If the statutory prohibition on an entitlement to payment under s 42 of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act) was not already imposing enough, recent amendments proposed by the Building Industry Fairness (Security of Payment) Act 2017 (BF Act) will no doubt widen your eyes.
New and additional penalties for unlicensed building work (which commenced in November 2017), now include for repeated offences up to 1 year’s imprisonment or a hefty fine of up to approximately $44,000.00.
The BF Act amendments introduce the following maximum penalties for a breach of section s42 QBCC Act:
- for a first offence – a fine of up to approximately $32,000.00;
- for a second offence – a fine of up to approximately $38,000.00; and
- for a third offence – a fine of up to approximately $44,000.00 or 1 year imprisonment.
To avoid these section 42 penalties, where undertaking building work, contractors must hold the appropriate QBCC class of licence under the Queensland Building and Construction Commission Regulation 2003 (QBCC Regulation) relevant to the work they contract to perform. With or without a QBCC licence, it is now more critical than ever that contractors undertake a careful assessment of any proposed work before committing to a contract. If you have a QBCC licence, you should undertake an assessment or get advice to ensure all proposed work falls within your relevant class of licence. If you don’t have a QBCC licence, you should undertake an assessment or get advice as to whether any proposed work is ‘building work’ under QBCC Act, or is otherwise excluded under the QBCC Regulation.
Unfortunately, these are not simple or straight forward matters. Firstly, navigating the excluded work in Schedule 1AA of the QBCC Regulation is tricky, because there are exceptions to exclusions. It’s possible certain work may be an exception to what is otherwise excluded from the definition of building work, and therefore constitute building work requiring an appropriate class of QBCC licence.1
Assuming any given exclusion in Schedule 1AA of the QBCC Regulation applies without a careful assessment of all work is a grave error. The consequences are all or nothing and the punishment now even more severe. Only a small component of the work need be unlicensed building work to offend section 42.2
By way of example, many electrical contractors assume they are not required to hold a QBCC licence because the work they do typically falls within the exclusion in item 20 of Schedule 1AA of the QBCC Regulation as electrical work.
However, there are exceptions to excluded electrical work prescribed in the Electrical Safety Act3 which include the following:
- locating or mounting electrical equipment, or fixing electrical equipment in place, if this task is not performed in relation to the connection of electrical equipment to an electricity supply;
- erecting structures for the support of electrical equipment; and
- locating, mounting or fixing in place electrical equipment.
Grave consequences await if an electrical contractor assumes the work they do is excluded from any QBCC licence requirement, without a closer examination of the nature and extent of any proposed work which may fit the above exceptions. If those exceptions apply to the work and the contractor does not hold a relevant QBCC licence, section 42 is triggered on entry into the contract.
More than ever, contractors in Queensland must get into the habit of undertaking a careful assessment or obtaining advice on the nature and extent of all proposed work and their licence status, before making any commitment to the work. If not already, this should be an essential step for all contractors in business in Queensland. Contact us if you have any queries or concerns regarding your licensing status.
1 Ooralea Developments Pty Ltd v Civil Contractors (Aust) Pty Ltd & Anor  QSC 254 at .
2 Dart Holding Pty Ltd v Total Concept Group Pty Ltd  QSC 158.
3 Electrical Safety Act 2002 (Qld) s 18(2).
Authors: Julian Troy (Special Counsel) and Antony Calligeros (Graduate)