On 23 July 2020, the Queensland Government’s Building Industry Fairness (Security of Payment) and Other Legislation Amendment Act 2020 (Qld) (BIFOLA Act) received royal assent, bringing significant changes to the licensing requirements for head contractors under the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act).

The amendments introduced by the BIFOLA Act will remove section 8 of Schedule 1A of the QBCC Act, known as the ‘head contractor exemption’. The impending removal of this section will mean unlicensed head contractors no longer have the benefit of a current exemption which allows them to contract for building work on the proviso that they engage an appropriately licensed subcontractor to carry out the work. This amendment is set to bring head contractors back into line with other contractors performing building work in Queensland – or risk facing serious penalties for non-compliance.

Going back over old ground – background and the proposed change

In late 2013, significant reforms to the licensing regime in Queensland were introduced, including the amendment to permit unlicensed head contractors to subcontract building work to licensed subcontractors. This resulted in head contractors becoming exempt from the consequences and penalties associated with undertaking to carry out, and carrying out, unlicensed building works in Queensland under section 42(1) of the QBCC Act.

This section provides that unless a person (or entity) holds a licence of the appropriate class for the building work, they must not carry out, or undertake to carry out the building work (i.e. enter into a contract). ‘Carrying out’ building work will include personally carrying out the work, directly or indirectly causing the building work to be carried out, or providing advisory, administrative or supervisory services for the carrying out of building work.

However, since its introduction, the head contractor exemption has been criticised by some industry members who claim that it provides a loophole for head contractors by allowing them to enter into contracts for building work without being subject to the strict obligations placed on licence holders.

Practical implications

The legislative change will have far-reaching implications for building and construction contracts and tenders across Queensland and will pose serious potential consequences to unlicensed head contractors if they enter into contracts for, or carry out, building work.

One example is civil contractors who perform minor building work as part of their scope of work – such as concrete pads or concrete retaining walls – but who are unlicensed to carry out these works. While these civil contractors have long relied on the exemption to engage licensed subcontractors to fulfil certain components of building work, once the exemption is removed, they will need to ensure they hold a licence in their own capacity.

It is important to note that this change goes much further than civil contractors – it extends to any contractor unlicensed for a specific scope of work who has been relying on the fact that their subcontractor holds a licence for those works.

It does not matter how small a portion the unlicensed building work is compared to the overall scope – any unlicensed building work is sufficient to attract the penalties under the QBCC Act. The consequences for failing to comply with section 42(1) of the QBCC Act are serious and include:

• not being entitled to monetary or other consideration for the unlicensed building work carried out, aside from the limited amounts permitted by section 42(4) of the QBCC Act (i.e. the amount paid in supplying materials and labour, but excluding the unlicensed party’s own labour, profit, and any supply costs unreasonably incurred);
• significant monetary penalties of up to $45,692.50; and
• possible jail time for third offences, or if the unlicensed building work is also tier 1 defective work.

There are also implications for the unlicensed party’s entitlement to recover progress payments under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (‘BIF Act’). The adjudication process under the BIF Act is regularly used by contractors as a quick means of recovering disputed progress payments. However, the Queensland Courts have held in a number of decisions that a breach of section 42(1) of the QBCC Act, even if confined to a minor portion of a contractor’s overall scope of work, will disentitle the contractor from using the adjudication regime.

What should construction companies be doing now?

As some companies may have to undertake substantial licensing updates or implement structural organisational change, it is advisable they start preparing for the amendment now. Unlicensed head contractors who have subcontracted or tendered for building work should seek advice as to whether they need to commence steps to become licensed. It may also be necessary for larger companies to look at their operations on a project by project basis and consider whether structural changes are required to ensure that head contractors are appropriately licensed.

While the BIFOLA Act received royal assent in July 2020, the head contractor exemption has not yet commenced and is awaiting proclamation (with no indication as to when this will occur). It is possible (although, unlikely) that the change will apply retrospectively, however it is expected that further clarity will be provided around transitional provisions over the coming months. In any regard, head contractors are being advised to be prepared for this significant change – especially when non-compliance brings such hefty penalties.

Original article from Build Australia, by Alex Power, Special Counsel, McCullough Robertson Lawyers.

WorkSafe ACT Incident - 15 June 2020

WorkSafe ACT are investigating the circumstances of the collapse of formwork while a concrete pour was underway. An element of this investigation includes the use of propriety formworks systems. An examination of a large volume of these systems has identified irregularities in the manufacturing of these frames. Defects in some frames have been identified to include defective and non-compliant welding of structural components.

