ABCC update: Building Code 2016 Amendment passes Senate

ABCC update: Building Code 2016 Amendment passes Senate

In an important win for the majority of industry, the Building and Construction Industry (Improving Productivity) Bill 2017 (the Bill) last night passed the Senate, amending the Building and Construction Industry (Improving Productivity) Act 2016 (the BCIIP Act) to enable the ABCC and Code for the Tendering and Performance of Building Work 2016 (the Code) to be as effective as originally intended. The Bill will take effect once Royal Assent is received, which is likely to be in the next few days.

The Bill amends the BCIIP Act to reduce the time available for contractors who made a non-compliant enterprise agreement prior to 2 December 2016 – from 29 November 2018 to 1 September 2017 – and clarifies that whilst contractors holding such agreements are still eligible to tender for federally funded work until 1 September 2017, they will not be eligible to be awarded the contract until they have code compliant arrangements in place.

The Bill therefore provides clarity for members wishing to be eligible for future federally funded work for which an expression of interest or request for tender was called on or after the date the amendment to the BCIIP Act takes effect.

Members will recall that the amendments address a number of the unintended negative consequences resulting from Senator Hinch’s successful 11th hour amendment to the originally proposed legislation in late November 2016.

Master Builders commends Senator Hinch, together with other key cross-bench senators including Senators Xenophon, for acting on the direct feedback received from a large number of subcontractors and medium sized construction companies and withstanding intense pressure from the CFMEU and like-minded lobbyists, to ensure the successful passage of the Bill.

From a practical perspective, the amended BCIIP Act will have the following effect:

• Contractors who have made a non-compliant enterprise agreement (e.g. CFMEU Pattern EBA 2016-2018) before 2 December 2016 remain eligible to tender (but not be awarded) for future federally funded work 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 an agreement from 2 December 2016 onwards are unaffected, meaning they continue to need to be compliant with the Code in order to be eligible to tender for future federally funded work – i.e. they do not get the transitional period to 1 September 2017.

Whilst Master Builders continues to make itself available to engage with the CFMEU 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.

Master Builders will continue to make members aware of developments and encourages members seeking further information to contact the IR Department on (03) 9411 4560.

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