Application of Code amendments to enterprise agreement content

Contractors seeking to undertake Commonwealth funded building work have greater clarity with respect to the impact of their enterprise agreements following amendments to the Code for the Tendering and Performance of Building Work 2016, which took effect 21 February 2017.

The amendments to the Building and Construction Industry (Improving Productivity) Act 2016 on 17 February 2017 reduced the transition period for enterprise agreement content from two years to nine months. The new transition period concludes 31 August 2017. Importantly, companies with non-code compliant agreements can tender for, but not be awarded taxpayer-funded projects during this transition.

The Code amendments align the 2016 Code with those amendments to the Act and provide additional transitional exemptions to assist building contractors with the transition to compliance.

Agreements made since 2 December 2016 must be compliant

Contractors who have made a non-compliant agreement since 2 December 2016 are not eligible to express interest in, tender for or be awarded Commonwealth funded building work as long as they are covered by that agreement.

Ongoing exemption for pre 25 April 2014 agreements - (subsection 2(b))

Contractors do not need to make enterprise agreements compliant with the 2016 Code if the agreement was made on or before 24 April 2014 (and has not been varied in accordance with section 207 of the Fair Work Act 2009).

The choice of date reflects the intention, stated in the advance release version of the code first published in April 2014 by the Minister for Employment, that the enterprise agreement content rules would only apply to enterprise agreements made after 24 April 2014.

Limited exemptions

Contractors who have made an enterprise agreement on or after 25 April 2014 but before 2 December 2016 may be eligible for one of the limited exemptions below.

Exemption during transition period for tendering only - (subsection 1(a))

During the transition period, contractors with non-compliant enterprise agreements made after 24 April 2014 and before 2 December 2016 may express interest in and tender for Commonwealth funded building work. This exemption does not extend to the awarding of the building work. See below for further exemptions.

Exemption during transition period for unrelated enterprise agreement(s) if tendering on or after 17 February 2017 - (subsection 1(d)(e))

During the transition period, contractors tendering on or after 17 February 2017, with non-compliant enterprise agreements made after 24 April 2014 and before 2 December 2016, may be awarded building work on a Commonwealth funded project if the non-compliant enterprise agreement(s) does not apply to that contractor in respect of that building work.  Building work can continue for the duration of the project without those enterprise agreement(s) needing to be Code compliant.

Exemption for pre 2 December 2016 agreements that apply only to building work tendered for prior 2 December 2016 - (subsection 2(a))

Contractors covered by non-compliant enterprise agreements made before 2 December 2016 are still eligible to tender for and be awarded Commonwealth funded building work after 2 December 2016 provided that the non-compliant enterprise agreement(s) only applies to building work tendered for before 2 December 2016.  In order to be awarded any post 2 December 2016 Commonwealth funded building work though, the contractor must ensure that the enterprise agreement that applies to that work is 2016 Code compliant.

Exemption where tendered from 2 December 2016 to 16 February 2017 - (subsection 1(b)(c))

Contractors who tendered for a Commonwealth funded building project during this period can be awarded a contract for that project  before 29 November 2018, even if covered by a non-compliant enterprise agreement made prior to 2 December 2016. Building work can continue for the duration of the project without the enterprise agreement needing to be Code compliant.

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For further information, advice or assistance please contact the ABCC at 1800 003 338 or enquiry[at]abcc.gov.au.