What is the Security of Payments Working Group?
The Security of Payments Working Group was established under the.
The functions of the Working Group include:
- monitoring the impact of the activities of the ABCC on the conduct and practices of building industry participants in relation to their compliance with laws that relate to the security of payments that are due to persons in relation to building work;
- making recommendations to the ABC Commissioner about policies, procedures or programs that could be implemented to improve compliance by building industry participants with security of payment laws; and
- making recommendations to the Minister about any matter that the Minister requests the Working Group to consider.
When did the Working Group begin and when does it meet?
On 26 May 2017, Senator the Hon Michaela Cash, then Minister for Employment, appointed 11 members to the Security of Payments Working Group.
The Working Group has held seventeen meetings (summarised below) and will continue to hold four meetings annually. The next is scheduled for 2 December 2021.
Appointees to the Security of Payments Working Group
The Working Group has 9 members. Under the BCIIP Act, the ABC Commissioner is a member of the Working Group. Other appointed members include a Chair of the Working Group and eight industry representatives.
Ms Justine Ross, the CEO of the Asbestos Safety and Eradication Agency was appointed as Chair on 8 November 2018 for a three year tenure. Ms Ross was re-appointed as Chair for a further three years from 8 November 2021.
On 9 June 2020, the Hon Christian Porter, then Attorney-General and Minister for Industrial Relations, appointed the following nine industry representatives as members of the Security of Payments Working Group for a three year tenure:
- Ms Sophie Ismail—representing the interests of employees in the building industry (ACTU)
- Ms Vasuki Paul—representing the interests of employers (Ai Group)
- Ms Rebecca Sostarko —representing the interests of employers (Master Builders Australia)
- Ms Melissa Adler—representing the interests of employers (Housing Industry Association)
- Mr Ken Phillips—representing the interests of contractors (Self Employed Australia)
- Mr Suresh Manickam—representing the interests of contractors
- Mr Chris Melham—representing the interests of contractors (Civil Contractors Federation)
- Ms Lorraine Djuricin—extensive adjudication experience in conflict resolution (Adjudicate Today) (resigned October 2021)
- Ms Juanita Gibson—representing the interests of contractors (Subcontractors Alliance) (resigned February 2021)
Seventeenth Meeting 07/10/21
The seventeenth meeting was held on 7 October 2021.
The Q4 Quarterly Report and Trend Analysis showed a spike in the number of security of payment cases the ABCC received. The majority of these claims related to delayed, rather than disputed or unpaid claims. The education and compliance campaign run in April likely to have contributed to this increase.
The 2020-21 annual statistics were also presented to the Working Group. These showed a continued trend of organisations attaching multiple claims to single reports representing a significant reduction in red tape.
The ABCC presented to the Working Group on the Desktop Audit process, which accounts for the majority of the agency’s SOP-related compliance activities.
The Working Group provided a report on the security of payment issues observed by their organisations. Members raised concerns about the quality of consultation undertaken during this time, as re-opening and responding to changing COVID-19 restrictions continues to be a major focus.
Sixteenth Meeting, 24/06/21
The sixteenth meeting was held on 24 June 2021.
The Q3 Quarterly Report and Trend Analysis showed a decrease in the number of security of payment cases the ABCC received. The majority of these claims related to delayed, rather than disputed or unpaid claims.
The majority of ABCC security of payments activities are now being undertaken via Desktop audits. Human error remains the main cause of error in disputed and delayed payments. The ABCC continues to see that many subcontractors are submitting invalid payment claims due to being made before the reference date, not meeting the requirements or not referencing the correct SOP laws.
The ABCC presented to the Working Group on the details of the formal warning issued to i2Solutions by the Minister for Industrial Relations on 5 May 2021.
The Working Group received a presentation from representatives in the Building and Energy division of the Department of Mines, Industry Regulation and Safety from the Government of Western Australia on the new Building and Construction Industry (Security of Payment) Act 2021, which passed WA parliament on 22 June 2021.
Members discussed the findings of the ABCC Security of Payments Research Project.
Fifteenth Meeting, 08/04/21
Fourteenth Meeting, 10/12/20
The fourteenth meeting was held on 10 December 2020.
The Q1 Quarterly Report for 2020-21 showed an increase in the number of security of payment cases from Q4, 2019-20. The trend analysis is continuing to show changes associated with the increase in new entities reporting on SOP to the ABCC.
Q1 saw an increase in the value of delayed payments but saw a decrease in the average number of days payments were delayed. In addition there was a significant reduction in the number of days stakeholders took to report unpaid claims to the ABCC.
The ABCC continues to work with newly reporting entities to improve their systems and processes and it is expected that the average time of payment will continue to trend downward. Amounts for delayed payments are expected to start trending downwards as these entities’ systems improve.
The Working Group provided a report on the security of payment issues observed by their organisations. The Members were busy considering the implications of the newly introduced Fair Work Amendment (Supporting Australia’s Job and Economic Recovery) Bill 2020.
Thirteenth Meeting, 24/09/20
The thirteenth meeting was held on 24 September 2020.
The Q4 Quarterly Report for 2019-20 showed a decrease in the number of Security of Payment cases from Q3, with figures returning to similar levels to those seen in Q1 and Q2.
The 2019-20 annual statistics and trend analysis also showed this trend, which was attributed to an increase in new entities reporting on SOP to the ABCC, following the ABCC’s SOP education campaign.
This influx of new reports also impacted the figures for delayed and unpaid payments by increasing both case numbers and average time to payment. It is expected that these figures will fall steadily again as the ABCC works with these newly reporting entities.
