1 August 2022
Updates to the Building Code 2016
The Government has repealed a substantial portion of the Code for the Tendering and Performance of Building Work 2016.
As a first step in implementing the Government’s election commitment to abolish the Australian Building and Construction Commission and repeal the Building and Construction Industry (Improving Productivity) Act (the Act), the Government has issued the Code for the Tendering and Performance of Building Work Amendment Instrument 2022 (Amending Instrument). The Amending Instrument amends the Code for the Tendering and Performance of Building Work 2016 (the Building Code 2016) by repealing the majority of that code.
Changes to the Building Code 2016
Prior to the Amending Instrument, the Building Code 2016 imposed a number of requirements on building contractors and building industry participants (Code Covered Entities) who had tendered for Commonwealth Funded Building Work. The Building Code 2016 also imposed extensive requirements on non-corporate Commonwealth entities (Funding Entities) when funding Commonwealth Funded Building Work.
The Amending Instrument repeals almost all the requirements of the Building Code 2016, including:
- all of Part 3 (Requirements to be complied with by code covered entities in respect of building work), other than section 11F which deals with the engagement of non-citizens and non-residents and which is required to be included in the code under the Act;
- all of Part 4 (Compliance, monitoring and enforcement arrangements);
- all of Part 5 (Funding Entities), other than:
- section 25A, which deals with the information required to be provided by preferred tenderers; and
- section 26(8), which requires Funding Entities to only contract with Code Covered Entities that use products which comply with the relevant Australian Standards,
both of which are required to be included in the code under the Act; and
- all of Part 6 (Workplace Relations Management Plans).
Part 6 has been replaced with a new Part 6 addressing certain transitional arrangements. Importantly, under these transitional arrangements, Code Covered Entities which were subject to an Exclusion Sanction immediately prior to the commencement of the Amending Instrument remain ineligible to be awarded Commonwealth Funded Building Work (and Funding Entities must not enter into contracts for Commonwealth Funded Building Work with an entity while it is subject to an exclusion sanction).
Next steps for Funding Entities
Due to the extent of the changes brought about by the Amending Instrument, existing template clauses (including the existing ABCC model clauses) will no longer be appropriate for new approach to market documentation or contracts. Clauses should be amended to reflect the Amending Instrument (and AGS can assist with this process).
Importantly, while much of the Building Code 2016 has been repealed, Funding Entities should note the following:
- The Building Code 2016 remains in effect (albeit as amended by the Amending Instrument). Relevant clauses should still refer to the Code for the Tendering and Performance of Building Work 2016, rather than the Amending Instrument.
- The fundamental provisions regarding what is ‘Commonwealth Funded Building Work’ and when an entity becomes a ‘Code Covered Entity’ remain in effect. Non-corporate Commonwealth Entities should continue to consider the application of the Building Code 2016 to their procurements, and should include appropriate notices and clauses in their approaches to market and contracts.
- The content of the Building Code 2016 has been substantially curtailed. Approach to market and contract clauses should be amended to address only these remaining requirements (namely the information to be provided by preferred tenderers, compliance with Australian Standards, and the ineligibility of Excluded Entities).
The Amending Instrument commenced with immediate effect on 26 July 2022. Funding Entities should take steps to reflect the amended requirements of the Building Code 2016 in any current or planned procurements, and should seek advice before enforcing any contract clauses which reflect provisions of the Building Code 2016 which are repealed by the Amending Instrument. In certain circumstances, imposing the repealed requirements during procurements or under contracts could constitute adverse action under the Fair Work Act 2009 (Cth).
Finally, Funding Entities should note the following:
- The Building and Construction Industry (Improving Productivity) (Accreditation Scheme) Rules 2019 remain in force and are not impacted by the Amending Instrument. Commonwealth entities should continue to apply the WHS Accreditation Scheme requirements of the Act and the Accreditation Scheme Rules where appropriate.
- The Building Code 2013 continues to apply under transitional arrangements to certain building work where a building contractor or building industry participant submitted a tender before 2 December 2016. To the extent that any such work is ongoing, the Building Code 2013 will still apply to that work notwithstanding the Amending Instrument.
Further information on the application and requirements of the Building Code 2016 can be obtained from the Department of Employment and Workplace Relations. AGS can also provide specific advice on the Building Code 2016 and the Amending Instrument, including by tailoring documentation to address the requirements of the amended Building Code 2016.
Important: The material in Express law is provided to clients as an early, interim view for general information only, and further analysis on the matter may be prepared by AGS. The material should not be relied upon for the purpose of a particular matter. Please contact AGS before any action or decision is taken on the basis of any of the material in this message.