Defective welds that have been identified in propriety systems include issues with:

• inconsistent weld size
• porosity
• undercut
• lack of fusion
• overlap
• toe shape (non-uniform weld)
• stop-start
• stray-arc (arc-strike).

PCBU’s have a duty to ensure the provision and maintenance of safe plant and structures. To ensure this PCBU’s are required to take reasonably practicable measures which should include facilitating an inspection of these systems by a competent person and any defective or deformed frames including welds must not be used until the faults are recertified.

Other elements of the investigation have identified limited testing of propriety systems in accordance with AS3610 restricts the use of systems in configurations outside of full assembly configuration the system is tested in. Different systems have considerably different working load limits therefore it is imperative that the working load limits are known, the configurations of the system are in accordance with manufacturers specifications and the full assembly is used in the same configuration the testing is undertaken with the load to be applied within the WLL capacity identified for the system.

Action required

PCBU’s must consider all reasonably practicable controls to manage the risk of a formwork collapse.

These controls include:

• Ensuring that a competent person must design the formwork to retain its shape and withstand loads such as reinforcing, concrete and other associated materials and the dynamic loads imposed by pouring, vibrating, the movement of people or plant or environmental factors such as wind and rain;
• Installing the formwork in accordance with the design and instructions from the designer - formwork should be rigid, watertight, braced and tied together to maintain position and shape during construction;
• Checking variations to the design and ensure they are verified in writing by the designer, engineer or other competent person;
• Not mixing components from different formwork systems;
• Putting measures in place (e.g. bracing), to prevent vertical support feet, on inclined surfaces, from slipping;
• Before loading with weight, ensuring that a competent person (e.g. an engineer with experience in structural design -certifying engineer) inspects and certifies completed formwork and its supporting structures meet the design specifications and are structurally sound;
• Placing concrete in accordance with the specified sequence and pour rate in order to maintain the stability of the formwork;
• Monitoring formwork as it is being loaded to check for signs of potential failure or collapse and to ensure vertical and horizontal movements do not exceed specifications; and
• Providing all workers with information and training specific to the formwork system, including:
• • details of the formwork system, tasks, activities and components;
  • design intention regarding installation, use, movement, alterations and dismantling;
  • control measures to minimise identified risks; and
  • how to inspect materials used in the formwork system.

The Safe Work Australia website provides useful information relating to Formwork. The links are provided below.

Formwork and falsework guidance material

Formwork guide

Information sheet: Formwork falsework

Formwork guidance material (ZIP)

For further information contact WorkSafe ACT on 13 22 81 or email WorkSafe@act.gov.au.

This Alert contains information emerging during an investigation by WorkSafe ACT into the mentioned incident at the date of this report. The information contained in this report does not necessarily reflect the final outcome of WorkSafe’s views or proposed actions with respect to this incident. WorkSafe ACT does not warrant the information in this report is complete or up-to date and does not accept any liability to any person for the information in this report, or its use.

Recently FIA Business Advisory partner, HLB Mann Judd, launched their inaugural podcast series 'Talking Family Business'. This series looks at the evolution between their client Western Earthmoving and HLB Mann Judd Sydney.

Western Earthmoving is a third generation family business which has significantly grown into one of Australia's largest civil contracting firms.

You can listen to the first two episodes using the following links:

Spotify

Apple Podcast

On their website here

Episode 1 - Establishing the relationship

In the first episode Graham Ragg Managing Director of Western Earthmoving and Stephen Preen Partner Business Advisory discuss the importance of building trust in their 50-year working relationship.

Episode 2 - Maintaining & Nurturing

The second episode looks at the succession when Wal Ragg handed over the reins of WEM to his son Graham, and the massive shifts in industry forcing them to remain ever nimble with their financial plan.

Upcoming episodes

Episode 3: Planning a succession (17 November)

Episode 4: Regenerating the relationship (24 November)

Episode 5: The need for routine future-proofing (1 December)

Episode 6: Successions & siblings (8 December)

End of Year Update for Private & Family Business clients

HLB Mann Judd’s 2020 End of Year Update shares a number of topics relating to planning for the holidays and new year. This looks at:

• Marketing for the holiday season
• Covid safe Christmas parties
• FBT and gifts for employees
• End of year checklist
• Creating a budget for the new year
• Reasons to change business structure
• Hiring workers for the holiday season post COVID-19
• Tasks businesses should complete at the end of the year

Download your copy HERE

A Word to the WISE Podcast from FIA legal partner, Kingston Reid.

New safety laws have just been enacted in Western Australia. Now the countdown begins until commencement.

