National Code Compliance Changes

By Cate Greene.

Key Points:
A major concern is the extent to which contractors will be able to comply with the National Code before the 1 October 2005 deadline.

On 13 July 2005, the Federal Minister for Employment and Workplace Relations, Kevin Andrews, announced sweeping changes to the implementation and enforcement of the National Code of Practice for the Building and Construction Industry.

The National Code is:

"… a set of principles which describe good practice in respect of workplace relations, occupational health and safety, procurement and security of payment in the construction industry."

This announcement follows a recent review of the Commonwealth's Implementation Guidelines for the National Code. Minister Andrews explained that the review was undertaken so that the Implementation Guidelines "remain up to date and continue to be a catalyst to drive reform in the building and construction industry".

The key changes are summarised below.

Contractors must comply with the National Code at time of registration of interest and/or tender

Commonwealth agencies will only be able to accept registrations of interest and tenders from contractors who are National Code compliant at the time of submitting the registration of interest and/or tender.

At present, a contractor need only demonstrate that it will become compliant before the delivery of the construction works.

The Commonwealth Government says this will reduce delays between tender, planning and delivery phases of projects and increase the spread of National Code compliant arrangements.

Contractors must comply with the National Code on all future (even non-Government) projects

Commonwealth agencies will only be able to deal with contractors who are National Code compliant on all future projects, regardless of whether such projects are for the Commonwealth Government, other Governments or for the private sector.

The Implementation Guidelines will apply to unregistered agreements

The Implementation Guidelines will be extended to cover unregistered agreements, to ensure that contractors comply with the letter as well as the spirit of the National Code and the Implementation Guidelines.

The Commonwealth Government says that this will reduce uncertainty because all workplace agreements, whether registered or unregistered, will need to comply with the National Code. The National Code will also define some clauses in agreements which "hinder workplace reform" as non-compliant.

New sanctions and a new, improved Code Monitoring Group

Minister Andrews has flagged that there will be a new sanctions regime and a strengthened Code Monitoring Group "to reflect enhanced [National] Code monitoring arrangements."

Further changes

There will also be amendments to ensure consistency with the new Building and Construction Industry Improvement Bill 2005 (expected to be passed in August 2005) and further strengthening of occupational health and safety requirements.

Key dates

The first stage of the reforms, including changes to the National Code and Implementation Guidelines, will take effect from 1 October 2005.

Comment

The Commonwealth Government expects that:

"[its] initiatives in progressing these measures will raise the standards of behaviour in the building and construction industry, achieving workplace reform , higher productivity and lower costs."

It remains to be seen whether or not the Commonwealth Government will achieve its objectives.

For example, issues may arise as to the extent to which contractors will be able to comply with the National Code before the 1 October 2005 deadline, particularly in Victoria and New South Wales where a number of employers are reported to have signed a new agreement which reportedly may not satisfy the revised Guidelines.

The revised Guidelines have only just been released. The Government has indicated it will use the Guidelines as tender conditions rather than enshrine the Guidelines in legislation, as originally announced. It is expected they will be replaced by the workplace relations package released in 2006.

Future editions of Project Insights will monitor the progress of these changes.

For further information, please contact Cate Greene.