The Federal Government has recently introduced significant changes to overhaul the Code for the Tendering and Performance of Building Work 2016 (Building Code) and reduce the powers of the Australian Building and Construction Commission (ABCC).
The Code for the Tendering and Performance of Building Work Amendment Instrument 2022 (Amendment) came into effect on 26 July 2022 and significantly amends the Building Code, reducing the obligations imposed on building contractors and building industry participants.
It is important that participants in the building and construction industry carefully consider how the changes affect their obligations under the Building Code.
What is the Building Code?
The Building Code was introduced in 2016 to promote best practice industrial relations for contractors wishing to tender for Commonwealth funded building and construction work. It imposed a number of obligations on companies intending to tender or undertake Commonwealth-funded building work.
Prior to the 2022 election, the Labor Government committed to abolishing the ABCC, repealing the Building Code and repealing the Building and Construction Industry (Improving Productivity) Act 2016 (BCIIP Act) which the Building Code was issued under.
The Amendment is an interim measure to remove the majority of the Building Code’s requirements, as the Code cannot be repealed until the BCIIP Act is repealed, which may take some time.
What has been removed?
The Amendment removes the vast majority of substantive requirements imposed by the Building Code, including but not limited to requirements for code covered entities to:
- comply with a Workplace Relations Management Plan (WRMP);
- require downstream code compliance from subcontractors;
- comply with the restrictions on enterprise agreements and the requirement to submit enterprise agreements to the ABCC for compliance approval;
- comply with the security of payment provisions under the Building Code;
- maintain policies and procedures to protect freedom of association;
- manage drug and alcohol issues on site;
- report actual or threatened industrial action to the ABCC; and
- report any breaches or suspected breaches of the Building Code to the ABCC.
The changes are in effect from commencement (26 July 2022). Accordingly, from that date the ABCC will no longer be:
- accepting or assessing new WRMPs, and will not be assessing any WRMPs previously submitted; and
- issuing letters of compliance for enterprise agreements.
What remains in place?
While the vast majority of substantive provisions have been removed, those that remain in place include but are not limited to:
- the obligation on code covered entities to undertake labour market testing regarding engaging non-citizens or non-residents to undertake building work;
- the obligation on funding entities to ensure that certain information is provided by a preferred tenderer before a contract is entered into in respect of Commonwealth funded building work;
- the obligation on funding entities to only enter into a contract in respect of Commonwealth funded building work with a code covered entity that only uses products in building work that comply with the relevant Australian standards published by, or on behalf of, Standards Australia; and
- exemptions for essential services providers and the effects of exclusion sanctions.
Recommendations
We recommend that entities in the building and construction industry:
- seek legal advice regarding the impact of the changes on their business operations; and
- review standard agreements to remove any outdated references to the Building Code.
We will provide updates as more information becomes available.
More information
If you have any queries or would like further information about this article, please contact:
Kathryn Speed
Principal
M: 0408 446 013
E: kspeed@pageseager.com.au
Ella Wade
Lawyer
T: (03) 6235 5161
E: ewade@pageseager.com.au
Published: 17 August 2022
