The ABCC Commissioner has published details of NSW based company RMA Construction Group Pty Ltd’s non-compliance with the Code for the Tendering and Performance of Building Work 2016 (Cth) (the Code) after it failed to pay a subcontractor on time and breached security of payment laws.
The non-compliance follows RMA defying an adjudicator’s determination that the company pay a subcontractor $68,897 for work undertaken at the Defence Housing Australia project site in Joongah Street Randwick, NSW in February 2021.
At the direction of RMA, the subcontractor, a sole trader, installed 400 metres of fencing at the site, but the subcontractor’s payment claim was disputed.
The matter was taken to adjudication with the adjudicator determining $68,897, including interest and the adjudicator’s fees be paid to the subcontractor by 8 April 2021.
Rather than pay the adjudicated amount, RMA sought to negotiate payment of a lesser amount. During those negotiations, RMA issued correspondence to the subcontractor, that included a misrepresentation to the subcontractor that it was prohibited from sharing RMA’s correspondence with the ABCC.
Following the ABCC’s intervention, RMA eventually paid the amount of $70,888. The payment was made 105 days after the date stipulated by the adjudicator.
RMA breached sections 11D(1)(a) 11D(1)(b) and 11D(1)(f) of the Code when it failed to:
· pay the adjudicated amount within five business days of the adjudicator’s determination.
· ensure payments, which were due and payable by RMA were made in a timely manner and were not unreasonably withheld; and
· report the disputed or delayed adjudicated amount to the ABCC Commissioner as soon as practicable after the date on which the payment fell due, or indeed at all. Instead, the ABCC was notified of the disputed or delayed adjudicated amount by the subcontractor.
The subcontractor was paid all amounts owing within 27 days of reporting the matter to the ABCC. This rapid recovery highlights the need for contractors to understand their security of payment rights and seek help from the ABCC when they have an issue.
Following the ABCC’s intervention, RMA has undertaken measures to prevent similar breaches from occurring. These include:
· staff training on the Code and security of payment legislation
· revised policies and procedures
· acknowledging and accepting responsibility for the contraventions
· implementing a revised dispute settlement procedure
· quarterly project audits to ensure compliance with mandatory Code reporting obligations.
If you are experiencing disputed or delayed payments from a Code covered entity, you can call the ABCC on 1800 003 338 for free advice and assistance.