Queensland’s head contractor licensing reform postponed
As part of significant reforms to the licensing regime under the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act) that were passed last year, the removal of the head contractor licensing exemption was due to take effect on 24 July 2021.
Today, the Queensland Government published the Building Industry Fairness (Security of Payment) and Other Legislation Amendment (Postponement) Regulation 2021 (Qld) (Regulation), which postpones this until 24 July 2022.
Quick refresher: What is the head contractor licensing exemption?
Significant reforms to the QBCC Act in 2013 permitted unlicensed head contractors to subcontract building work to licensed subcontractors and thereby be exempt from the consequences associated with undertaking to carry out, and carrying out, unlicensed building work in Queensland.
Last year, Parliament passed the Building Industry Fairness (Security of Payment) and Other Legislation Amendment Act 2020 (Qld) (BIFOLA), section 125A of which will, when it commences, remove the head contractor licensing exemption. In an earlier article (available here), we discussed the effect that the removal of the head contractor licensing exemption will have on the Queensland construction industry. In short, it will require head contractors to ensure that they personally hold licences to carry out building work that they undertake to perform and in fact perform. It will also alter the manner in which construction work is procured in Queensland, because a head contractor will not be able to undertake to carry out work for which it is not personally licensed even if it intends to subcontract the work to parties who are.
The BIFOLA was assented to on 23 July 2020, and the removal of the head contractor licensing exemption was due to commence by operation of law on 24 July 2021.
What has changed?
The Regulation postpones the removal of the head contractor licensing exemption until 24 July 2022.
The Explanatory Notes to the Regulation state that the postponement is to provide additional time for industry consultation on the implementation of this change.
The postponement will be a welcome (albeit temporary) relief to many head contractors in the Queensland construction industry. It remains necessary for head contractors and those who procure their services to plan for the ultimate implementation of this reform and consider how their practices may change when it takes effect. We will continue to monitor and provide updates as to the status of these reforms.
For further information about how these issues may affect you, please contact our team.
This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.