Who is your payer and do you really want to work for your payer?

Latest update 22/11/2023 | Last update 09/08/2023 | First published 09/08/2023 on TradeBox's website, 27/07/2023 on Aitchison Reid's client newsletter

This guidance article was provided to TradeBox Australia by Aitchison Reid Building and Construction Lawyers, and written by Aitchison Reid's director, Fionna. Individual liability limited by a scheme approved under professional standards legislation.

Before I craft a contract...

Before I craft a contract for a client or a new TradeBox trade schedule, I always talk with the client I am drafting the contract for or the TradeBox customer from that particular trade. The first question I ask is: “What are you most concerned about in the industry?” The number one tradie response is: “Getting paid”. Unfortunately, getting paid before you do the work is usually not an option, due to:

• The terms of the contract or subcontract; or

• The domestic building law requirements.

And on most occasions, you can’t repossess the construction work you have carried out, because it won’t move and even if it could move, once construction has been carried out it becomes part of the land and is no longer a good that is capable of being repossessed.

So, what can you do?

My approach to getting paid is layered. No one action is going to save your business every time. As much as I wish you could get paid in full on time, every time – it is just not that simple. So, when thinking of payment protections, think laminated timber. One sliver of the timber is easily penetrated, but when the layers of timber are bonded together, they can be incredibly strong, but also not completely indestructible. So today, I will provide you one sliver of payment guidance, which is relevant to whatever work you do.

Who is your payer?

There are two parts to this very simple tip:

• Confirming who the payer actually is;

• Confirming if you really want to work for the payer.

Confirming who your payer actually is

It sounds simple, but it can actually be very easy to confuse who the payer is. I find a simple question like, “So who will be hiring us?” is a really helpful way to confirm who your payer is. A number of people often confuse a sole trader with a trading name, with a company name. From a legal perspective, there is a big difference, especially if you want to enforce payment. So, [it's] super important to find out who you are contracting with, from the beginning. Again, if someone gives a name that could be a company or a trading name, [some] good questions are:

• “Is that a company or a trading name?”

• “What is the ABN?”

The ABN is a great double check to see if the information you have been given is correct.

Confirming if you really want to work for the payer

Sometimes we can be in such a rush to get the job, that we forget to check if we want to work for the payer.

There are number of simple and free checks you can carry out on your payer:

If they are a company:

• Check the ASIC register here: https://connectonline.asic.gov.au/RegistrySearch/faces/landing/SearchRegisters.jspx?_adf.ctrl-state=8r9cms5cr_4

• Check the QLD court register here for current proceedings: https://apps.courts.qld.gov.au/esearching/

• Check the old court and tribunal decisions: https://www.sclqld.org.au/caselaw

• Check the adjudication decision register: https://my.qbcc.qld.gov.au/myQBCC/s/adjudication-registry

• Check their QBCC licence (if they are a builder or higher subcontractor): https://www.qbcc.qld.gov.au/

• Check their ABN: https://abr.business.gov.au

If they are a person:

• Ask for a photo of their licence;

• Check the QLD court register here for current proceedings: https://apps.courts.qld.gov.au/esearching/

• Check the old QLD court and tribunal decisions: https://www.sclqld.org.au/caselaw

• Check their QBCC licence (if they are a builder or higher subcontractor) https://www.qbcc.qld.gov.au/

A liquidated or deregistered company, a cancelled or a suspended QBCC licence are very strong tells, that your payer is unlikely to pay.

Pending court cases, recent demerit points, a history of having its QBCC licence suspended for not paying subcontractors are all reasons to question if you want to work for this payer.

When looking at adjudications, tribunal and court decisions, sometimes you can see how the payer behaves. Did the adjudicator, Tribunal member or judge think they were being reasonable? Do you think they were being reasonable?

If you want to know about more tips and guidance, you can sign up for the “5 Easy Tools You Can Action to Help Your Tradie Business Get Paid” that I wrote for TradeBox Australia (see tradebox.com.au). Otherwise, just wait for my email next month on getting paid.

Please note

This article was written by Fionna C A Reid, director of law practice Aitchison Reid Building and Construction Lawyers (Aitchison Reid) for TradeBox Australia (TradeBox), so that TradeBox can share the article as guidance with tradies and subbies. Use of this article is subject to TradeBox’s terms and conditions of use stated here: https://www.tradebox.com.au/terms-and-conditions-our-ar-content

Aitchison Reid, like TradeBox, is based in Queensland.

This article has been drafted in reference to building and construction trade businesses in Queensland only.

TradeBox is not a law practice. This article is not legal advice and is for guidance purposes only. Seek advice on matters of interest arising from the commentary, information and guidance in this article.

Aitchison Reid’s content for this article was released to TradeBox in August 2023. Individual liability limited by a scheme approved under professional standards legislation.