Building and Construction General On-site Award 2020 - A Simple Guide for Your Business

Apr 15

Who Does the Award Cover?

The Building and Construction Award applies to a broad range of businesses across Australia. If your work involves on-site construction, it's highly likely to be the main award for your employees. The award covers three main categories of work:

General building and construction: This includes projects like building houses and offices, carrying out renovations, site clearing, earth-moving, excavation, site restoration, and landscaping associated with a building project.
Civil construction: This covers the construction and maintenance of public infrastructure, such as roads, bridges, dams, tunnels, waterworks, and power plants.
Metal and engineering construction: This applies to on-site metal trades work for large-scale projects, including the construction of power stations, oil refineries, and other major industrial plants.

The award also applies to businesses that supply on-hire labour (labour-hire firms) to these sectors.

It's important to know that some specialised industries, such as plumbing, electrical contracting, and mining, have their own separate awards.

Ordinary Hours of Work and RDO’s

The standard work week under the award is an average of 38 hours. These hours are typically worked Monday to Friday, between 7:00 am and 6:00 pm.

A key feature of the award is the Rostered Day Off (RDO) system. Think of the RDO system as a compulsory savings plan for a paid day off. Each day, your employee works for 8 hours, but you pay them for 7.6 hours. The remaining 24 minutes (0.4 hours) goes into a "time bank." After 19 days of work, this "bank" has accrued enough time to pay for a full day off, which they take on their rostered day.

Breaks

Employees are entitled to specific breaks throughout the workday to rest and eat.

Meal Break: An unpaid lunch break of at least 30 minutes. An employee should not work for more than five hours continuously without a meal break.
Rest Break: A paid 10-minute break, typically taken during the morning.
Overtime Breaks: If an employee works 2 hours or more of overtime after their normal finish time, they are entitled to an additional paid break.

Shiftwork

If your business operates outside of standard daytime hours and you require employees to work shifts (such as an afternoon or night shift), you must pay them a higher rate. This extra payment is known as a shift loading.

Understanding Pay and Roles

Pay under the Construction Award is more than just a flat hourly rate. It's a combination of a base rate determined by the employee's role, plus penalties and allowances that apply in specific situations.

Employee Roles & Classifications

The award organises employees into different classification levels based on their skills, qualifications, experience, and the complexity of their duties. The award uses the abbreviation CW/ECW, which stands for Construction Worker (for general and civil construction) and Engineering Construction Worker (for metal and engineering construction). Levels range from CW/ECW 1 for entry-level roles up to CW/ECW 8 and beyond for highly specialised roles.

Simply put, the higher the classification level, the higher the minimum rate of pay. It's crucial that you classify each employee correctly based on the work they actually perform.

Here are some examples of roles at different levels:

Entry-level roles: General builders' labourers, demolition workers.
More experienced roles: Scaffolders, steel fixers, traffic controllers.
Tradesperson roles: Carpenters, bricklayers, plasterers, painters.
Specialist & Operator Roles (Higher Levels): This includes operators of heavy machinery like large graders and excavators, as well as 'Special Class' tradespeople who have completed additional training and work on complex systems.

Minimum Pay, Penalties, and Allowances

An employee's total pay is not just one number; it's a package of entitlements, all of which are built upon their correct classification.

Minimum Pay: This is the base hourly rate linked directly to an employee's classification level.
Penalty Rates: These are higher rates of pay, calculated on the base rate, that apply when an employee works outside of ordinary hours. Common situations where penalty rates apply include:
- Overtime (working more than 38 hours per week)
- Weekends (Saturdays and Sundays)
- Public holidays
Allowances: These are extra payments made to compensate employees for specific work conditions, for providing their own tools, or for incurring certain costs. Common examples include:
- Industry Allowance: An all-purpose payment included in the weekly rate to compensate for the general working conditions found on construction sites.
- Tool Allowance: A payment for tradespeople who are required to provide and maintain their own standard set of tools.
- Travel Allowance: A daily payment to cover the costs and travel patterns that are typical in the construction industry.
- Special Allowances: The award contains many other allowances for specific situations, such as a multi-storey allowance for working at heights on tall buildings or an allowance for being a designated first aid officer.

Common Pitfalls for Employers

Incorrect Classification: Classifying a skilled employee at too low a level is a frequent and costly error. Incorrectly classifying or not regularly reviewing and updating existing classifications can result in substantial back-pay claims, Fair Work Ombudsman penalties, and reputational damage.
Forgetting Minimum Engagement for Casuals: Casual employees must be paid for a minimum of four hours for each shift they are called in for, plus their applicable travel and fares allowances, even if they are sent home early. Overlooking the allowances component of this rule can lead to significant underpayments.
Missing Allowances: It’s easy to overlook specific allowances that depend on the site or task, such as the multi-storey allowance on a high-rise project or the first aid allowance for a qualified appointee. Missing these can result in systemic underpayment across multiple employees, leading to complex and expensive back-pay claims.
RDO Miscalculations: The process of accruing, banking, and paying out RDOs can be tricky. An error here creates a significant financial risk, as all accrued and untaken RDOs must be paid out correctly upon termination, potentially resulting in a large, unexpected payout.

Practical Tips for Staying Compliant

A proactive approach to award compliance can save significant time and money. Here are a few practical tips:

Start Right: When a new employee joins your team, provide them with a written document that clearly states their employment type (e.g., full-time, casual, or daily hire) and their classification level. This prevents classification disputes from the outset.
Review Classifications Annually: To avoid classification errors, conduct an annual audit of employee duties against the classification definitions in Schedule A of the Award, especially after they complete new training or take on more responsibility.
Keep Detailed Records: Accurate record-keeping is your best defence against claims. Meticulously record all hours worked, leave taken, and all specific allowances paid. Detailed records are essential for proving you have met your obligations regarding allowances and hours.
Provide Access to Information: You are required to ensure your employees have access to a copy of their Award and the National Employment Standards (NES). This can be done via a workplace notice board or through accessible electronic means.

While the Building and Construction General On-site Award is detailed, compliance begins with a solid understanding of its core components. By focusing on the key areas of employee classification, hours of work, and the correct application of allowances and penalties, you can build a strong foundation for your business.

Remember, every situation is unique. If you are ever in doubt about your obligations, FiveSeven are here to help.

The information above forms part of our Understanding Your Award series and provides a high-level overview only. Further obligations may apply depending on your business and workforce. This Information is current at the time of publication. Workplace laws and awards may change.