29 June 2017

All building and construction industry employers that perform or tender for Commonwealth funded building work must ensure that their enterprise agreements (EAs) comply with the provisions of the Building Code 2016 by the transition period expiry date of 31 August 2017.

On 17 February 2017, amendments to the Building and Construction Industry (Improving Productivity) Act 2016 came into effect bringing forward the transition period expiry date from 29 November 2018 to 31 August 2017.

Employers that do not have Building Code 2016 compliant EAs will not be eligible to perform or be awarded Commonwealth funded building work after 31 August 2017. There is no limit on the size of the building and construction employer to whom the Code applies, with the provisions applying to large building companies all the way through to small subcontractors.

What is Commonwealth funded building work?

Commonwealth funded building work is broadly defined and includes a variety of projects that are either performed directly for the Commonwealth or indirectly funded by the Commonwealth by a grant or other program.

How do employers comply with the Building Code 2016?

All employers and subcontractors that perform or tender for Commonwealth funded building work must ensure that their EAs comply with section 11 of the Building Code 2016.

Examples of non-compliant EA provisions include but are not limited to:

  • prohibition or restriction on labour hire;
  • prescription on the number of employees or subcontractors that can be employed or engaged;
  • union consultation or approval in relation to the type of employees employed;
  • union consultation or approval in relation to the engagement of subcontractors or the terms of engagement;
  • limitations on an employer’s right to make decisions about redundancy, demobilisation or redeployment of employees for operational reasons;
  • limitations on an employer’s ability to determine when and where work can be performed to meet operational requirements;
  • prohibition on the payment of loaded rates of pay;
  • prescription of the terms and conditions on which subcontractors are engaged; and
  • prescription on the type of work or tasks that may be performed by employees or subcontractors.

Watch this space!

The Building Code 2016 differs from the previous Building Code 2013 in many areas.

There is currently heated debate as well as union protests over the Building Code 2016, which was recently showcased by the CFMEU’s national day of protest on 20 June 2017. The Federal Opposition has introduced a disallowance motion in the Senate seeking to strike down the Building Code 2016, which is due to be voted on by 9 August 2017.

If you are an employer in the building and construction industry and perform or tender for Commonwealth funded building work and have any concerns about EA compliance, please contact our workplace relations team on 07 3231 2444.


This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please let us know.