A Victorian building company has been issued a one-month exclusion sanction for its failure to comply with state security of payments legislation.
The exclusion sanction, imposed by the Minister for Jobs and Industrial Relations, Kelly O’Dwyer, means APM Group (Aust) Pty Ltd (APM) and its related entity APM Holdings (Aust) Pty Ltd are excluded from expressing interest in, tendering for, or being awarded Commonwealth-funded building work for the one-month exclusion period, 1 May 2019 to 31 May 2019.
APM was found to have breached the Building Code 2013 by failing to pay a subcontractor over $40,000, and failing to resolve a payment dispute with a subcontractor in a reasonable, timely and cooperative way.
In the course of its dealings with the subcontractor, APM’s conduct included:
- Threatening to ‘cash’ the subcontractor’s bank guarantees if it proceeded with an application for adjudication;
- Applying pressure on the subcontractor not to exercise its statutory rights to suspend works; and
- Withholding the subcontractor’s retention amounts (bank guarantees) from prior projects beyond the defect liability period to pressure the subcontractor to perform works on a current project.
APM failed to pay progress payments to the subcontractor even after an independent adjudicator had determined the claim should be paid.
ABCC Commissioner Stephen McBurney said subcontractors deserved to be paid on time and that in many cases their livelihood depended upon it.
“In this instance, APM’s conduct had a significant impact on the subcontractor both emotionally and financially,” Mr McBurney said.
“APM’s failure to pay the subcontractor compromised the ability of the subcontractor to pay their bills and put pressure on their relationship with suppliers.
“APM’s failure to abide by the independent adjudication outcome also undermines the statutory regime implemented to address security of payment issues.”
There are a number of requirements placed on code covered entities that are intended to help ensure progress payments are made in a timely manner. Code covered entities must also report disputed or delayed progress payments to the ABCC.
The APM sanction is the first exclusion sanction relating to non-compliance with security of payments laws since the ABCC launched its Security of Payment campaign in July 2018.