Code of Practice for the Building and Construction Industry of ...

Code of Practicefor theBuilding and Construction Industryin Western Australia

© January 2002 Government of Western AustraliaABN 32174 173 572This document is available on request in alternativeformats such as large type, audio tape, computerdisk and Braille.

ForewordBuilding and construction is a major industry in Western Australia interms of number of employers, employees and investment dollars. Animperative for the industry is to be economically viable and attractiveto potential developers wishing to invest in this State. For this reason,the Code of Practice has been revised to make it more relevant to theneeds and expectations of the industry in the 21st Century.This Code of Practice is the outcome of genuine dialogue betweenemployer groups, unions and the Government. The end result is adocument that emphasises best practice in all areas rather than merelybeing a document listing the legislative obligations of industry parties.This Code of Practice has much to recommend it to the industry. Ifobserved by all parties then it will promote greater levels ofresponsibility and maturity within the industry. It is these characteristicswhich will attract investors and development to this State therebyproviding employment opportunities and business growth.I encourage all industry to observe the Code, not just in meeting itsminimum requirements, but rather, by demonstrating behaviour thatexceeds the Code’s expectations.I commend the Code of Practice to the building and constructionindustry in Western Australia.John Kobelke MLAMinister for Consumer and Employment ProtectionJanuary 2002

Contents1.0 Preamble 12.0 Objectives 23.0 Application 34.0 Code monitoring committee 55.0 Best practice and continuous improvement 65.1.0 Occupational safety and health 75.2.0 Training and skill development 86.0 Contract administration requirements 107.0 Tendering practices 117.1.0 Calling of tenders 117.2.0 Collusive tendering 148.0 Industrial relations 158.1.0 Awards and legal obligations relating toemployment 158.2.0 Industrial associations 158.3.0 Industrial disputation 168.4.0 Consent mediation 168.5.0 Procedures for the operation of private mediators 17

1.0 Preamble1.1 This Code of Practice for the Building and Construction Industryin Western Australia, (the Code), is a key strategy of theGovernment of Western Australia to promote best practice andfoster a culture of co-operation within the building andconstruction industry.1.2 The Government is committed to assisting the industrymaximise its performance, as it will benefit all industryparticipants and the well being of the State’s economy.1.3 This Code supplements other industry reform strategies andGovernment policies.1.4 Industry participants are expected to comply with all aspects ofthis Code.1.5 To encourage all industry parties to observe this Code, theGovernment endorses the Code Monitoring Committee.1.6 Implementation guidelines and Government policy documentswill extend the provisions of the Code and provide detailedinterpretation of the intent of the Code for specific situationsand industry sectors.1.7 When developed, implementation guidelines dealing withGovernment expectations of industry participants are to be readin conjunction with this Code.1.8 This revised Code is to take effect from January 2002.CODE OF PRACTICE for the Building and Construction Industry in Western Australia 1

2.0 Objectives2.1 The objectives of this Code are to:a) improve efficiency and productivity in the building andconstruction industry by discouraging unsatisfactorypractices, including those that arise from short-termexpedient decision making;b) encourage industry participants to comply with the spiritand intent of all laws relating to the industry;c) create an industry body to monitor compliance with theCode;d) make best practice and continuous improvement anessential part of the industry, demonstrated by behaviourthat exceeds mere compliance with regulatoryrequirements;e) improve the standard of occupational safety and healthacross the industry;f) foster growth in the level of training and skill developmentin the industry;g) improve the industry’s quality of contract administrationand tendering practices; andh) encourage industry participants to embrace a co-operativeapproach towards industrial relations.2 CODE OF PRACTICE for the Building and Construction Industry in Western Australia

3.0 Application3.1 The building and construction industry includes all activities in,or in connection with, building and construction andengineering construction work in any industry or on any site.3.2 Without limiting the generality of this definition, the buildingand construction industry specifically includes:a) all Government funded building, construction andmaintenance contracts and consultant commissions withinthe building and construction industry; andb) all private sector and/or non-Government building,construction and maintenance contracts and consultantcommissions within the State.3.3 The requirement to comply with the Code shall extend to, butwill not be limited to, the following parties:a) principal contractors, sub-contractors and suppliers;b) employers and employees;c) consultants;d) all levels of Government;e) clients, owners and developers;f) organisations, associations or persons otherwise involvedin, or associated with, the industry and fulfilling arepresentative role; andg) unions, their officials, officers and members.3.4 Everyone covered by the Code shall be expected to observe allof its provisions applicable to their activities.CODE OF PRACTICE for the Building and Construction Industry in Western Australia 3

