On 9 August 2017, the Senate will consider a motion proposed by Labor Senator Doug Cameron that the Code for the Tendering and Performance of Building Work 2016 (Building Code 2016) be disallowed. It is unlikely that the Senate will support the disallowance motion but the unions are refusing to agree to vary enterprise agreements to ensure Code-compliance prior to the disallowance motion being dealt with. It remains to be seen whether the unions will shift their position after 9 August 2017, if the disallowance motion is defeated.

Background to the Code

The Building Code 2016 contains detailed requirements regarding enterprise agreement content, site practices and other issues.

Head contractors and sub-contractors that wish to carry out work on Commonwealth funded construction projects need to ensure compliance with the Building Code 2016 on Commonwealth funded building work, State Government funded building work and private funded building work.

It is imperative that all affected employers to make every effort to reach agreement with their own employees on necessary variations to enterprise agreements to achieve Code-compliance.

If the majority of employees covered by an enterprise agreement support a variation, the variation can proceed despite any union opposition. It is evident from a review of recent agreement variations by the FWC that some construction industry employers have succeeded in reaching agreement with their employees on variations to enterprise agreements to achieve Code-compliance.

Important timeframes

From 1 September 2017, a business will only be able to express interest in, tender for, or be awarded Commonwealth funded building work if:

• All enterprise agreements made by the employer and its related entities on or after 2 December 2016 (that apply to building work) comply with the Building Code 2016; and
• All enterprise agreements made between 25 April 2014 and 1 December 2016 by the employer and its related entities (that apply to building work) comply with the Building Code 2016 by 1 September 2017.

Enterprise Agreements made prior to 25 April 2014, which have not been varied, do not need to comply with the Building Code 2016.

Hundreds of contractors and subcontractors have enterprise agreements that were made between 25 April 2014 and 1 December 2016 which are not compliant with the Building Code 2016. The contractors and subcontractors are facing being excluded from Commonwealth funded building work from 1 September 2017 unless the relevant agreements are varied or terminated. The exclusion of these contractors would have a major impact on construction projects given the large number of highly experienced major specialist contractors with enterprise agreements that are not Code-compliant.

Do you require further assistance?

For information or assistance regarding how the Building Code operates please contact Ai Group’s Workplace Advice Service on 1300 55 66 77.

Alternatively, if you would like assistance in understanding the steps to ensure Code compliance for your business, please contact your local Ai Group Workplace lawyer in Sydney, Newcastle, Wollongong, Melbourne or Brisbane.