The Working Group provided a report on the security of payment issues observed by their organisations. The impact of COVID-19, especially in Victoria, was a key focus.
Twelfth Meeting, 25/06/20
The twelfth meeting was held on 25 June 2020. The Q3 Quarterly Report for 2019-20 indicated an overall increase in security of payment cases and slight decrease in complaints from the previous quarter.
A trend analysis report derived from the quarterly data of the first three quarters of the 2019-2020 financial year revealed:
- a reduction in the average number of days for delayed payments; and
- a reduction in the median amount claimed as delayed or unpaid over the period.
The Working Group members provided a report on the security of payment issues observed by their organisations, with the main focus being on the impact of COVID-19 and recovery of the industry post pandemic.
Eleventh Meeting, 19/03/20
The eleventh meeting was held on 19 March 2020.
The ABCC Q2 Security of Payments Quarterly Statistics showed consistent results with those reported in the previous quarter. The ABCC noted that new reporting forms have had a positive effect in reducing administrative processing times for both the ABCC and people reporting their claims.
The Working Group were presented the ABCC’s Security of Payment Education and Communications Campaign and discussed the possible impacts of COVID-19 on the building and construction industry.
Tenth Meeting, 05/12/19
The tenth meeting was held on 5 December 2019. The ABCC presented its security of payments statistics for the quarter ending 31 December 2019. The quarter showed a small reduction in the number of reports of disputed or delayed payments received, however there was an increase in the number of individual claims attached to reports. This is attributed to the new improved reporting form which allows contractors to report more than one claim in a single report.
The Working Group discussed its Terms of Reference and its functions as outlined in the Building and Construction Industry Improving Productivity Act 2016.
Ninth meeting, 06/09/19
The ninth meeting was held on 6 September 2019. The ABCC Q4 Security of Payments Quarterly Statistics showed an upward trend of subcontractors reporting an issue of non-payment. The ABCC discussed its ongoing efforts in simplifying and streamlining reporting for contractors and ensuring that reports relating to phoenixing activity are responded to immediately.
The Security of Payments Annual Report was endorsed by the Working Group and will be presented in the ABCC’s 2018-19 Annual Report.
Eighth meeting, 31/05/19
The eighth meeting was held on 31 May 2019. The ABCC presented its security of payments quarterly statistics for the March quarter, and discussed its new reporting methodology for incoming security of payment cases. This quarter saw a further increase in security of payment cases and provided a strong indication of where the ABCC should focus its next education campaigns.
Seventh meeting, 01/03/19
The seventh meeting was held on 1 March 2019. The ABCC presented its security of payments quarterly statistics for the quarter ending 31 December 2018. This quarter saw a higher number of self-reporting notifications by reporting disputed or delayed payments. The increase was primarily due to the commencement of mandatory reporting for Code covered entities from 1 September 2018.
The group also received an update from the Department of Industry, Innovation and Science on the Building Ministers’ Forum including its response to the recommendations of the Murray Review.
Sixth meeting, 12/11/18
The sixth meeting was held on 12 November 2018. Prior to the meeting, Grant Lovelock resigned as acting chair of the working group. Justine Ross was appointed by the Minister, the Hon Kelly O’Dwyer, as both the chair and a member to the working group for three years.
The ABCC reported that the quarter ending 30 September 2018 saw a significant increase in the number of enquiries on security of payments. The higher number of enquiries was likely attributable to the commencement of the education campaign on 16 July 2018 and the end of the transition period for mandatory reporting of disputed or delayed progress payments on 1 September 2018.
The ABCC presented the security of payments frequently asked questions on its website. The ABCC sought feedback and advice from the working group on the website content relating to security of payments.
Fifth meeting, 17/08/18
The fifth meeting was held on 17 August 2018. The meeting was chaired by Grant Lovelock, who was appointed by the Minister, the Hon Craig Laundy, to serve as acting chair.
The meeting was attended by Mr John Murray AM, who took questions from members on his recommendations and findings in his report, Review of Security of Payment Laws.
The members were also presented the ABCC’s security of payment education campaign. The campaign aims to raise awareness of security of payments in the building and construction industry and provide information on how the ABCC can assist with these enquiries. The agency acknowledged the contributions from the members in helping craft the campaign’s key messages.
Fourth meeting, 04/05/18
The fourth meeting was held on 4 May 2018. The members discussed the definition of reportable delayed or disputed progress payments inand provided feedback on the ABCC’s proposed key messages for education. Further feedback was planned to be provided out of session.
Third meeting, 16/02/18
The third meeting took place on 16 February 2018. The members were introduced to the new ABC Commissioner, Mr Stephen McBurney, and were advised that enquiries to the ABCC about security of payments are gradually increasing. The Working Group also discussed the ABCC’s education strategy and how best to target communication with subcontractors.
Second meeting, 10/11/17
The second Working Group meeting was on Friday 10 November 2017, in Melbourne. During this meeting, the outstanding actions from the previous meeting regarding the Terms of Reference and Forward Work Plan were settled. The ABCC provided context on its role in security of payments laws and the agency’s jurisdiction over code covered entities .
In addition, education was discussed as a tool to increase building industry participants’ pursuit of security of payments rights and the reporting of security of payments issues.
First meeting, 07/07/17
The Working Group met for the first time on Friday 7 July 2017, in Melbourne. The Terms of Reference and the Forward Work Plan were discussed and the ABC Commissioner gave a presentation on the role and functions of the ABCC regarding security of payments.