FWBC warns unregistered written agreement breaches Building Code

Fair Work Building & Construction is aware of at least one construction company which has entered into an unregistered written agreement which breaches the Building Code 2013 (Building Code). 

The particular agreement states:  “It is the policy of the company that all its employees subject to this agreement will be encouraged to join […] union. Accordingly, the company undertakes to positively promote union membership at the point of recruitment by strongly recommending that all employees join […] union.”

The Building Code encourages productivity and lawful workplace relations on building sites. It sets out the Australian Government’s expected standards for building contractors or building industry participants involved in Commonwealth funded construction projects.  Under freedom of association laws, workers must be free to be a member or not be a member of a union. Likewise, employers must be free to be or not be a member of an employer association. Under the Building Code, building contractors must proactively protect freedom of association rights.

Unregistered and informal agreements, also known as side deals, contain terms and conditions that are in addition to those outlined in an award or enterprise agreement.

The Building Code has a specific section which deals with unregistered written agreements.  Under the Building Code, contractors cannot bargain for or make an agreement that provides for terms, conditions or benefits for the contractor’s employees unless that agreement is going to be registered.  An exception to this is agreements between individuals and their employers. So if a contractor is operating under a side deal, outside the scope of their enterprise agreement or the award, this is a breach of the Building Code.  

Companies or subcontractors found to be in serious breach of the Building Code can be sanctioned. The sanction may include being banned from working on Commonwealth funded projects.  

FWBC General Manager Building Code, Cathy Cato, said she would not rule out recommending companies be sanctioned if they could not satisfy FWBC they were taking sufficient steps to address breaches.

Ms Cato said FWBC took its responsibility of monitoring compliance with the Building Code extremely seriously. “FWBC’s aim is to achieve compliance with the Building Code, using rectification measures where appropriate,” Ms Cato said. “Where serious breaches occur, we will not hesitate to report them to the Code Monitoring Group, which in turn may make recommendations to the Minister regarding exclusion sanctions.”

Ms Cato urged any contractor who is party to an unregistered written agreement to urgently report it to FWBC, as is required under the Building Code. “If you are not sure if the Code applies to you, or whether an agreement you have entered into breaches the Code, please contact us for advice,” Ms Cato said. More information on the Building Code is available on FWBC’s website or by phoning our Hotline on 1800 003 338.

PDF icon Media Release - FWBC warns unregistered written agreement breaches Building Code.pdf