Fact Sheet
The Building Code 2013 –
Questions and Answers
Introduction
The Building Code 2013 (the Code) sets out the requirements for all building contractors or building
industry participants involved in Commonwealth funded construction projects. It is issued under s.27
of the Fair Work (Building Industry) Act 2012 [FW(BI) Act]. Failure to comply with this
Commonwealth legislation may result in a contractor or participant being precluded from
Commonwealth funded building work. The Code, which came into effect on 1 February 2013,
replaces all previous versions of the Australian Government Implementation Guidelines for the
National Code of Practice for the Construction Industry (the Guidelines).
This Fact Sheet is designed to assist building contractors and building industry participants
understand the requirements of the Code. It is not legal advice or a substitute for the Code itself.
Building contractors and participants should refer to the terms of the Code and seek independent
legal advice where appropriate.
Who does the Code apply to?
The Code applies to building contractors and building industry participants that have tendered for,
or expressed interest in, “building work” that is funded in whole or in part by the Commonwealth, or
have performed work on those projects that are within the scope of the Code. Once covered by the
Code in this way, building contractors and participants must meet the requirements of the Code in
relation to all their future “building work”, regardless of whether it is Commonwealth funded (see
also: “Does the Code apply to my privately funded projects?” below).
The “building work” covered by this Code is defined in the FW(BI) Act. It excludes, for example, work
related to a single-dwelling house that is not part of a development of five or more single dwelling
houses.
For “building work” that is covered by the Code, it applies to those contractors or participants who
participate in on-site activities, and those where the conduct relates to onsite activities but does not
occur on the site. The offsite activities that are covered include building work performed on an
auxiliary or holding site separate from the primary construction site (see also: “Offsite Activities”
below).
I am currently working on a project covered by an earlier version of the
Guidelines. Do I need to change anything?
In most circumstances it will be business as usual. The requirements imposed by the Code apply
prospectively from the commencement of the Code.
For current projects, if you change existing arrangements related to that project on or after
1 February 2013 (such as varying the Enterprise Agreement, or engaging a new subcontractor) those
changes must meet the requirements of the Code. Where an existing industrial instrument complies
with a previous version of the Guidelines, there will be no need to change it. However, if you sought
to vary that instrument or make a new one after 1 February 2013, you would have to ensure that it
complies with the Code.
What if my business engages a new subcontractor on an existing Code
project?
Existing lawful arrangements with subcontractors do not need to change. However, any
arrangements you enter into with a new subcontractor for an existing project on or after 1 February
2013 will need to comply with the Code.
A new subcontractor that tenders for work on the project would also become subject to the Code
and would need to comply with it in their own right on all their future building work. (See also: “Does
the Code apply to my privately funded projects?” below).
Are there any Guidelines or do I just need to know what’s in the Code?
The obligations that apply to building industry participants are described in the Code.
The Department of Employment has also issued supporting guidelines for Commonwealth Funding
Entities which procure building work on behalf of the Australian Government.
What does the Code require me to do?
The Code contains a range of requirements. These are the same as, or very similar to, those found in
previous versions of the Guidelines. The most significant of these are that businesses that have
tendered for Code work must:

comply with all building industry laws, such as the FW(BI) Act and the Fair Work Act 2009
(FW Act)

comply with other relevant legislation including the Competition and Consumer Act 2010

comply with all court and tribunal decisions, directions and orders

not bargain for certain types of written agreements that, for example, cannot be certified,
registered, lodged or otherwise approved under a designated building law

ensure that any person engaged as either an employee or a contractor is lawfully entitled to
be so engaged under Australian law

ensure that no one is coerced to make over award payments to their employees

ensure that they have an appropriate Work Health Safety & Rehabilitation management
system in place

