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Building code of conduct 'should' pull industry into line

23 April, 2014

The federal government has published an advance release of the Building and Construction Industry (Fair and Lawful Building Sites) Code 2014, designed to restore the rule of law and fairness to Australia's construction sector.

The new code will come into effect when the Building and Construction Industry (Improving Productivity) Bill 2014 commences as an Act.

Minister for Employment, Eric Abetz, said the new code sets out the standard of workplace relations conduct expected from those contractors that want to perform work funded by the commonwealth.

"Fair, productive and lawful building sites are critical to Australia's competitiveness, and job creation potential," Abetz said.

"It is important that contractors that want to work on projects funded by the taxpayer have the ability to operate efficiently and flexibly to ensure projects are delivered on time and on budget.

"For too long, the building and construction sector has provided the worst examples of industrial relations lawlessness.

"The new code emphasises the importance of compliance with the law and freedom of association on building sites.

"Our new code, together with a stronger ABCC [Australian Building and Construction Commissioner], will help get the building and construction industry back on track."

Under the Fair and Lawful Building Sites Code 2014, contractors who choose to be eligible for commonwealth-funded building work will need to comply with the new code. If contractors don't comply with the code, they won't be able to work on commonwealth-funded projects.

The code reverses the previous Labor government's changes which were made to "appease" the Construction, Forestry, Mining and Energy Union (CFMEU), the government said in statement (April 17).

Enterprise agreements and other "procedures" will no longer be able to contain restrictive work practices or discriminatory provisions.

For example, clauses and practices that will not be permitted by the code include:

  • requiring contractors to employ a non-working shop steward or job delegate
  • 'one in, all in' clauses where, if one person is offered overtime, all the other workers must be offered overtime whether or not there is enough work
  • 'jump up' provisions that prevent engaging subcontractors unless they provide certain union dictated terms and conditions to workers despite their existing lawful industrial arrangements;
  • requiring contractors to obtain the approval of a union over the number and types of employees that a contractor may engage on a project.

The new code also recognises the right of entry provisions as a privilege given to officials of registered organisations and, accordingly, requires strict compliance with the right of entry laws by all industry participants.

Contractors will be covered, prospectively, from the first time they tender for commonwealth-funded building work after the new code commences. Once a contractor is covered by the code, it will be required to act consistently with it, including on future privately funded work.

When in effect, the provisions of the code will apply in respect of enterprise agreements made after 24 April 2014. This means that from commencement of the code, contractors covered by agreements that were made after 24 April 2014 that don't comply with the code's content requirements for enterprise agreements, will not be eligible to tender for and be awarded commonwealth-funded building work.

The Productivity Commission's recently released draft inquiry report into Public Infrastructure concluded that government procurement codes such as that which is in place in Victoria were "powerful" and "influential" instruments in the sector.

"We have worked with state governments who have put in place their own codes to ensure a broad consistency in approach," Abetz said.

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