compliance with industrial relations and employment ... · compliance audits during the course of...

Compliance with Industrial Relations and

Employment Obligations Strategy

for

ACT Government Capital Works Projects

-

Part 1

Introduction

Why best practice industrial relations and employment practices?

1. The construction industry is a major contributor to the Territory’s economy. It encompasses a diverse range of activities and provides significant employment opportunities to people living in the Territory and the surrounding region. The ACT Government is a significant client of the ACT construction industry engaging firms to undertake a broad range of civil and commercial construction activity to meet the needs of the community.

2. The ACT Government is concerned that employees/workers undertaking those activities under the contracts it lets for construction of works are dealt with fairly, appropriately and ethically under the law in terms of their entitlements to appropriate levels of pay and conditions during the conduct of works on behalf of the Territory.

The Strategy

3. The ACT Government has established, in 2011, an industrial relations and employment strategy (Strategy) aimed at:

(1) improving workplace and management culture in the ACT construction sector;

(2) promoting better employer and employee relationships; and

(3) improving industrial relations planning and management at both the enterprise level and on specific projects.

4. Details of the Strategy are set out in this document.

5. The primary purpose of this Strategy is to ensure that industrial relations and employment compliance best practice is part of the culture of the construction industry, particularly with respect to ACT Government contracts.

Part 2

Key Definitions

1. For the purpose of the Strategy the following defined terms apply (with a number of other terms defined in the Strategy and bolded in the first instance):

ACT Government or Territory means:

1 IRE Strategy v3 May 2018| ACT Government

-

(1) the Australian Capital Territory being the body politic established by section 7 of the Australian Capital Territory (Self-Government) Act 1988 (Cth); and

(2) any Territory entity under the Auditor-General Act 1996 (ACT) excluding: the University of Canberra; a Territory-owned corporation or another entity established under the Corporations Act 2001 (Cth).

Adverse Project Compliance Audit means:

An IRE Project Audit Report in which the Approved Auditor has recommended referral to one or more Regulatory Authorities.

Adverse Ruling means:

a ruling by any court, tribunal, board, commission or other entity (including but not limited to Fair Work Australia) with jurisdiction to determine industrial relations and/or employment matters to the effect that an entity or individual has breached its IRE Obligations.

Approved Auditor means:

an auditor or audit firm identified by the ACT Government as part of a list of suppliers to:

(1) assess a Building Entity’s application for an IRE Certificate; and

(2) undertake audits of Building Entities in order to assess their compliance with IRE Obligations.

Building Entity means:

any of the following seeking engagement or engaged to perform Building Work on an ACT Government project (whether engaged or sought to be engaged by the ACT Government or another entity): a project manager, head-contractor, subcontractor, trade contractor or other entity performing Building Work.

Building Work has the same meaning as “building work” in section 5 of the Building and Construction Industry Improvement Act 2005 (Cth) – see Attachment 1.

Industrial Instruments means:

an award or agreement, however designated, that:

(1) is made under or recognised by an industrial law; or

(2) concerns the relationship of an employer and the employer’s employees.

IRE Application Report means:


-

a report issued by an Approved Auditor in response to an application from a Building Entity for an IRE Certificate.

IRE Audit Report means:

a report issued by an Approved Auditor in response to a request from the ACT Government to undertake an audit of a Building Entity’s compliance with its IRE Obligations while engaged on an ACT Government capital works project.

IRE Certificate or Industrial Relations and Employment Certificate means:

a certificate issued by the ACT Government to a Building Entity following consideration of a recommendation by an Approved Auditor in an IRE Application Report.

IRE Obligations means compliance with:

(1) Prescribed Legislation;

(2) the orders, directions or decisions of any court, tribunal, board, commission or other entity (including but not limited to Fair Work Australia) with jurisdiction to consider the interpretation, breach or any other matter concerning any Prescribed Legislation; and

(3) Industrial Instruments.

Pre -Engagement Stage means:

any of the following referable to the engagement of an entity to perform Building Work on an ACT Government project: request for tender stage, request for proposal stage, expression of interest stage, request for quotation stage, or any other request for offer stage.

Prequalification means:

the ACT Government’s prequalification scheme, under which a Building Entity must be prequalified in order to submit tenders for work on ACT Government Building projects.