In this podcast, Miriam Power and Oliver Marshall discuss some of the key features of the laws including the potential wider application of the new laws, industrial manslaughter, increased penalties and insurance prohibitions.

CLICK TO START LISTENING

While historically it may have been considered antithetical that overtime loadings could be payable to casual employees who, by their definition, perform ad hoc and flexible hours of work, the Fair Work Commission has made a series of final determinations varying 96 modern awards to provide for just that. In a number of cases, employers will be required to calculate those overtime rates on the full casual loaded rate of pay, compounding headaches for employers.

FIA Legal Partner, Kingston Reid, discuss more In this article.

As a consequence, the Commission determined to consider the question of overtime for casual employees as a common matter. In July 2020, the Commission issued its proposed determinations for resolving ambiguities around overtime for casual employees, and at the end of October, it issued its final determinations for the variation of 96 modern awards to clarify casual employee entitlements to overtime loadings.

Following this decision, as of 20 November 2020, overtime for casual employees under these 96 modern awards will need to be calculated either:

• in substitution for casual loading;
• in addition to casual loading (cumulative approach); or
• in addition to the sum of an employee’s minimum hourly rate plus casual loading (compounding approach).

The result under a number of these modern awards that casual employees’ overtime loadings should be calculated inclusive of casual loading (the compounding approach), has left some employers scratching their heads.

The Full Bench pointed to two previous decisions, to conclude that the meaning of the award expressions “time and a half”, “double time” and “double time and a half” referred to an employee’s ordinary time rate of pay. Applying the “compounding approach”, the Full Bench found that casual loading forms part of a casual employee’s ordinary rate of pay, unless the definition in that modern award of “hourly ordinary time rate” explicitly excludes casual loading.

Kingston Reid is currently discussing with impacted clients the possibility of seeking judicial review of the Commission’s decision to the Federal Court but for now the decision stands, as the Full Bench has made clear that no further submissions will be accepted in respect to any of the determinations. Modern award covered employers should consider the determination that will operate in respect to the modern award that covers them and ensure that it is well understood when casual employees may become entitled to overtime, and how that overtime loading is to be calculated.

The terms of each modern award do vary, however the entitlement to an overtime loading typically arises where:

• an employee works in excess of 38 hours per week; or
• an employee performs work outside the spread of hours prescribed under the applicable modern award.

Employers who engage casual employees under an enterprise agreement do not need to make any immediate change to overtime payments for those casuals, while the current enterprise agreement continues to apply. However, on entering into bargaining for any future enterprise agreements, employers will need to review their overtime calculation methods, to ensure that their casual employees are still Better Off Overall where the cumulative or compounding calculation methods of overtime calculation would otherwise apply under the applicable modern award.

If you are in any doubt as to how this decision may affect your business, contact us at Kingston Reid to discuss.

Katie Sweatman
Partner
+61 3 9958 9605
katie.sweatman@kingstonreid.com

Aimee Ford
Lawyer
+61 3 9958 9610
aimee.ford@kingstonreid.com

Welcome to Issue 7 of FIA Financial & Business ADvisory partner, HLB Mann Judd's financial reporting publication that aims to keep you in the loop with all the latest accounting and financial reporting developments, and the potential impact they may have on your business.

In their last issue for the year, they consider why it is important to pay close attention when assessing whether holding a significant minority equates to control. With the end of SPFS looming for certain entities, they look at the transitional relief available to entities required to change from special purpose to general purpose financial statements, and why there may be merit in doing so early. And finally, they provide an update on recent AASB activity, including other Staff FAQs that may be helpful to readers.

In this issue they address:

AASB 10

• Be wary of significant minorities

SPFS

• The merits of transitioning to GPFS early

Recent AASB Activity

• Deferral of amendments to classification of liabilities
• Tier 2 disclosures for COVID-19-related rent concessions
• New AASB Staff FAQs

DOWNLOAD NOW

A Word to the WISE Podcast.

In this podcast, Alice DeBoos and Duncan Fletcher discuss whether enterprise bargaining is dead, or just resting its eyes!

CLICK TO START LISTENING

An industry first innovation - 120+ years structural life with Dincel 275

By omitting steel reinforcement bars, Dincel 275 is able to offer the following benefits:

• Faster - Safer - Air Void free - Waterproof Walls 
• Significant reduction in embodied energy and carbon footprint. (reduced steel manufacturing) 
• Prevent potential corrosion issues.

Below or above ground retaining walls.

Dincel 275 – waterproof tested at CSIRO and tested for strength at UTS.

The testing was completed in accordance with the requirements of AS3600-2018 (Appendix B) and is certified by UTS as compliant with the National Construction Code ‘deemed-to-satisfy’ provisions for structural requirements.