proactively ensure compliance with the Code both within their own business and by any
subcontractors.
Does the Code involve changes?
Single set of requirements
Previous versions of the Guidelines applied to projects tendered for after the commencement of
each particular version of the Guidelines. This resulted in building industry participants potentially
having to comply with a range of differing requirements depending on which version of the
Guidelines applied at the time to each project.
The new Code largely reflects the May 2012 Guidelines. Many of the differences reflect efforts to
clarify ambiguities and reflect language changes in the translation from guidelines to legislation.
Offsite activities
There is no broadening of the types of construction activities that are covered by this section of the
Code beyond those that were covered under the previous Guidelines. For example, as well as on-site
activities, the Code still covers contractors or participants who participate in activities or conduct
that relate to on-site activity, but occur away from the site. This includes, for example, building work
performed on an auxiliary or holding site that is separate from the primary construction site.
As was the case under the May 2012 Guidelines, the Code does not extend to material supply
contracting arrangements and manufactured products (e.g. the supply of manufactured products,
prefabricated components and building materials) except for onsite activities of a supplier, such as
the onsite installation of their product.
The change in wording in the Code does, however, clarify that conduct that would not ordinarily
occur on-site that directly relates to on-site activities, such as bargaining for agreements and
entering into contracts, is covered by the Code. This is a clarification only, and is consistent with the
intent and application of the previous Guidelines.
Good faith bargaining
The Code requires contractors and participants to comply with the good faith bargaining
requirements in the FW Act in respect of the negotiation of enterprise agreements. This was also the
case with the previous Guidelines.
The Code also reflects the good faith bargaining requirements in FW Act.
Building contractors and building industry participants comply with the good faith obligations by
giving genuine consideration to proposals made by other bargaining representatives, giving reasons
for the bargaining representative’s responses to those proposals and responding to proposals made
by bargaining representatives in a timely manner. A bargaining representative cannot simply refuse
to consider a bargaining representative’s proposal.
What are my obligations regarding the engagement of non-citizens or
non-residents?
Employers are required to comply with relevant migration laws including the Migration Act 1958.
Consistent with the May 2012 Guidelines, the Code reinforces the requirement that building
contractors and building industry participants should only engage people who are lawfully entitled
to work in Australia.
To be compliant with the Code, employers must be able to demonstrate that they have taken
reasonable steps and implemented appropriate systems to ensure that they only engage persons
who are legally entitled to work in Australia, and that those workers are undertaking work in
accordance with their visa conditions. For instance, an employer who regularly engages nonAustralian workers may demonstrate compliance with the Code by checking the work entitlement of
jobs applicants through the Department of Immigration and Citizenship’s Visa Entitlement
Verification Online (VEVO) system.
Employers engaging persons who are not Australian citizens or are persons who are subject to visa
conditions have further obligations under the Migration Act 1958. Further information can be found
through the Department of Immigration and Citizenship website: Australian Immigration Guide to
Work Entitlements; and Understanding Your Obligations. Employers can also call the Employers
Immigration Hotline on 1800 040 070.
What am I required to have in place concerning dispute settlement?
As was required by the May 2012 Guidelines, the Code requires a genuine dispute settlement
procedure to be included in an enterprise agreement and provides that the procedure must include
the capacity for an independent third party to settle the dispute by a decision binding on the parties.
There is no need to vary an enterprise agreement approved before 1 February 2013, whether for
existing or new projects. Enterprise agreements approved under the FW Act before 1 February 2013
will remain Code compliant.
Enterprise agreements made after 1 February 2013 must include a dispute settlement procedure
consistent with the Code. The requirements for the dispute settlement procedure are unchanged
from the May 2012 version of the Guidelines. All contractors and building industry participants
subject to the Code will still need to comply with the other requirements of the FW Act relating to
dispute resolution that apply to them.
Has the definition of “Workplace Arrangements” been changed (section 13)?
Section 13 of the Code is similar to the equivalent provisions in the previous Guidelines. As before,
building contractors and building industry participants must not require, or unduly influence,
subcontractors or suppliers to have particular workplace arrangements in place. The interpretation
of “workplace arrangements” needs to be read in the context of the Code as a whole, and the
section does not, for example, conflict with or diminish the requirements elsewhere in the Code in
relation to subcontractors.
How will the requirements in relation to “Over Award Payments” (section 14)
be applied in practice?
Section 14 of the Code is similar to the equivalent provisions in the previous Guidelines. In practice,
a contractor or participant will be required to act on reports that a subcontractor has been coerced
into making an over award payment or that undue pressure has been exerted. In this situation a
person could reiterate that this behaviour breaches the Code and, if the conduct amounts to a
breach of the FW Act, refer the matter to Fair Work Building and Construction (FWBC) for
investigation.
What is reasonable and appropriate will vary from case to case, but as was the case under
previous Guidelines, a contractor or participant will not be found to have breached the Code if there
was nothing that they could have reasonably done to prevent the conduct.
How will I know that I am tendering for work that is subject to the Code?
If you are tendering directly with the Commonwealth funding entity, the entity is required to ensure
that all their advertisements indicate that the Code applies to the project. Similarly, they must make
compliance with the Code a condition of the tender.
If you are tendering to a business that is further down the contracting chain, the company calling for
the tenders must ensure that all of its contracts require subcontractors to comply with the Code.
This includes at the time the expression of interest or tender is lodged.
Does the Code only apply to head contractors (that have tendered directly to
a Government entity)?
No. As was the case under previous Guidelines, the Code applies to any business that submits an
expression of interest or tender for building work that is ultimately funded by the Australian
Government. This means that subcontractors who tender to the head contractor, or at any point in
the contracting chain on such a project, will become subject to the Code.
Does the Code apply to my privately funded projects?
Yes, as was the case under the previous Guidelines, once you become subject to the Code, all of your
future privately funded projects will also be subject to the Code. You do not need to ensure
compliance of subcontractors on privately funded work.
Work health safety and rehabilitation (WHSR)
Building contractors must have a system in place to manage WHSR which would meet the
requirements of the Code. This system must be fully documented and meet the minimum
requirements in the Code which include:



