The Federal Government has released new implementation guidelines (Guidelines) for the National Code of Practice for the Construction Industry (Code) affecting all projects subject of an expression of interest or tender on or after 1 May 2012. Major changes include the removal of detailed prescriptions against project agreements whilst permitting unregistered agreements in specific areas. The other areas of change appear simply to align the Code with the Fair Work Act. The Guidelines assert that the Code will prevail over any state/territory guidelines.

The following is a summary of the major changes to the Code arising from the release of the new Guidelines:

Removal of strict conditions

The previous Guidelines discouraged and contained detailed prescriptions against "project agreements" whereas the new Guidelines require only that project agreements "must be made and approved under the Fair Work Act or in accordance with State industrial law". Project agreements are permitted regardless of the value of the project. However, project agreements will still be difficult to obtain due to the agreement-making processes under the Fair Work Act.

Unregistered agreements

The Guidelines retains the general ban on unregistered agreements, however it will permit unregistered agreements to be made on matters such as reducing carbon emissions, workplace bullying, construction site waste, promoting the employment of women and indigenous people and "initiatives to encourage fair, cooperative and productive workplace relations across the industry". The final area being quite broad and reflective of the somewhat aspirational language used in the Fair Work Act. This may afford greater flexibility for employers at the workplace level.

Genuine dispute resolution clause

The Guidelines require employers under a Fair Work Enterprise Agreement made after 1 May 2012 to have a "genuine" dispute resolution provision in their Enterprise Agreement and be a mechanism for disputes to be resolved through binding decisions made by an independent third party.

Sham contracting

The new Guidelines aim to address sham-contracting and have stated that employers "found to have engaged in sham contracting will be considered to have committed a fundamental breach of these Guidelines".

The Code and Code compliance has been an issue for employers in the construction industry in the past. Only time will tell whether the amendments to the Code will result in a move towards fair, co-operative and productive construction sites.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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