FWA, EBAs and the new Code

Australia’s workplace relation laws, and particularly those relating to the building and construction industry, remain in a state of flux as a result of recent amendments to the Fair Work Act 2009 (Cth) (FW Act).

Fair Work Amendment Act 2015 (Cth)

In late 2015, the government enacted the Fair Work Amendment Act 2015 (Cth), which amended the FW Act so that:

  1. the good faith bargaining requirements now apply to Greenfield Agreement negotiations;
  2. negotiations of Greenfield Agreements now have a set time frame, with employers able to apply to the Fair Work Commission (FWC) for approval of the agreement once a 6 month negotiation period has expired;
  3. Greenfield Agreements must now provide “for pay and conditions that are consistent with the prevailing pay and conditions within the relevant industry for equivalent work.”; and
  4. protected action ballot orders will only be granted once an employer has initiated bargaining for a new Enterprise Agreement, preventing protected industrial action being used to pressure employers prior to bargaining commencing.

Those amendments that did not pass the Senate are currently before the House of Representatives in the form of the Fair Work Amendment (Remaining 2014 Measures) Bill 2015. Further possible amendments include:

  1.  amendments to the right of entry provisions, including providing the FWC with capacity to deal with disputes relating to frequency of visits; and
  2. the inclusion of provisions relating to untaken leave upon termination and leave accruing whilst on workers’ compensation.

We will be closely monitoring future developments regarding the FW Act and providing advice to assist our clients in navigating the shifting landscape of Australia’s workplace relations laws. Building and Construction Industry (Improving Productivity) Bill 2013 (BCI Bill)

The government is also reviewing the BCI Bill, which (if enacted) will:

  1. enable a new Building Code to be issued;
  2. re-establish the Australian Building and Construction Commission (ABCC); and
  3. provide the ABCC with the following powers, amongst others:
    (a) An officer of the ABCC may enter a premises to inspect any work, process or object
    (b) The ABCC may issue an ‘examination notice’ without the approval of the Administrative Appeals                     Tribunal
    (c) The ABCC may compel a person to give evidence, irrespective of the privilege against self-incrimination.

On 17 August 2015, the BCI Bill failed to pass the senate for a second time, however Senator Abetz has indicated the government’s intention to re-engage with cross-bench senators in a further attempt to secure approval of the BCI Bill.

Building and Construction Industry (Fair and Lawful Building Sites) Code 2014 (draft Code)

The draft Code sets out a number of workplace relations requirements, including certain terms and clauses prohibited from enterprise agreements. Unless contractors/subcontractors are compliant with the code, they will not be eligible to work on Commonwealth-funded projects. In addition, once a contractor/subcontractor becomes subject to the Code (i.e. by tendering for a Commonwealth-funded project), it will be required to maintain compliance with the Code on all future projects, including privately funded projects, or else risk becoming ineligible.

Given the terms of the draft Code, it will have the effect of rendering of the current common EBAs invalid.

If the BCI Bill is enacted, the Code will apply retrospectively to all ‘Enterprise Agreements’ entered into on or after 24 April 2014. As a result, contractors/subcontractors could go from being Code-compliant to non-Code compliant, and unable to tender for government funded work unless their agreement is amended or replaced.

Consequently, those in the building and construction industry who intend to negotiate new Enterprise Agreements face considerable uncertainty, especially due to the continued delayed commencement of the BCI Bill.

To add to the confusion, the Full Bench of the FWC recently quashed the approval of two Enterprise Agreements which attempted to prospectively achieve compliance with the draft Code by including provisions which will only apply if the BCI Bill (and the draft Code) are passed. The FWC found that, as the draft Code was yet to have statutory effect, the terms and conditions of employment were uncertain and therefore non-compliant with the FW Act.

Contractors/subcontractors covered by the draft Code looking to make new Enterprise Agreements, should ensure that necessary clauses are included which require parties to vary the agreements to achieve code compliance if and when the BCI Bill is enacted.

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