3.5 Any person seeking to be involved with Government buildingand construction projects, or who is involved with such projects,is required to observe all aspects of the Code and whereapplicable, the Implementation Guidelines and Governmentpolicies.3.6 All levels of Government are to observe this Code and theImplementation Guidelines when:a) putting out tenders for building and construction work;b) assessing bids for such work; andc) managing building and construction projects.4 CODE OF PRACTICE for the Building and Construction Industry in Western Australia

4.0 Code monitoring committee4.1 To encourage industry parties to observe the Code, the CodeMonitoring Committee (CMC) has been established.4.2 The CMC is made up of five members chosen by the Ministerfor Consumer and Employment Protection. Three of the fivemembers are called on at any one time to deal with specificmatters brought to the CMC’s attention. The CMC meetsregularly, at least every six months, or as required.4.3 The CMC receives complaints of alleged breaches of the Code.It does not receive complaints relating to industrial relationsmatters nor matters that are before the courts or being dealtwith by other formal dispute resolution processes.4.4 Any person wishing to report an alleged breach of the Codemust do so in writing to the CMC’s Secretariat.4.5 The CMC has no statutory powers to determine matters, nor isit a dispute settlement body. The CMC does not allow legalpractitioners or legal representatives to participate in arguingthe merits or otherwise of matters brought to its attention.4.6 The CMC reports on issues for the benefit of the Minister ofConsumer and Employment Protection. The Minister will takenote of issues reported by the CMC and determine what courseof action is appropriate.4.7 The CMC Secretariat is Mr Warren Milward. His contact details are:Phone: (618) 9222 7615Email: wmilward@doplar.wa.gov.auFacsimile: (618) 9222 7777Mail Address: The Secretariat, Code Monitoring Committee,Department of Consumer and Employment Protection,2 Havelock Street, WEST PERTH WA 6005CODE OF PRACTICE for the Building and Construction Industry in Western Australia 5

5.0 Best practice and continuousimprovement5.0.1 A positive commitment to best practice is expected of allindustry participants and may be tested and measured usingpre-qualification criteria and other selection processes whereverpossible.5.0.2 Contractors, sub-contractors, industry suppliers and otherservice providers may be expected to demonstrate bestpractice by reference to past performance or by theimplementation of appropriate business operating systems andstandards.5.0.3 These may also include standards of environmentalmanagement and the adoption of practices that go beyondmere compliance with regulatory requirements. Industryparticipants may be monitored during the contract period.5.0.4 This commitment will be evidenced by continuous improvement in:a) occupational safety and health;b) training and skills development;c) business practices and relationships;d) use of technology and innovation in construction;e) environmental management;f) administration and tendering;g) industrial relations;h) value for money;i) pre-qualification of contractors and sub-contractors;6 CODE OF PRACTICE for the Building and Construction Industry in Western Australia

j) security of payment; andk) return to meaningful work and rehabilitation of injuredemployees.5.1.0 Occupational safety and health5.1.1 The building and construction industry values the safety, healthand well being of all people involved with its activities and iscommitted to achieving the highest standard of safety andhealth performance.5.1.2 To demonstrate clear and committed leadership, the industryparticipants should observe the following expectations:a) comply, as a minimum requirement, with all relevantoccupational safety and health legislation. This includescomplying with the consultation requirements and theprovisions for resolution of issues set out in theOccupational Safety and Health Act 1984 (the Act);b) ensure the provision of suitable accredited training forworkers and management. Where on-site safety orconsultative committees are formed or exist, the memberswill be adequately trained in occupational safety andhealth;c) implement safety management systems on all projects thatestablish continuous improvement processes to ensurethat, as far as practicable, the safety and health hazards areidentified, and the risks are assessed and controlled;d) provide the people working in the industry with theopportunity to assist in the development andimplementation of these management systems;CODE OF PRACTICE for the Building and Construction Industry in Western Australia 7

