Security of Payments
Each State and Territory has its own Security of Payments legislation which provides legislative protections for contractors to receive payment for building work performed under a contract. Whilst similar, the State and Territory schemes are different and may operate in slightly different ways.
The ABCC has involvement in security of payments in two important respects: through the national Security of Payments Working Group established by the Commonwealth Building and Construction Industry (Improving Productivity) Act 2016 (BCIIP Act) and through the Code for Tendering and Performance of Building Work 2016 (Building Code).
State and Territory Schemes
New South Wales
You can seek specific information on the scheme that applies in New South Wales from Fair Trading NSW
You can seek specific information on the scheme that applies in Victoria from the Victorian Building Authority
You can seek specific information on the scheme that applies in Queensland from the Queensland Building and Construction Commission
You can seek specific information on the scheme that applies in South Australia from the Office of the Small Business Commissioner
You can seek specific information on the scheme that applies in Western Australia from the Building Commission
You can seek specific information on the scheme that applies in Tasmania from the Department of Justice
Australian Capital Territory
You can seek specific information on the scheme that applies in the ACT from the Land, Planning and Building Directorate
You can seek specific information on the scheme that applies in the Northern Territory from the Construction Contracts Registrar
The ABCC may be able to assist contractors in relation to security of payment issues through the Building Code. Contractors that are covered by the Building Code 2016 must:
- strictly comply with State and Territory security of payment laws. Where a contractor does not, they may be sanctioned and rendered ineligible to do Commonwealth funded work;
- have documented dispute settlement processes detailing how disputes about payments to subcontractors will be resolved. The process provide for referral to an independent adjudicator;
- ensure disputes about payments are resolved in a reasonable, timely and co-operative way;
- comply with any project bank account or trust arraignment that may apply on a Commonwealth funded project.
The ABCC will monitor the conduct of Building Code contractors to ensure they comply with these security of payment obligations. A failure to meet the Building Code’s security of payment requirements can result in an exclusion sanction that prevents the contractor being awarded Commonwealth funded work.
Further guidance on security of payments under the Building Code can be found in our Building Code - Security of payments section.
Security of Payments Working Group
The Security of Payments Working Group (the Working Group) was established under the BCIIP Act and will enhance protections for subcontractors by improving compliance with security of payments legislation.
A key function of the Working Group is to monitor the impact the ABCC has on improving compliance with security of payments obligations.
On 26 May 2017 Senator the Hon Michaelia Cash, Minister for Employment, appointed 11 members to the Security of Payments Working Group. The ABC Commissioner is a member of the Working Group.
The Working Group met for the first time on Friday 7 July 2017 in Melbourne. The meeting was chaired by Justine Ross. 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.
The second Working Group meeting took place on Friday 10 November 2017 in Melbourne. 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. 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.
The Working Group will meet four times a year in Melbourne and the next meeting will take place on Friday 16 February 2018.
Appointees to the Security of Payments Working Group
Mr Steve Kibble — Chair (Department of Employment)
Ms Sophie Ismail — representing the interests of employees in the building industry (ACTU)
Ms Vasuki Paul — representing the interests of employers (Ai Group)
Mr Shaun Schmitke — 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 (National Electrical and Communications Association)
Mr Chris Melham — representing the interests of contractors (Civil Contractors Federation)
Ms Juanita Gibson — representing the interests of contractors (Subcontractors Alliance)
Ms Lorraine Djuricin — extensive adjudication experience in conflict resolution (Adjudicate Today)
Ms Justine Ross — workplace relations and safety expertise (Department of Employment)
Need more information?
For further information, advice or assistance please contact the ABCC at 1800 003 338 or enquiry [at] abcc.gov.au.