home-about work-security of payments
 

 Security of Payments
 Print Leaflet

"It is important for subbies to seek advice early in disputes about payment"

ABOUT THE BUILDING AND CONSTRUCTION INDUSTRY SECURITY OF PAYMENT ACT 1999

For several years the CFMEU has lobbied the NSW Government for laws to be introduced to assist unpaid contract workers. As a direct result of the union's efforts, the Building & Construction Industry Security of Payment Act 1999 was passed by the NSW parliament.


Benefits of the Act:

  • Disputes are resolved promptly through the adjudication process and not at the end of the job, as has been the case in the past.

  • The Act provides for speedy out-of-Court processes for non-payment of progress claims. If the progress claim debt is not contested within ten days, it is deemed to be admitted. If it is disputed and notice is given within the ten days, there is an out-of-Court adjudication procedure.

  • It provides a ban on "pay when paid" or "pay if paid" clauses in contracts.

  • Contract workers can obtain a Court judgment quickly without a Court hearing and will also be entitled to stop further work until paid.

It is important for subbies to seek advice early in disputes about payment, as there are strict statutory time limits that prevent late claims being lodged. If claims are not lodged within time, subbies will lose valuable legal rights to payment.

This Act does not apply to contracts between a residential property owner and a contractor in relation to work on the owner's own home.

How it works
The process involved in getting paid is three stages and there are strict time limits on all three stages.

1. A Payment Claim Notice must be issued and served. The notice must:
 
  • Identify the construction work to which the Payment Claim relates.
  • Indicate the amount of money claimed & the payment period relating to the invoice amount.
  • State that the claim is made under the Building and Construction Industry Security of
    Payment Act 1999 (CFMEU can provide labels available to help with this).
2. It is also very important to serve the claim properly. It should be delivered by hand to the principal place of business of the Debtor (principal contractor).
 
3. The Debtor then has 10 business days to either pay the claim or serve the contract worker with a Payment Schedule. If they do not respond within the time period, they are assumed to have admitted the amount claimed. There can be no extension of this time. In that case the Claimant can go straight to the Court to obtain a judgment without having to argue a case.
 
4. If the Debtor disputes the amount claimed, they must respond by serving the contract worker (the Claimant) with a Payment Schedule within 10 working days. The Claimant then has five business days to apply for adjudication. If the Claimant does not do this within the five days they lose the right to adjudication under the Act, and the right to suspend work. There is nothing in the Act however, to stop a Claimant lodging a fresh payment claim and starting again.

The adjudication process can be done by an adjudicator agreed between the parties or an Authorised Nominating Authority (ANA) can appoint the adjudicator. A list of ANA's is available from the Union Office.

The adjudicator must determine the application as quickly as possible. The adjudicator’s decision is final and, if in favour of the applicant, the Order can then be legally enforced.