09 July 2021

Postponement of the removal of the head contractor licencing exemption in Queensland

This note was written by Aisling Scott.

The Building Industry Fairness (Security of Payment) and Other Legislation Amendment Act 2020 (“Amendment Act”), passed in July 2020, contained a key amendment to the Queensland Building and Construction Commission Act 1991 (Qld) (“QBCC Act”) which removed an important exemption to the requirement to hold a contractor’s licence in Queensland. 

The exemption permitted an unlicensed person to enter into a contract to carry out building work if the entirety of the building work was to be carried out by a person who was appropriately licensed to carry out that work building work (“head contractor exemption”).[1] This exemption was of particular importance to developers, as it permitted them to carry out developments for which they otherwise would have required a licence provided the actual building work was carried out by a licensed builder.

Certain provisions of the Amendment Act were commenced by proclamation in August 2020, including in relation to a review into the role of developers in Queensland.[2]

The provisions of the Amendment Act removing the head contractor exemption were to commence on 24 July 2021.[3] The delay in the removal of the exemption was (amongst other reasons) presumably to permit the completion of a review into the role of developers in the industry in Queensland. 

However on 8 July 2021, the Governor in Council issued the Building Industry Fairness (Security of Payment) and Other Legislation Amendment (Postponement) Regulation 2021 postponing the commencement of the removal of the head contractor exemption for a further 12 months.

The Explanatory Note states that additional time is to “allow additional time to consult on implementation” in relation to the removal of the head contractor exemption. While not specifically referenced, it is likely that the postponement is to facilitate the completion of the review into the role of developers, and to allow this review to be completed before the head contractor exemption removal comes into effect.

Unlicensed entities (particularly developers) who carry out “building work” in Queensland in reliance on the head contractor exemption should be mindful of:

  • the revised commencement date for the removal of the exemption;
  • the prerequisites to holding a licence for building work in Queensland (including financial and technical requirements) which can be onerous and require time to implement; and
  • the breadth of the definition of “building work” under the QBCC Act which includes administrative, supervisory and other tasks connected with “building work”.

[1] See Schedule 1A, section 8, to the QBCC Act.

[2] See new section 115D of the QBCC Act commenced by Proclamation: Subordinate Legislation 2020 No. 158.

[3] Acts Interpretation Act 1954 s 15DA provides that if a law has not commenced within one year of assent, the provisions not commenced will automatically commence on the next day. However, a regulation may extend this period to no more than two years.

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