What is the Code?

The Code is shorthand for the Code for the Tendering and Performance of Building Work 2016.

On 26 July 2022, the Code was amended by the Code for the Tendering and Performance of Building Work Amendment Instrument 2022 (the Amendment Instrument).

The amended Code continues to apply to any building contractor or building industry participant who tendered for or expressed interest in Commonwealth funded building work on or after 2 December 2016, i.e. a code covered entity.

The Amendment Instrument removes most of the requirements imposed by the Code, however some requirements such as Labour Market Testing remain.

Certain obligations placed on Funding Entities also remain, please see Funding Entities.

When does the Code apply?

When does the Code apply to me?

Whether you’re a head contractor or a subcontractor, the Code applies to you on all new work from the first time you submit an expression of interest or tender for Commonwealth funded building work. This makes you a ‘code covered entity’.  

The July 2022 amendments to the Code have not changed the application of the Code, however most of the substantive requirements imposed by the Code have now been removed.  

Does the Code apply to my privately funded projects?

Yes, but only on new projects after you’ve become subject to the Code. Once you’ve become subject to the Code, you’re required to comply with its requirements on all privately funded projects that you’re awarded thereafter. This means that any privately funded projects that you’re awarded after you become a code covered entity are subject to the requirements of the Code.

Does the Code apply to my related entities?

Yes, your related entities become subject to the Code as soon as you do. The July 2022 amendments to the Code have not changed this requirement.

What is building work under the Code?

What is ‘building work’?

'Building work' is defined in the Building and Construction Industry (Improving Productivity) Act 2016 (BCIIP Act).

Recent amendments to the Code have not changed the definition of ‘building work’.

The Code applies to building work, but the definition of building work under the Code is slightly narrower than the definition in the BCIIP Act. There are two types of building work that are subject to the laws in the BCIIP Act but are not subject to the Code:

  1. The off-site prefabrication of made-to-order components to form part of any building, structure or works, unless that work is performed on an auxiliary or holding site that is separate from the primary construction site or sites; and
  2. The transportation or supply of goods to be used for building work, directly to building sites (including any resources platform) where that work is being or may be performed.

Below, you can learn about the various types of building work that are subject to the Code. You can also read about whether the Code applies to:

  • residential building work
  • manufacturing
  • transport and supply
  • sole traders
  • semi-permanent structures

What is building work under the Code?

The definition of 'building work' in the Code is relatively broad and includes the following:

  • Any of the activities listed below, as they relate to buildings, structures or works that form, or are to form, part of land (including land beneath water), whether permanent or temporary, being:
    • construction
    • alteration
    • extension
    • restoration
    • repair
    • demolition
    • dismantling.
  • The same activities listed above, in so far as they relate to railways (not including rolling stock) and docks.
  • The installation of fittings in any building, structure or works forming, or to form, part of land, such as:
    • heating
    • lighting
    • air-conditioning
    • ventilation
    • power supply
    • drainage
    • sanitation
    • water supply
    • fire protection
    • security
    • communications systems.
  • Any operation that is part of, preparatory to, or is for rendering complete, any of the work described above, including:
    • site clearance, earth-moving, excavation, tunnelling or boring
    • the laying of foundations
    • the erection, maintenance or dismantling of scaffolding
    • the on-site prefabrication of made to-order components to form part of any building, structure or works
    • site restoration, landscaping or the provision of roadways and other access works.

Residential building work

Building work (as defined above) generally does not include residential building and construction. The Code does not apply to any work that is part of a project involving:

  • construction, repair or restoration of a single-dwelling house
  • construction, repair or restoration of any building, structure or work associated with a single-dwelling house
  • alteration or extension of a single-dwelling house (so long as it remains a single-dwelling house after the alteration or extension).

However, if this same work is undertaken as part of a multi-dwelling development that consists of, or includes, the construction of at least five single-dwelling houses, then the Code does apply.

Manufacturing

Generally, the manufacturing of building products does not fall within the scope of the Code unless it's the on-site prefabrication of made-to-order components to form part of any building, structure or works.

Note that work undertaken on auxiliary or holding sites may be considered on-site work.

Transport and supply

The Code does not apply to the transportation or supply of goods directly to building sites—for example, the delivery of metal sheeting. However, if the supplier or transporter also performs building work on site, such as installing the goods or materials, then the installation is considered building work and the contractor is subject to the Code while performing that installation work.

