Implementation of the Building and Construction Industry (Security of Payment) Act
The Building and Construction Industry (Security of Payment) Act 2021 (WA) (the “new Act”) will introduce better payment protections for all participants in the Western Australian building and construction industry. It is one of the most significant legislative changes for the local industry since the 2004 introduction of the Construction Contracts Act 2004 (the “CCA”).
In line with the State Government’s 3-year Action Plan for Reform for implementing the Act, the first stage of reforms are due to take effect from 1 August 2022 and will apply to construction contracts entered into on or after that date. The CCA will continue to apply to construction contracts entered into before then.
Stage 1 of the implementation roadmap focuses on the introduction of new security of payment laws that create more structure and transparency to payment rights under contracts, together with a more effective means for contractors to recover payments owed through a process of rapid adjudication. The new laws are more consistent with those in the rest of Australia.
The other stages will start on 1 February 2023 (Stage 2) and 1 February 2024 (Stage 3).
The Department of Mines, Industry Regulation and Safety – Building and Energy division (Building and Energy), will support businesses to adjust to the reforms through a substantial campaign of industry education. This will officially kick off in June 2022 and run until at least the end of the year.
To help businesses understand the new laws that are to commence on 1 August 2022, Building and Energy will publish a suite of educational materials on its website. These include:
- a full suite of educational videos and fact sheets covering the full payment process under new security of payment laws;
- template forms for making and responding to payment claims, as well as utilising the rapid adjudication process to recover overdue construction payments; and
- user guides for the adjudication process (both for claimants and respondents).
Building and Energy is also collaborating with experienced Western Australian law firm, Jackson McDonald, which has been appointed to help develop and deliver information sessions for industry participants on the new laws and how they operate.
The seminars will also be made available online in June 2022, and will explain all key provisions of the security of payment laws including:
- how the Act will apply to construction contracts;
- the types of contracts that are covered;
- payment procedures and practices;
- how the rapid adjudication process will work; and
- practical tips on how to participate fruitfully in the payment process under the Act.
Building and Energy has also engaged Jackson McDonald to assist with preparing a training course for current and prospective adjudicators about the new Act to meet registration requirements. The training course will be delivered later this month on 23 May to 12 candidates chosen through a competitive selection process.
Details about the industry education initiatives will be provided soon. More information on the laws including an Action Plan that outlines key reforms and stages is available on the Security of payment webpage.
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