The revised Code for the Tendering and Performance of Building Work 2016 (the Code) has taken effect, following the commencement of the Building and Construction Industry (Improving Productivity) Amendment Act 2017 (BCIIPA Act) on 17 February 2017.

Members will recall that industry was first made aware of the new enterprise agreement content requirements on 17 April 2014, whereby the advance release of the Building and Construction Industry (Fair and Lawful Building Sites) Code 2014 was announced, making clear that enterprise agreements made after 24 April 2014 would be subject to the new agreement content requirements.

Since that time, the Australian Government continued to provide clear and unambiguous advice that the new arrangements would apply to contractors entering into enterprise agreements after 24 April 2014. However, members will recall that an unintended consequence of the Hinch transitional arrangements (passed in November 2016) was to cast doubt on the requirements for the vast majority of contractors who heeded the Government’s message, refusing to enter into a new agreement that would not be compliant with the new Code.

In a victory for fairness and common sense, the amendments to the Code now provide the necessary clarity for those wishing to be eligible for future federally funded work:

• Contractors who have an enterprise agreement that was made before 25 April 2014 are not subject to the agreement content requirements of the Code. However, the agreement content requirements will have immediate effect in respect to any future enterprise agreement made, or, any agreement variation made in accordance with section 207 of the Fair Work Act 2009.

• Contractors who have made a non-compliant enterprise agreement from 25 April 2014 and before 2 December 2016 are subject to the agreement content requirements of the Code. However, they will remain eligible to tender (but not be awarded) federally funded work where an expression of interest or tender is lodged from commencement of the BCIIPA Act (i.e. 17 February 2017) until 31 August 2017. From 1 September (and earlier if in order to be awarded a contract) these contractors will need to either replace the enterprise agreement with a code compliant one, formally terminate their agreement, or vary the agreement to make it code compliant.

• Contractors who have made a non-compliant enterprise agreement from 2 December 2016 are immediately subject to agreement content requirements of the Code, meaning they will need to formally terminate or vary the agreement to make it code compliant, should they wish to be eligible to tender for future federally funded work.

In addition to the above, the amendments to the Code also provide clarity for those who have tendered for federally funded work prior to the amendments taking effect:

• Contractors who have made a non-compliant enterprise agreement from 25 April 2014 and before 2 December 2016 who lodged an expression of interest or tender for a federally funded project between 2 December 2016 and 17 February 2017, remain eligible to be awarded that work until 29 November 2018.

• Contractors who have made a non-compliant enterprise agreement from 25 April 2014 and before 2 December 2016 and who lodged an expression of interest or tender for a federally funded project before 2 December 2016 will not be subject to the agreement content requirements of the Code with respect to building work relating only to that expression of interest or tender.

Master Builders notes that the immediate response from the CFMEU on the amendments has been to persist with their ideological agenda, rather than to act in the best interests of their membership and find a pragmatic solution. This is disappointing, as it is understood that the changes required to make the Victorian CFMEU Pattern EBA 2016-2018 compliant with the Code are largely non-controversial, and would not, in practice, result in a diminution of employee entitlements as falsely claimed by some within the CFMEU.

Whilst Master Builders continues to make itself available to engage with the CFMEU at an industry level to expedite a Code-compliant solution for the industry, in the interim, it will continue to advise members on the range of alternatives available to employers and employees.

Members seeking further information are encouraged to contact the IR Department on (03) 9411 4560.