Increased protections for subcontractors

South Australian subcontractors will be better protected, under new laws introduced to State Parliament this week.

Workers owed money for jobs they’ve started under a construction contract will benefit from increased oversight and an improved adjudication system, ensuring better payment practices.

Attorney-General Vickie Chapman said the extensive reforms were developed in response to the 2017 national review undertaken by John Murray AM to strengthen security of payment laws across Australia.

“Too often, small businesses and contractors are left in the lurch by those who engage them but fail to pay their bills on time,” Attorney-General Chapman said.

“The Marshall Liberal Government has consulted widely to ensure these laws are up to scratch and what the industry needs.

“Often issues arise when a contractor and subcontractor disagree over milestone or progress payments, and an independent adjudicator is required to settle the dispute.

“These new laws will increase the registration threshold for adjudicators, with approved adjudicators then bound by a Code of Conduct.

“Breaches of certain aspects of this Code could be punishable by a fine of up to $5,000, or an expiation of $210.

“Where an adjudicator breaches a condition of their registration – for example failing to advise the Small Business Commissioner in writing of a court’s decision to overturn an adjudicator’s determination – their registration could be suspended or cancelled,” she said.

The proposed legislation will also improve the oversight of adjudicators and authorised nominating authorities, as well as the adjudication applications referral process, ensuring the adjudication system is fair and of a high standard.

Furthermore, it will enable contractors or builders to make a payment claim on an owner builder of a residential property.

Small Business Commissioner John Chapman said de-identified adjudication determination would be published on the Small Business Commissioner’s website to help businesses understand how those determinations were made and make the process as transparent as possible.

“Overall, these reforms are aimed at strengthening processes around business payment disputes, strengthening the protections for ensuring progress payments are made in a timely manner and delivering a consistent mechanism for security of payment laws,” Commissioner Chapman said.

The reforms will be funded by a $10 fee on all building and associated trade licences.

“It will offer a more robust, fair and effective system that better supports our local businesses,” he said.