Australia: Restoration of the Australian Building and Construction Commission

Last Updated: 13 December 2016
Article by Justine Ansell
Most Read Contributor in Australia, September 2017

The Building and Construction Industry (Improving Productivity) Bill 2013 (the Bill) was passed this week in the Senate.

The Bill will see the Building and Construction Industry (Improving Productivity) Act 2013 (the Act) restore the Australian Building and Construction Commission (ABCC) as the construction industry watchdog and regulator, replacing Fair Work Building and Construction and putting in place a regulator with powers similar to those held in the past.

The main object of the Bill is to provide an improved workplace relations framework for building work, so that it is carried out fairly, efficiently and productively for the benefit of all building industry participants and for the benefit of the Australian economy as a whole.

The aims of the Bill are to:

  • improve the bargaining framework to encourage genuine bargaining at the workplace level;
  • promote respect for the rule of law;
  • ensure respect for the rights of building industry participants;
  • ensure that building industry participants are accountable for their unlawful conduct;
  • provide effective means for investigating and enforcing the Act;
  • improve work health and safety in building work;
  • encourage the pursuit of high levels of employment in the building industry; and
  • provide assistance and advice to building industry participants about their rights.
  • The ABCC Commissioner will be required to enforce the requirements of the Fair Work Act 2009 (Cth) on wages and entitlements, general protections, including the protection of freedom of association and prohibitions on coercion, discrimination, sham contracting arrangements, industrial action, strike pay and right of entry.

The Bill includes building industry specific provisions relating to unlawful action and coercion and restores the higher penalties for contravention of those provisions. The maximum civil penalties that can be imposed will be tripled, seeing civil penalties for individuals increased to $36,000 and for body corporates increased to $180,000.

A number of amendments from the Senate crossbench will see the placement of new checks on the operations of the ABCC and on employers operating in the construction industry.

There will also be new procurement rules applying to projects worth more than $4 million, requiring builders tendering for government work to provide information on local content and compliance with Australian standards.

There will also be amendments which will require the Building and Construction Industry (Fair and Lawful Building Sites) Code 2014 (the Code) to include provisions that seek to give preference to Australian workers, rather than those workers employed subject to visas.

There has also been approval to establish a security of payment working group.

The ABCC will also be required to include in its annual report, details of compliance activity against building employers.

The ABCC will also have its jurisdiction extended to include offshore oil and gas projects.

The Federal Government has pledged to provide an additional $35 million over four years for the re-established ABCC.

The ABCC will be required to act in a "reasonable and proportionate manner to each of the categories of building industry participants". This change will require additional reporting by the ABCC Commissioner, and a requirement that the ABCC uphold the Australian Public Service values as set out in section 10 of the Public Service Act 1999 (Cth) by "performing his or her functions in an apolitical manner and acting impartially and professionally". The Employment Minister will also be allowed to remove the Commissioner for failing to "perform his or her functions with impartiality as between all categories of building industry participants".

What does this mean for the construction industry?

The new Code sets out the standards of workplace relations conduct expected from contractors that want to perform work funded by the Commonwealth Government. Contractors will be required to meet the requirements of the new Code in order to be eligible to work on Commonwealth-funded projects.

Builders in the construction industry will be able to have non-compliant enterprise agreements in place for a further 2 year period, expiring in November 2018. This means that builders operating under enterprise agreements that are not compliant with the new Building and Construction Industry (Fair and Lawful Building Sites) Code 2014 will have until November 2018 to ensure their enterprise agreements are compliant with the new Code. This might be through variation to an existing agreement, or renegotiation for a replacement agreement.

The ABCC Commissioner will also have powers to require a person to give information, produce documents or answer questions relating to an investigation of a suspected contravention of the Act, or a designated building law by a building industry participant. The ABCC Commissioner will have powers to require persons to participate in an examination.

Construction and infrastructure clients requiring:

  1. advice on their enterprise agreements;
  2. advice on, or a review of, their processes for engaging with ABCC inspectors; and/or
  3. training for project managers and supervisors on their rights and obligations under the new legislation,
  4. can contact our Workplace Relations and Safety team.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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Justine Ansell
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