On 17 April 2014, the Australian Government published an advance release of the Building and Construction Industry (Fair and Lawful Building Sites) Code 2014 (Code), which will come into effect when the Building and Construction Industry (Improving Productivity) Bill 2014 commences as an Act.  The Code will replace the Building Code 2013.

The Minister for Employment, Senator Eric Abetz, recently said that the ‘new code, together with a stronger ABCC [Australian Building and Construction Commission], will help get the building and construction industry back on track’.

The Code has been developed to ensure that building work is carried out fairly, efficiently and productively.  It sets out the required standards for Code covered entities involved in Commonwealth funded projects. 

Application of the Code

A ‘Code covered entity’ is a building contractor or building industry participant required to comply with the Code in respect of building work described in Schedule 1 of the Code.

A Code covered entity is required to comply with the Code from the first time they submit an expression of interest or tender for Commonwealth funded building work after the Code commences.   If Code covered entities do not comply with the Code, they can be excluded from tendering for, or being awarded, Commonwealth funded building work.

A related entity of an entity becomes a Code covered entity subject to the Code at the time the first entity becomes subject to the Code.

Once covered by the Code, a Code covered entity will be required to act consistently with it, including on future privately funded work.  A Code covered entity must ensure that any agreement with a subcontractor requires the subcontractor to act consistently with the Code.

Impact of the Code

The Code emphasises the importance of strict compliance with the law, including right of entry laws and work health and safety laws to the extent that they apply to an entity in relation to building work.  The Code prohibits a funding entity from entering into a contract with any Code covered entity that has had an adverse decision, direction or order made by a court or tribunal for a breach of a designated building law, work health and safety law or competition and consumer law, and has not fully complied, or is not fully complying, with such a decision, direction or order.  A funding entity must not enter into a contract with a Code covered entity that is excluded from performing work funded by a state or territory government unless approval is provided by the ABCC Commissioner.

The Code specifies the type of building work for which a prescribed Workplace Relations Management Plan is required.

When the Code commences, Code covered entities covered by enterprise agreements that were made after 24 April 2014 which do not comply with the Code’s content requirements for enterprise agreements, will not be eligible to tender for, or be awarded, Commonwealth-funded building work.  Enterprise agreements will no longer be able to contain provisions which restrict a Code covered entity managing its business or improving productivity, are discriminatory, or are inconsistent with the Code’s freedom of association requirements. When the Code is formally released, a re-established ABCC may issue a determination that an enterprise agreement meets the enterprise agreement requirements of the Code.