IR Q&A Issue 6
Q: What rights does a client have to withhold money on a payment claim?
A: Generally, if the work has been completed under the Contract, you should be entitled to be paid for the works completed. The ACT Contract provides that progress payment claims will be payable on the completion of that particular stage despite minor defects or omissions which do not prevent the building works from progressing to the next stage.
There are, however, some instances where a client might be able to hold on to monies due and payable under a progress claim. This might be where the works have not been deemed to have reached practical completion or where there are defects and/or omissions which prevent the works from being reasonably fit for occupation or use.
Q: What happens if the client doesn't pay the claim by the due date? What can I do as the builder?
A: The client has obligations under the contract to pay a progress claim when the specified works have been completed, or where practical completion has been met. A failure to do so entitles you (the builder) to interest on the overdue amount (the rate is specified in Appendix A) and there may be other options such as suspending the building works, issuing a notice of dispute and worst case scenario, potentially giving you grounds to terminate the contract.
Q: I have an employee who is heading away to help fight bushfires interstate. Does the employee need to give me notice and do I need to pay him?
A: An employee is entitled to take community service leave where they are engaging in a voluntary emergency management activity, such as being a member of the RFS and being deployed to assist with an emergency, such as those fires we have seen recently on the East Coast of Australia.
It is important to note that there are no limits on the amount of community service leave that can be taken.
An employee will need to give you notice of their intended community service leave as soon as possible (including after the leave starts) as well as an estimated time for their absence from the workplace which should include engagement in the activity, reasonable travel time and rest time.
If you're not sure whether the employee is entitled to this leave, you can request evidence of their engagement in such activities. NSW RFS have a 'Supportive Employer Program' available which provides recognition for the contribution that employers make by allowing their employees to attend incidents, when required, as well as further education about what it means to be a volunteer firefighter.
If you have any queries or would like to ask a question, please contact me on 6175 5919 or email email@example.com