Facts about the Building Code 2016
The Code for the Tendering and Performance of Building Work 2016 (the Code) encourages the development of safe, healthy, fair, lawful and productive building sites for the benefit of all building industry participants.
The Code requires strict compliance with work health and safety (WHS) obligations by contractors. Code covered entities must:
- comply with all relevant Commonwealth, State and Territory WHS laws, including training requirements and asbestos safety requirements;
- only use products that comply with relevant Australian standards on Commonwealth funded building work; and
- comply with drug and alcohol testing requirements on Commonwealth funded building work.
Protecting Australian jobs
Code covered entities must now undertake labour market testing before they can engage new employees who are not Australian citizens or permanent residents. This means that such individuals, including temporary visa holders, cannot be engaged unless:
- the position was first advertised in Australia;
- the advertising was appropriately targeted; and
- no Australian citizen or permanent resident is suitable for the job.
The Code does not prevent enterprise agreements giving preference to Australian made clothing or equipment.
Security of Payments
The Code imposes new requirements for security of payments, including:
- complying with State and Territory security of payments laws;
- reporting disputed and delayed progress payments to the ABCC; and
- complying with any adjudication decision.
Letters of Compliance
Commonwealth funded projects
On Commonwealth funded projects, letters of compliance are required when engaging contractors* to perform building work. On these projects, a letter of compliance is needed if the contractor or a related entity is covered by an enterprise agreement made from 25 April 2014 and a transitional exemption does not apply. Letters of compliance are needed only for those performing building work on such projects.
Privately funded projects
On privately funded projects, agreement compliance under the Code is not a prerequisite to engaging subcontractors. Accordingly, letters of compliance should not be requested on privately funded projects. A code covered entity is, however, responsible for ensuring its own enterprise agreement complies with the Building Code, including on privately funded projects. More information on eligibility to tender is available on the ABCC website.
The cost of non-compliance with the Code
A breach of the Code may result in an exclusion sanction, which prevents a code covered entity from expressing interest in, tendering for, or being awarded Commonwealth funded building work for the duration of the sanction.
Further information on these requirements is outlined on the ABCC website at www.abcc.gov.au. Alternatively, you can call the ABCC Hotline on 1800 003 338.
*Letters of compliance are only required from contractors that are constitutional corporations or are performing work in a Territory or Commonwealth place.