Federal code compliance

Building Code 2016

The Building Code 2016 applies to any Commonwealth-funded building work where an EOI or tender is submitted after 2 December 2016. A tender can apply to work between a builder and federal agency, a subcontractor and builder, and a sub-subcontractor and subcontractor.

Contractors (including related entities) seeking to tender for federal work and who are covered by an EBA made after 25 June 2014, must obtain a letter of compliance from the Australian Building and Construction Commission (ABCC) confirming that the EBA complies with section 11 of the 2016 Code. Section 11 stipulates that an EBA must not contain terms and conditions inhibiting freedom of association, workplace flexibility or the prerogative of management to determine labour and contractors.

Contractors who are only covered by EBAs made before 25 April 2014 or a Modern Award or other lawful workplace arrangement can use the ABCC's Self-Declaration A to demonstrate their eligibility to express interest in, tender for and be awarded a contract for Commonwealth-funded building work.

What else does the Code apply to? 

  • Related entities of a business  even if the related entity is not a tenderer
  • The builder's EBA on private projects but not a subcontractor's EBA on private work. 

Enterprise agreements 

Transition for compliance with the code

An EBA is 'made' when the majority of employees vote in support of it and it is then filed with the Fair Work Commission (FWC).  

  • If your EBA was made after 2 December 2016, you won't be eligible to tender unless your EBA is compliant with the 2016 Code
  • If your EBA was made before 2 December 2016 and you submitted an EOI or tender before 17 February 2017 (even if the tender was awarded after that time), your EBA content is not required to comply with the 2016 Code until 28 November 2018
  • If your EBA was made before 2 December 2016 and you submit an EOI or tender between 17 February 2017 and 1 September 2017, you're required to have an EBA that is compliant with the 2016 Code before a contract can be awarded 
  • If your EBA was made before 2 December 2016, you won't be eligible to tender after 1 September 2017 unless your EBA is compliant with the 2016 Code.

The EBA compliance requirements of the Code do not apply to any EBA that was: 

  • Made before 25 April 2014, and has not been varied in accordance with section 207 of the Fair Work Act 2009 
  • Made before 2 December 2016, if the project commencement and EOI or tender were also lodged prior to that date.
The ABCC has issued a factsheet containing information about when your EBA need to be code compliant. 

Non-compliant EBAs

The ABCC will audit contractors' behaviour and practices under the Code. An EBA previously deemed as compliant doesn't override the ABCC's authority to audit and assess practices and behaviours that would fail to protect freedom of association. A contractor on ‘2016 Code projects’ needs to ensure that the EBA contents doesn't cause or lead to behaviour which is beyond the terms of the EBA and is in breach of freedom of association.

What changes should be made to CFMEU or similar EBAs?

At Master Builders' request, the federal Department of Employment assessed a number of existing EBAs, including the Queensland CFMEU EBAs. The Department identified many clauses in the CFMEU EBA that need to be deleted or amended, and this assessment is being confirmed with the ABCC.

Some EBA clauses found to be non-compliant in their current form include:

  • Union attendance at employee induction
  • Two-hour union activity meeting
  • Deducting union dues
  • Union entry
  • Hour of work limits
  • Any clause requiring third party (union) approval
  • RDOs fixed calendar
  • Engagement of subcontractors
  • Engagement of labour hire
  • 'Jump up' clauses.

Read Master Builders CFMEU EBA 2015-2019 Assessment for Code Compliance to see which clauses are most likely to need to be amended or deleted to satisfy the Building Code 2016. The advice is developed from a number of 'preliminary' assessments made by the Department of Employment up to November 2016. Master Builders has deliberately changed as little as necessary in the existing CFMEU EBA for it to comply with the code. Employers who are party to the CFMEU EBA 2015-2019 are not limited to these amendments and the ABCC may approve alternate drafting.

How to become Code compliant?

If an employer needs to vary its EBA to be code compliant, it requires a simple majority (50 per cent, plus one) of employees to support the changes. If an employer has a CFMEU EBA which is not yet past its nominal expiry date, the employer is required to consult with the CFMEU on the variation. The minimum period for making a new EBA (as required by the Fair Work Act 2009) is 21 calendar days between the first notice to make a new agreement and the time of voting. Amending an existing EBA requires only seven days' notice and consultation prior to voting.

Master Builders has drafted and filed over 1,000 EBAs for members in recent years. Our extensive knowledge of the federal codes allows us to support you throughout the bargaining process, assess existing agreements and prepare and lodge code-compliant agreements. Master Builders has already obtained a number of alternative 2016 Code-compliant assessments from the ABCC, including a revised union EBA, and will help members develop a strategy to vary or renew their EBAs.

For more information, contact Master Builders Workplace Relations team on (07) 3225 6407 or visit the ABCC website