Labour market testing
Section 11F of Code for the Tendering and Performance of Building Work 2016 (Code) imposes new requirements on employers when they want to hire people to undertake building work who are not Australian citizens or Australian permanent residents. This section of the Code requires a series of tests and activities to be applied during such recruitment, commonly referred to as ‘labour-market testing’.
Requirements of section 11F
When they recruit new people, employers covered by the Code need to ensure the following:
- the position is first advertised in Australia
- the advertising is presented in a way that many qualified Australian citizens and permanent residents would know about the opportunity
- any skills or experience requirements listed in the advertising are appropriate to the position
- the employer can show that no Australian citizen or Australian permanent resident is suitable for the job.
Application of section 11F
The requirements of section 11F of the Code only apply to:
- code covered entities
- the hiring of any non-Australian citizen or non-permanent resident to do building work on any project, from the time the company becomes a 2016 code covered entity1.
Examples of roles included in labour market testing
The requirements apply to all people proposed to be employed to undertake building work. This may include:
- skilled tradespeople
- unskilled tradespeople and labourers
- managers including project managers, site managers and foremen
- engineers and other specialty occupations
- project directors, superintendents and other higher management if their role includes undertaking building work2.
Examples of roles excluded from labour market testing
- clerical and IT staff located at the head office of a company
- corporate management not doing building work
- front-end bid teams
- other head office staff not doing building work.
The ABCC will seek evidence from employers to demonstrate compliance with labour market testing requirements where non-Australian citizens or permanent residents have been engaged since the company became a code covered entity.
This evidence may include but is not limited to:
- job applications
- documents from recruitment processes including reasons for not appointing any Australian citizen or permanent resident that applied for the position
- employment contracts.
Breaching section 11F
If the Australian Building and Construction Commissioner determines that a code covered entity has failed to comply with the Code, the Commissioner may refer the matter to the Minister with a recommendation that a sanction should be imposed. The Minster may issue a formal warning or impose an exclusion sanction on the code covered entity.
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1A code covered entity is a building contractor or building industry participant that has submitted an expression of interest (EOI) or tender (howsoever described) for Commonwealth funded building work on or after 2 December 2016, and therefore become subject to the Code. Specific requirements in the Code apply to code covered entities. Refer to section 34 of the Building and Construction Industry (Improving Productivity Act 2016, and Section 6 of the Code.
2To learn more about what defines ‘building work’ please refer to the ‘Our jurisdiction’ fact sheet, available at abcc.gov.au/resources.