Building Code 2016

 

The Building Code 2016 is the Code for the Tendering and Performance of Building Work 2016 and commenced on 2 December 2016.

You become subject to the Code (a “Code-covered entity”) from the first time you submit an expression of interest or tender for Commonwealth-funded building work. From this point, you and your related entities must comply with the Code on all new projects, including privately-funded projects. However, you are not required to ensure subcontractor compliance on private projects.

Originally, there was a two-year transitional period. However, following key amendments being passed in February 2017, you now need to comply with Building Code 2016 by 1 September 2017.

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

What does the mean for you?

If you are seeking to win contracts for Commonwealth-funded building work you must have a Code-complaint enterprise agreement by 31 August 2017. It is important to realise the exemption until 31 August 2017 is limited to submitting expressions of interest and tendering, meaning your agreement will need to comply with the Building Code 2016 before you can be awarded Commonwealth work.

The timing of your current enterprise agreements have a bearing on your compliance with Building Code 2016:

  • Agreements made on or after 2 December 2016 must comply with the 2016 Code to submit an expression of interest tender or be awarded Commonwealth-funded work
  • Agreements made before 2 December 2016 will no longer be deemed compliant with the 2016 Code until 28 November 2018. You can submit an expression of interest and tender for Commonwealth-funded work until 31 August 2017, but you will need a Code-compliant agreement to be awarded the work. However, if you have already submitted an expression of interest or tendered for relevant building work before 22 February 2017 you will remain eligible to be awarded that building work until 28 November 2018.

How do I show I am Code-compliant?

If you are Code-compliant the Australian Building and Construction Commission (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 the Building Code 2016 Assessment Request/Letter of Compliance Form, available here.

Do I need to obtain a letter of compliance if my employees are covered by the terms of a modern award?

Yes. Even if you do not have an enterprise agreement, all contractors who are seeking to win contracts for Commonwealth-funded building work will require a Letter of Compliance.

What do I need to do to ensure my agreement is Code-compliant?

This will depend on the current status of your enterprise agreement:

  • Enterprise agreements that have passed their nominal expiry date or will pass their nominal expiry before 31 August 2017: We recommend you act fast to get a new Code-compliant agreement in force before 31 August 2017. The Industrial Relations team at Master Builders SA can assist you in reviewing and drafting your new enterprise agreement to ensure compliance.
  • Enterprise agreements still in force after 31 August 2017 and assessed as being compliant with Building Code 2014: Your agreement will most likely be compliant with the 2016 Code. Please contact our Industrial Relations team for a review.
  • Enterprise agreements still be in force after 31 August 2017 and not Code-compliant: Contact the Industrial Relations team at Master Builders SA who are available to help you review your agreement and provide you with advice as to your best options moving forward. 
  • Enterprise agreements entered into before 25 April 2014 and have not been varied: These agreements are exempt from having to be compliant with the 2016 Code.

ABCC enforcement: What you need to know

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.

The content of enterprise agreements has dominated media coverage but the Code contains many other things that are very important for 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 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 information can be found here.

Reporting requirements

Code covered entities must report to the ABCC:

  • actual or threatened industrial action within 24 hours of becoming aware;
  • a breach or suspected breach of the Code within two working days of becoming aware. Within 14 days, a follow up notification confirming steps taken to rectify the breach is required;
  • any disputed or delayed progress payments to the ABC Commissioner and the relevant funding entity as soon as practicable after payment is due;
  • any direct or indirect request or demand by a building association that the code covered entity engage in conduct that appears to be for the purposes of a secondary boycott within 24 hours.

Consequences of breaching the Code

If you breach the Code the ABC Commissioner may recommend to the Minister that a sanction be imposed. This could see your business not permitted to tender for, or be awarded, Commonwealth funded building work for up to one year.

The ABCC has made it clear it will take an active approach to policing the Code, including a strong audit program to begin immediately.

The Industrial Relations team at Master Builders SA can assist your organisation to smoothly transition to Building Code 2016, ensuring you are eligible to be awarded Commonwealth-funded work.  Please contact our Industrial Relations team on 08 8122 4990 or at IR@mbasa.com.au for any further assistance or more information.


Resources

The Building Code 2016 can be downloaded in its entirety here.

The ABCC's guide to assessing common Enterprise Agreement clauses for their Code compliance can be found here. It will be updated regularly.

Our quick guide to prohibited clauses in Enterprise Agreements can be found here.

Our Building Code 2016 Fact sheet on non-enterprise agreement clauses is available here.

A Table of Scenarios can be found here