The Federal Government has announced that the new Building Code
2013 will take effect from 1 February 2013. The Code will take the
form of a legislative instrument and will replace the existing
Implementation Guidelines for the National Code of Practice for the
Construction Industry. It will operate together with supporting
guidelines that set out Commonwealth procurement obligations.
Who will the Code apply to?
The Code will apply to building contractors and building
industry participants who submit an expression of interest or
tender for specified building work after 1 February 2013.
Any building contractors or building industry participants who
are covered by any version of the Guidelines will be subject to the
Code, irrespective of when they submitted an expression of interest
or tender for the Commonwealth funded building work. The
Government's intention in this respect is to streamline
compliance by having only one set of requirements.
All privately funded building work will also be subject to the
Code as soon as a building contractor or building industry
participant becomes covered by the Code.
What are the main changes?
The Code has a similar form to the Guidelines. Its purpose is
not to create additional obligations, but rather to codify the
Guidelines to ensure compliance with relevant workplace relations
Aside from ensuring that no form of the Guidelines will have
effect from 1 February, the Code also gives additional guidance on
the behaviour expected during bargaining for an enterprise
agreement. It stipulates that building contractors and building
industry participants must not refuse to consider a proposal made
by a bargaining representative on the ground that a third party has
indicated that it will not procure, or will only procure, services
from a person covered by an industrial instrument that contains a
It is likely that this additional requirement has been included
in an attempt to water down the influence of the Victorian
Government's Code Compliance Unit – specifically, its
requirements regarding the form that an enterprise agreement must
take for a contractor to be eligible for Victorian Government
funded building work.
As the Code is issued under the Fair Work (Building Industry)
Act 2012, it also clarifies that building contractors and building
industry participants must notify the Director of the Fair Work
Building Industry Inspectorate, which operates under the name of
Fair Work Building and Construction (FWBC), of any
alleged breaches, voluntary remedial action or other matters
relating to the Code within 21 days of becoming aware of it.
Monitoring and consequences of
FWBC has primary responsibility for monitoring compliance with
the Code. The consequences for not complying with the Code can be
significant. Depending on the seriousness of the breach, sanctions
include being precluded from tendering for Commonwealth funded
building work for a period of time.
If an employer engages in sham contracting, it will be
considered a fundamental breach of the Code. Ensuring compliance in
this respect is critical to maintaining an ongoing ability to
tender for Commonwealth funded building work.
Implications for building industry
All building industry participants, particularly those who have
made an expression of interest or tendered for specified building
work before 1 February should be alert to the future application of
Building industry participants who have specific queries in
relation to their obligations under the Code, or who want to ensure
that any enterprise agreement that is being bargained for is Code
compliant, should contact a member of the Workplace Relations and
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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