In November 2016, the Turnbull Government introduced legislation to remove the Fair Work Building Industry Inspectorate (FWBII) and re-introduce the Australian Building and Construction Commission (ABCC) as watchdog for the building industry.
The same legislation gave effect to the Commonwealth Building Code 2016 (Code), outlining the criteria businesses must meet before they can tender for Commonwealth funded building work.
Originally, businesses were to be given a grace period up until 29 November 2018 to ensure that their enterprise agreements were compliant with the Code. However, following cross-bench negotiations on 15 February 2017, the Senate brought forward the expiry of the Code transition period to 31 August 2017.
The effect of reducing the transition period for contractors is that unless specific circumstances apply (e.g. a contractor tendered for Commonwealth funded building work in the period from 2 December 2016 to 16 February 2017 and was subsequently awarded a contract for that work), a contractor cannot tender for, or commence work on, Commonwealth building work from 31 August 2017 unless their enterprise agreement complies with the Code.
What effect does the Code have on Enterprise Agreements?
The Code prohibits a range of content from being included in a contractor’s enterprise agreement. Among the extensive list, prohibited content includes any clauses which:
The Code further requires a dispute settlement term to be included in the enterprise agreement, and for any decision by an arbitrator or other binding outcome in relation to the dispute to be consistent with the Code.
The Code includes a requirement to have in place a Code-compliant Workplace Relations Management Plan and comprehensive fitness for work policy on all sites. Importantly, this policy must provide for drug and alcohol testing, and address how those on site will be required to comply with the relevant fitness for work policy.
The fitness for work policy must:
The Code provides for a minimum number of workers to be tested per month as follows:
From 31 August 2017, the ABCC will be assessing enterprise agreements to check for consistency with the requirements of the Code.
It is an uncertain time for businesses in the construction industry. With the reduction of the exemption time for the application of the Code, it is imperative that businesses take steps now to review their processes and enterprise agreements to determine what updates are required if they wish to continue performing work on Commonwealth funded building projects.
With the limited amount of time businesses have to comply with the Code, it is highly advisable to begin planning the process for negotiating a new enterprise agreement and seeking the necessary advice, so that there is minimal or no impact on your business’ ability to tender for Commonwealth work.
If you require assistance in re-negotiating your enterprise agreement, please contact Lavan’s Employment and Safety Team.