ABCC and the New Code of Practice

The Australian Building and Construction Commission (ABCC) and the new Code of Practice for the Construction Industry (Code for the Tendering and Performance of Building Work 2016) became operative on 2 December 2016.

What does the New Code apply to?

The new Code applies to works that are tendered or expressions of interest made after the 2nd December 2016. Works that were subject to tender prior to this date are subject to the Building Code 2013. However there is a catch. In order to be eligible for federally-funded works, companies need to be Code Compliant with the new 2016 Code on all works, both public and private from 2nd December 2016.

When does the Code start and what is the Transition Period?

There has been a lot of press regarding the 2 year transition period for companies that have an enterprise agreement made before 2 December 2016, so here are the rules:

If you are making an enterprise agreement after 2 December 2016, the Code applies to the new agreement. The agreement will need to assessed as Code compliant by the ABCC in order for you to be eligible to tender for federal or partially federally-funded works.
If your agreement is made before 2 December 2016, companies have until 29 November 2018 to ensure their agreement is compliant with the Building Code 2016. Thereafter, if the agreement remains and contains non-code compliant content, the company will not be eligible for federal or partially federally-funded works. The reality is that in these circumstances, there should be actions to commence the variation or termination of non-compliant agreements in the short-term to ensure a long-term code eligibility status.

What Does the Code Require?

Enterprise Agreements

The Code prohibits the following content from Enterprise Agreements:

‘jump-up’ clauses - which purport to impose limitations on employee engagement, wages and conditions, productivity, and subcontracting arrangements;
Compulsory consultation with a Union/s regarding employee and subcontractor engagement;
Limitations on redundancy, demobilisation or redeployment of employees;
Prohibitions on loaded rates of pay; and
Provisions requiring, encouraging or discouraging union association or right of entry.

Site Practices

Prohibition of non-working shop stewards or job delegates.
No Unions at inductions.
Right of Entry only strictly in accordance with legislative provisions.

Contractors

Prohibition on coercive action to force contractors into making above entitlement payments.

Reporting

Obligation to report actual or threatened industrial action to the ABCC within with 24 hours. Further Employers must take reasonable steps to end unprotected industrial action.

Workplace Relations Management Plans (WRMPs)

Requirement to have WRMP approved by the ABCC on certain federally-funded works. The WRMP must include provisions such as how the Company intends to:

communicate the requirements of the code on site, including to subcontractors;
promote a fair, lawful, efficient and productive workplace;
a fitness for work policy to manage alcohol and other drugs in the workplace (incl. regular testing); and
deliver the project on time and within budget.

Administration and Commercial

Prohibition from engaging in Sham Contracting.
Comply with all applicable laws and requirements regarding the security of payments to persons.
Ensure people who are not Australian citizens or Australian permanent residents are not employed unless first meeting the requirements of valid visas enabling employment (i.e. 457 visa).

Drayton’s Assistance

Drayton’s are able to assist with all aspects of understanding and implementing the Code. Companies should be mindful that ALL contractors wishing to undertake Commonwealth-funded building work now require a letter of compliance with the Building Code 2016 from the ABCC to confirm they are eligible to tender, regardless of their workplace arrangements. This includes companies with Modern Award arrangements. The ABCC will now issue letters of compliance for:

Enterprise Agreements made on or after 2 December 2016 that meet Building Code 2016 requirements;
Enterprise Agreements made before 2 December 2016 (letter of compliance only valid until 28 November 2018); and
Modern Awards or other lawful workplace arrangements.

If you would like more information please contact Drayton's on 07 3831 7099 or admin@draytons.com.au.