Print - Building Equality Policy: Staged approach to non-compliance

Published by:: Industrial Relations Victoria
Date:: 26 June 2024

Overview

This Guidance has been prepared to provide advice to Contract Managers and Contractors experiencing or anticipating difficulties meeting the Building Equality Policy. See 'Staged approach to non-compliance' in the Building Equality Policy.

For contracts executed on or after 1 July 2024, non-compliance with the Building Equality Policy will be managed using the staged approach to non-compliance (Staged Approach). This involves setting Alternative Appropriate Obligations to achieve suitable levels of compliance with the Building Equality Policy.

This Guidance provides information to assist Contractors and Contract Managers to negotiate Alternative Appropriate Obligations.

The Staged Approach has five steps:

Social Procurement Commitment Response Form serves as the starting point for the development of the Alternative Appropriate Obligations
Contractor notification procedures including evidence, supporting documentation detailed reasons for non-compliance – known as the Non-Compliance Notification
Contract Manager processes to evaluate the Non-Compliance Notification
Contractor and Contract Manager processes for negotiating Alternative Appropriate Obligations
Contractor and Contract Manager monitoring and reporting requirements

The Staged Approach is intended to support Contractors by:

providing a framework for the consistent application of the Alternative Appropriate Obligations across departments, agencies and projects
providing detailed examples, to provide a benchmark for Contractors to negotiate Alternative Appropriate Obligations. Contractors are encouraged to identify innovative solutions to address the structural and cultural barriers to women’s workforce participation
identify and mutually agree Alternative Appropriate Obligations to avoid a breach of contract for failure to comply with the Building Equality Policy mandatory obligations

Application

Contractors are required to make every effort to comply with the Building Equality Policy before seeking Alternative Appropriate Obligations under the Staged Approach.

To the extent of any inconsistencies, the Building Equality Policy takes precedence over this Guidance.

Policy intent of ‘alternative appropriate obligations’

Under the Staged Approach, Contract Managers are required to work with Contractors experiencing or anticipating difficulties meeting the Building Equality Policy and mutually agree Alternative Appropriate Obligations to achieve suitable levels of compliance.

For the purpose of this guide, Alternative Appropriate Obligations includes actions and targets as referenced under the ‘Staged approach to non-compliance’ at number iii in the Building Equality Policy.

Important note:

Where Contractors identify they may not be able to comply with the targets at Actions 1 and 2, they are then eligible to seek approval to use the Staged Approach and identify Alternative Appropriate Obligations.

Contractors and Contract Managers cannot propose aggregate targets or targets below the minimums at Actions 1 and 2, as this is inconsistent with the intent of the Building Equality Policy.

To maximise the impact of the Building Equality Policy in creating education and training opportunities for women, where Contractors propose Alternative Appropriate Obligations, they must be proportionate to the non-compliance. For further information about proportionate responses refer to the examples below.

What projects are eligible for the Staged Approach?

This Guidance applies to:

Contractors experiencing difficulties meeting the Building Equality Policy mandatory obligations
contracts that are executed on or after 1 July 2024

This Guidance does not apply to:

Contractors who have voluntarily agreed to incorporate the Building Equality Policy mandatory obligations into contracts. For example, projects valued at less than $20 million
Contractors seeking to use the Alternative Appropriate Obligations to avoid creating a Gender Equality Action Plan (GEAPs) or undertaking a GEAP Audit

Five steps to compliance

Contractors should talk to their Contract Manager about Alternative Appropriate Obligations that are suitable for their circumstances.