Prescribed Legislation means each of the following:

(a) Industrial Instruments applicable to the Subcontractor, a supplier or Sub-subcontractor;

(b) Long Service Leave Act 1976 (ACT);

(c) Long Service Leave (Portable Schemes) Act 2009 (ACT);

(d) Workers’ Compensation Act 1951 (ACT);


-

(e) Fair Work Act 2009 (Cth);

(f) Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth);

(g) Superannuation Guarantee (Administration) Act 1992 (Cth);

(h) Fair Work (Building Industry) Act 2012 (Cth);

(i) Workplace Gender Equality Act 2012 (Cth);

(j) Paid Parental Leave Act 2010 (Cth);

(k) Payroll Tax Act 2011 (ACT);

(l) Work Health and Safety Act 2011 (ACT);

(m) any Regulations made under the above Acts;

(n) any laws of the Commonwealth or the Australian Capital Territory which vary or replace the above Acts or Regulations, or any part of them; and

(o) any other Acts or Regulations of the Commonwealth or the Australian Capital Territory, which deal with matters relating to industrial relations, employment and/or workplace safety obligations.

Project Compliance Audit means:

an audit of compliance with the IRE Obligations of one or more Building Entities on an ACT Government work site commissioned by the ACT Government.

Regulatory Authority means:

the relevant Commonwealth or Territory entity or entities legally responsible for ensuring compliance with Prescribed Legislation.

Territory means:

see ACT Government.

2. For the purpose of this Strategy reference to an entity includes an individual.

Part 3

Current practices

1. There are a number of measures which the ACT Government already employs to encourage and ensure best practice with respect to industrial relations and employment, including:

(1) requirements for certain tenderers/contractors to be prequalified;


-

(2) requirement to have and maintain Quality Assurance systems;

(3) insurance requirements;

(4) the completion of Ethical Supplier’s Declarations (in the form of Statutory Declarations); and

(5) broad requirements under Territory contracts for compliance with the applicable law and contractual remedies/ sanctions for non-compliance.

2. These measures will continue to be utilised by the Territory in conjunction with the Strategy.

Part 4

The National Code of Practice for the Construction Industry 1997

1, The Strategy will be implemented as part of the ACT Government’s commitment to the National Code of Practice for the Construction Industry 1997 (Construction Code). The Construction Code was developed in 1997 as a joint State/Territory governments and Commonwealth government initiative.

2. The Construction Code emphasises the maintenance of the highest ethical standards in all construction related activities. The core principles of the Construction Code, supported by practices and initiatives of each jurisdiction, are aimed at ensuring that the industry:

(1) is client focused and respects the rights of clients;

(2) builds relationships on a foundation of trust;

(3) observes the highest ethical principles in tendering;

(4) maintains high standards in occupational health, safety and environmental management; and

(5) encourages responsible industrial relations leading to economically sustainable arrangements.

Awards and Legal obligations relating to employment

3. The Strategy has been developed as an ACT Government initiative to address the national principle set out in the Construction Code that all parties must comply with the provisions of applicable:

(1) awards and workplace arrangements which have been certified, registered or otherwise approved under the relevant industrial relations legislation; and


-

(2) legislative requirements.

Part 5

Application of the Strategy

1. The Construction Code states:

The construction industry includes all organised activities concerned with demolition, building, landscaping, maintenance, civil engineering, process engineering, mining and heavy engineering. … Any party wishing to do business with governments or work on government construction projects will be required to comply with all aspects of the Code applicable to their activities.

2. The Strategy will apply to all entities engaged to perform Building Works as on site activities on ACT Government projects.

Part 6

The Strategy

1. Details of the Strategy are as set out in this Part 6.

2. The Strategy was implemented on 1 July 2011. It was intended that Building Entities would need to hold an IRE Certificate to work on ACT Government projects by 1 January 2012.

3. The implementation of the Strategy included the following:

(1) establishment of a list of Approved Auditors responsible for:

(a) assessing applications by Building Entities for IRE Certificates and issuing IRE Application Reports to those Building Entities; and

(b) conducting random Project Compliance Audits of Building Entities as and when requested by the ACT Government.

(2) when a Building Entity provides the Territory with their IRE Application Report, which contains a recommendation by the Approved Auditor to issue an IRE Certificate, the Territory will consider the issue of an IRE Certificate to the Building Entity;


-

(3) requirements for all Building Entities to hold a current IRE Certificate:

(a) at the Pre-Engagement Stage;

(b) at the time of entering into contract; and

(c) for the term of the relevant contract.