e) set priorities and objectives based on the risk assessmentsthat are measurable and achievable. Regularly reviewperformance against the set objectives with the aim ofcontinuously improving performance;f) ensure people working in the industry have the skills,equipment and training required to perform their taskssafely and without harm to their health; andg) ensure safety induction/training programs incorporateinformation on their management systems and ensureunderstanding of the duties placed on the various partiesby the Act.5.2.0 Training and skill development5.2.1 Industry-wide flexible, accessible and innovative approaches toskill development will enable the building and constructionindustry to react positively to the changing demands of theworkplace, and provide opportunities for the workforce toobtain nationally recognised qualifications.5.2.2 By integrating training and skill development into managementprocesses and project management, enterprises can positivelyreact to changing knowledge and skill requirements.Compliance with policies such as the State Government’sPriority Access Policy on public sector projects is a major step inencouraging a commitment to training.5.2.3 The Priority Access Policy initiative is aimed at usingGovernment procurement and contracting to increase trainingand employment opportunities for Western Australian jobseekers. Industry participants are expected to implement asystematic and rigorous approach to training and skilldevelopment to ensure an appropriate number of trainees andapprentices are engaged in the industry and on site.8 CODE OF PRACTICE for the Building and Construction Industry in Western Australia

5.2.4 Training and skill development associated with constructionprojects will be based on:a) compliance with the Government’s relevant training, skilldevelopment and equal employment opportunity policiesfor the construction industry;b) commitment to training for the next generation of buildingand construction industry workers through accreditedtraining programs;c) commitment to skilling workers through accreditedprograms to support workplace safety and technologicalchange;d) equal employment strategies in non-traditional areas; ande) commitment to training, which leads to nationallyrecognised qualifications.CODE OF PRACTICE for the Building and Construction Industry in Western Australia 9

6.0 Contract administration requirements6.1 All individuals and parties involved in the administration ofcontracts shall have a commitment to:a) co-operating with clients, principal contractors, subcontractors,consultants and suppliers in the administrationof the contract to enable the contractor, consultant or thesupplier to fulfil their contractual obligations;b) dealing with contractual claims in a timely manner;c) ensuring the timely processing and payment of contractualentitlements;d) submitting accurate and fair payment claims;e) complying with any relevant legislation or contract termsconcerning payment;f) protecting agreed commercial-in-confidence information;g) co-operating with contracting parties in the administration ofcontracts to enable them to fulfil their contractual obligations;h) ensuring that time and cost overruns are mitigated by cooperativeefforts to solve problems so that they do notdevelop into claims or disputes;i) ensuring an appropriate level of competence in thosepersons appointed to administer contracts;j) responding promptly to reasonable requests for adviceand information; andk) ensuring that a co-operative approach to dispute resolution isadopted and that litigation is reserved as a last resort.10 CODE OF PRACTICE for the Building and Construction Industry in Western Australia

7.0 Tendering practices7.0.1 The clauses in this section relate to tendering issues. Allindividuals and parties involved with the tendering process arerequired to comply with the conditions in this section.7.1.0 Calling of tenders7.1.1 Tendering at all levels in the industry must be conductedhonestly and fairly;7.1.2 Parties shall not seek tenders without a firm intention toproceed. Before calling tenders, the principal shall arrangeadequate finance to carry out the work. The party callingtenders shall have regard to the costs to the industry and thecommunity at large, and avoid multiple bids, or repeatedrounds of tendering;7.1.3 Tenderers shall not be charged to obtain tender documents.Tender deposits are acceptable but shall be refunded onsubmission of a conforming bid;7.1.4 The following information should be provided in any invitationto tender:a) name (including ACN and ABN) and registered office ofprincipal, architect, quantity surveyor, and other majorconsultants;b) location of site;c) general description of work and some indication of sizeincluding specific requirements;d) type of contract and any special conditions beingcontemplated; ande) proposed date for issue of tender documents andsubmission of tenders.CODE OF PRACTICE for the Building and Construction Industry in Western Australia 11

