On 2 December 2016 the Building and Construction Industry (Improving Productivity) Act 2016 and the Building and Construction Industry (Consequential and Transitional Provisions) Act 2016 commenced, as did the new ABCC.

As a result:

  • the Office of the Fair Work Building Industry Inspectorate (known as Fair Work Building and Construction) ceased operation; and
  • the Minister for Employment, Senator the Hon Michaelia Cash issued a new building code, which will now apply to companies who wish to undertake Commonwealth-funded building work.

Building work to which code of practice applies

  • Building work that is being undertaken for, or on behalf of, a funding entity (irrespective of the value of a project).
  • Building work: that is indirectly funded by the Commonwealth by a grant or other program in circumstances in which funding for the building work is an explicit component of the grant or program; and for which: the value of the Commonwealth’s contribution to the project that includes the building work is at least $5,000,000 and represents at least 50% of the total construction project value; or, the Commonwealth’s contribution to the project that includes the building work is at least $10,000,000 (irrespective of its proportion of the total construction project value).
  • Building work for which the Commonwealth provides assistance in advance of the commencement of construction; and, which has an identified capital component; and for which: the value of the Commonwealth’s contribution to the project that includes the building work is at least $5,000,000 and represents at least 50% of the total construction project value; or the Commonwealth’s contribution to the project that includes the building work is at least $10,000,000 (irrespective of its proportion of the total construction project value).
  • A Build, Own, Operate, Transfer (‘BOOT’) project initiated by an agency of the Commonwealth for the delivery of functions or services of the Commonwealth.
  • A Build, Own, Operate (‘BOO’) project initiated by an agency of the Commonwealth for the delivery of functions or services of the Commonwealth.
  • Building work that involves a pre-commitment lease to which a funding entity is a party.
  • Building work that involves a Public Private Partnership (‘PPP’) for the delivery of functions or services of the Commonwealth.  Note: a PPP involves the creation of an asset through financing and ownership control by a private party and private sector delivery of related services that may normally have been provided by the Commonwealth. An agency of the Commonwealth may contribute to establishing the infrastructure, for example through land, capital works or risk sharing. The service delivered may be paid for by the Commonwealth or directly by the end user.
  • Building work that involves a Private Finance Initiative (‘PFI’) for the delivery of functions or services of the Commonwealth.

Application of Code

The Code applies to all new tenders for Commonwealth-funded building work and all building contractors who tender will need to comply with the Code’s conduct requirements on building sites. However, there is an exemption for essential service providers (s.6A) and at the discretion of the ABC Commissioner.

Enterprise Agreements

Enterprise agreements made from 2 December 2016 must comply with the Code in order to be eligible to be awarded Commonwealth-funded work.

Building industry participants covered by agreements made prior 2 December 2016 have until 29 November 2018 to ensure their agreements are Code compliant.

Letter of compliance from the ABCC

All contractors seeking to undertake Commonwealth-funded building work now require a letter of compliance from the ABCC to confirm they are eligible to tender, regardless of their workplace arrangements.

To close, under the Building and Construction Industry (Improving Productivity) Act 2016 at chapter 2, part 4 (sections 32A-32K) there is also a Security of Payments Working Group established by this legislation, which among other functions, will make “recommendations to the ABC Commissioner about policies, procedures or programs that could be implemented to improve compliance by building industry participants with security of payment laws” [s.32A(2)(b)], so there will be much more to come no doubt.