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Peter Pether
Partner
T +61 2 9296 2416
Sydney
Barry Casey
Adam Wallwork
Julie Wright
Andrew Chew
Melbourne
James Forrest
Peter Megens
Perth
Simon Lee
Brisbane
Scott Budd
On 1 August 2009, the Australian Government introduced its new Implementation Guidelines for the National Code of Practice for the Construction Industry (the 2009 Guidelines).
The National Code of Practice for the Construction Industry (the Code) sets minimum standards for certain Australian Government building and construction work. The supporting Guidelines provide details on compliance requirements.
The 2009 Guidelines have been introduced to reflect:
- the commencement of the Fair Work Act 2009 (Cth)
- Wilcox QC’s findings in his report, Transition to Fair Work Australia for the Building and Construction Industry, and
- the outcomes of government consultation with state and territory governments, employee and employer associations and major contractors.
All contractors who tender for Australian Government construction work should ensure that they:
- comply with the Code and 2009 Guidelines
- proactively ensure that their subcontractors comply with the Code and 2009 Guidelines
- maintain workplace relations and OHS&R practices that comply with the Code and 2009 Guidelines, any judicial decisions against them and all relevant legislation, and
- understand that previous performance in complying with the Code and 2009 Guidelines will affect their ability to successfully tender for future Australian Government construction work.
Scope of the 2009 Guidelines
The 2009 Guidelines apply to all projects that were the subject of expressions of interest or tenders let for the first time on or after 1 August 2009. For all projects where expressions of interest or tenders were called for before 1 August 2009, the Guidelines applicable at the date of commencement of those projects will continue to apply for the life of those projects.
The 2009 Guidelines cover a similar scope of activities to the 2006 edition of the Guidelines (the 2006 Guidelines), except:
- the 2009 Guidelines now apply solely to participants in onsite activities (including work performed on auxiliary or holding sites).
- material suppliers are no longer specifically required to comply with the Code and 2009 Guidelines.
The sanctions that may be imposed for non-compliance remain unchanged.
Introduction of Tender Evaluation Criteria
Under the 2009 Guidelines, when evaluating tenders, the relevant government agency:
- must assess the previous performance of the tenderer on applying the Code and 2009 Guidelines
- must not enter into contracts with tenderers who have had a judgment against them (not including decisions under appeal) relating to employee entitlements which remains unpaid, and
- may show preference to tenderers that have a demonstrated commitment to trainees and apprentices, women and indigenous Australians.
Responsibility for Compliance
Under the 2009 Guidelines, the allocation of responsibility for compliance is as follows:
- Contractors must proactively ensure that their subcontractors comply with the 2009 Guidelines, including by making compliance a contractual obligation and confirming the requirement for compliance at site or project meetings.
- Employees are no longer specifically required to comply with the Code and 2009 Guidelines.
- Project managers and/or head contractors are no longer required to establish processes to ensure freedom of association and union right of entry to premises in accordance with the law.
- Tenderers are specifically required to comply with the 2009 Guidelines from the date of tender or lodgement of an expression of interest.
Project Agreements
Project agreements incorporating site-wide payments, conditions or benefits will not be permitted, except in exceptional circumstances, on projects worth less than $100 million. This amount has been increased from $25 million under the 2006 Guidelines.
Workplace Relations and OHS&R
The broadest changes introduced by the 2009 Guidelines come in the areas of workplace relations and OHS&R.
Unregistered Agreements
Any party to an unregistered written agreement (other than common law agreements made between the employer and an individual employee) will be deemed non-compliant with the Code and 2009 Guidelines.
Under the 2006 Guidelines, unregistered written agreements were permitted if they complied with the Code and 2006 Guidelines and did not provide for a site allowance or any other matters that would be prohibited if included in a workplace agreement.
Sham Contracting
Sham contractor arrangements, where an employer holds out an employment relationship as an independent contractor relationship, are now specifically deemed inconsistent with the Code and 2009 Guidelines.