7.1.5 Where the principal imposes a time frame for the project, thattime frame must be reasonable.7.1.6 Conditions of tendering must be the same and be fair andreasonable for each tenderer on any particular project.7.1.7 Unless otherwise specifically required, “general conditions ofcontract” that are standard in the industry or relevant industrysector will be used. Special conditions will only be used whenspecific site and project requirements make the “generalconditions” unworkable or unfair.7.1.8 “General conditions of contract” and any “special conditions”should observe the principle that the party best able to controla risk should bear that risk.7.1.9 Late tenders shall not be accepted.7.1.10 Tender documents must specify the client’s requirementsclearly and indicate the criteria for evaluation.7.1.11 Where quantities are provided by the principal, they shall bemeasured in accordance with the current edition of theAustralian Standard Method of Measurement of BuildingWorks.7.1.12 The time for closing of tenders should not be earlier than2.00pm and tenders should not close on a Monday or a dayfollowing a public holiday.7.1.13 The confidentiality of all information provided in the tenderingprocess shall be preserved.7.1.14 Except where a quality assured or audited tender process isused, tenders shall be publicly opened and read immediatelyfollowing the time of closing of tenders.7.1.15 As soon as practicable after the opening of tenders, tenderersshall be advised of the prices received or when their tendersare no longer under active consideration.12 CODE OF PRACTICE for the Building and Construction Industry in Western Australia

7.1.16 If the principal considers that there may be an error in anytender that cannot be corrected without unfairly changing thecompetitiveness of the bid, the tenderer shall be given anopportunity to check the tender and either confirm the tenderwithout amendment, or withdraw the tender.7.1.17 If the principal decides not to accept any tender and to recalltenders, the original tenderers shall be advised of the reasonsfor the recalling and as a general principle, invited to submit anew tender where appropriate.7.1.18 During tender evaluation, principals shall not seek to trade-offdifferent tenderers’ prices against others in an attempt toobtain lower prices. Principals should first exhaust negotiationswith the initial preferred tenderer before negotiating with othertenderers.7.1.19 If no tender is acceptable, negotiations for an amended tendermay be conducted, preferably in the first instance with theinitial preferred tenderer.7.1.20 In cases where no contract is awarded, or the project issubsequently re-tendered, consideration should be given toreimbursing a portion of the original tenderers’ tender costs.7.1.21 Reasonable consideration should be given to reimbursementof some portion of tender costs where significant externaladvice or consultants’ costs are required to be expended bytenderers to satisfy tender requirements.7.1.22 Tenderers retain their right to intellectual property unlesspurchased by the principal.7.1.23 In addition to the provisions set out above, the ethics andprocedures defined in the Australian Standard Code ofTendering AS 4120 will also apply.CODE OF PRACTICE for the Building and Construction Industry in Western Australia 13

7.2.0 Collusive tendering7.2.1 This section applies to tenderers. The term “tenderer” relatesto principal contractors, sub-contractors, consultants andsuppliers where appropriate.7.2.2 Tenderers shall not discuss tenders at meetings prior to thesubmission of their tenders, unless the client has been invited toattend and has been given reasonable prior notice in writing.This provision shall not apply to any meeting of tenderers todiscuss contractual conditions of tender.7.2.3 Tenderers shall not participate in collusive tendering. Collusivetendering practices shall include, but not be limited to:a) agreement between tenderers as to who should be thesuccessful tenderer;b) any meeting of tenderers to discuss tenders prior to thesubmission of their tenders which is intended to, or resultsin, disadvantage to the client;c) exchange of information between tenderers about theirtenders, prior to the close of tenders;d) agreement between tenderers for the payment of moneyor the securing of reward or benefit for unsuccessfultenderers by the successful tenderer;e) agreements between tenderers to fix prices of contract.This includes any collaboration between tenderers onprices to be included in contracts or commissions withoutthe consent of the client;f) the submission of a cover tender (that is, a pre-arrangedinflated bid), which is intended to advantage anothertenderer or disadvantage the client; and/org) any unlawful or illegitimate agreement between tenderersprior to submission of tenders to fix the rate of payment ofindustry association fees.14 CODE OF PRACTICE for the Building and Construction Industry in Western Australia

