Revised Building Code released, and reduction in powers of the ABCC

From today, measures will commence to reduce the powers of the Australian Building and Construction Commission (ABCC) "to the bare legal minimum”.

The Code for the Tendering and Performance of Building Work Amendment Instrument 2022 (Interim Building Code), makes significant changes to the obligations imposed on the Commonwealth, Funding Recipients, Contractors and subcontractors regarding the procurement and delivery of Commonwealth Funded Building Work.

The Interim Building Code

The Interim Building Code amends and streamlines the Code for the Tendering and Performance of Building Work 2016 (Building Code) and is being described by the Minister for Employment and Workplace Relations, the Hon. Tony Burke as a "down payment" on the Government's commitment to abolish the ABCC.

The changes in the Interim Building Code will remove most of the obligations imposed by the Building Code.

Key changes have been made to eligibility requirements for Commonwealth Funded Building Work including removing the requirement to have an ABCC letter of compliance, and the requirement to submit and have approved a Workplace Relations Management Plan, to tender for or be awarded a contract for Commonwealth Funded Building Work. It also removes the ABCC Commissioner’s role in relation to granting exemptions and imposing exclusion sanctions (existing exemptions and exclusion sanctions will however remain on foot).

The Interim Building Code repeals Part 4 of the Building Code, which provides for certain compliance monitoring and enforcement powers of the ABCC. The Minister has separately announced that the Fair Work Ombudsman (FWO) and health and safety regulators will now be tasked with enforcing the Fair Work Act 2009 and certain safety measures provided for in the Building Code in the building and construction industry.

The Interim Building Code will also:

• remove additional restrictions on building industry participants in relation to enterprise agreements with respect to subcontractor arrangements (such as those prohibiting “jump up clauses” which require labour hire or subcontractor employees’ wages to be the same as those workers directly engaged on the project), union consultation clauses and restrictions on contracting out or hiring casuals;
• remove clauses relating to sham contracting, collusive practices, and security of payments that are provided for in other laws; and
• remove clauses relating to freedom of association, right of entry, and industrial action and disputes that are provided for in other laws.

Other obligations have not been repealed as they are legislative requirements contained in the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) and must be repealed via legislation passed by Parliament (such as requirements regarding the use of domestically sourced and manufactured building materials, assessment to whole-of-life costs, impact on jobs and contribution to skills growth. Procurement documentation which concerns Commonwealth Funded Building Work will need to continue to address these requirements.

The changes to the Building Code are significant for the Commonwealth, Funding Recipients, Contractors, subcontractors, and other building industry participants involved in the procurement and delivery of Commonwealth Funded Building Work.

We encourage participants in the building and construction industry to familiarise themselves with the Interim Building Code and seek advice regarding the impact of the changes on their business or operations.