Q&A with Malvin Khaira
Q: I am a subcontractor who has completed works for a builder. The builder is not responding to my payment claims. What can I do?
A: There are a few options available to you.
- You may wish to commence proceedings in ACAT or the Magistrates Court. This would ideally require the assistance of a solicitor and will involve legal costs and court fees. Therefore, it is important that you consider the value of the sums claimed before deciding whether to pursue this option. Costs may be recoverable from the losing party, however, this is a double edged sword and may ultimately result in you bearing the other party’s costs if you are unsuccessful.
- If you are owed at least $2,000, you may wish to issue a statutory demand for payment of the debt. A statutory demand is provided for under s459E Corporations Act. Creditors can make a statutory demand for payment of a debt as long as the debt is due and payable. Companies which are served with a statutory demand have 21 days to apply to the Court to have it set aside. A company is deemed to be insolvent if, having received a statutory demand, it fails to pay the creditor or have the demand set aside by a court. If the company is deemed insolvent, it could be wound up. This is therefore a useful way of pressuring companies to pay their debts and is also cost effective when compared to commencing legal action in the courts. If you are a member and require further guidance on this, please feel free to contact us.
- You may wish to undergo adjudication under the ACT Building and Construction Industry (Security of Payment) Act 2009. An independent adjudicator will make an interim determination as to the amount of progress payment, if any, to be paid by the builder to the subcontractor. The adjudicator’s determination is not final, however, it is binding on the parties until the dispute is resolved by private agreement, a court, or some other process. However, an adjudicator’s decisions are enforceable as a judgment debt through the courts. Please find the list of adjudicator’s in Canberra here. This method is typically cost effective compared to commencing proceedings in the ACAT or Magistrates Court.
Q: Is there a requirement for my business to have an enterprise agreement?
A: No. There is no requirement to have an enterprise agreement. Individual employment contracts are perfectly fine so long as they do not provide for terms that are contrary to or less than those under the Modern Awards and National Employment Standards (NES).
Many employers seek to implement an enterprise agreement as it is often simpler and more efficient in the long term compared to Modern Awards. This is because costs associated with accounting and payroll can add up when employers need to calculate specific entitlements like meal allowances; penalty rates; overtime; and the many additional allowances applicable to individual employees depending on the type of work they do.
At MBA ACT we have come across several Enterprise Agreements that do not necessarily provide efficiency to the employer in terms of simplifying the entitlements or allowances that an employee is entitled to. Instead, it often creates more complication than if a Modern Award was to operate instead. It is therefore our advice that as an employer you should always ask yourself the following questions when deciding to have an enterprise agreement.
- Is there a reason why you want an Enterprise Agreement to govern the employer/employee relationship rather than simply having individual employment contracts that could potentially do the same thing?
- Is an Enterprise Agreement going to simplify entitlements or allowances that your employees are entitled to in a way that provides you as an employer efficiency in accounting and payroll?
- You will need to comply with strict timeframes and processes including the facilitation of meetings with bargaining representatives and consideration of their proposals, failing which could result in the Enterprise Agreement being knocked back. Are you prepared to bear the time and costs required to negotiate an EBA and to go through the process with the Fair Work Commission? (MBA does not charge its members for this service).
Please note that you do not necessarily have to agree to bargain if your employees or an eligible union wishes to bargain for an enterprise agreement. However, the Fair Work Commission could make a determination that you are required to bargain if satisfied that a majority of the employees to be covered by the agreement want to bargain. If you are a member that is faced with such a situation, please contact us at MBA ACT.
If you have any queries or would like to ask a question, please contact Malvin on 6175 5900.