On this page you will find information about industry issues and legislation that affects subcontractors.
The ABCC has also created a number of fact sheets to assist you in gaining more specific information on a variety of topics. Please refer to our fact sheet Your Responsibilities as a Subcontractor for a summary of your rights and responsibilities.
[Independent Contractors Legislation][National Code and Guidelines][Unlawful Industrial Action][Strike Pay][Freedom of Association][Certified Agreements and Bargaining Periods][Powers of ABCC Inspectors][Unions][Superannuation][Workers Compensation][Project Agreements]
Independent Contractors Legislation
The Independent Contractors Act 2006 (IC Act) and the Workplace Relations Legislation Amendment (Independent Contractors) Act 2006 was introduced to protect the status of independent contractors, by freeing them from the constraints of industrial and employment law.
Independent contractors legislation, offers protection from:
• ‘sham arrangements,’ which misrepresent an employment relationship as an independent contracting relationship; and
• unfair services contracts
A penalty of up to $33,000 may be imposed for breaches of the independent contractor laws.
If you are in any doubt as to your status, we suggest that you take specialist advice. An Independent Contractors Hotline is available from 8am – 6pm (Eastern Standard Time) Monday to Friday on 1300 667 850, or Contact Us.
Further information regarding the rights and responsibilities of independent contractors can be found in our fact sheets section.
National Code & Guidelines
If the project you are working on is funded by the Australian Government, it will be a term of your subcontract that you will have to comply with the National Code of Practice for the Construction Industry ('National Code') and the Implementation Guidelines ('Guidelines').
What is the National Code?
The National Code is a set of principles which describe best practice in respect of workplace relations, occupational health and safety, procurement and security of payment in the construction industry.
What are the Implementation Guidelines?
The Implementation Guidelines for the National Code of Practice were developed to assist with interpretation and implementation of the National Code. The Guidelines were reviewed and re-issued in June 2006 and took effect from 1 November 2005.
Who does the National Code apply to?
The National Code and the 2006 Guidelines detail the responsibilities of Australian Government agencies as clients, project managers, contractors and employers. All companies wishing to work on Australian Government construction projects must comply with and implement the National Code and 2006 Guidelines on all their Australian-based construction activities – including private projects.
What must I do?
As a subcontractor, you will not be awarded work on Australian Government construction projects if you do not comply with the National Code and 2006 Guidelines. If you have a workplace agreement it must comply with the National Code and 2006 Guidelines. You must ensure that you comply with the National Code and Guidelines during tender processes. In addition, entities related to a contractor seeking or engaged in Australian Government construction must also be National Code compliant in respect of their building and construction activities.
For more information about Code compliance or to download the Code and other relevant documents please visit the National Code page on this website.
Unlawful Industrial Action
Unlawful Industrial Action is generally action taken by employees or employers in the building industry that interrupts or restricts normal work. However, there are a number of legislative provisions that define building industrial action and what makes such action unlawful. Severe penalties may be imposed on an individual or a body corporate, including a union, that is found by a court to have participated in unlawful industrial action.
Do employees have to be paid while taking industrial action?
Under the Workplace Relations Act 1996 (WR Act) it is illegal for employers to pay employees for any period of industrial action. It is also illegal for unions and their members to make claims for pay for any period of industrial action, or to take or threaten further industrial action to try to obtain such pay. Industrial action includes situations where employees do something which restricts, limits, or delays work, such as imposing bans, or work-to-rule and go-slow campaigns.
For more information please read our fact sheet: Unlawful Industrial Action in the Building and Construction Industry.
Can the ABCC take action against employers who pay strike pay?
The ABCC can take legal action against any person suspected of breaching the strike pay provisions of the WR Act. Employers who make payments of strike pay may incur a penalty of up to $6,600 as an individual or up to $110,000 as a body corporate.
Can employees covered by the WR Act who are taking industrial action receive any payment at all?
Generally 'No', but there are two situations in which the prohibition on payment will not apply. The first is where an employer authorises or agrees to the employees' actions. This authorisation must be provided in writing prior to the action taking place. The second is where work has stopped because employees have a reasonable concern about an imminent risk to their personal health and safety owing to unsafe working conditions.
Does the prohibition on strike pay still apply if the industrial action is protected?
Yes. This prohibition applies even if the industrial action is protected action.
Freedom of Association
What is Freedom of Association?
In Australia, every employee is free to join, or not to join, a union. Equally, every employer is free to join, or not to join, an employer association. It is illegal to try to force anyone into joining or not joining a union or employer association. Freedom of Association in the building and construction industry is governed by special provisions in the Building and Construction Industry Improvement Act 2005 (BCII Act), the WR Act and the IC Act.
Can I be required to employ only union labour?
No. Both compulsory unionism and preference for union members are illegal and breach freedom of association legislation.
Can I refuse to employ union labour?
No. Refusing to employ a person because they are in a union is also a breach of freedom of association provisions.
When tendering for work, can I be required to implement a policy of “no ticket, no start”?
No. If a head contractor attempts to require you to agree to a closed shop they are breaching the law.
For more information, please read our Freedom of Association in the Building and Construction Industry fact sheet.
Workplace agreements and bargaining periods
You are not legally required to have a collective workplace agreement.
What is a collective workplace agreement?
A collective workplace agreement under the WR Act is an agreement between:
- an employer and a group of employees; or
- an employer and a union representing employees,
that has been lodged with the Workplace Authority.