(4) contractual requirements for all Building Entities engaged on ACT Government projects to perform Building Works to be subject to possible Project Compliance Audits during the course of the relevant project (with contractual provisions to cover the audit process and possible breaches of the contract for failure to comply with the audit process and/or be the subject of an Adverse Project Compliance Audit);

(5) establishment of a protocol for the notification to relevant Regulatory Authority of an Adverse Compliance Audit;

(6) inclusion in the relevant Building Entity’s prequalification records of all IRE Application Reports supplied to the ACT Government and IRE Audit Reports;

(7) where a Building Entity has an Adverse Ruling made against it in respect of its IRE Obligations, the Territory may:

(a) take action (or direct a head contractor/project manager to take action) against the Building Entity as provided for in its contract;

(b) take that Adverse Ruling into consideration in assessing the Building Entity’s performance for future tendering opportunities;

(c) revoke the IRE Certificate of the Buildng Entity;

(d) suspend the Building Entity from applying for a new IRE Certificate for a period of up to 12 months; and/ or

(e) place conditions on the Building Entitiy’s retention of the IRE Certificate.

The Territory’s decision-making process will be set out in a publicly available policy document.

Pre-Engagement Stage

4. At the Pre Engagement Stage, a Building Entity seeking engagement will be required to supply a current IRE Certificate as part of the procurement process. This may not be required if the Building Entity is prequalified with the ACT Government and a copy


-

of the current IRE Certificate is held by the ACT Government with its prequalification records.

Contract Stage

5. In addition, any contracts for the engagement of a Building Entity to perform Building Works on an ACT Government project will be subject to the requirement that the Building Entity:

(1) provide a current IRE Certificate for their contracting entity at the time of engagement (unless already supplied at the Pre-Engagement Stage and that IRE Certificate remains current); and

(2) be required to maintain a current IRE Certificate for the term of the contract; and

(3) be subject to possible Project Compliance Audits during the term of the contract.

Contract management phase

6. If a Building Entity receives and Adverse Project Compliance Audit during the term of the contract, the Approved Auditor will advise the Territory, who may then advise the relevant Regulatory Authority or Authorities.

7. If the matter is ultimately notified to the relevant Regulatory Authority it may determine the necessity for further investigation/action, if it believes it is warranted.

Criteria for applications for IRE Certificates and Project Compliance Audits

8. The criteria against which Approved Auditors will assess applicants for IRE Certificates and conduct Project Compliance Audits has been developed by the ACT Government.

9. Building Entities will be required to complete an Application for IRE Certificate form or IRE Project Audit form, whichever is applicable and provide it to the Approved Auditor at the time of its application for an IRE Certificate or audit as applicable. Unless approved by the ACT Government, the Approved Auditor who assesses a Building Entity’s application for an IRE Certificate will not be appointed to conduct an audit of that Building Entity.

10. In establishing criteria set out above consideration has been given to the provisions of the Privacy Act 1988 (Cth) and the application of the associated National Privacy Principles and/ or Information Privacy Principles as applicable, having regard to the entity involved.


-

Term of IRE Certificate

11. IRE Certificates will be valid for 18 months from the date of issue by the Territory, subject to the Building Entity’s ongoing compliance with its IRE Obligations.

Costs of the Approved Auditor

12. The costs of the Approved Auditor associated with the assessment of any application for an IRE Certificate will be met by the entity which is making the application (in the same way as contractors currently prequalified with the Territory are required to provide quality assurance audit / compliance documentation).

13. The cost of the Approved Auditor associated with the conduct of any Project Compliance Audit will be met by the ACT Government. The relevant entity being audited will bear its own costs associated with the audit, including but not limited to:

(1) completing relevant forms;

(2) compiling information required to be provided as part of the audit; and

(3) attending upon the Approved Auditor to provide information and answers to queries.

That entity will not be able to claim those costs back from the Territory/head contractor under its contractual arrangements with the Territory.

