NEWS 

WESTERN AUSTRALIA  -  

 

Decision Regulatory Impact Statement: Reforms to plumbing legislation

On 27 November 2019, the Department of Mines, Industry Regulation and Safety – Building and Energy Division (Building and Energy) published a decision paper marking the end of an extensive review of Western Australia’s plumbing laws.

The decision paper – formally titled Decision Regulatory Impact Statement: Reforms to plumbing legislation in Western Australia (the ‘DRIS’) – sets out the legislative changes that are intended to be made and covers 20 separate reforms.

Each decision in the DRIS takes into account the feedback that was provided in the more than 1,000 submissions received in response to a Consultation Regulatory Impact Statement released by Building and Energy in May 2018.

The broad areas of reform covered in the DRIS are:

  • The funding model for plumbing regulation

  • The future role of the Plumbers Licensing Board

  • The definition and scope of regulated plumbing work

  • The testing and maintenance of plumbing safety devices

  • Minor plumbing repairs by private homeowners in their own homes

  • The requirements for modular plumbing installations

  • The regulation of plumbing designers and plumbing design verifiers

  • The scope of work covered under a restricted plumbing permit

  • The transition from apprentice to tradesperson

  • Advertising to perform plumbing work

  • Supervision and general direction and control by Licensed Plumbing Contractors

  • Penalties and prosecution

  • Compliance notification for ‘minor plumbing work’

Further information, including a summary of each reform, is available at www.commerce.wa.gov.au/building-and-energy/plumbing-review. A copy of the DRIS itself is also available from this webpage.

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Changes to Construction Contracts Act in WA... 

In the current economic climate, businesses must ensure they are up to date with the multitude of bespoke security of payment regimes applying in the jurisdictions in which they operate. In the very near future, we see a confluence of factors combining to form what could be a “perfect storm” for adjudications convened under those regimes. The COVID-19 pandemic continues to negatively impact global supply chains and cash flow for contractors already operating on low margins on Australian and overseas construction projects.

 

Where the risk of disputes is elevated, culminating in non-payment, greater recourse by contractors to security of payment legislation can be expected.
The Building and Construction Industry (Security of Payment) Bill 2020 introduces significant reform to the process for adjudication in Western Australia, bringing it more into line with the “East Coast Model”—particularly the regime in New South Wales. 

Some of the main changes are noted below.

Unfair time bars


Time bars are a common feature of construction contracts and are typically enforced by courts, even when the application of the time bar can be harsh for a contractor.

Under the Draft SOP Bill, a time bar provision contained in a construction contract may be declared unfair, and will have no effect, if compliance with the provision is not reasonably possible or would be unreasonably onerous on a party.

Notice to be provided before calling on performance security
The proposed legislation prohibits a party to a construction contract calling on a performance security unless it has given the other party 5 business days’ notice of the intention to call on the security.

The legislative intent with requiring notice to be given is likely aimed at giving contractors an ability to remedy any default. However, the notice period will also enable contractor’s time to seek injunctive relief from courts in order to prevent a party calling on a performance security.

If this provision finds its way into the final form of legislation it is likely there will be an increase in applications for injunctive relief in courts to prevent a call on security.

Mining exemption
The mining exclusion under the CCA often serves to exclude construction work on resource projects from the scope of the CCA. The mining exclusion has been narrowed in the Draft SOP Bill with the result that construction work on resource projects, which are a large feature of construction activity in WA, may be captured by the new legislation.