The performance of construction work in Queensland is heavily regulated.
Traditionally, contractors that perform exclusively civil work have generally been beyond the reach of the licensing regime in Queensland.
However, recent cases have demonstrated that civil contractors may be subject to the licensing regime, which if not complied with, can have significant financial implications for the contractor.
When is a licence required?
The Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act) requires that a person must not carry out, or undertake to carry out, building work unless the person holds a contractor’s licence of the appropriate class.
Civil contractors have traditionally relied on two primary exceptions to the requirement to be licensed:
- The “head contractor” exemption; and
- That the work the civil contractor is performing is not “building work” as defined under the QBCC Act.
However, despite these exceptions, there are significant risks for civil contractors if any aspect of their contacted works is “building work” to which the QBCC Act applies.
Exception 1: “Head Contractor” exemption
One exemption to the requirement to hold a licence applies where the work is not residential construction work or domestic building work and is to be carried out by a person (an appropriately licensed contractor) who is licensed to carry out building work of the relevant class.
The unlicensed person may directly or indirectly cause the building work to be carried out by an appropriately licensed contractor, or enter into another contract with an appropriately licensed contractor, to carry out the work.
Recent changes to the legislation mean that the government may prescribe that the head contractor exemption cannot be relied on in certain circumstances. However, no such regulations have yet been made.
Exception 2: The work is not “building work”
Provided that all of the work which the civil contractor performs, or undertakes to perform, is not “building work” as defined, then the requirement for licensing will not apply.
Relevantly for civil contractors, the scope of what is “building work” under the QBCC Act does not include the type of work generally performed by civil contractors. This includes:
- Construction, maintenance or repair of a busway or a tunnel for a busway;
- Construction, maintenance or repair of a road or a tunnel for a road;
- Construction, maintenance or repair of a bikeway or footpath or a tunnel for a bikeway or footpath for public use;
- Construction, maintenance or repair of a dam;
- Work consisting of earthmoving and excavating;
- Laying of asphalt or bitumen.
What is the risk for civil contractors?
Despite the above exceptions, if any aspect of a civil contractor’s work includes “building work”, the requirement for a licence will be triggered.
This is because construction contracts are “entire contracts” and not divisible.
Therefore if a contractor enters into a contract that is in some part for “building work”, the entire contract will be a building contract to which the QBCC Act applies.
Because the scope of what is “building work” is broad, there is a risk to civil contractors that they may inadvertently enter into contracts including building work for which they do not hold to required licence.
Generally, “building work” is work pertaining to a “building”, which is defined as “any fixed structure”. The result of the broad definitions is that “building work” can refer to work which is beyond what is usually strictly regarded as building work.
Some examples of work which have been found by the courts to be “building work” because it is work related to a “fixed structure” include:
- Piling work for solar farm structures;
- Installed ag pipe;
- Installation of a bike rack.
Where the licensing requirements are breached, the entire contract is affected and is unenforceable. A contractor’s payment entitlement for the entire work will be limited to recovery of reasonable remuneration for materials and labour, rather than the contractually negotiated rates and prices.
Unlicensed contracting is also a penalty provision under the QBCC Act.
Civil contractors should be aware that if any aspect of their contract constitutes “building work” for which they do not hold the required licence, the entire contract will be affected and there is a risk that the contract will not be enforceable in relation to payment.
To mitigate this risk, civil contractors should carefully review their scope of work to ensure that if there is any aspect of “building work” within that scope, that they hold the appropriate licence to perform that work.
Need help understanding your obligations or the licencing process? Get in touch here.