Also, you are entitled to engage your employees on individual agreements, known as Australian Workplace Agreements. Alternatively, you may engage people as independent contractors.
What is a bargaining period?
In order to come to a collective agreement, one party must first formally notify the other of its intention to commence negotiations. This notification commences a bargaining period, which is the period during which negotiations are to take place. The initiation bargaining period must be formally notified under the WR Act, with the written Notice Initiating Bargaining Period being served on the other side to negotiations and the AIRC. The bargaining period commences 7 days after the day on which the notice was given. To be properly notified, it must start at least seven days after one party notifies the other and the AIRC that it intends to seek an agreement.
This is important, because if a bargaining period is not properly notified, any industrial action taken during the period will not be protected action.
How long does a bargaining period last?
There is no time limit on the length of a bargaining period.
Protected action and secret ballots
Either party (ie. the employer or the employees/union) may legally take industrial action during a bargaining period. This is known as protected action. Three working days’ written notice must be given of the intention to take action.
Industrial action by employees will only be protected action if it has been authorised in advance by a secret ballot. During a bargaining period, the union/employees to the negotiations may apply to the AIRC for an order for a ballot to be held to determine whether relevant employees would support protected action. Protected action may commence if at least 50 per cent of relevant employees vote in the ballot, and more than 50 per cent of those employees approve the action.
If a bargaining period is in place and one party takes protected action, the other can apply to the AIRC to suspend or terminate the bargaining period and thus end the protected status of the industrial action.
The AIRC can suspend or terminate a bargaining period on a number of grounds, including the following:
- the party taking action has not genuinely tried or is not genuinely trying to reach an agreement
- the party taking industrial action has failed to comply with AIRC directions or recommendations, and/or
- the industrial action is threatening the life, personal safety, health or welfare of the population or part of it, or is threatening to damage the economy.
A bargaining period must not be used as a device to take industrial action on other matters. To be protected, industrial action must be for the purpose of negotiations for a certified agreement.
Union officials and Right of Entry laws
No automatic Right of Entry
Union officials do not have an automatic right to enter workplaces. A union official who wishes to enter premises must hold a federal right of entry permit. Even with the permit, conditions apply to right of entry.
Please see the ABCC's Right of Entry Poster (PDF 131KB) which is a guide to Right of Entry for workplace relations purposes.
For additional information please refer to our Right of Entry – Subcontractors, What to do When a Union Official Comes on Site fact sheet, available on our Fact Sheets page.
Superannuation
What are my superannuation contribution obligations?
You are legally bound to make superannuation contributions as stipulated in the superannuation guarantee legislation. You will be subject to the Superannuation Guarantee Charge if you fail to comply with such obligations. If you fail to make the required contributions you may also be ordered by a court to provide an employee with compensation for unpaid contributions. In these circumstances you will be liable for the value of any benefits (e.g. disability or death benefits) that would have accrued under the superannuation provisions, and are potentially liable for the loss of income that the contributions would have earned in a superannuation fund.
Under the National Code, you are obliged to avoid making provisions for superannuation in project agreements. You are also obliged to ensure that all-in payments do not include superannuation contributions under the superannuation guarantee legislation.
The BCII Act gives the Courts power to penalise action taken with the intent to coerce an employee to nominate or an employer to contribute to a particular superannuation fund.
What other Acts govern superannuation contributions?
These include the Superannuation Industry (Supervision) Act 1993; Superannuation Guarantee Charge Act 1992; and the Superannuation (Resolution of Complaints) Act 1993. These are all Commonwealth Acts. You should obtain professional advice from the following agencies in relation to any superannuation-related issue you may have.
Workers compensation
Workers' compensation insurance provides compensation for workers who sustain an injury that is related to their employment. State and Territory laws are the primary source of obligations on employers to pay premiums. Subcontractors are responsible for the payment of workers' compensation premiums, in respect of their employees.
Although subcontractors as employers owe a legal duty of care to their employees, responsibility for safety of large construction sites also rests with the head contractor.
Depending on the location of their employees, subcontractors will be subject to a relevant state law.
Powers of ABCC Inspectors
The Office of the Australian Building and Construction Commissioner, through its ABC Inspectors, is entitled to enter premises for the purpose of investigating possible contraventions of the WR Act, the BCII Act, the Independent Contractors Act 2006 (IC Act) or an industrial instrument.
Whilst on the premises ABC Inspectors can:
- interview any person, including any employee of your company;
- inspect and copy documents on the premises or accessible from a computer on the premises that the inspector believes on reasonable grounds to be relevant to the purpose of entry;
- require a person who has custody of, or access, to produce documents within a specified period;
- inspect any work, material, machinery, appliance, article or facility; and
- take samples of any goods or substances in accordance with regulations.
For additional information please refer to our Powers of ABCC Inspectors fact sheet, available on our Fact Sheets page.
Notifications to the Australian Building and Construction Commissioner
Building industry participants must notify the ABC Commissioner, as soon as practicable, when they make or are otherwise involved in an application made to a court under the BCII Act, the WR Act or section 34 of the IC Act and the proceedings relate to building work. If you fail to notify the ABCC you are liable for a penalty of:
- up to $2750 if you are a body corporate.
- up to $550 in any other case.
Notifications to the ABCC should be faxed to: 03) 8509 3020. Enquiries should be directed to Eugene Quigley - Advocate, ABCC on: 03) 8509 3011.
For more information please visit our Notifications to the ABCC page.
Project Agreements
A project agreement is used to establish common terms and conditions of employment for workers and subcontractors on a site.