Building Licence Applications NSW – Can a subcontractor and unlicenced person gain the required experience

Builders Licence Application

By Kelvin Keane | Nexus Law Group Consulting Principal – Sydney

I wrote previously about the difficulties applicants may have with the often complex and confusing process of lodging an application with Fair Trading for a trade contractor’s licence. This is especially the case where the applicant is engaged by a builder on a subcontract basis, without holding a licence and then seeks to reply on this experience in their licence application.

The Commissioner for Fair Trading has issued a notice[1] outlining the qualifications and experience required to obtain a builders licence. The notice states that the applicant is to have an appropriate level of qualification, such as a Certificate IV in Building, and at least two years practical experience under the supervision of a licenced contractor. The applicant’s experience must be gained while the applicant is ‘lawfully engaged’ and the applicant must be financially remunerated while undertaking the work.

From my review of licence application refusals, the Commissioners statement has been interpreted by Fair Trading to mean that where a person is subcontracting to a builder, but does not hold a licence in any class, they are not lawfully engaged because the Home Building Act 1989 (Act) section 12 requires they be licenced or an employee as follows:

12 Unlicensed work

An individual must not do any residential building work, or specialist work, except:

(a) as, or as a member of a partnership or an officer of a corporation that is, the holder of a contractor licence authorising its holder to contract to do that work, or

(b) as the holder of an owner-builder permit authorising its holder to do that work, or

(c) as an employee of the holder of such a contractor licence or permit.

This interpretation has led to many in the industry who have been working for builders, in some cases for many years, on a subcontract arrangement without a licence being refused a licence on the basis the experience is invalid.

The Fair Trading interpretation of the Commissioners notice is however contrary to the findings of the NSW Civil and Administrative Tribunal in these circumstances. In particular, the decision in Shoobridge v Commissioner of Fair Trading [2015] NSWCATOD 42 (Shoobridge) covered in detail the various claims by Fair Trading that an unlicenced contractor, or unqualified person, cannot have their experience accepted as valid experience.

It was the Senior Members opinion that Fair Trading were wrong and that despite the provisions of section 12 providing that an individual must not do any residential building work unless they are the holder of a contractor licence or are employed, section 13 of the Act provides an alternative and separate means by which a person can gain experience when they are a subcontractor and unlicenced.

Section 13 provides that a person must not do residential building work except:

  • as a holder of an endorsed contactor licence; or
  • under the supervision and subject to the direction of the holder of an endorsed contractor licence or supervisor certificate authorising as holder to supervise that work.

The Senior Member clearly states that this provision allowed for an unqualified person to be engaged as a subcontractor where the qualified supervisor or contractor is supervising the unqualified persons work. The Senior Member considered that this employment arrangement provided adequate protection to the consumer as the primary contract was between the consumer and the licenced contractor.

The Senior Member went on to state that he considered this person was lawfully engaged and their experience was valid and should be accepted. Despite the Shoobridge decision and a previous case[2]presenting the same decision, I am still seeing Fair Trading determinations refusing licences on the same basis.

If you have been subcontracting to a builder while unlicenced and are seeking to lodge an application it is important therefore to adequately address the issues that may arise so as to provide you with the best opportunity for success.

If you have any questions, contact Kelvin Keane at [email protected] or telephone +61 (2) 9016 0141

 

This publication is © Nexus Law Group and is for general guidance only. Legal advice should be sought before taking action in relation to any specific issues.

 

[1] Home Building Act 1989 Section 33D(1) Instrument, NSW Government Gazette N0. 52 of 28 April 2017

[2] Hale v Commissioner of Fair Trading [2015] NSWCATOD 1