Does your enterprise agreement comply with the new building code

If your business enters into a new enterprise agreement on or after 24 April 2014 that is not Code compliant, your business will not be eligible to tender for Commonwealth funded building work.

On 17 April 2014, the Government published an advance release of the Building and Construction Industry (Fair and Lawful Building Sites) Code 2014.

The Code hasn’t yet come into effect, but it has a number of important implications for businesses in the construction industry that tender (or may in the future tender for) work funded by the Commonwealth Government and if it is approved, the Code will operate retrospectively with effect from 24 April 2014.

Prohibited terms in new enterprise agreements

Many of the provisions in the Code are directed at terms in enterprise agreements that limit the right of your business to manage its affairs or productivity, or which discriminate between types of workers. This includes terms:

  • imposing limitations on the use of subcontractors;
  • requiring consultation with, or approval by, Unions about the number, type and sources of labour to be used on a project;
  • limiting the right of your business to make decisions about redundancies, demobilisation and redeployment;
  • prohibiting the ability of your business to pay hourly rates that incorporate allowances, overtime and other penalties;
  • allowing Unions or other persons to monitor compliance with an enterprise agreement (e.g. through audits);
  • prohibiting an employee from being selected from overtime unless overtime is extended to all employees;
  • requiring Union paraphernalia to be displayed on a building site.

If your business has negotiated an enterprise agreement with a trade union in the past, you may be familiar with many of these terms. They tend to be the kinds of terms imposed by Unions when negotiating enterprise agreements in the building and construction industry.

Under the Code however, these kinds of terms will be prohibited in new enterprise agreements for businesses that tender for Commonwealth funded building work.

The Code will also require strict compliance with the right of entry laws.

What are the implications for your business?

The Code is unlikely to come into effect until later this year, after the new Senate has taken office. When the Code does commence however, it will apply to enterprise agreements made on or after 24 April 2014. The Code will not apply to existing enterprise agreements.

This means that if your business enters into a new enterprise agreement on or after 24 April 2014 that is not Code compliant, your business will not be eligible to tender for Commonwealth funded building work.

As your agreement comes up for expiry and renegotiation, we urge you to consider how you might use the Code as a benchmark for developing a new agreement tailored to your business rather than an agreement built around the Union’s pattern agreement.

What should you do?

If your business is currently negotiating a new enterprise agreement, or will be in the future, our specialist Employment, Industrial Relations and Safety team can assist you in ensuring the agreement is Code compliant.

Even if your business doesn’t currently tender for Commonwealth funded building work, it will be best practice to ensure that any new enterprise agreement is Code compliant so that your business is eligible for this kind of work in the future.

For more information contact the Employment, Industrial Relations and Safety team:

Jennifer Wyborn — Partner — Employment Industrial Relations & Safety
(02) 6279 4328
jennifer.wyborn@meyervandenberg.com.au

Nathan Moy — Lawyer — Employment Industrial Relations & Safety
(02) 6279 4366
nathan.moy@meyervandenberg.com.au