A recent decision by a Fair Work Commission (FWC) full bench has overturned the approval of two enterprise agreements that incorporated the proposed Fair and Lawful Building Sites Code 2014 (Building Code 2014).

In its decision, the full bench warned that enterprise agreements that incorporate the proposed Building Code 2014 might not pass the better off overall test (BOOT), an enterprise agreement approval requirement of the Fair Work Act 2009 – finding that:

“The Act requires that enterprise agreements contain terms and conditions of employment that are certain. We are not satisfied that the agreements, in their present form, whereby the future terms and conditions of the employees are capable of being altered by the act of a third party, are sufficiently certain to pass the BOOT”.

Whilst the decision can be questioned on a number of grounds, including that the proposed Building Code 2014 does not contain provisions that would be capable of failing the BOOT – it nonetheless provides another reason for contractors wishing to tender for future federally funded work to carefully consider the attendant risks of entering into a new enterprise agreement before the fate of the proposed code, currently before the Senate, is known.

Under the proposed Building Code 2014, on taking effect, any enterprise agreement made after 24 April 2014 will be subject to the code’s agreement content compliance requirements.

Master Builders reminds members that the current Industry EBA 2011-2015 has been assessed as non-compliant with the proposed code, where entered into after 24 April 2014.

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