Contracts

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Painter

It is the painter and decorator’s responsibility to ensure that a written contract that accurately reflects the agreement reached is in place between themselves and their client.

Contracts will vary depending on whether the type of painting and decorating work that is proposed is residential or commercial. Any agreement for the performance of ‘home building work’ as defined by the Home Building Contracts Act 1991, must be in writing and be signed and dated by both parties. The contract documentation should include all specifications, addenda and the painting and decorating schedule.

If you are unsure what type of contract to use or what should be included, contact an association such as the Master Painters and Decorators Australia, Master Builders Association, Housing Industry Association or Australian Institute of Architects, who may be able to provide advice as well as a selection of contract templates.

Failure to have proper contracts in place or contracts that do not accurately reflect the agreement between the parties can result in proceedings being brought against the painter and decorator. If you are unsure about contractual requirements or a particular aspect of the contract, seek independent professional advice.

Home building contracts

The Home Building Contracts Act 1991 (the Act) regulates contracts between any person undertaking home building work or associated work, including painting and decorating, with a value of between $7,500 and $500,000.

‘Home building work’ is defined as constructing a new home, painting and decorating, renovating an existing dwelling, placing a transportable home on land or carrying out any associated work ie installing a swimming pool, kitchen cabinetry, constructing a garage or shed or performing landscaping work.

As a registered painter and decorator, when entering into contracts for painting work over the value of $7,500, it is a requirement to comply with the provisions of the HBC Act.

The main provisions of the HBC Act are:

Notice for the Home Owner

  • Must be given to the home owner prior to a contract being signed and work commencing.

The contract

  • Must be in writing.
  • Must contain all the terms, conditions and provisions of the agreement.
  • Must be signed and dated by both parties.

Contract terms

  • Prohibit 'rise and fall' clauses.
  • Include some exceptions to costs incurred due to an increase in government charges or duty.

Deposits and progress payments
A home building contract cannot provide for a payment that exceeds 6.5% of the total cost before the commencement of painting and decorating work. After the commencement of the work, any progress payment must be for work actually performed or materials already supplied.

Contract variations

  • Must be in writing.
  • Must be signed and dated by both parties.
  • A copy must be given to the home owner prior to any work commencing.

While these provisions impose a statutory obligation for a specific category of work (ie fixed price home building work contracts between $7,500 and $500,000), the Building Commission considers that the principles of having the contract in writing and the receipt of progress payments should be applied to all building contracts.
Failure to comply with the provisions may incur penalties of up to $10,000 in the case of individuals and $50,000 in the case of a company.

Sham contracting

There are different types of working relationships under Australian law whereby workers are considered to be either employees or independent contractors.

Employees have set legal rights relating to wages, working hours and leave entitlements.

Independent contractors run their own businesses and are able to negotiate their own fees and working arrangements as well as provide services to a wide range of clients.

A ‘sham contracting’ arrangement occurs when an employer knowingly disguises an employment relationship by telling an employee that they are being hired as a contractor when they are really an employee. This arrangement may mean the worker will miss out on their legal employee entitlements.

Employers must not mislead employees about the effect of changing their working arrangements or threaten employees with dismissal in order to become independent contractors.

Under the Fair Work Act 2009, it is illegal for an employer to misrepresent an employment relationship or employment offer as an independent contracting arrangement.

Further information about general protection for employees is available on the Fair Work Commission website.

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