The Federal Government has issued an advance release of its revised Building and Construction Industry (Fair and Lawful Building Sites) Code 2014 (Revised Code), which will come into effect when the Building and Construction Industry (Improving Productivity) Bill 2014 (Bill) commences as an Act. Once enacted, the Bill will also reestablish the Australian Building and Construction Commission.

Although the Bill is timetabled to be before the Senate this week, it is not certain that it will become law this year given current political uncertainties. As this is the last sitting week of Parliament for 2014, it may not be considered until February 2015.

The Revised Code sets out the Australian Government’s requirements for all building industry participants tendering for Commonwealth funded building work. Once in force, contractors will be covered by the Revised Code, prospectively, from the first time they tender for Commonwealth funded building work and will need to meet the requirements of the Revised Code to be eligible to work on Commonwealth funded projects.

The Draft Code

On 17 April 2014, the Federal Government released an initial draft version of the Building and Construction Industry (Fair and Lawful Building Sites) Code 2014 (Draft Code), which specified various requirements for building industry participants seeking to tender for Commonwealth funded building work. These requirements largely related to the content of enterprise agreements, compliance with right of entry laws, dispute resolution procedures, safety standards and notification requirements for the reestablished Australian Building and Construction Commission. After considering feedback from various stakeholders, the Federal Government has now revised this Draft Code.

What's Changed?

The Revised Code has strengthened and enhanced various aspects of the Draft Code. Significant amendments include:

• applying the content requirements for enterprise agreements (section 11) to enterprise agreements varied under section 207 of the Fair Work Act 2009 (Cth) (subsection 11(2A)). This amendment is in response to the uncertainty around whether the requirements of the Draft Code would apply to variations of enterprise agreements. The Revised Code now makes it clear that it does apply to varied instruments from the date of variation
• prohibiting reading down clauses in enterprise agreements (section 11A). Section 11A will ensure that building industry participants to which the Code applies, are not to be covered by agreements containing clauses which purport to remedy, or render ineffective, clauses which are inconsistent with section 11 of the Revised Code. For example, a clause that reads "this clause will not apply in the event that it is contrary to the provisions of the Code" will be prohibited. Section 11 outlines the required content of agreements, as well as prohibited conduct, arrangements and practices
• requiring that a Revised Code covered entity must comply with its obligations under the Migration Act 1958 (Cth). This means that building industry participants must strictly comply with immigration laws and visa requirements (subsection 9(4)).

Next Steps for Building Industry Participants Tendering for Commonwealth Projects

When it commences, the Revised Code will apply in respect of enterprise agreements made on or after 24 April 2014. This means that from the commencement of the Revised Code, contractors covered by agreements that were made on or after 24 April 2014, that do not meet the Revised Code’s content requirements for enterprise agreements, will not be eligible to tender for or be awarded Commonwealth funded projects. It also appears to be the Federal Government's intention for the Revised Code to apply to agreements which were made prior to 24 April 2014 that have been varied after that date.

The Federal Government has also indicated that once the Revised Code is formally released, the reestablished Australian Building and Construction Commission will be able to issue a determination as to whether an enterprise agreement meets the requirements of section 11 of the Revised Code. In the meantime, the Federal Government will conduct interim assessments of draft agreements on request.