Enterprise Agreements – The goal posts have been moved!

As of 18 May 2016, Fair Work Building and Construction (FWBC) is responsible for assessing whether enterprise agreements comply with the  Building Code 2013 (Building Code).

Previously, due to a 2009 Ministerial Direction put in place by the previous Labor federal government, if an enterprise agreement was registered by the Fair Work Commission, it was deemed to be compliant with the Building Code.

However, on 6 May 2016, the Minister for Employment issued a revision of the  Supporting Guidelines for the Building Code,changing the way in which the Government monitors and enforces compliance with the Building Code.

The FWBC has since issued a fact sheet outlining details of the changes, which include:

  1. The changes only apply to enterprise agreements made on or after 18 May 2016 and to Commonwealth funded building projects procured from 1 June 2016 (Scope of Changes).
  2. Contractors within the Scope of Changes that have enterprise agreements containing clauses that are inconsistent with the Building Code, will be ineligible to tender for Commonwealth funded building work.
  3. Contractors who make a new enterprise agreement or vary an existing enterprise agreement on or after 18 May 2016, are required to:

    (a)  apply to the FWBC for approval, using the appropriate form; and

    (b)  obtain a letter from the FWBC which demonstrates that the enterprise agreement complies with the              Building Code.

  4. To assist with understanding whether an enterprise agreement is required to be assessed by the FWBC, the FWBC has provided a helpful flow chart (download here).
  5. The changes do not affect existing projects, or projects for which the procurement process commenced prior to 1 June 2016.
  6. Contractors and building industry participants who are covered by awards, other workplace arrangements or enterprise agreements made prior to 18 May 2016, can continue to bid for Commonwealth funded building work.

Conclusion

We recommend that building contractors and building industry participants who are covered by enterprise agreements made or amended on or after 18 May 2016 that intend on tendering for Commonwealth funded projects, ensure that:

  1. enterprise agreements made on or after 18 May 2016 comply with the Building Code and are submitted to the FWBC for approval; and
  2. they register and attend CDI’s Breakfast Seminar on this topic on 9 June 2016.

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