On 17 April, the Federal Government published an advance release
of the Building and Construction Industry (Fair and Lawful
Building Sites) Code 2014 (Code), which aims
to address productivity issues in the construction sector and
prohibit restrictive work practices and discriminatory
The proposed Code sets out the standard of workplace relations
conduct expected from contractors when performing work funded by
the Commonwealth Government, and is part of a number of changes
which include re-establishing the Australian Building and
Construction Commission (ABCC).
The Code will replace the existing Building Code 2013 and will
come into effect when the Building and Construction Industry
(Improving Productivity) Bill 2014 commences as an Act
(expected to be around July 2014). Importantly, the Code will apply
to enterprise agreements made after 24 April 2014.
Who is covered?
Building contractors and building industry participants, who are
already covered by the Building Code 2013, will be
required to comply with the new Code.
Once the Code takes effect, subcontractors, building suppliers
and other building contractors who submit an expression of interest
or tender for new Commonwealth-funded building work will be covered
by the Code.
Once covered by the new Code, building contractors and
participants are required to act consistently with the Code in
relation to all their future building work, including both
Commonwealth and privately funded work.
What are the new changes?
Under the new Code, enterprise agreements will no longer be able
to contain restrictive work practices or discriminatory provisions.
Building contractors and participants must also not engage in any
conduct, procedure or practice that would have the same effect as a
prohibited clause in an enterprise agreement.
Some examples of clauses and practices that will not be
permitted by the Code include:
requiring contractors to employ a non-working shop steward or
'one in, all in' clauses where, if one person is
offered overtime, all the other workers must be offered overtime,
whether or not there is enough work
'jump up' provisions that prevent engaging
subcontractors unless they provide certain terms and conditions
required by unions to workers, despite their existing lawful
requiring contractors to obtain the approval of a union over
the number and types of employees that a contractor may engage on a
The Code also requires strict compliance with the right of entry
laws by building contractors and for building contractors to
monitor and ensure that subcontractors comply with the Code while
undertaking Commonwealth-funded building work.
When does the Code take effect?
Compliance with the Code generally will be required once the
Code commences operation later this year.
Importantly, the prohibition on restrictive work practices and
discriminatory content in enterprise agreements will have
retrospective effect. A business with an enterprise agreement made
after 24 April 2014, which does not comply with the new content
requirements, will not be eligible to tender for and be awarded
Commonwealth-funded building work.
The ABCC will take the role of enforcing all non-compliance with
the Code by building contractors or participants, when the Code
commences. The ABCC may issue a formal warning or impose a
sanction, which excludes tendering and contracting for Commonwealth
funded work for a period of up to one year.
Employers in the building industry should therefore ensure that
any enterprise agreements entered into from 24 April 2014 do not
contain clauses which will make them ineligible for work on
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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