At the Request for Tender stage Contractors must complete a Social Procurement Commitment Response Form which explains how they will comply with, report on, and verify compliance with the Building Equality Policy. Under the Social Procurement Framework, Request for Tender is referenced as – ‘expression of interest’ or ‘invitation to supply’.
When the preferred Contractor has been selected, the Social Procurement Commitment Response Form must form part of the contract between Contract Manager and the Contractor. This will set the starting position for the development of the Alternative Appropriate Obligations.
When the Contractor is having difficulties meeting the Building Equality Policy they must notify the Contract Manager in writing, as soon as practical by using the Non-Compliance Notification form.
The Non-Compliance Notification must include:
- details of the Building Equality Policy that cannot be met and the reasons for non-compliance
- a report including evidence to demonstrate what steps the Contractor has taken to meet the Building Equality Policy
- any other supporting documentation the Contractor considers relevant
- proposed Alternative Appropriate Obligations. The aim of Alternative Appropriate Obligations must address specific areas where contractor performance has not met BEP requirements. The actions proposed must be to the shortfall identified.
The Contract Manager is then responsible for determining whether the Contractors evidence and reasons for non-compliance are sufficient. An example of non-compliance could be that there is an undersupply of women in specific trade, non-trade, management and specialist positions (As set out in the 'Staged approach to non-compliance', Building Equality Policy).
Once the Contractor provides the Non-Compliance Notification, the Contract Manager may:
- request further information about the potential non-compliance and actions taken to meet the Building Equality Policy
- discuss possible Alternative Appropriate Obligations
The Contractor must:
- engage in good faith discussions with the Contract Manager
- produce information requested by the Contract Manager
- propose Alternative Appropriate Obligations that exceed the requirements at Action 3 - Gender Equality Action Plans
Good faith discussion requirements aim to ensure that Contractors and Contract Managers act in an appropriate and productive manner. The requirements seek to facilitate improved communication between the parties to increase the likelihood of reaching alternative appropriate obligations as required under the Building Equality Policy.
As part of the non-compliance evaluation, the Contract Manager will determine if, on the evidence provided, the Contractor has demonstrated that:
- substantial efforts have been made to meet the Building Equality Policy
- it is not possible to meet the Building Equality Policy
- the Alternative Appropriate Obligations proposed by the contractor must represent a reasonable and proportional approach to addressing the shortfall in performance relating to BEP requirements.
Reasons for non-compliance and appropriate evidence
Relevant reasons for not non-compliance include:
- women only comprise a small proportion of the workforce for a position
- location or geographical spread of the project
- change in scope or project conditions
Under-supply of women can be evidenced via peak bodies such as the Victorian Registration Qualification Authority, and National Centre for Vocation Education Research or Australian Bureau of Statistics.
Appropriate evidence may include:
- detailed description of the attempts made to meet the Building Equality Policy, including recruitment strategy and/or subcontractor agreements
- industry data showing a shortage of trade, non-trade, management/supervisory and specialist labour and apprentices, trainees and cadets for specific positions. External data sources are considered secondary evidence, as Contractors must have made efforts to meet the Building Equality Policy.
Timeline of the negotiation and agreement
Within 30 days of receiving the Non-Compliance Notification, the Contract Manager should:
1. confirm the project is approved to use an Alternative Appropriate Obligations (as outlined in Step 3). If the project is not approved the reasons why and next steps (refer to Responses to non-Compliance below)
2. confirmation of whether the proposed Alternative Appropriate Obligations are sufficient to address the shortfall in BEP requirements. If the proposal is not deemed sufficient, feedback should be provided as to why (some examples of Alternative Appropriate Obligations are listed below).
Within 30 days of receiving the Non-Compliance Response, the Contractor must accept or refuse the proposed Alternative Appropriate Obligations.
If the Contractor accepts the Alternative Appropriate Obligations, the Contract Manager must issue the Contractor with written confirmation of the agreed outcomes, including the relevant evidentiary and reporting requirements.
Update Building Equality Policy Commitments
The Contractor’s Social Procurement Commitment Response Form must be updated to include the agreed Alternative Appropriate Obligations. This will ensure Contractors and Contract Managers apply a consistent approach across departments and agencies to the Alternative Appropriate Obligations.
Responses to non-compliance
Where agreement on Alternative Appropriate Obligations cannot be reached, the Contract Manager may determine this represents a breach of contract.
The Contract Manager will take a graduated approach by considering the nature and severity of the non-compliance and the capability and capacity of the contractor to comply. Responses may include:
- Placement on a register for increased compliance oversight and monitoring across the portfolio of projects the Contractor is currently undertaking for the department and/or agency (as set out in ‘Responses to non-compliance', Building Equality Policy.)
- A formal warning from the responsible departmental Secretary and/or Minister.
- Further, more consequential, responses may be considered by departments and agencies in the future, after compliance and monitoring processes have been operationalised.
Model construction contract clauses
Model construction contract clauses are embedded in approved standard form construction contracts. Model contract clauses have been developed to support the implementation of the Staged Approach. To access model clauses see, Construction standard form contracts.
The agreed Alternative Appropriate Obligations must be monitored and reported by the Contractor in the format and at the frequency required in the relevant contract/s.
When Alternative Appropriate Obligations are agreed:
- reporting must continue to be captured and reported at a position level
- actual hours must be reported, and the Alternative Appropriate Obligations must be measured against the targets committed to at contract execution or where there has been a variation against the total value of the packages of work
- if using the Victorian Management Centre (VMC) the targets will show the estimated labour hour commitments as the percentage agreed at contract execution. Agreeing Alternative Appropriate Obligations will not change reporting unless there has been a variation to the original contract

