EXPLANATORY STATEMENT
Select Legislative Instrument 2007 No. 303
Issued by the authority of the Minister for Employment and Workplace Relations
Building and Construction Industry Improvement Act 2005
Building and Construction Industry Improvement (Accreditation Scheme) Amendment Regulations 2007 (No. 2)
The Building and Construction Industry Improvement Act 2005 (the Principal Act) provides for improved workplace relations practices in the building and construction industry. The Principal Act and the Building and Construction Industry Improvement (Accreditation Scheme) Regulations 2005 (the Accreditation Scheme Regulations) established the Australian Government Building and Construction Occupational Health and Safety Accreditation Scheme (the Scheme), administered by the Federal Safety Commissioner, for persons who wish to enter into building contracts with the Commonwealth or Commonwealth authorities.
Section 78 of the Act provides, in part, that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
The Building and Construction Industry Improvement Amendments (OHS) Act 2007 (the Amendment Act), which was recently given Royal Assent, made a number of amendments to the Principal Act. The amendments include, among other things: extending the application of the Scheme to cover situations where building work is indirectly funded by the Commonwealth, ensuring that persons are accredited under the Scheme at the time of entering into a contract and while the building work is being carried out, and extending the accreditation requirement to Commonwealth funding arrangements beyond those currently contemplated by the legislation.
These Regulations make a number of amendments to the Accreditation Scheme Regulations arising from the amendments to the Principal Act. These Regulations prescribe several categories of building work to which the requirement that an accredited person is engaged to undertake the work does not apply, including:
- where building work that is directly funded by the Australian Government has a value of less than $3 million;
- where building work is indirectly funded, and the Australian Government contribution to the project is less than $5 million and that contribution represents no more than 50 per cent of the total construction project value, or the Australian Government contribution to the project is less than $10 million irrespective of the total project value; and
- where the building work is undertaken by a subcontractor.
Extensive consultation was undertaken in regards to the developing of the Amendment Act. The Office of the Federal Safety Commissioner undertook extensive consultation with industry associations, employers and government agencies in relation to the Accreditation Scheme Regulations.
Details of these Regulations are set out in the Attachment.
These Regulations commence on 1 October 2007.
The Regulations are legislative instruments for the purposes of the Legislative Instruments Act 2003.
ATTACHMENT
Details of the Building and Construction Industry Improvement (Accreditation Scheme) Amendment Regulations 2007 (No. 2).
Regulation 1 – Name of Regulations
Regulation 1 provides that the title of the Regulations is the Building and Construction Industry Improvement (Accreditation Scheme) Amendment Regulations 2007 (No. 2).
Regulation 2 – Commencement
Regulation 2 provides for the Regulations to commence on 1 October 2007.
Regulation 3 – Amendment of Building and Construction Industry Improvement (Accreditation Scheme) Regulations 2005
Regulation 3 provides that the Building and Construction Industry Improvement (Accreditation Scheme) Regulations 2005 (the Accreditation Scheme Regulations) are to be amended as set out in Schedule 1.
Regulation 4 – Transitional
Proposed regulation 4 provides that regulation 24 of the Accreditation Scheme Regulations as in force before the commencement of the proposed Regulations continues to apply to building work under a contract entered into before
1 March 2006.
Schedule 1 – Amendments
Item [1] – Part 3
This item substitutes current Part 3, which consists of only regulation 24, with a new Part 3.
Regulation 24
The new regulation 24 prescribes several categories of building work to which the requirement that an accredited builder is engaged to undertake the building work does not apply for the purpose of subsection 35(4) of the Principal Act. These are:
- building work that is carried out outside Australia;
- building work under a contract entered into on or after 1 March 2006 but before 1 October 2007 and has a value of less than $6 million;
- building work directly funded by the Commonwealth or a Commonwealth authority under a contract with a value of less $3 million;
- building work indirectly funded by the Commonwealth or a Commonwealth authority unless it is
- under a contract with a value of more $3 million; and
- the Commonwealth’s contribution to the funding is at least $5 million, and represents at least 50% of the total funding, and is made on or after 1 October 2007;
- building work indirectly funded by the Commonwealth or a Commonwealth authority unless it is
- under a contract with a value of more $3 million; and
- the Commonwealth’s contribution to the funding is at least $10 million, and is made on or after 1 October 2007;
- building work carried out by a subcontractor. A subcontractor is defined as a builder who carries out some or all of the building work under a contract with another builder who carries out some or all of the building work.
