March 2017 wage increase?

March 2017 wage increase?

Members should note that the requirement to pay a wage increase from the first pay period commencing on or after (ppc) 1 March 2017 only applies to employers holding the CFMEU Pattern EBA 2016-2018, where the agreement has formally taken effect following its approval by the Fair Work Commission (FWC).

Employers holding the extant Industry EBA 2011-2015 are not required to pass on any wage increase. Any increase to employees is therefore solely at the discretion of the employer, or a matter for negotiation – e.g. through individual common law contract.

Members should note that for those wishing to do future federally funded work, it is a breach of section 12 of the Code for the Tendering and Performance of Building Work 2016 (the Code) for a code covered entity to attempt to coerce or exert undue influence or undue pressure on a contractor or subcontractor to make over entitlements payments in relation to building work. For example, it would be a breach of the Code for a builder to pressure a subcontractor holding Industry EBA 2011-2015 to pay an increase from ppc 1 March 2017 in accordance with the CFMEU Pattern EBA 2016-2018.

In addition, section 10 of the Code prohibits code covered entities from bargaining in relation to an agreement, making an agreement or implementing an agreement in respect of building work that provides for terms and conditions or benefits of employment of employees (which may include above entitlements payments), where the agreement will not (or the employer reasonably believes will not) be approved by the FWC. It is important to note that this prohibition does not include genuine common law agreements between an employer and an individual employee. However, the ABCC has made clear that collectively negotiating an agreement to give a general pay rise to employees through individual common law employment agreements while the employees are coved by an enterprise agreement would not be deemed a genuine common law agreement and would therefore constitute a breach of section 10 of the Code.

Master Builders therefore strongly recommends that contractors holding Industry EBA 2011-2015 that wish to pay their employee/s more than the minimum set out in the EBA seek advice on how to achieve such an outcome without putting themselves at risk of breaching the Code.

This is particularly important given the vast majority of contractors who currently hold Industry EBA 2011-2015, made the agreement prior to 25 April 2014 and are therefore exempt from the agreement content requirements (i.e. sections 11(1) and (3), 11A(1) and 15(1)) of the Code. As a result, these contractors (unlike those who entered into CFMEU Pattern EBA 2016-2018), remain eligible to tender and be awarded federally funded work into the future without restriction.

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

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