The following article was authored by KCL Law’s Ben Hicks, Lawyer, and published in the Australian Construction Law Newsletter #189, November/December 2019.
Introduction
During the week of 18 November 2019, the Victorian Government announced carpentry as the first building practitioner to be regulated under the Building Amendment (Registration of Building Trades and Other Matters) Act 2018 (Vic) (the Act) assented on 25 September 2018.
The following week, the Victorian Government announced their full list of priority building practitioners that will, over a five–year–five–stage implementation plan, become licensed and regulated.
The Act’s announcement is the second major reform announcement for Victorian building practitioners licensing and registration this year, after the Professional Engineers Registration Act 2019 (Vic) (Engineers Act), which will reform licensing and registration for engineers, was assented on 3 September 2019.
This article investigates these recent announcements and details the past, present and future of building practitioner’s registration and licensing in Victoria.
Who is a building practitioner?
Under the Building Act 1993 (Vic) (Building Act), a ‘building practitioner’ includes:1
- building surveyor;
- building inspector;
- quantity surveyor;
- engineer;
- draftsperson;
- builder;
- scaffolder; and
- project manager.
Expressly excluded from ‘building practitioner’ are:
- an architect (as they are regulated under the Architects Act 1991 (Vic)); and
- a person (other than a domestic builder) who does not carry on the business of a building.2
The problem and solution for building practitioner licensing and regulation
In February 2018, Peter Shergold and Bronwyn Weir in their report ‘Building Confidence’ (Shergold Weir Report) identified that registers for building practitioners differ between states and territories, resulting in:
- difficulty in mobility for building practitioners (often confined to a state or territory);
- complexity between jurisdictions in recognising the skills and qualifications of building practitioners (may have building practitioners performing beyond their competency); and
- most importantly; gaps in accountability for the building practitioners who are responsible for National Construction Code (NCC) compliance
(for instance, those responsible for fire safety design might not need to ‘sign off’ on it under the
relevant NCC).3
The solution put forward in the Shergold Weir Report was:
- Each state and territory register the following building practitioners:
- project manager;
- builder;
- building surveyor;
- building inspector;
- architect;
- engineer;
- draftsperson;
- plumber; and
- fire safety practitioner.
- Alongside these registrations:
- only registered building practitioners perform the work for which they hold registration—this should then extend to ensuring that only appropriately registered practitioners can prepare compliant NCC documentation;
- each category of building practitioner has defined sub–categories (such as civil and structural engineer) and a further sub–category of domestic and commercial to restrict the scope of work the registered person can perform;
- consultancy with industry groups to be undertaken to further determine disciplines; and
- each state and territory prescribe consistent requirements for registration of building practitioners.4
In December 2018, the Senate in the Economics References Committee report ‘Non–confirming building products: The need for a coherent and robust regulatory regime’ (Senate Committee Report) also addressed licensing and registration.
First, the Senate Committee found the construction industry’s high tendency for insolvency prompted the necessity of licensing:
In an industry characterised by low barriers to entry, small profit margins and inequitable allocation of risk, an effective licensing regime is necessary to protect participants from both unscrupulous and hapless operators.5
Second, after considering the Shergold Weir Report and their own interim Aluminium Composite Panel Report opined:
- the current system is broken and fragmented, since licensing and registration is spread over the state and territories, all having various requirements which greatly affects NCC compliance and consequently the safety of the Australian public and consumers; and
- a national licensing scheme should be adopted with consideration to be given to developing a national licensing authority to oversee the development of a national licensing policy and administration of such a licensing scheme.6
Despite the Shergold Weir Report and Senate Committee Report recommendations, building practitioner licensing and registration has proceeded slowly on a state and territory basis (rather than a national licensing scheme). Adoption continues to be fragmented and lacks coherency between state and territories.
Status of building practitioner licensing and registration regulation
Victorian building practitioner license and registration is dealt with through the Act and the Engineers Act.