Overview
The Building and Construction Industry Improvement Act 2005 was enacted to address the need for improved workplace relations practices within the building and construction industry. This Act established the Australian Government Building and Construction Occupational Health and Safety Accreditation Scheme, aimed at ensuring that individuals and entities entering into building contracts with the Commonwealth or Commonwealth authorities meet specific accreditation standards. The scheme was intended to enhance occupational health and safety standards across the industry. The Building and Construction Industry Improvement (Accreditation Scheme) Amendment Regulations 2007 (No. 2) were introduced to further refine and expand the scope of the Accreditation Scheme. These amendments were designed to align with the Building and Construction Industry Improvement Amendments (OHS) Act 2007, which expanded the application of the scheme to cover building work indirectly funded by the Commonwealth and ensured that accreditation requirements applied throughout the duration of building contracts. The regulations also introduced exclusions for certain categories of building work, such as those with a value below specified thresholds or those undertaken by subcontractors. These amendments were made following extensive consultation with industry stakeholders and are intended to streamline the accreditation process while maintaining high standards of occupational health and safety.
Scope and Application
The Building and Construction Industry Improvement Act 2005 (Principal Act) aims to improve workplace relations practices within the building and construction industry. This Act, along with the Building and Construction Industry Improvement (Accreditation Scheme) Regulations 2005, established the Australian Government Building and Construction Occupational Health and Safety Accreditation Scheme (the Scheme). This Scheme, administered by the Federal Safety Commissioner, is mandatory for individuals or entities seeking to enter into building contracts with the Commonwealth or Commonwealth authorities. The Building and Construction Industry Improvement Amendments (OHS) Act 2007 introduced several amendments to the Principal Act, expanding the Scheme's application to cover building work indirectly funded by the Commonwealth and ensuring that individuals must be accredited under the Scheme both at the time of contract entry and throughout the building work's duration. The Building and Construction Industry Improvement (Accreditation Scheme) Amendment Regulations 2007 (No. 2) further refine the application of the Scheme by prescribing specific categories of building work exempt from the requirement of engaging an accredited person. These exemptions include building work directly funded by the Australian Government with a value of less than $3 million, indirectly funded building work where the Australian Government contribution is less than $5 million and represents no more than 50% of the total project value, or less than $10 million regardless of the total project value, and work undertaken by a subcontractor. The Regulations, which came into effect on 1 October 2007, are legislative instruments under the Legislative Instruments Act 2003.
Key Provisions
The Building and Construction Industry Improvement (Accreditation Scheme) Amendment Regulations 2007 (No. 2) amend the Building and Construction Industry Improvement (Accreditation Scheme) Regulations 2005 to update the categories of building work that are exempt from the accreditation requirement under the Building and Construction Industry Improvement Act 2005 (sections 35(4) and 35(5)). These amendments reflect changes introduced by the Building and Construction Industry Improvement Amendments (OHS) Act 2007. Regulation 24 now specifies that an accredited builder is not required for building work carried out outside Australia, work under a contract entered into between 1 March 2006 and 1 October 2007 with a value less than $6 million, work directly funded by the Commonwealth with a contract value less than $3 million, and work indirectly funded by the Commonwealth under certain conditions. Additionally, building work carried out by a subcontractor is also exempt.
The amended regulations impose several obligations on parties involved in building projects. Firstly, they require that any building work undertaken for the Commonwealth, directly or indirectly funded, must meet the accreditation requirements unless it falls under one of the specified exemptions. Secondly, subcontractors must ensure that the principal contractor is accredited if the building work is not exempt. The regulations also mandate that parties must have an accredited builder engaged at the time of entering into a contract and throughout the duration of the building work. Furthermore, the regulations require ongoing compliance with the accreditation scheme and mandate that all building work must comply with occupational health and safety standards.
Breaches of the accreditation requirements can result in significant legal consequences. Under the Principal Act, failure to engage an accredited builder where required can lead to penalties for the contractor and the principal party. The maximum penalty for an individual is $12,000, while the maximum penalty for a corporation is $60,000. Additionally, contractors who knowingly engage in non-compliant building work can face civil liability for any resulting harm or damages. In more severe cases, repeated or egregious breaches may lead to criminal charges, resulting in higher penalties and potential imprisonment. It is crucial for all parties to adhere to the accreditation requirements to avoid these serious legal repercussions.