Shaun Bailey, Ash Street Partners
Who among us isn’t tempted at the prospect of a 10 day break at a cost of 3 days’ annual leave?
With our tendency to take additional leave to bridge the succession of public holidays, this month presents unique challenges under security of payment legislation. April often sees reduced staffing levels, early “beat the traffic” office departures and questionably convenient sick days. This combination can leave construction industry businesses vulnerable, not to mention their advisors.
Security of payment legislation in every Australian jurisdiction imposes strict deadlines for responding to payment claims. Failure to act within those timeframes can result in loss of the right to respond, deemed liability (on an interim basis) with attendant enforcement action and adjudication risk. In NSW, the ACT, the Northern Territory and Victoria that time limit is 10 Business Days or shorter if your contract so provides.
On each of the April public holidays, time under security of payment legislation typically stops running. That is also the case over Christmas and new year. There is however a material difference between the two vacation periods in terms of claims risk. The risk lies in how the legislation defines “Business Days” or, in some jurisdictions, “working days”. In December, time under the legislation does not typically run between the Christmas and new year public holidays. In April however, time under the legislation continues to run between the Easter and ANZAC public holidays.
That difference leaves respondent businesses vulnerable to the risk of "ambush" claims served around and between the April vacation periods. Claimants may exploit the temporary absence of staff to serve payment claims in ways that catch the respondents off guard. Similar tactics can be employed for service of statutory adjudication applications.
Businesses in the construction sector should be vigilant to mitigate these risks.
- Firstly, ensure that informed staff are available to monitor and respond to payment claims and adjudication applications, even during holiday periods.
- Secondly, establish clear protocols for handling incoming deliveries at contractual and usual places of business and registered offices, including designating backup staff to manage urgent matters.
- Thirdly, immediately upon returning to work, review all documentation that arrived over the break – doing so promptly might mean that it is still not be too late to respond.
- And always consult your contract and the legislation in your local jurisdiction.
While April offers us all opportunities for relaxation, it also requires vigilance. Awareness and preparation are the key to navigating this challenging period successfully.
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