Western Australia
Thu 3 August 2017

Tougher rules for enterprise agreements under Federal Code

The transition period for compliance with the Commonwealth Building Code 2016 ends on August 31.

After that date, contractors (and their subcontractors) awarded Federally-funded construction works need to be covered by the Modern Award or have Code-compliant enterprise agreements (note this also applies to Federally-funded works that are delivered by State Government agencies). A number of exemptions apply, including a general exemption for enterprise agreements entered into before April 25, 2014. Check the Australian Building and Construction Commission (ABCC) website for more details.

The ABCC can also provide advice on draft enterprise agreements and issue a Letter of Compliance if it determines the enterprise agreement meets the requirements of section 11 of the Building Code 2016 (companies whose employees are covered under the Award can simply confirm compliance by completing a Self-Declaration form).

Under Section 11 of the Code, enterprise agreements must not:

  • impose limits on a company’s right to manage its business or to improve productivity;
  • discriminate against any person, class of employee, or subcontractor;
  • restrict freedom of association (i.e. mandate or encourage union membership)

The Code provides some more specific examples of clauses that are not permitted in enterprise agreements. This includes clauses that:

  • prescribe the number of employees or subcontractors that may be employed at a particular site or particular time;
  • prohibits or limits the employment of casual or daily hire employees.
  • Require employers to seek union approval before hiring employees or engaging subcontractors
  • prescribe the terms and conditions on which subcontractors (and their employees) are engaged
  • prescribe the scope of work or tasks that may be performed by employees or subcontractors;
  • limit the right of an employer to make decisions about redundancy, demobilisation or redeployment of employees based on operational requirements;
  • prohibit the payment of a loaded rate of pay
  • prevents an individual employee being selected to perform overtime unless other employees are similarly provided overtime.
  • provide for the monitoring of agreements by persons other than the employer and employees to whom the agreement applies;
  • require or allow union logos, mottos etc to be applied to company supplied property or equipment;
  • may be seen to encourage (or discourage) union membership
  • Provide union entry rights other than those rights in the Fair Work Act.