Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 


Payment Problems In The Construction Industry

Legislation Announced To Relieve Payment Problems In The Construction Industry

Associate Minister of Commerce Laila Harré has announced the details of proposed new legislation aimed at outlawing widespread payment problems in the construction industry.

Since the Statutory Liens and Wages Act was repealed in 1986 sub-contractors have been exposed to a high degree of risk when it comes to getting paid by operators at the top of the contractual chain.

"Pay-when-paid and pay-if-paid clauses have been the financial downfall of many small sub-contractors, and more recently we have seen larger companies forced into bankruptcy or liquidation because of this legal loophole," Laila Harré said.

The main features of the new legislation will be:

 Outlawing pay when paid and pay if paid clauses in construction contracts

 Establishing a fast-track binding, but not final adjudication process to resolved disputes concerning construction contracts

 Establishing a default regime under which contractors and sub-contractors would be entitled to regular progress payments for work done, unless both parties agree otherwise

 The limited reintroduction of a Security Interest or Lien as a remedy for non-payment. This would mean a property could not be sold until the person who placed the Lien had been paid. To ensure this provision is not used spuriously it could only be used once an adjudicator has made an award in a contractor's favour.

 Adjudicators' awards will be binding. This means that any award will have to be paid according to the adjudicator's ruling and can be enforced through the courts. Appeals will be allowed but this will not delay payment.

The legislation is modelled on laws that exist in New South Wales and the United Kingdom, with adaptations to suit New Zealand conditions.

"Giving sub-contractors the right to stop work if they are not paid on time will also help identify problems sooner rather than later, and should in turn reduce the magnitude of losses if a company does fall over," Laila Harré said.

"Hundreds of small businesses and their employees have paid a heavy price for the hands-off approach to payment problems in the construction industry.

"This is as much an issue of social justice as it is of improving the commercial environment for players in the construction industry. The unfair allocation of risk is not good for the construction industry or the people who rely on it for their livelihood," Laila Harré said.

Ends

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

 

Breed Laws Don’t Work: Vets On New National Dog Control Plan

It is pleasing therefore to see Louise Upston Associate Minister for Local Government calling for a comprehensive solution... However, relying on breed specific laws to manage dog aggression will not work. More>>

ALSO:

Corrections Corrected: Supreme Court Rules On Release Dates

Corrections has always followed the lawful rulings of the Court in its calculation of sentence release dates. On four previous occasions, the Court of Appeal had upheld Corrections’ practices in calculating pre-sentence detention. More>>

ALSO:

Not Waiting On Select Committee: Green Party Releases Medically-Assisted Dying Policy

“Adults with a terminal illness should have the right to choose a medically assisted death,” Green Party health spokesperson Kevin Hague said. “The Green Party does not support extending assisted dying to people who aren't terminally ill because we can’t be confident that this won't further marginalise the lives of people with disabilities." More>>

ALSO:

General Election Review: Changes To Electoral Act Introduced

More effective systems in polling places and earlier counting of advanced votes are on their way through proposed changes to our electoral laws, Justice Minister Amy Adams says. More>>

Gordon Campbell: On Our Posturing At The UN

In New York, Key basically took an old May 2 Washington Post article written by Barack Obama, recycled it back to the Americans, and still scored headlines here at home… We’ve had a double serving of this kind of comfort food. More>>

ALSO:

Treaty Settlements: Bills Delayed As NZ First Pulls Support

Ngāruahine, Te Atiawa and Taranaki are reeling today as they learnt that the third and final readings of each Iwi’s Historical Treaty Settlement Bills scheduled for this Friday, have been put in jeopardy by the actions of NZ First. More>>

ALSO:

Gordon Campbell: On The Damage De-Regulation Is Doing To Fisheries And Education, Plus Kate Tempest

Our faith in the benign workings of the market – and of the light-handed regulation that goes with it – has had a body count. Back in 1992, the free market friendly Health Safety and Employment Act gutted the labour inspectorate and turned forestry, mining and other workplace sites into death traps, long before the Pike River disaster. More>>

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news