8.0 Industrial relations8.0.1 All participants in the industry individually or collectively,through their industrial associations (unions or employerorganisations), should recognise their responsibility in avoidingindustrial disputation.8.0.2 The parties will recognise each others rights and obligationsunder all relevant legislation in applying a co-operativeapproach to industrial relations.8.1.0 Awards and legal obligations relatingto employment8.1.1 All parties must comply with the provisions of applicable:a) awards and industrial relations arrangements that havebeen certified, registered or otherwise approved under therelevant industrial relations legislation; andb) legislative requirements.8.1.2 Workplace arrangements which seek to improperly avoidawards, registered agreements and/or legislative obligationsare not consistent with this Code.8.1.3 Legislative requirements regarding freedom of association andstrike pay are to be observed.8.2.0 Industrial associations8.2.1 The Code encourages participation in industrial relations byemployees and employers and responsible representation byindustrial associations consistent with freedom of associationlegislation.CODE OF PRACTICE for the Building and Construction Industry in Western Australia 15

8.2.2 A representative of an industrial association is to be providedwith access to a site when acting in accordance with the Codeand relevant industrial legislation. The representative isrequired at all times to act subject to, and in accordance with,all relevant industrial legislation and all laws in accessing andcarrying out their functions on the site.8.2.3 Relevant industrial legislation includes any awards and industrialrelations arrangements that have been certified, registered orotherwise approved under State or Federal industrial legislation.8.2.4 It is recognised that certain contracts may impose additionalconditions on all persons seeking to enter a work site, forexample, access to a defence establishment or a prison forsecurity purposes.8.3.0 Industrial disputation8.3.1 Should industrial disputation occur, the participants involvedmust recognise their responsibility to bring about a resolution atthe workplace through co-operation and communication for thebenefit of the industry.8.3.2 Dispute settlement procedures that have been certified,registered or otherwise approved under the relevant industrialrelations legislation should be followed at all times.8.3.3 If the matter remains unresolved, the dispute should bereferred, in accordance with the relevant dispute settlementprocedures, to the appropriate body for settlement.8.4.0 Consent mediation8.4.1 The Government will establish the positions of PrivateMediators in support of the principles of co-operation betweenthe parties in the building industry.16 CODE OF PRACTICE for the Building and Construction Industry in Western Australia

8.4.2 Where the parties agree, they may access the Private Mediatorto assist in resolving issues in dispute.8.4.3 The mediation procedures shall form part of this Code.8.5.0 Procedures for the operation of private mediators8.5.1 If the parties agree, the Private Mediator shall be notified of thedispute. Before notifying the Private Mediator, the parties musthave made a genuine attempt to resolve the dispute byapplying the relevant dispute settlement procedures.8.5.2 Where there is agreement by the disputing parties to use thePrivate Mediator, either party can lodge a request for a hearing.8.5.3 By agreeing to use the Private Mediator, the parties also agreeto abide by the decision made by that person.8.5.4 Once the Private Mediator has been appointed to hear thedispute and where there has been a stoppage of work, allparties will resume work as quickly as possible.8.5.5 Upon notification of a dispute, the Private Mediator shall advisethe parties of the time, date and place of the hearing afterdiscussions with them. The parties shall be bound by thisnotification.8.5.6 The hearings will be conducted informally. Parties cannot berepresented by legal practitioners before the Private Mediator.8.5.7 The Private Mediator will act as a facilitator to bring about aresolution of the dispute between the parties.8.5.8 Where required, a decision confidential to the parties will bemade at the conclusion of the hearing. Confirmation of thedecision will be forwarded to the parties within two workingdays of the hearing.CODE OF PRACTICE for the Building and Construction Industry in Western Australia 17

8.5.9 Decisions issued by the Private Mediator are to be limited tothe dispute before that person and no party will have anyappeal rights. The decision shall hold no precedent value toany other party.8.5.10 The Private Mediator cannot hear a matter that has beendetermined or is currently before the industrial relationstribunals or the courts.8.5.11 The Private Mediator cannot issue a decision whichcontravenes the legal requirements of:a) awards and industrial relations arrangements that havebeen certified, registered or otherwise approved underthe relevant industrial relations legislation; andb) any Commonwealth or State Act of Parliament or anysubsidiary legislation.18 CODE OF PRACTICE for the Building and Construction Industry in Western Australia