Escalation of Audit findings

14. Adverse Project Compliance Audits may be referred to the relevant Regulatory Authorities. A separate protocol has been developed to document these arrangements. Regulatory Authorities may include, but are not limited to:

(1) the Australian Building and Construction Commission (ABCC);

(2) the Australian Taxation Office (ATO);

(3) the Department of Immigration and Citizenship (DIAC);

(4) the ACT Long Service Leave Authority;

(5) the ACT Revenue Office; or

(6) the relevant work safety authority(s), for example Worksafe ACT, Acess Canberra, Chief Minister, Treasury & Economic Development Directorate.


-

Implications of an Adverse Ruling

15. Where a Building Entity is found to have been subject to an Adverse Ruling and holds an IRE Certificate the Territory may choose to:

(1) take action (or direct a head contractor/project manager take action) against the Building Entity as provided for in its contract;

(2) take that Adverse Ruling into consideration in assessing the Building Entity’s performance for future tendering opportunities;

(3) revoke the IRE Certificate of the Building Entity;

(4) suspend the Building Entity from applying for a new IRE Certificate for a period of up to 12 months; and/ or

(5) place conditions on the Building Entity’s retention of the IRE Certificate.

Review Process

16. In the Event the ACT Government chooses not to grant an IRE Certificate the Building Entity may request a review by the Executive Director, Infrastructure Finance & Capital Works.

17. In the event the ACT Government decides to suspend or revoke a Building Entity’s IRE Certificate or place conditions on its retention by the Building Entity the Building Entity may seek a review of that decision by the Executive Director, Infrastructure Finance & Capital Works.

Further Information

18. The following, once developed, will be available on the Infrastructure Finance & Capital Works website www.procurement.act.gov.au or from the Infrastructure Finance & Capital Works office, together with other appropriate guidance and information:

(1) Regulatory Authority protocol;

(2) criteria against which Approved Auditors will assess applicants for IRE Certificates;

(3) criteria for the conduct of Project Compliance Audits (including a pro-forma audit contents/tool); and

(4) the review process should a decision be made to not issue an IRE Certificate to a Building Entity, suspend or cancel a Building Entity’s IRE Certificate or place conditions on the continuance of the IRE Certificate.


www.procurement.act.gov.au

-

Attachment 1 Definition of “Building Work”

The definition of “building work” in section 5 of the Building and Construction Industry Improvement Act 2005 (Cth) is as follows:

5.(1) Subject to subsections (2), (3) and (4), building work means any of the following activities:

(a) the construction, alteration, extension, restoration, repair, demolition or dismantling of buildings, structures or works that form, or are to form, part of land, whether or not the buildings, structures or works are permanent;

(b) the construction, alteration, extension, restoration, repair, demolition or dismantling of railways (not including rolling stock) or docks;

(c) the installation in any building, structure or works of fittings forming, or to form, part of land, including heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply, fire protection, security and communications systems;

(d) any operation that is part of, or is preparatory to, or is for rendering complete, work covered by paragraph (a), (b) or (c), for example:

(i) site clearance, earth-moving, excavation, tunnelling and boring;

(ii) the laying of foundations;

(iii) the erection, maintenance or dismantling of scaffolding;

(iv) the prefabrication of made-to-order components to form part of any building, structure or works, whether carried out on-site or off-site;

(v) site restoration, landscaping and the provision of roadways and other access works;

but does not include any of the following:

(e) the drilling for, or extraction of, oil or natural gas;

(f) the extraction (whether by underground or surface working) of minerals, including tunnelling or boring, or constructing underground works, for that purpose;


http://www.austlii.edu.au/au/legis/cth/consol_act/baciia2005527/s4.html#building_work

http://www.austlii.edu.au/au/legis/cth/consol_act/baciia2005527/s5.html#land



-

(g) any work that is part of a project for:

(i) the construction, repair or restoration of a single dwelling house; or

(ii) the construction, repair or restoration of any building, structure or work associated with a single dwelling house; or

(iii) the alteration or extension of a single dwelling house, if it remains a single dwelling house after the alteration or extension.

(2) Paragraph (1)(g) does not apply if the project is part of a multi-dwelling development that consists of, or includes, the construction of at least 5 single dwelling houses.

(3) Subject to subsection (4), building work includes any activity that is prescribed by the regulations for the purposes of this subsection.

(4) Building work does not include any activity that is prescribed by the regulations for the purposes of this subsection.

(5) In this section:

"land" includes land beneath water.






compliance with industrial relations and employment ... · compliance audits during the course of...

Documents