explicit management commitment to the plan
employee involvement in the implementation of the plan
arrangements for hazard identification, risk assessment and risk control.
Where a contractor or participant already has a WHSR system in place that fully meets these
requirements, there is no need to develop a new Code-specific system. For smaller-scale building
contractors, the level of detail and complexity of the WHSR system may vary so long as it reasonably
applies the requirements in a way that reflects the circumstances of their activity.
Principal contractors must prepare a comprehensive and site-specific WHSR plan before building
work commences.
These requirements are consistent with the May 2012 Implementation Guidelines.
These requirements are separate to, and do not substitute for, other legal requirements that you
may need to meet in relation to WHSR.
What if I am involved in a dispute about the application of the Code or found
to be non-compliant?
FWBC promotes and monitors compliance with, and investigates possible contraventions of, the
Code.
The Code review and appeal processes have not changed from the arrangements that were in place
under previous versions of the Guidelines. Any dispute about the application or the meaning of the
Code should be referred to the Department of Employment for formal policy advice. The
department can also provide a formal advice to contractors on whether their workplace
arrangements are consistent or inconsistent with the requirements of the Code.
As with all previous versions of the Guidelines, the Code Monitoring Group (CMG) will deal with
Code issues, including alleged breaches and sanctions. It consists of senior representatives from a
number of Australian Government agencies who hold an interest in the Code. The CMG secretariat is
administered by the Department of Employment. The CMG is established by the Building Code 2013
Supporting Guidelines for Commonwealth Funding Entities (the Supporting Guidelines).
Parties may also seek internal review of a CMG decision by the Secretary of the Department of
Employment, or make a complaint to the Commonwealth Ombudsman.
How does the Code relate to state or territory guidelines?
The Code, along with other Commonwealth legislation, provides a comprehensive statement for
building contractors and building industry participants of what the Commonwealth’s requirements
are in relation to building work to which the Code applies.
When a contractor or participant is undertaking Commonwealth funded work, they are required to
comply with the Code, the FW Act and designated building laws. Any state or territory procurement
arrangements regarding building and construction work and their implementation cannot override
the Code and other Commonwealth laws.
How do I know if my agreements or other industrial instruments are
compliant?
The Code refers to requirements relating to enterprise agreements, but should not be interpreted as
making enterprise agreements mandatory.
Enterprise agreements
Generally, any enterprise agreement approved under the FW Act will be treated as consistent with
the Code, subject to agreements made after 1 February 2013, including a dispute settlement
procedure which is consistent with section 17 of the Code. You will not require a letter advising that
the agreement is consistent with the Code if this reflects your existing arrangements.
As an interim arrangement, assessment letters will be provided by the Department of Employment
on request, subject to verifying that an enterprise agreement entered into on or after 1 February
2013 contains a genuine dispute settlement procedure as outlined in section 17 of the Code. These
letters will be issued after the department has assessed the agreement and will state that the
department considers the agreement is consistent with the Code.
Other instruments
Where companies have other arrangements in place such as certified, registered, lodged or
otherwise approved industrial instruments, or common law contracts of employment, the
Department of Employment will continue to assess these for consistency with the Code to ensure,
for example, consistency with section 10 of the Code.
Modern Awards
There are no specific requirements in relation to modern awards under the Code and therefore they
do not need to be assessed by Department of Employment. The department will also continue to
provide advice to all employers, including those with FW Act agreements, about how to comply with
the Code.
You can ask for advice about the Code or apply online for a letter of consistency at
http://employment.gov.au/buildingcode or call the Code Assist line on 1300 731 293.
What is the role of Fair Work Building and Construction?
For the most part, the roles of FWBC, Department of Employment, and the CMG will continue
unchanged under the Code.
FWBC will continue to promote and monitor compliance with the Code, and to inquire into and
investigate any act or practice that is contrary to the Code. The Code also enables FWBC Inspectors
to exercise their full range of investigative powers in relation to compliance with the Code.
A key part of FWBC’s role is promoting the Code and providing information and advice to industry
about compliance matters.
Under the Supporting Guidelines, CMG matters such as membership, sanctions, and administrative
process are unchanged and the CMG will operate in the same way that it did under the
May 2012 Guidelines and previously. The Supporting Guidelines also outline the role of the CMG
Secretariat, which will continue to support the CMG to undertake its functions.
Department of Employment has policy responsibility for the Code and the Supporting Guidelines and
will work with FWBC and the CMG to ensure that provisions operate and are applied as intended.
Further information in relation to FWBC’s role in relation to the Code can be found at
www.fwbc.gov.au or by calling 1800 003 338.
I procure building work for the Australian Government - do I have to alter my
existing contractual documentation?
No. There is no need to vary any contracts you currently have in place. However, any new tenders or
contracts for work that are funded by the Australian Government should reflect the obligation to
comply with the Building Code. A suite of model tender and contract provisions can be found in the
Supporting Guidelines at www.employment.gov.au/BuildingCode.
Want to know more?
Further information concerning the Code can be found at www.employment.gov.au/BuildingCode
Australian Immigration Guide to Work Entitlements http://www.immi.gov.au/managing-australiasborders/compliance/legalworkers/
Understanding Your Obligations http://www.immi.gov.au/skilled/rights-obligations-workers.htm
Date: May 2013