Overview

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.}

Subcontractors who submit an EOI or tender for any project after 2 December 2016 become subject to the Code. This makes them code covered entities.

The Building Code 2013 continues to apply to you as the head contractor for the life of the project.

You would be subject to the Code on this project. The Building and Construction Industry (Consequential and Transitional Provisions) Rules 2016 provides that where both codes may otherwise apply, the Code takes priority.

This means that where an expression of interest was submitted prior to 2 December 2016 but a tender for the same work was submitted from 2 December 2016 onwards, the head contractor or subcontractor would be subject to the Code for the work. The head contractor would also need to demonstrate compliance with the Code requirements in order to be eligible to tender for and be awarded the work.