Generally, the delivery and pumping/pouring of concrete may be covered by the Code. This is because such activity is considered to be 'part of’ building work as described above (i.e. 'the laying of foundations', included in the definition of 'building work').

Maintenance

General maintenance is not included in the definition of building work. Accordingly, the Code generally doesn't apply to maintenance work. For example, carrying out maintenance work on an existing structure, such as a bridge or road, to maintain its original state and function or to prevent future degeneration, is generally not considered building work.

However, if the work undertaken goes beyond maintenance to include activity such as repairing something that is damaged, broken or malfunctioning (for example, repairs to cladding and other structural repairs), then that work may be considered building work and therefore may be subject to the Code if undertaken by a code covered entity.

Sole Traders

A sole trader that is not a constitutional corporation cannot be subject to the Code unless they are performing building work in a Territory or Commonwealth place.

Semi-permanent structures

Whether the set-up of a semi-permanent structure falls within the definition of building work depends on whether it is a building or structure that forms, or is to form, part of land.

A semi-permanent structure may also constitute building work if it is preparatory to, or is for rendering complete, the construction of buildings, structures or works that form, or are to form, part of land. Examples include the erection, maintenance or dismantling of scaffolding, or site restoration, landscaping, and the provision of roadways and other access works.

Contractors not performing building work

If a contractor is not performing building work as defined above, then the contractor is not subject to the Code.

For example, consultants engaged to conduct design work are not covered by the Code unless they are performing building work on site. Similarly, licensed security guards patrolling and protecting building sites are not considered to be performing 'building work'.

However, if work performed by a contractor is 'part of’ the building work then they may be covered by the Code in respect of this work. For example, this could include project managers and engineers. However, each case depends on its particular circumstances.

What are the requirements of the Code?

On 26 July 2022, most the Code’s substantive requirements were removed.

If you’re a contractor, you should familiarise yourself with these changes.

The amended Code continues to require code covered entities to undertake Labour Market Testing (on all building work, including Commonwealth funded building work). All other substantive requirements applying to code covered entities have been removed.

Certain obligations placed on Funding Entities also remain, please see Funding Entities.

Requirements for engaging non-citizens and non-residents

The Code sets out requirements for code covered entities before they employ persons who are not Australian citizens or Australian permanent residents to undertake building work.

This is commonly known as labour market testing. We’ve outlined these requirements for you below.

Labour market testing requirements

Section 11F of the Code provides that a code covered entity must ensure that no person that is not an Australian citizen or Australian permanent resident (within the meaning of the Migration Act 1958) is employed to undertake building work for the code covered entity unless:

  • the position is first advertised in Australia; and
  • the advertising was targeted in such a way that a significant proportion of suitably qualified Australian citizens and Australian permanent residents would be likely to be informed about the position; and
  • any skills or experience requirements set out in the advertising were appropriate to the position; and
  • the employer demonstrates that no Australian citizen or Australian permanent resident is suitable for the job.

Monitoring compliance

We monitor code covered entities’ compliance with the requirements outlined above by seeking evidence from employers that demonstrates compliance with labour market testing requirements, where non-Australian citizens or permanent residents have been engaged on a project since the company became a code covered entity.

The evidence we seek may include, but is not limited to:

  • Job advertisements
  • Job applications
  • Documents from recruitment processes including reasons for not appointing any Australian citizen or permanent resident that applied for the position
  • Employment contracts

Can I seek an exemption?

What essential service exemptions are available?

The Minister may grant an exemption from the Code to a building contractor or building industry participant under either section 6A or section 6B of the Code if certain conditions are satisfied.

What is the effect of an exemption?

If an exemption is granted to a building contractor or a building industry participant that is a code covered entity, the effect of an exemption is that the entity is deemed not to be a code covered entity for the duration of the period or the project specified in the exemption (section 6A exemption) or while the exemption applies (section 6B infrastructure exemption).

This means they do not have to comply with the requirements of the Code while the exemption applies. For example, the building contractor or building industry participant isn't required to undertake Labour Market Testing.

It's important to note that any code covered entity that deals with a building contractor or building industry participant that has an applicable exemption is still required to comply with the requirements of the Code.

    What about the Building Code 2013?

    Before the Code came into effect, the Building Code 2013 applied to Commonwealth funded building work. It’s important to note that the Building Code 2013 continues to apply to any building work to which it applied prior to the introduction of the Code.