Alternative Appropriate Obligations - Examples

Guiding principles

Alternative Appropriate Obligations must focus on increasing the number of women in the sector. They must be specific and measurable and be in addition to legal obligations under workplace, occupational health and safety, equal opportunity and discrimination laws.

The examples are not exhaustive, they serve as a benchmark for Contractors and Contract Managers to negotiate Alternative Appropriate Obligations, which must exceed Action 3 – Gender Equality Action Plans.

Proportionate examples that must be modified to address non-compliance

The examples below are not prescriptive. Contractors will need to tailor Alternative Appropriate Obligations so that they are proportionate to the individual procurement activity.

Contractors are required to apply the Building Equality Policy through their subcontracting supply chains. This provides an opportunity for Contractors to work collaboratively with subcontractors to mutually agree Alternative Appropriate Obligations to help meet the Building Equality Policy.

The examples are based on feedback from the people working in the construction sector including employers, unions, industry associations and employees. Contractors are uniquely placed to lead this work.

Alternative Appropriate Obligations must focus on increasing the number of women in the sector. Actions agreed through negotiations between the Contractor and Contract Manager must be supported by clearly articulated outcomes that are proportional to the level of non compliance, with measures identified to monitor and report their successful implementation.

Incentives - Actions 1 and 2

The targets at Actions 1 and 2 are intentionally ambitious as they seek to accelerate employment and training opportunities for women. Contractors can put in place incentivisation programs to work cooperatively with the subcontracting supply chain to meet the Building Equality Policy targets.

Contract Managers and Contractors cannot propose aggregate targets or targets below the minimums in the Building Equality Policy, as this is inconsistent with the intent of the policy.

Example: Contractors can agree to employ women on other Victorian Government or privately funded construction projects to offset any targets they cannot meet under Actions 1 and 2.

Example: Contractors can offer results-based incentive programs to subcontractors to motivate them to hire women in ongoing positions to help them meet the targets in Actions 1 and 2. This will be negotiated between the Contractor and subcontractors.

Example: Contractors can offer incentive programs to subcontractors to encourage them to hire adult apprentices and trainees as they bring a diverse skill set that could allow them to progress at a faster rate, allowing businesses to expand their skilled workforce quicker. This will be negotiated between the Contractor and subcontractors.

Educating the subcontractor's supply chain

Contractors can lead the development and implementation of wraparound educational support programs to raise awareness about the Building Equality Policy across the subcontracting supply chain.

As Contractors rely on the subcontracting supply chain to deliver projects this will help Contractors meet their contractual obligations.

Example: Contractors can create wraparound educational support services for subcontractors to explain what the Building Equality Policy is, why it is important, what actions/initiatives they can implement, and the benefits that will flow to the subcontractor and Contractor.

Educational support is needed so that subcontractors understand how they can contribute to change.

Example: Contractors can run workshops/courses with subcontractors to determine the barriers and opportunities to implementation of the Building Equality Policy. The aim will be to identify practical actions to connect subcontractors with women seeking to work in the industry.

