Above entitlement payments

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What are above-entitlement payments?

‘Above-entitlement payments’ refers to any payment or benefit that is above the amount or value of a payment or benefit required to be paid under a Commonwealth industrial instrument or industrial law within the meaning outlined in the FW Act.

What’s required of me regarding above-entitlement payments?

There are several requirements that a code covered entity must abide by in order to comply with the Code and the FW Act. We’ve outlined these for you below.

A code covered entity must not:

organise or take, or threaten to organise or take, action with intent to coerce a contractor, subcontractor or consultant into making an above-entitlement payment in respect of building work
exert undue influence or undue pressure on a contractor, subcontractor or consultant to make an above-entitlement payment in respect of building work
organise or take, or threaten to organise or take, action with intent to coerce a contractor, subcontractor or consultant into contributing to a particular fund or scheme, or supporting a particular product, service or arrangement
apply, or attempt to apply, undue influence or undue pressure on a person to contribute to a particular fund or scheme, or to support a particular product, service or arrangement.

For example, if you’re a building contractor, you are prohibited from placing undue pressure on a subcontractor to select a particular income protection insurance scheme or to make use of a particular training provider.

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Standards of conduct on site

When does the Code apply?

If you’re a building contractor or other type of building industry participant that can be required to comply with the Code by section 34 of the BCIIP Act, then you become subject to the Code from the first time you submit an expression of interest (EOI) or tender (howsoever described) for Commonwealth funded building work on or after 2 December 2016. This makes you a ‘code covered entity’.

I am a subcontractor who is a code covered entity on a Building Code 2013 project (ie I submitted my tender for this project after 2 December 2016). What happens if I further subcontract building work on this project?

Subcontractors* tendering after 2 December 2016 become subject to the Code on that project and future projects—which means they become code covered entities.

We’ll monitor your compliance with the Code, which sets out the obligations for code covered entities.

As a code covered entity you are also required to ensure any subcontractors you engage comply with the Code. When further subcontracting the work you should:

only engage subcontractors who meet the eligibility requirements (section 23)
- you can use Model Clause Type C in your tender and contract documentation
- you can request a Letter of Compliance or Self-Declaration (as applicable) from the subcontractor. The ABCC’s proof of eligibility assessment tool outlines when Letters of Compliance or Self-Declarations may apply
ensure as far as reasonably practicable that contractors who you engage take remedial action to rectify non-compliant behaviour.

_{Contractors engaging subcontractors who are not constitutional corporations or are not carrying out work in a Territory or Commonwealth place must ensure that any agreement entered into in relation to building work with the subcontractor requires the subcontractor to act consistently with the Code in respect of building work that is the subject of the agreement.}

I am a head contractor on a Code project. What happens if I engage subcontractors* to undertake building work on that project?

Subcontractors tendering after 2 December 2016 become subject to the Code on that project and future projects, which makes them code covered entities.

As a code covered entity you are required to ensure that any subcontractors you engage comply with the Code. Requirements in respect of compliance with the Code differ slightly depending on whether the project is directly or indirectly funded by the Commonwealth.

When subcontracting the work you should:

only engage subcontractors who meet the eligibility requirements (section 23)
- you can use Model Clause Type B in your tender and contract documentation
- you can request a Letter of Compliance or Self-Declaration (as applicable) from the subcontractor. The ABCC’s proof of eligibility assessment tool outlines when Letters of Compliance or Self-Declarations may apply
for projects that are directly funded by the Commonwealth, only enter a contract in respect of building work with a code covered entity that only uses products that comply with the relevant Australian standards published by, or on behalf of, Standards Australia. This requirement is not mandatory for projects that are indirectly funded by the Commonwealth. However, it’s recommended that it be implemented as a matter of best practice
require subcontractors:
- to advise you, prior to entering into a contract with them, whether the subcontractor has, within the preceding three years:
  - had an adverse decision direction or order made by a court or tribunal for a breach of a designated building law, work health and safety law or the Migration Act 1958
  - been required to pay any amounts under an adjudication certificate (provided in accordance with a law relating to the security of payments that are due to persons in respect of building work) or owed any unsatisfied judgement debts (including by any related entity) to a building contractor or building industry participant
- for projects that are directly funded by the Commonwealth only, to update the advice referred above every six months for the duration of the contract between you and the subcontractor
ensure that all subcontractors on site comply with the WRMP that applies to the building work
ensure as far as reasonably practicable that contractors who you engage take remedial action to rectify non-compliant behaviour.

_{*The Code may require a person to comply with it in respect of building work only if the person is a building contractor that is a constitutional corporation or a building industry participant carrying out work in a Territory or Commonwealth place. The definition of building industry participant includes building contractors.
Contractors engaging subcontractors who are not constitutional corporations or are not carrying out work in a Territory or Commonwealth place must ensure that any agreement entered into in relation to building work with the subcontractor requires the subcontractor to act consistently with the Code in respect of building work that is the subject of the agreement.}

More FAQs

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Above entitlement payments

What are above-entitlement payments?

What’s required of me regarding above-entitlement payments?

Standards of conduct on site

Frequently Asked Questions

When does the Code apply?

I am a subcontractor who is a code covered entity on a Building Code 2013 project (ie I submitted my tender for this project after 2 December 2016). What happens if I further subcontract building work on this project?

I am a head contractor on a Code project. What happens if I engage subcontractors* to undertake building work on that project?

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Above entitlement payments

What are above-entitlement payments?

What’s required of me regarding above-entitlement payments?

Standards of conduct on site

Frequently Asked Questions

When does the Code apply?

I am a subcontractor who is a code covered entity on a Building Code 2013 project (ie I submitted my tender for this project after 2 December 2016). What happens if I further subcontract building work on this project?

I am a head contractor on a Code project. What happens if I engage subcontractors* to undertake building work on that project?