Building Equality Policy Targets Gender Equality In Construction

May 26, 2022

Complete with three actions and gender equality targets across the construction sector, Victoria’s new Building Equality Policy is a mandatory policy for construction projects valued at $20M or more.There is a recent addition to the Victorian Government’s suite of social procurement policies: the Building Equality Policy. The purpose of this policy is to create a more gender-inclusive construction industry by setting training and employment targets for women in this sector.

This is an important initiative. Women currently represent just 2% of the construction workforce. That’s 2% of a workforce supporting $202B of construction activity in Australia in the last 12 months. It’s a statistic none of us can or should ignore.

Construction is also an industry that is facing skill shortages. Governments across the nation have been pouring budget into construction and infrastructure projects for the past few years, to the point the sector can barely keep up with supply.

Working towards gender equality in construction is not just the right thing to do; it’s absolutely necessary as we build domestic capability and capacity in such a thriving and important sector.

We commend the Victorian Government for taking positive steps in this area, even if (as we shall discuss later in this article) the first iteration of the policy may have overlooked some of the impacts to smaller businesses.

We’ll first summarise the key aspects of the policy, before discussing some of the potential challenges.

About the Building Equality Policy (BEP)

The Building Equality Policy or BEP took effect 1 January 2022. It aims to create training and employment opportunities for women in construction through public sector procurement. The policy is mandatory for Victorian public construction projects valued at $20M or more.

Three Actions

With a focus on attract, recruit and retain, the BEP has three key actions requiring suppliers to:

  • action 1 – meet project-specific gender equality targets
  • action 2 – engage women as apprentices and trainees
  • action 3 – implement Gender Equality Action Plans (GEAPs)

Action 1: Project gender equality targets

Under the Building Equality Policy, suppliers must meet minimum on-site gender equality targets across different role categories as follows.

Trade covered labour (3%)

Women are required to perform at least 3% of the contract works’ total estimated labour hours for each trade position. (Trade covered labour comprises building/construction qualified trades and apprentices engaged by the principal contractor or subcontracted to perform work.)

Non-trade Construction Award covered labour (7%)

Women are required to perform at least 7% of the contract works’ total estimated labour hours for each non-trade Construction Award covered labour position. (Non-trade covered labour comprises trainees and ancillary workers engaged by the principal contractor or subcontracted to perform work.)

Management/supervisory and specialist labour (staff) (35%)

Women are required to perform at least 35% of the contract works’ total estimated labour hours for each staff position. (These staff are people who spend 80% of their time dedicated to a specific project, and may be engaged by the principal contractors or subcontracted to perform the work. Backoffice workers, managers and other professionals who are not onsite project-based workers of principal contractors or subcontractors are not to be counted towards the target.)

Action 2: Require suppliers to engage women apprentices or trainees to perform building and construction work

Here, suppliers are to meet 4% target of works’ labour hours for registered female trainees and apprentices as part of the 10% MPSG commitment.

When responding to tenders, suppliers will be encouraged to set aspirational targets that exceed the minimum requirements in the BEP.

In meeting actions 1 and 2, principal contractors have a contractual obligation to ensure participants in their supply chains are contributing to the overall targets across the project.

Action 3: Require Gender Equality Action Plans (GEAP)

Suppliers need to submit project-specific and organisation-wide Gender Equality Action Plans (including workplace gender audits) with an expression of interest or tender. This responsibility falls to the construction partner and not itssubcontractors. The GEAPs will form part of the procurement contract if the tenderer is successful.

Implementation & transitional compliance period

This Building Equality Policy applies to Victorian government-funded construction projects valued at $20M or more. As such, the threshold aligns to the Local Jobs First threshold for the Major Project Skills Guarantee, requiring 10% of labour hours to be dedicated to apprentices, trainees and cadets.

Furthermore, similar to Local Jobs First requirements, the financial threshold refers to the total budget allocated over the life of the project, excluding GST, and not the value of individual contracts. This means lower-value contracts delivered by separate lead contractors under a higher-value project will be subject to the policy requirements.

