While some parts of the scheme still have to be developed, there
are parts of the scheme already in place which mean that
participants in the construction industry should be reviewing their
payment arrangements with contractors, subcontractors and
What has been put in place immediately as a result of the
passage of the ABCC Act is:
The issue of the Building Code 2016 which contains expanded
obligations relating to security of payment;
The ABC Commissioner must monitor and act to ensure the
compliance by building employers and building contractors of their
obligations under the Building Code 2016.
The establishment of a SOP working group, comprising the ABC
Commissioner and government and industry representatives. The
functions of the working group include monitoring the impact of the
ABCC on SOP compliance and making recommendations in response to
tasks set by the Minister.
The new Building Code contains the previous code's general
requirement that building contractors and building industry
participants make timely payment and comply with Commonwealth,
State and Territory laws and other requirements relating to the
security of payment, but adds the following specific
there must be a documented dispute settlement process that
details how disputes about payments to subcontractors will be
resolved, and the participant must comply with that process. That
process must include a referral process to an independent
adjudicator if the dispute cannot be resolved between the
a participant must comply with any requirements relating to the
operation of any project bank account or trust arrangement that
apply to the code covered entity in relation to Commonwealth funded
building work. These have not been developed yet and will likely be
one of the early tasks given to the SOP working group; and
a participant must report any disputed or delayed progress
payment to the ABC Commissioner and the relevant funding entity as
soon as practicable after the date on which the payment falls
The Building Code also outlaws any undue influence or coercion
against a contractor, subcontractor or consultant to exercise or
not exercise rights they might have under State or Territory SOP
Industry participants who are subject to the Building Code must
ensure that their contractual arrangements comply with the first of
these additional requirements (dispute settlement) and also do not
contain provisions which might be interpreted as measures directed
at dissuading the use of SOP rights. Participants should also stay
alert for the development of the flagged project bank account or
trust arrangements. A failure to comply with the Building Code may
attract the attention of the ABCC and could potentially result in
exclusion from participation in Commonwealth funded projects.
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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If an owner wants to remove a caveat, issuing a lapsing notice is a quick and easy way to shift the problem to the caveator.
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