On 7 October 2011, the Victorian Government released draft Implementation Guidelines to the Victorian Code of Practice for the Building and Construction Industry (Victorian Guidelines) for public comment.

The purpose of the Victorian Construction Guidelines is to vary the application of the National Code of Practice for the Construction Industry (National Construction Code) as it applies to construction projects in Victoria that are fully or partially funded by the Victorian government.

The Victorian Guidelines contain a number of important differences from the Australian Government Implementation Guidelines for the National Code of Practice for the Construction Industry (National Guidelines):

  • the Victorian Guidelines will apply to all onsite building and construction work undertaken in Victoria, and will be binding on contractors and their related entities in relation to future privately-funded work;
  • tenderers for contracts that are funded by the Victorian government must submit workplace relations and health and safety management plans;
  • the Victorian Guidelines contain express prohibitions on:
    • discrimination against genuine independent contractors;
    • sham contracting; or
    • arrangements designed to avoid strike pay, right of entry and freedom of association obligations;
    • coercion or pressure to make over-award payments;
  • the Victorian Guidelines require contractors to take all reasonable steps to bring any unlawful industrial action to an end, including by pursuing legal action where possible;
  • the Victorian Guidelines require identification of practices that are inconsistent with the freedom of association and require contractors to adopt policies to promote the right to join or not to join a union;
  • the Victorian Guidelines require establishment of rigorous processes for Government monitoring and enforcement of the Guidelines, and outlines various sanctions for non-compliance; and
  • the criteria for the establishment of project agreements on sites are expressly set out in the Victorian Guidelines.

A dedicated Victorian-based Monitoring and Compliance Group will be put in place to undertake monitoring and compliance activities for Victorian construction operations covered by the Victorian Guidelines, and will provide compliance feedback to contractors and report breaches of the Guidelines.  The Victorian Monitoring and Compliance Group will also respond to written reports of alleged breaches of the Victorian Guidelines.

Sanctions for breach of the Guidelines include:

  • Formal warnings;
  • Referral of a compliant to the relevant industry organisation for assessment;
  • Reduction in tendering opportunities;
  • Reporting of the breach to a statutory body; and
  • Publicising the breach and identification of the breaching party.

Written submissions in respect of the draft Victorian Guidelines must be submitted to the Department of Finance and Treasury until 28 October 2011.

What should construction companies be doing now?

Construction firms seeking to tender for Victorian State projects should consider how the Victorian Guidelines will affect their employment policies and practices, and will need to carefully ensure compliance with the Victorian Guidelines to avoid the imposition of sanctions which may affect their tender bid. 

Tenderers will also need to ensure they prepare the newly implemented management plans prior to tendering.

Construction firms should also be aware that the Victorian Guidelines will apply to future privately-funded projects, whether those projects are undertaken directly or by a related entity, and failure to comply with the Victorian Guidelines on those privately-funded ventures could expose the firm to adverse publicity and potential legal or industry action.