Freedom of Association and Right of Entry
A number of examples of practices that are inconsistent with the emphasis on freedom of association in the Code have been removed from the 2009 Guidelines.
Specific right of entry requirements under the 2006 Guidelines have been replaced with a general requirement for contractors to ensure that they and their subcontractors comply with their right of entry requirements in accordance with applicable legislation, court and tribunal orders and industrial instruments.
Dispute Settlement
Specific dispute settlement requirements under the 2006 Guidelines have been replaced with a general requirement for:
- any significant workplace relations or OHS&R disputes to be reported to the principal contractor
- the principal contractor to report any dispute that may impact on project cost or time to the government agency, and
- the establishment of clear reporting structures to facilitate the above.
Workplace Reform
The 2009 Guidelines introduce a general expectation that all parties demonstrate good faith when bargaining for workplace reform.
This replaces the proscription in the 2006 Guidelines of the inclusion of various provisions in industrial agreements such as those relating to:
- employee ratios
- one-in-all-in arrangements for workplace practices
- last-on, first-off clauses for redundancy, and
- labour restrictions, such as requiring union approval for the use of subcontractors.
Australian Building and Construction Commissioner
The 2009 Guidelines outline the Australian Government’s announcement that it intends to retain the ABCC until 31 January 2010. Following that date, all ABCC functions and responsibilities, including those under the Code and 2009 Guidelines, will transfer to a specialist building and construction division, the Fair Work - Building Industry Inspectorate, subject to the passage of applicable legislation.
For more information on the 2009 Guidelines, see:
- the Code,
- the 2009 Guidelines, and
- ABCC fact sheets on the Code and 2009 Guidelines.
Authors
Andrew Chew, Special Counsel
Megan Coall, Solicitor
The Victorian Government introduced the Major Transport Projects Facilitation Bill (Vic) (‘Bill’) on 13 August 2009. The Bill is intended to streamline the environmental impact assessment, approvals and land acquisition process to facilitate the timely completion of major transport projects. The regime contemplated in the Bill is intended to apply to many of the projects identified in the Victorian Government’s $38 billion Transport Plan, including the proposed Peninsula Link PPP. Roads Minister Tim Pallas believes that the Bill will result in time savings of around 12 months in the EIA and approvals process for major transport projects.
It aims to achieve these objectives by consolidating the decision-making powers of a number of Ministers and Government Departments in relation to declared major transport projects in the one decision-making authority, being the Victorian Planning Minister (‘Minister’). The Minister will act as a “one-stop-shop”, and will be responsible for complying with environmental impact assessment (‘EIA’) and approvals requirements under Victorian law which are currently the responsibility of a number of Ministers and Departmental personnel.
Under the current draft of the Bill, the Premier may declare a major transport project to be a project to which the Bill applies (‘Declared Project’). When such a declaration is made, the Declared Project will be subject to the EIA processes contained in the Bill, and any required environmental and planning permits and approvals may be issued by the Minister.
The nature and scope of an EIA required in relation to a Declared Project will to be determined in accordance with strict statutory time limits specified in the Bill. There are two levels of EIA that may be required; the first (and least onerous) is the “Impact Management Plan Assessment Process”, while the second is the “Comprehensive Impact Statement” process (‘CIS Process’). The level of assessment required will depend in part on the nature of a particular project and the impacts likely to result from it. Where private land is required to be compulsorily acquired to facilitate a Declared Project, or where approval is required under legislation such as the Planning and Environment Act or the Environment Protection Act, then that project will be subject to the more onerous CIS Process.
In addition to the amendments to the EIA process, the Bill makes provision for:
- a partial regulation of dealings between State regulated utilities and the government project authority responsible for a project. This will set out arrangements for entering into a utility agreement outlining the rights and responsibilities of the proponent and utility in relation to utility infrastructure located within a project area
- arrangements for the compulsory acquisition of land required for Declared Projects. This will involve the Planning Minister identifying land required for a Declared Project. Once this has occurred, the responsible project authority may compulsorily acquire that land, and
- limitations to the opportunity for legal challenges to be made to the EIA and approvals process.
