May - June 2016 Industry Update

Security of Payments

FWBC has recently received calls from subcontractors seeking assistance in pursuing head contractors for payment, where payment for work has been withheld due to a dispute between the parties.

FWBC’s scope for assisting with these matters is limited due to the agency only having authority to investigate and prosecute alleged breaches of federal workplace laws whereas it is state and territory law that governs agreements and contractual relationships between subcontractors and clients. However, if a client or head contractor is found to have breached court orders relating to payment of a subcontractor, FWBC can become involved through its jurisdiction over Building Code matters.

What should I do if I believe a client is unlawfully withholding payment?

In the first instance, if a subcontractor is of the belief that a head contractor is withholding payment for building works, they should contact the relevant state or territory-based body responsible for enforcing ‘security of payment’ laws. A table has been included below.

State/territory Applicable legislation Body responsible Contact number

Responsible bodies for enforcing 'security of payment' laws

Australian Capital Territory Building and Construction Industry (Security of Payment) Act 2009 (ACT) The Environment and Planning Directorate monitors the operation of this Act.

The Environment and Planning Directorate may be contacted on (02) 6207 1923.

Contact details for Authorised Nominating Authorities may be found here.

New South Wales

Building and Construction Industry Security of Payment Act 1999 (NSW)

A legislative review of this Act is currently being undertaken by the Office of Fair Trading

Office of Fair Trading monitors the operation of this Act.

The Office of Fair Trading may be contacted on 13 32 20.

Contact details for Authorised Nominating Authorities may be found here.

Northern Territory Construction Contracts (Security of Payments) Act 2004 (NT) Department of Lands, Planning and the Environment NT

The Northern Territory Government may be contacted on (08) 8999 5511.

The Construction Contracts Registrar may be contacted on (08) 8924 7608.

Contact details for Registered Appointers may be found here.

Queensland Building and Construction Industry Payments Act 2004 (QLD) Building & Construction Industry Payments Agency (under the Building Services Authority) The Building & Construction Industry Payments Agency may be contacted on 1300 272 272.
South Australia Building and Construction Security of Payment Act 2009 (SA) Office of the Small Business Commissioner

The Office of the Small Business Commissioner may be contacted on 1800 087 722 or (08) 8303 2026.

Details for lodging a dispute may be found here.

Tasmania

Building and Construction Industry Security of Payment Act 2009 (Tas)

The Department of Justice monitors the operation of this Act.

The Department of Justice may be contacted on 1300 135 513.

Contact details for Nominating Authorities may be found here.

Victoria

Building and Construction Industry Security of Payment Act 2002 (Vic)

The Victorian Building Authority (established under the Building Act 1993 (Vic)) monitors the operation of this Act.

The Victorian Building Authority may be contacted on 1300 815 127.

 Contact details for Authorised Nominating Authorities may be found here.

Western Australia Construction Contracts Act 2004 (WA) Building Commission (under the Department of Commerce)

The WA Building Commission may be contacted on 1300 489 099.

Contact details for Prescribed Appointers may be found here.

 

What is FWBC’s capacity in these matters?

Section 21 of the Building Code 2013 relates to security of payment matters. If a subcontractor has pursued these matters through the state and territory-based authorities, a court may issue a ruling ordering the client or head contractor to make a payment(s) to the contractor concerned.

Should the head contractor fail to adhere to these orders they may be in breach of Section 21 of the Building Code 2013. Breaches of the code can result in a sanction, possibly rendering the head contractor ineligible from tendering for projects funded or partially funded by the Commonwealth Government.

Why is this important?

Many subcontractors in the building and construction industry are small to medium sized enterprises. Often they are family-owned and run entities that require steady cash flows to stay afloat and pay workers’ wages.

A delay in receiving payment from a client can often lead to a contractor having to lay-off workers.

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