New requirements for contracting with Victorian Government agencies

On 10 August 2022, the Victorian Government introduced the Fair Jobs Code (FJC), which sets out the standards and requirements that suppliers and businesses contracting with any Victorian Government agency must meet. The FJC comes into effect on 1 December 2022.

Why was the FJC introduced?

The FJC is designed to ensure that "suppliers tendering for threshold procurement contracts or high value procurement contracts [with the Victorian Government], and businesses applying for significant business expansion grants [from the Victorian Government], are recognised for treating workers fairly".

The FJC seeks to, for example: promote fair labour standards; secure employment and job security; encourage compliance with workplace laws; and foster cooperative and constructive relationships between employers, employees and their representatives.

What does the FJC cover?

The FJC covers the following categories of Victorian Government agency contracts and grants.

• Threshold procurement contract: a contract with a Victorian Government agency with a value of $3 million or more (excluding GST)
• High value procurement contract: a contract with a Victorian Government agency with a value of $20 million or more (excluding GST)
• Significant business expansion grant: a grant from a Victorian Government agency with a value of $500,000 or more (excluding GST) and where the key milestones under the grant agreement specify that the business will deliver new jobs

What does the FJC require?

Pre-Assessment Certificates

From 1 December 2022, the FJC requires all suppliers seeking to be considered for threshold procurement contracts or high value procurement contracts, and businesses applying for significant business expansion grants, to hold a Pre-Assessment Certificate in order to be eligible for consideration.

FJC Plans

All suppliers seeking to be considered for high value procurement contracts, and businesses applying for significant business expansion grants, must also submit a Fair Jobs Code Plan (FJC Plan) to the contracting Victorian Government agency as part of that procurement or grant process.

FJC standards

The FJC also sets standards that suppliers and businesses contracting with the Victorian Government must meet.

Suppliers seeking to enter into threshold procurement contracts must comply with:

In addition to Standard 1, suppliers seeking to enter into high value procurement contracts, and businesses seeking to applying for significant business expansion grants, must also comply with:

Suppliers engaged in relation to a high value procurement contract must also only engage subcontractors who hold a Pre-Assessment Certificate, unless the value of the relevant subcontract is less than $10 million (excluding GST).

What is the Pre-Assessment Certificate process?

Pre-Assessment Certificates are issued by the FJC Unit and can be applied for via the application form available on the FJC website.

As part of the application process, suppliers and businesses will be required to disclose:

• employment, industrial relations, and workplace health and safety-related compliance breaches in the past three years (as evidenced by an adverse ruling or enforceable undertaking)
• evidence of corrective action taken against any compliance breaches (such as compensation to affected workers, reinstatement of affected workers, or the introduction of new policies and procedures)

In deciding whether to grant a Pre-Assessment Certificate, the FJC will take into account the following where there have been employment-related compliance breaches by the supplier or business:

• the underlying seriousness of the conduct of the supplier or business, including whether the supplier or business has engaged in conduct that took advantage of, treated unfairly, or otherwise harmed, its workers
• whether the conduct was an isolated or systemic issue
• whether the supplier or business disclosed any adverse rulings or enforceable undertakings to the FJC Unit and/or a Victorian Government agency
• whether the supplier or business has taken steps to ensure that the conduct does not reoccur
• any information provided by the supplier or business, victims or persons directly affected by the conduct, regulators involved in investigating or taking action in the matter, or Victorian Government agencies that have engaged the supplier or business

Suppliers and businesses may apply for a Pre-Assessment Certificate at any time; they do not need to have a specific tender or grant application in progress. Once an application has been submitted, the FJC Unit will notify the supplier or business of the outcome generally within 30 business days.

A Pre-Assessment Certificate is valid for two years from the date of issue, unless revoked by the FJC Unit or surrendered by the supplier or business. A supplier or business may apply for renewal of its Pre-Assessment Certificate. There are also review processes in place for Pre-Assessment Certificates that are declined or revoked.

Suppliers and businesses that hold a Pre-Assessment Certificate are subject to ongoing disclosure and must notify the FJC Unit of any adverse ruling or enforceable undertaking against the supplier or business within 10 business days of it being made. Suppliers and businesses must also cooperate with, and respond to, reasonable requests, inquiries, and audits relating to information from the FJC Unit, contracting Victorian Government agency, or the Local Jobs First Commissioner with respect to matters related to the FJC. Model clauses requiring compliance will also be included in the relevant contract or grant agreement.

The register of suppliers and businesses that hold a current Pre-Assessment Certificate is publicly available on the FJC website.

What is a FJC Plan?

The FJC Plan outlines how suppliers/businesses, in respect of high value procurement contracts or significant business expansion grants, intend to deal with matters related to industrial relations, occupational health and safety, workforce planning and workforce diversity (including labour models to be used for the delivery of the contract/works).

Suppliers bidding for high value procurement contracts must submit a FJC Plan at the time of submitting their tender or offer. Businesses applying for significant business expansion grants must submit a FJC Plan within 12 months of entering into a grant agreement.

Failure to submit a FJC Plan may lead to a procurement tender or offer being rejected, or being in breach of a grant agreement. A breach of a grant agreement may have financial implications or result in termination of the grant agreement. Delivery of the FJC Plan by the supplier or business will be monitored by the contracting Victorian Government agency.

A template for completing a FJC Plan is available on the FJC website.

Next steps: What does the FJC mean for me?

Whilst the FJC comes into effect on 1 December 2022, applications for Pre-Assessment Certificates are open now.

Suppliers and businesses that are likely to be subject to the FJC's requirements should:

• carefully review the requirements for applying for a Pre-Assessment Certificate and the required documentation and information that will need to be included in this application
• consider applying for a Pre-Assessment Certificate early (and well before the commencement of the FJC from 1 December 2022)
• be mindful that the FJC has indicated that suppliers and businesses should expect that they would be unlikely to obtain or retain a Pre-Assessment Certificate where they have been subject to adverse rulings or enforceable undertakings reflecting serious or systemic misconduct; and/or they have not demonstrated that they have rectified the conduct underlying any adverse rulings or enforceable undertakings and taken appropriate steps to prevent the conduct from reoccurring
• consider whether they will likely be required to also submit a FJC Plan and familiarise themselves with the relevant requirements for completing a FJC Plan

For more information on how the abovementioned changes may apply to your organisation, please contact a member of our Workplace Relations & Safety team.

Photo by Gabrielle Henderson on Unsplash