Building Amendment (Registration of Building Trades and Other Matters) Act 2018 (Vic)
In Victoria, change in licensing and registration first commenced with the Act’s assent on 25 September 2018. The Act’s purpose, in theory, adopts the Shergold Weir Report (and later, the Senate Committee Report) insofar that it seeks:
- greater accountability of building practitioners for non–compliant work through the application of disciplinary processes (those responsible will more likely need to ‘sign off’);
- confidence be enhanced through workers carrying out or perform restricted work having adequate qualifications, skills and experience to do so (building practitioners should be more limited to work they are capable of doing); and
- the potential incidence of non–compliant building work to be reduced.7
The Act provides for amendments to the Building Act to introduce a mandatory registration and licensing scheme of certain building practitioners and their employees who perform certain building work as prescribed under the regulations (prescribed work).8
A building practitioner who is under the regulations deemed prescribed work is required to have either a registration or employee occupational licence to perform the prescribed work, otherwise cannot be on site. The distinction between registration and employee occupational licence is that the former provides the right or duty to perform certain business functions—for example operate business, be a contractor and contract for building work.9
The Act looks to deter workers against representing or carrying out prescribed work except where licensed or registered to do so through an incremental discipline approach which, depending on the action and severity, will vary from a reprimand or warning up to a 500 penalty unit (currently $82,610) individual or 2500 penalty unit (currently $413,050) company fine.10
There are exceptions, for instance, no offence occurs if the prescribed building work is performed by an apprentice or trainee employed under a training contract to carry out the prescribed building work, and their employer is approved by the Victorian Registration and Qualifications Authority.11
The Act has been deliberately slow changing, with an intent to identify the areas of prescribed work and have licensing and regulation for building practitioners complete over a five–year transitional period.
The reason is because:
- there are a large number of unlicensed and unqualified construction workers in the industry who will need to undertake the appropriate qualifications and training;12 and
- a regulatory impact statement (RIS) process is being undertaken to determine a workable and cost–effective licensing and registration scheme by addressing items such as qualifications and experience, industry impact, and licensing and registration costs.13
The first of the new prescribed work for license and registration was announced the week of 18 November 2019 to be carpentry.14
The following week, the list of priority trades was finalised and released by the Victorian government. The five–year implementation plan is indicative only at this stage and subject to further regulation, however it is anticipated that the role out will occur as follows:
Implementation (Stage 1) | Implementation (Stage 2) | Implementation (Stage 3) | Implementation (Stage 4) | Implementation (Stage 5) | |
Trade | Carpentry | BricklayingBlocklayingWaterproofingWall and Floor TilingConcretersPainters and DecoratorsInsulation workPlasterers | Solid PlasterersRoof TilingGlazierExcavator and earth worksLandscapingDemolition work | Floor FinisherTrades involved in swimming pool and spa buildingOther minor building work regulated in Victoria | Work already requiring high risk work licence under OHS ActScaffoldingRiggingSteel FixerDoggerCrane Operator |
Application period | 2021—2022 | 2022—2023 | 2023—2024 | 2024—2025 | 2025—2026 |
Provisional registration/ licensing period | 2022—2027 | 2023—2028 | 2024—2029 | 2025—2030 | 2026—2031 |
Last date for provisional registration/ licences to transition to full licences/ registration | 2027 | 2028 | 2029 | 2030 | 2031 |
Source: https://engage.vic.gov.au/registration-and-licensing-building-trades15
The intended transition pathway for carpenters is as follows:
- commencement for registration and licensing will be on 1 September 2020;
- from this date, there will be a period of one year for the person wanting to perform the prescribed work to apply for a provisional registration or licence. If a person applies, they can continue working without full registration or licence until the application is decided; and
- provisional registered persons will be expected to upgrade to full registration or licence within five years of receiving their provisional licence.16
The details of what will be required to obtain a provisional licence and registration and full licence and registration for carpentry is expected to be released next year (drafting is anticipated to occur between January to July 2020).17
Further details on the transition pathway for priority trades will be better known late next year.
Professional Engineers Registration Act 2019 (Vic)
Currently in Victoria, registration requirements exist for civil, mechanical, electrical, and fire safety engineers engaged in the building industry and are building practitioners under the Building Act.
