In December 2016, we provided an update on the re-establishment of the Australian Building and Construction Commission and the introduction of the new Code for the Tendering and Performance of Building Work 2016 (Code). A new bill has now passed to bring forward the deadline for certain enterprise agreements to be Code-compliant from 29 November 2018 to 1 September 2017. The bill is awaiting Royal Assent.
What do these changes mean for your business?
The Code is already in force on building sites across Australia, and applies to companies pursuing Commonwealth funded building work, even when performing work on privately funded projects. The Code restricts a wide range of practices, both directly and by prohibiting clauses in enterprise agreements that permit them.
The Code previously gave building industry participants until 29 November 2018 to ensure their enterprise agreements made before 2 December 2016 are Code-compliant. Now building industry participants with non-compliant enterprise agreements made before 2 December 2016 will be able to submit expressions of interest and tender for Commonwealth funded building work, but only until 1 September 2017. Such building industry participants will not be eligible to be awarded, or perform, building work until such time as they are no longer covered by a non-compliant enterprise agreement.
This change does not affect expressions of interest or tenders submitted before the bill becomes law. If a building industry participant with a non-compliant enterprise agreement made before 2 December 2016 has submitted an expression of interest or tender for building work after 2 December 2016 but before the bill becomes law, that participant will still have until 28 November 2018 to ensure they are no longer covered by a non-compliant enterprise agreement.
The change also does not alter the current position for building industry participants with enterprise agreements made after 2 December 2016 – such enterprise agreements must be compliant with the Code if building industry participants covered by them are to submit expressions of interest or tender for building work.