National Code Of Practice For The Construction Industry – Workplace Relations Impact Of New Implementation Guidelines

In 1997, the Commonwealth, State and Territory Governments published the National Code of Practice for the Construction Industry (Code) (click here to read).

Parties to the construction industry (which includes but is not limited to clients, principal contractors, subcontractors, suppliers, consultants, employees, unions (including their officials, employees and members), and industry associations while undertaking a representative role) are required to comply with the Code if they wish to do business with governments or work on government construction projects.

The Code sets a number of principles and standards of behaviour in relation to a number of areas, including, amongst other things:

• workplace reform
• occupational health safety and rehabilitation
• industrial relations.

To ensure an effective implementation of the Code, the Australian Government publishes implementation guidelines (Guidelines) which must be complied with by a party to the construction industry if they wish to do business with governments or work on government construction projects. The Guidelines were last reissued in June 2006 (click here to read), and the Rudd Government has published new Guidelines to take into account, amongst other matters, the changes to workplace relations legislation by the introduction of the Fair Work Act 2009. The Guidelines take effect in relation to all projects that are the subject of an expression of interest or tender let for the first time on or after 1 August 2009 - (Click here to read the new Guidelines).

Key changes to the Guidelines

The new Guidelines make a number of changes to the manner in which the Australian Government will consider tenders to perform construction work. These include:

• limiting the application of the Guidelines to parties that participate in on-site activities (effectively excluding suppliers unless they perform work on a building site)
• allowing for preference to be given to tenderers for government work who have demonstrated a commitment to:
• adding and/or retaining trainees and apprentices
• increasing the participation of women in all aspects of the construction industry
• promoting employment and training opportunities for Indigenous Australians in regions where significant indigenous populations exist
• allowing entities to waive the Guidelines in limited circumstances subject to a strict public interest test
• deeming parties who use unregistered written agreements that govern terms and conditions of employment and associated matters (but do not include individual common law contracts) as non-compliant with the Code and Guidelines (whether those agreements are compliant with the Code and Guidelines or not)
• deeming sham contracting arrangements as being inconsistent with the Code and Guidelines
• referring to the Fair Work Act 2009 in relation to right of entry requirements and affording employers less power to rely on the Guidelines to regulate right of entry. ( click here to read our January 2009 update on right of entry).

In addition, parties to whom the Code and Guidelines apply are required to comply with applicable workplace relations and payment legislation. As such, it is important for parties to whom the Code and Guidelines apply to familiarise themselves with the new workplace relations legislation which commenced on 1 July this year to ensure that they remain compliant with the Code and Guidelines.

Key implications for building and construction industry participants

It is crucial that the contracts and arrangements of those intending to tender for or perform government work now comply with the Code and the new Guidelines (including the new federal workplace relations laws).

Online assessments of workplace arrangements for compliance with the Code and Guidelines are available through the Department of Education, Employment and Workplace Relations.

For more information, please contact:

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.