While the BEP took effect from 1 January 2022, it will be subject to a transitional compliance period on all applicable government projects during 2022 and 2023. 

According to the policy: The transitional compliance period will enable government, employers, employees, industry associations and unions to work collaboratively to improve the supply pipeline of women and identify workable solutions and best practice approaches to inclusive workplace cultures.

During this period the government is proposing a facilitative approach to manage BEP non-compliance, with a focus on policy education and awareness.

Post the transition period (i.e. from 1 January 2024), contract provisions will provide remedies for non-compliance. Model contract clauses will be developed to reinforce a graduated approach to compliance.

There is help available to businesses in complying with the policy targets. The following organisations focus on recruitment and development of women in construction: Supporting and Linking Tradeswomen Australia;Tradeswomen Australia; National Association for Women in Construction.

The Industry Capability Network (ICN) is also available to support businesses in understanding and implementing the policy requirements.

Evaluation & weighting of the policy

The targets and requirements of the BEP will be implemented through the Victorian Government’s social procurement framework.

We understand BEP compliance will attract a weighting of around 5% in applicable government tenders. This is a general indication and may change based on the nature, value and strategic intent of the procurement. We hope the 5% weighting given to BEP compliance will form part of the overall assessment of social procurement, which has a weighting of 10%, rather than be additional to social procurement assessment.

Tendered responses to actions 1 and 2 will be qualitatively assessed, which means the assessment will be against the submitted target and timeframes for achieving them.

Workplace and project-based gender equality action plans will be assessed against progress towards completion. 

Contract management

Similar to Local Jobs First and social procurement requirements, reporting against BEP commitments will occur within six months of contract award, and then on a six-month rolling basis. Reporting will be through the VIPP Management Centre (VMC) and completed as part of overall social procurement and Local Jobs First commitments.

Suppliers at risk of not meeting BEP targets will have the opportunity to work with the buying department and the ICN to identify and implement remedies.

Sedo View

The goals underpinning the Building Equality Policy are important. Construction is a powerhouse industry, and it’s pleasing to see the Victorian Government seeking to use its spending power to improve the gender balance.

Moreover, this is not a token initiative (even if true gender equality seems very far off).

We have all seen a rise in women holding traffic management signs, or more female administrative roles in construction firms, as a means of meeting gender requirements as part of social procurement commitments. The BEP is not that, and will address some of those social procurement / gender equality loopholes.

Yes, the Building Equality Policy is greatly needed to drive true change and build diversity in the ‘blokey’ construction sector.

Having said that, we do have a few concerns about the potential impacts of this first iteration of the policy to small and medium-sized businesses, for which all the requirements may prove difficult to achieve (with the best will in the world!).

On the whole, the $20M project threshold suggests the policy is mainly targeted at larger firms that have the capacity to expand their workforces to achieve the gender equality targets. However, there are many smaller companies, with low FTE numbers, that also have the ability to deliver larger government construction projects.

Another key point is that the policy threshold of $20M applies to project value, rather than contract value.

For example, Homes Victoria may manage a $20M project for 10 co-located social housing developments – which means BEP applies. To deliver this project they may want to foster greater industry participation and so release 10 separate tenders for the construction of each social housing development. The resulting individual contracts may be for only $2M each. However, since the BEP applies to the project, those winning contractors would each be required to apply the policy in full.

Through this policy, the Victorian Government is trying to get the whole sector to take responsibility for addressing gender equality – which we applaud.

But I do worry about the smaller companies and subcontractors, who have these requirements pushed down from lead contractors. I suspect smaller lead contractors will find it difficult to resource a gender equality audit, organisational-wide GEAP and ongoing reporting commitments – let alone meeting all the other requirements! Subcontractors will also be faced with meeting gender equality targets.

Perhaps an interim step for the BEP would be to focus on contract value (not project value), and provide greater transitional support for subcontractors?

Ultimately, I hope this policy doesn’t prove a tipping point for businesses to choose not to work with government. Because it is getting harder. The more government exerts its buying power for social and economic benefits, the more hoops suppliers have to jump through. But I suppose that’s another issue! 

Deirdre Diamante

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