The Engineers Act obtained assent on 3 September 2019 with the objective to adopt, in theory, the Shergold Weir Report and the Senate Committee Report insofar that it seeks to:
- Improve mobility for engineers (the Engineers Act models closely to Queensland and it is anticipated that registration can be mutually recognised in both states. However, there are nuances for example Victoria, unlike Queensland, requires professional indemnity insurance to underpin certification under section 238 of the Building Act. Further, the Australian Capital Territory, New South Wales and Western Australia are currently looking into registration);
- Assist consumers in making informed decisions and providing them appropriate protection;
- Maintain public confidence in the standard of services provided by engineers; and
- Ensure professional engineering services are provided only by suitable qualified and experienced engineers.18
The Engineers Act is set to make it mandatory for the registration of five areas of engineering—civil, structural, mechanical, electrical, and fire–safety. Other areas may be prescribed later by regulation, but it is understood the government will want to cement the new laws before doing so.19
The Engineers Act looks to deter these engineer categories against representing or carrying out professional engineering services or endorsement except where licensed, registered or exempt (working under direct supervision or to a prescriptive standard).
Depending on the action and severity, up to a 500 penalty unit (currently $82,610) fine can be imposed for an offence contravening these prohibitions.20
Even though the Engineers Act has been enacted, licensing, registration and endorsement for the categorised engineers is not yet mandatory. The provisions of the Engineers Act will only commence after supporting regulations are created and gazetted. This will likely take several months and also include a period of phased introduction similar to the Act.21
What should you do?
Carpenters will need to make it their New Year’s resolution to comply with the building practitioner provisional licensing and registration regulations under the Act when released early to mid–next year so as to be ready for the intended change 1 September 2020.
Engineers who fall in the civil, structural, mechanical, electrical, and fire–safety categories should be prepared for an announcement in the coming months as to the regulatory requirements of mandatory licensing, registration and endorsement under the Engineers Act.
Other building practitioners (particularly those in implementation Stage 2) should be prepared for further details mid-to-late 2020.
Builders should plan ahead for the 2020 year by considering the implications that registration and licensing of carpentry, engineers and other building practitioners can have on their subcontract and consultancy agreements and construction policy.
References
- Building Act 1993 (Vic) section 3.
- Peter Shergold and Bronwyn Weir, Building Confidence—Improving the effectiveness of compliance and enforcement systems for the building and construction industry across Australia, February 2018, p 15–17.
- Senate Economics References Committee, Insolvency in the Australian construction industry, 3 December 2015, p xxii cited in Senate Economics References Committee, ‘Non–confirming building products: The need for a coherent and robust regulatory regime’, December 2018.
- Ibid, p 49.
- Building Amendment (Registration of Building Trades and Other Matters) Bill 2018 Second Reading Speech, 7 August 2018.
- The Building Amendment (Registration of Building Trades and Other Matters) Act 2018 section 5.
- Housing Industry Australia VIC Member Alert—Registration and Licensing of Trades—Scope of Trades Announced.
- The Building Amendment (Registration of Building Trades and Other Matters) Act 2018 sections 1, 11, 169EA, 169FA, and 169FB.
- Department of Environment, Land, Water and Planning Registration and Licensing of Building Trades, ‘Consultancy Paper and Information Sheet’, July 2019.
- Housing Industry Australia VIC Member Alert—‘Registration and Licensing of Carpenters to be First’, 15 November 2019.
- Department of Environment, Land, Water and Planning, Registration and Licensing of Building Trades, ‘Carpentry Work to be Considered First’, https://engage.vic.gov.au/registration– and–licensing–building–trades, retrieved 26 November 2019.
- Department of Environment, Land, Water and Planning Registration and Licensing of Building Trades, ‘Consultancy Paper and Information Sheet’, July 2019.
- Professional Engineers Registration Bill 2019 Explanatory Memorandum, 5 March 2019, p 1.
- Professional Engineers Registration Act 2019 (Vic) section 4.
- Ibid sections 67–69.
- Engineers Australia, Engineer registration in Victoria, https://www.engineersaustralia.org.au/Engineering–Registers/Victoria–Registration, retrieved 20 November 2019.
- Ibid.
- Professional Engineers Registration Bill 2019 Explanatory Memorandum, 5 March 2019, p 1.
- Professional Engineers Registration Act 2019 (Vic) section 4.
- Ibid sections 67–69.
- Engineers Australia, Engineer registration in Victoria, https://www.engineersaustralia.org.au/Engineering–Registers/Victoria–Registration, retrieved 20 November 2019.
Note: This article is a guide only and is not intended to constitute legal advice.