The Bill contains a number of substantial benefits for proponents of major transport projects in Victoria. However, some of the issues which arise in the context of the EIA and approvals process will still need to be addressed, and there are some limitations to what the Bill can achieve. These limitations include:
- the Bill will apply only to major transport projects; other major projects will remain subject to the existing EIA, approvals and land acquisition regime
- while the Bill streamlines the EIA and environmental approvals process, proponents will still need to allow a considerable amount of time for the EIA processes, particularly the CIS Process as outlined in the Bill, to be observed, and
- the Bill does not circumvent the need to obtain approval under the Commonwealth Environment Protection and Biodiversity Conservation Act 1999 (‘EPBC Act’). Nor does it reduce the risk of legal challenges to a particular project being made under that legislation. Proponents will be well aware that a number of large projects have been challenged under the EPBC Act.
The Bill is still in the relatively early stages of passage through the Victorian Parliament. As the Government does not control the Upper House, and given the Greens have already indicated that they will not support it, there remains some uncertainty over whether or not it will be enacted in its current form, or indeed enacted at all.
Author
Damien Gardiner, Senior Associate
Occupational Health and Safety
Extent of knowledge required of persons responsible under safety laws
The WA Supreme Court of Appeal has found that the obligation under the Occupational Safety and Health Act 1984 (WA) to take measures to ensure workplace safety is not absolute. The Court also considered what constitutes "control" for the purposes of that Act. Read more.
Model Occupational Health and Safety Legislation Due for release
The Council of Australia Governments formally committed to harmonising occupational health and safety (“OHS”) legislation in July 2008. Model OHS legislation is currently being developed by Safe Work Australia and an exposure draft is due to be released during September 2009. An update will be provided once the exposure draft has been released.
The Model OHS legislation will be open for public comment for 6 weeks. Click here for further details and instructions for submissions.
Security of Payments Legislation
The University of Sydney v Cadence Australia P/L & Anor [2009] NSWSC 635
The Supreme Court of NSW has held that a previously adjudicated payment claim, that is subsequently re-submitted as part of an expanded payment claim, may not be legitimately adjudicated on under the provisions of the Building and Construction Industry Security of Payment Act 1999 (NSW). Read more.
RJ Neller Building pty Ltd v Kjerulf David Ainsworth [2008] QCA 397
This case considered an application to stay a judgment which sought to enforce an adjudication determination under the Building and Construction Industry Payments Act 2004 (Qld). The case illustrates the difficulty that a person against whom an adjudication determination has been awarded has in avoiding payment of the adjudicated amount. Read more.
Tailored Projects P/L v Jedfire P/L [2009] QSC 32
The Supreme Court of Queensland has considered the circumstances in which the wording of a contract will supplant provisions of the Building and Construction Industry Payments Act 2004 (Qld). This case also considered whether section 17(4) could be applied to allow for two payment claims in relation to the same reference date to be treated as one and therefore for both claims to be payable. Read more.
Fortis Business Holdings LLC v Commonwealth Bank of Australia [2009] VSC 274
The Victorian Supreme Court considered an application by Fortis to be released from its implied undertaking to only use documents discovered by CBA for the proper conduct between itself and CBA.. Read more.
Cole Sopov & Anor v Kane Constructions Pty Ltd (No 2) [2009] VSCA 141
This case has confirmed that a contractor who is entitled to terminate a contract may choose to sue on a quantum meruit as an alternative to seeking contractual damages. Read more.
1144 Nepean Hwy Pty Ltd v Leigh Mardon Australasia [2009] VSC 226 [No. 1]
In this case the Supreme Court of Victoria acknowledged the legitimacy of expert determinations as a means of resolving disputes and made it clear that the Court will hold parties to their bargain whether they have incorporated a dispute resolution clause in their contract. Read more.
Yarraman Pine Pty Ltd v Forestry Plantations Queensland [2009] QCA 102
This decision considers whether an arbitrator has the power to remake a determination of a particular authority, such as a superintendent, or where the arbitrator must refer it back to the relevant authority. Read more.
