalf of your employees;
  • All contractors who are wanting to undertake Commonwealth-funded building work will now require a letter of compliance from the ABCC, confirming that they are now eligible to tender and subsequently work on these projects. Such contractors are now required to have an approved Workplace Relations Management Plan (“WRMP”) in place; and
  • Further enhanced Right of Entry and Freedom of Association requirements.

If your building/construction company has an existing EBA that was made prior to 2 December 2016, you now have until 1 September 2017 to ensure your EBA is Code compliant. This year is quickly getting away from us, for further explanation of any of the matters listed above please do not hesitate to get in contact with us as we would be more than happy to assist you in simplifying this complex legal area (see details below).

Expectations of Commonwealth funded project participants – WRMP’s

If your building company commonly participates in Commonwealth funded projects the Code requires that you have ensured a WRMP is included in all expression of interest and tender documents. As a part of the tender evaluation process the Commonwealth is now required to provide your WRMP to the ABCC if you are to be shortlisted. You will not be awarded the tender unless your WRMP has been approved by the ABCC.

In our experience WRMP’s are stringently assessed by the ABCC and are an incredibly detailed and complex document. We recommend if you are drafting or reviewing your WRMP you contact one of our specialist consultants and they will be able to resolve any concerns you may have.

Do not wait!

As stated above, if your building and construction company has an existing EBA that was made prior to 2 December 2016, you only have until 1 September 2017 to ensure your EBA is Code compliant or risk consequences that could impede severely on your productivity and reputation.

If you have allowed your existing EBA to pass the nominal expiry date pending the outcome of the passing of the Code, time is running out, your call to action is now. If you want to maintain a smooth and uninterrupted operation we can assist you with ensuring your EBA is compliant. If you want to move away from the pattern EBAs that have plagued the industry for so long, please give Mark Ritchie, Principal Consultant from Workplace Wizards a call on 0458 644 469 or email at mark@workplacewizards.com.au.

Mark Ritchie

Mark Ritchie

Mark is passionate about helping Australian businesses efficiently resolve their industrial relations issues. Mark has demonstrated proficiency advising managers, executives and boards of small to medium-sized enterprises, as well as some of Australia’s best-known companies, on both litigious and non-litigious matters.

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