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The Third Way: Welcome to the Third World

Union Power in Context: Industrial Relations in the Building Industry

Ross Dalgleish

Appendix C

[Extract from National Code of Practice (1997)]

Industrial Relations

It is agreed by Australian Governments that the industrial relations principles embodied in this Code are to apply to their construction projects.

Awards and Legal obligations relating to employment

All parties must comply with the provisions of applicable:

  • awards and workplace arrangements which have been certified registered or otherwise approved under the relevant industrial relations legislation;
  • and legislative requirements.

Workplace Arrangements

Workplace arrangements which reflect the needs of the enterprise ~ important elements in achieving continuous improvement and best practice

The content of the workplace arrangements are a matter for the parties to those arrangements, subject to them meeting legislative requirements. However they may encompass:

  • improved OHS and rehabilitation practices;
  • training and skill formation strategies;
  • multi skilling;
  • and flexible work practices, for example in relation to working time.

A party must not, directly or indirectly, pressure or coerce another party to enter into, or to vary or to terminate a workplace arrangement. Nor may they pressure or coerce them about the parties to and/or the contents. the form of their workplace arrangements. This does not prevent action sanctioned by relevant industrial relations legislation.

Overaward Payments

"Overaward payment" is defined to mean any payment and/or benefit above that is set out in the relevant award, registered agreement and/or legislation. This includes payments provided for in workplace arrangements.

Decisions on over award payments, including superannuation, redundancy and workers' compensation insurance, shall be made by the individual employer to suit the needs of the enterprise. No employer may be compelled to pay benefits above that prescribed in the relevant workers compensation legislation.

A party must not, directly or indirectly, coerce or pressure another party to make over award payments. No employer may be compelled to contribute to any particular redundancy or superannuation fund, or similar body unless that there is an award or legal requirement to do so. This does not prevent action sanctioned by relevant industrial relations legislation.

Project Agreements

Project agreements will only be appropriate for major contracts. Accordingly project agreements incorporating site-wide payments, conditions or benefits may be negotiated where the strategy has first been authorised by the Principal.

The integrity of individual enterprise agreements must be maintained. This means project agreements cannot override the workplace arrangements of individual contractors, subcontractors, consultants and suppliers, nor may they provide conditions which by their nature have effect beyond the duration of the project, such as, for example, redundancy pay and superannuation contributions. While there may be provisions in a relevant workplace arrangement that enables the parties to the arrangement to encompass provisions in a project agreement, there shall be no double counting of "over award" payments.

There shall be no flow on of the provisions of project agreements.

Such agreements should be developed, where possible, in consultation with the subcontractors working on the project. The agreements shall be certified or otherwise approved under the relevant industrial relations legislation.

Freedom of Association

All parties have the right to freedom of association. This means that parties are free to join or not to join industrial associations of their choice and that they are not to be discriminated against or victimised on the grounds of membership or non membership of an industrial association. A person cannot be forced to pay a fee to an organisation if not a member.

Dispute Settlement

All parties are required to make every effort to resolve grievances or disputes with their employees and applicable unions at the enterprise level, in accordance with the procedure outlined in the relevant award or workplace arrangements.

Strike Pay

No payment shall be made to employees for time spent engaged in industrial action, unless payment is legally required or properly authorised by, an industrial tribunal (where this is permitted by relevant industrial legislation

Industrial Impacts

The client of the principal contractor shall be advised during the progress of the work, and at the earliest opportunity, of any industrial relations OHS&R matter which may have an impact on the construction program the principal contract, other related contracts or project costs.

Security of Payment

To ensure that all parties receive payments due to them, the highest ethical standards must be observed throughout the contract chain This specifically includes ensuring the timely progress of the processing, management and finalisation of claims, payment retentions and securities due under the contract for all parties.

The Commonwealth, State and Territory Governments are applying the following set of principles(1) to security of payment in their jurisdictions:

  • Participants have the right to receive full payment as and when due;
  • All cash security and retention monies should be secured for the benefit of the party entitled to receive them;
  • Payment periods lower in the contractual chain should be compatible with those in the head contract;
  • Outstanding payments to participants, to the extent consistent with Commonwealth and State legislation, should receive priority over payments to other unsecured creditors;
  • All construction contracts should provide for non payment to be substantial breach;
  • All construction contracts should make provision for alternative dispute resolution mechanisms.
  • Only those parties who have the financial and technical capacity an business management skills to carry out and complete their obligations should participate in the industry;
  • All construction contracts in the contractual chain should be in writing'



1. As incorporated into the 'National Actions on Security of Payment', agreed to by Construction Ministers on 18 October 1996