Puerto Galera Pty Ltd v JM Kelly (Project Builders) Pty Ltd [2008] QSC 356
The Court considered whether a superintendent must hold a licence under section 42(2)(b) of the Queensland Building Services Authority Act 1991 (Qld). It was held that if the superintendent's role is not to build or carry out building work then there is no need to have a licence. Read more.
Act
Amendment to the Construction Contracts (Security of Payments) Act 2004 No. 66 (NT)
New Proclamation - provisions of the Justice and Other Legislation Amendment Act 2009 No. 12 (NT)
Proclaimed by GG. 25 24/6/2009 p. 2
Amendment to the Building Act 2000 No. 100 (TAS)
New Assent - Building Amendment Act 2009 No. 18 (TAS)
Assented to on 16 June 2009
Amendment to the Building Act 2000 No. 100 (TAS)
New Assent - Water and Sewerage Legislation (Miscellaneous Amendments) Act 2009 No. 24 (TAS)
Assented to on 24 June 2009
Amendment to the Local Government (Building and Miscellaneous Provisions) Act 1993 No. 96 (TAS)
New Assent - Water and Sewerage Legislation (Miscellaneous Amendments) Act 2009 No. 24 (TAS)
Assented to on 24 June 2009
Bill
Major Transport Projects Facilitation Bill 2009 (VIC)
Introduced into the Legislative Assembly on 12 August 2009.
Regulations
Amendment to the Building and Construction Industry Improvement Regulations 2005 No. 204 (COM)
New Statutory Rule - Building and Construction Industry Improvement Amendment Regulations 2009 (No. 1) 2009 No. 163 (COM)
Commenced 1 July 2009
Amendment to the Building Regulations 2004 No. 43 (TAS)
New Statutory Rule - Building Amendment Regulations 2009 No. 56 (TAS)
Notified in gazette 1 July 2009
Amendment to the Construction Industry Long Service Leave and Benefits Regulations 2005 No. 15 (NT)
New Statutory Rule - Construction Industry Long Service Leave and Benefits Amendment Regulations 2009 No. 15 (NT)
Effective from 1 July 2009
New Statutory Rule - Building and Other Legislation Amendment Regulation (No. 2) 2009 No. 92 (Qld)
Amends the legislation listed below to increase the fees found therein.
Commences 1 July 2009
Amendment to the Building Regulation 2006 No. 227 (QLD)
New Statutory Rule - Building Amendment Regulation (No. 2) 2009 No. 136 (QLD)
Notified in gazette 26 June 2009
Amendment to the Building Regulations 2006 No. 68 (VIC)
New Statutory Rule - Building Amendment (Fees) Regulations 2009 No. 79 (VIC)
Commenced 1 July 2009
Amendment to the Building Regulations 2006 No. 68 (VIC)
New Statutory Rule - Building Amendment Regulations 2009 No. 91 (VIC)
Effective 1 September 2009
Amendment to the Building Regulations 2006 No. 68 (VIC)
New Statutory Rule - Building Amendment (Bushfire Construction) Further Interim Regulations 2009 No. 105 (VIC)
Regulations (except regulations 8, 9 and 10) come into operation on 1 September 2009.
Regulation 9 comes into operation on 9 March 2010.
Regulations 8 and 10 come into operation on 30 August 2010.
Amendment to the Architects Regulations 2005 (WA)
New Statutory Rule - Architects Amendment Regulations 2009 (WA)
Effective from 1 July 2009
Amendment to the Building Regulations 1989 (WA)
New Statutory Rule - Building Amendment Regulations 2009 (WA)
Effective 1 October 2009
Amendment to the Building Regulations 1989 (WA)
New Statutory Rule - Building Amendment Regulations (No. 3) 2009 (WA)
Effective 5 August 2009
Amendment to the Building Regulations 1989 (WA)
New Statutory Rule - Building Amendment Regulations (No. 4) 2009 (WA)
Regulation 1 and 2 commence 1 September 2009
Remainder commences 2 September 2009