UTS has confirmed that Dincel 275 can be designed and installed consisting of the following concrete infill to service different engineering applications:

1. Mass concrete; OR
2. Conventional reinforced concrete; OR
3. Macro synthetic fibre (BarChip) reinforced concrete with no steel bars; OR
4. Macro synthetic fibre (BarChip) + conventional vertical bar reinforced concrete, without any horizontal bars

The vertical bars, if used, are totally encapsulated and away from any panel joint of Dincel 275. The absence of horizontal bars eliminates any possibility of the occurrence of horizontal steel corrosion, many installation, safety and air void problems.

With Dincel 275, 120 years of life expectancy is indisputable particularly in the absence of horizontal bars.

Many formwork companies, just like yours, have united together under the FIA membership for mutual benefit, knowing that by working together we are stronger and can achieve outcomes otherwise not possible by going it alone. As an example, providing valuable feedback to SWNSW on the revised NSW formwork Code of Practice and working in partnership with them has enabled the formwork industry to shape its content for the benefit of formworkers and their safety.

An extension of this and allowing for more engagement of our members the FIA recently launched three new committees. The aim of these committees is to build a collaborative membership to source fair, transparent and equitable outcomes for the formwork industry.

These committees will discuss the issues, advancements and challenges within the australian formwork industry and formulate policies, position papers and strategies that align with industry values and principles and deliver much needed change and clarity for formwork businesses and your workers.

Committees will be presented with the opportunity to contribute to documentation containing suggestions, advocacy and promotion of industry requisites or guidelines to be submitted to the relevant government minister, department or key industry stakeholders and released to industry, as well as updates and changes to technical information and legislation for clarity across formwork businesses in Australia.

In other words, this is YOUR opportunity to propose changes to current legislation, codes, standards, processes, technology advancements and issues within the industry.

On occasion, guest speakers will be invited to committee meetings and specially scheduled events to explain new and updated procedures and regulations and outline any changes that potentially affect Formwork business operations.

Volunteering to become an FIA committee member is a valuable opportunity to collaborate and network with industry colleagues, remain ahead of current events, have your say on important topics and acquire new ideas to apply to your business. Most of all, it is a great way to be a direct participant in advocating industry necessities to government for policy change.

The three committees are outlined below and we encourage you to click on the links to find out what each committee does and the policies, strategies and advocacy work being achieved.

Formwork Technical Committee

This committee will provide access for government/external agencies to understand industry issues and what is best practice. It will look at new technology, improvements, policies, manuals and the provision of technical notes to assist Formwork companies across Australia. 

This committee offers the formwork industry with continual opportunities to review and update specifications and standards.

As such, the Formwork Technical Committee/Working Group will utilise its expertise to provide input, review and suggest improvements on items such as formwork technical specifications and policies for Government's consideration.

WHS/IR/HR Committee

This committee will address the safety issues and training within the industry, work closely with government departments on legislation, WHS, standards, Compliance, changes to law, recent cases and the impact on Formwork business. FIA's current work on the NSW Code of Practice and work with SafeWork Australia and the NSW Building Commissioner's office will continue here.

Business Advisory Committee

This committee will provide information for Formwork business owners on how to run an efficient Formwork business, financial and business advisory services, contract negotiation, tender and procurement processes, insurance and Workers compensation advice.

Our members are experiencing many challenges to their businesses and the Formwork industry. Many changes and more challenges are yet to come with the increase in legislative cases, financial challenges in a COVID-19 and post COVID-19 economy and with changes to the education of formworkers and access to training. The FIA is here as your industry association to represent you and to advocate for change - change for the better that benefits you. 

Speak with one voice! Together - Stronger

As a result of the current climate, all organisations, industry groups and PCBU’s need to find innovative ways to engage with their customers and stakeholders.

The Construction Services Group (CSG) of SafeWork NSW will continue to engage with its stakeholders through the delivery of content for “toolbox talks” in the form of audio files and podcasts.

This episode of the SafetyCast series focuses on the Construction Site Supervisor, their roles, responsibilities and functions.

Also this week, after receiving your feedback, we have included the “Take 5 – Construction Site Supervisor – SafetyCast”, an abridged version of Construction Site Supervisor SafetyCast.

How to listen:

Download the complete Construction Site Supervisor SafetyCast 

Download the “Take 5 – Construction Site Supervisor – SafetyCast” 

Further articles, recordings and safety videos can be found in the FIA Safety Channel.

FIA SAFETY CHANNEL

FIA KNOWLEDGE CHANNEL