Example: Contractors can educate subcontractors during the Request for Tender stage about the Building Equality Policy. This will help ensure subcontractors understand what will be required if they choose to work with Contractors delivering government works.

Example: Contractors can develop and implement education and training programs that are based on the Respect Code to create safe, respectful and inclusive workplaces for women working onsite. These programs could also be implemented across the Contractors organisation so everyone is aware of and can support the successful implementation of the Building Equality Policy.

Supporting subcontractors to recruit women

Contractors can support subcontractors by connecting them with organisations, employers or programs that specialise in engaging women who are looking to work in the industry.

Example: Contractors can meet with subcontractors to discuss how they can work together to meet the Contractor’s requirement under the Building Equality Policy. Once initiatives are agreed, they must be included in the subcontractor’s contract, to hold them accountable. An incentive could also be included where commitments are exceeded.

Example: Contractors can dedicate a person and/or team to be responsible for recruiting women on behalf of their subcontractors, to ensure women have opportunities to work in the sector. For example, research has found that some Contractors are hiring Building Equality Policy Coordinators who can use their networks (employers, Incolink, recruitment agencies or Group Training Organisations) to find women looking to work in the sector.

Example: Civil and commercial Contractors can take a long-term view and partner with labour hire organisations to commit to developing women’s careers by providing work and training opportunities over the life of a project. For example, in the civil sector, women can be financially supported to develop their skills with a variety of equipment and machinery from the project inception to completion. Upskilling as the project needs change.

Developing templates to support subcontractor reporting

Contractors acknowledged that the reporting requirements associated with the Building Equality Policy place a significant amount of work and pressure on subcontractors.

Example: Contractors can provide subcontractors with resources and templates to minimise the financial and time impact reporting on the Building Equality Policy has created.

Example: Contractors can establish systems and processes forecasting labour requirements across projects to identify and respond to changing workforce needs. This information should be shared with the subcontracting supply chain at the tendering and project delivery stages.

Proactively increasing the pipeline of women entering the industry

Given the challenges around meeting Building Equality Policy, Contractors have started to proactively invest in sustainable and impactful discussions with primary and secondary schools and TAFEs, to increase awareness about the opportunities to work in construction.

Example: Contractors can work with their subcontractors to create practical educational programs for young women in local primary and secondary schools to provide them with an opportunity to experience first-hand working onsite.

Research found that subcontractors that participated in education program, felt positive about the program. One participant shared his reflections as a facilitator: “the school kids were like, this is so cool, it was so great to be part of this” and “I've just rung my mum and I'm so proud of what I've done today…. I felt this real joy that I was doing something purposeful, like I did something that mattered today at work”

Example: Contractors can partner with the TAFE sector and RTOs to establish training pathways into construction.

Example: Contractors can promote career opportunities and pathways by partnering with subcontractors to hold family days to show the women in their lives what is means to work in the construction industry as research has shown this makes the industry more attractive.

Example: Contractors can partner with women’s sporting codes to recruit women and lift the profile of women in construction across their broader supporter base.

Establishing initiatives to support women within their current workplace

As the number of women increases across the industry, it is important that Contractors support women by providing clear career pathways, financial support for education and training, mentoring and networking opportunities.

Example: Contractors can provide financial support for women seeking to enter the construction industry to cover the costs of tools and travel expenses as research has proven that this reduces the time between women considering and starting a career in the male-dominated workplace.

Register of high performing contractors

Contractors that demonstrate exemplary levels of compliance will be recognised by being placed on a register for high performing Contractors.
This register will be available to delivery agencies to help them negotiate with Contractors mutually agreed Alternative Appropriate Obligations.

Review of staged approach to non-compliance

The Alternative Appropriate Obligations will be reviewed as part of the RMIT evaluation of the Building Equality Policy implementation being undertaken in 2025. Through the Building Industry Consultative Council there will be opportunities for ongoing stakeholder feedback and refinement of the guidance to ensure it meets the needs of government and industry.

Help and support

For information and support, contact Industry Capability Network.

Access the Staged approach to non-compliance guidance for further information on managing non-compliance.

To understand the procurement process, see Buyers guide.

Access the Building Equality Policy - Define terms for further information.