Consequences of Hiring Unlicensed Contractors
When hiring a contractor for a job within the Fire Industry, as a consumer you trust the company you have hired. The issue that can arise is the business may not hold the appropriate licences for the job. Operating a construction business without the right licence for a particular job is not only illegal and unethical; it can also cost you the consumer more than you expect. Why would a business do this if it is illegal? Simply because the consumer is unaware of the issue and will not check. To shed some light on the situation, we will look into the dangers of unlicensed contracting. We'll also go over the unlicensed contractor fines and any other penalties or costs you might face.
What Is Building Work?
According to Section 42(1) of the Queensland Building and Construction Commission Act 1991 ('QBCC Act'):
“a person must not carry out, or undertake to carry out, building work unless the person holds a contractor’s licence of the appropriate class...”
The definition of construction work is broad, and it includes the expected work of:
the erection or construction of a structure;
a building's renovation, alteration, extension, improvement, or repair
lighting, heating, ventilation, air conditioning, water supply, sewerage, or drainage in relation to a building;
fire protection work;
carrying out a final building inspection;
building termite management systems;
Building work performed by an unlicensed person is illegal and has serious consequences for anyone who hires an unlicensed person to do building work.
Fire Protection Licensing Changes in Queensland
The Queensland Building and Construction Commission Regulation 2018 (QBCC Regulation) was amended on May 1, 2021, and the following changes were made:
reducing the number of different types and classes of fire protection licences
updating credentials in order to obtain a fire protection licence
simplifying the scopes of work for each type of fire protection licence
The outcome of these licence remodelling was to make building occupants in Queensland safer as a result of the changes, and fire protection licensees should have a clearer regulatory framework. However, we are finding that these changes are not actually having the required effect, especially as we find more unlicensed contractors performing works outside their allowed scope.
Penalties for Unlicensed Building Work
If such a person is found to have performed building work without the necessary licence, their right to payment is limited to the amounts specified in the QBCC Act, and no profit can be claimed.
Unlicensed building work is a violation of the QBCC Act, punishable by a fine of up to:
For the first offence, the penalty is 250 penalty units ($33,362.50).
For the second offence, the penalty is 300 penalty units ($40,035.00).
For a third or subsequent offence, or if the work is also tier 1 defective work (which is also a crime), the penalty is 350 penalty units ($46,707.50)1 or up to one year in prison.
But the consequences do not end there…
Isn't it true that there's nothing worse than doing work and not getting paid for it?
This is exactly what can happen if you perform work without the necessary licence.
A person who performs building work without a licence is not entitled to be paid for it, according to section 42(3) of the Queensland Building and Construction Commission Act ('QBCC Act'). There are some exceptions, such as the ability to claim payment for the actual cost of materials and labour required to complete the work.
Unlicensed contractors are not eligible for payment for the following:
The provision of your own labour;
Material and labour costs that were not incurred in a reasonable manner;
A sum greater than what you agreed to pay for the construction work; and
Any sum that can reasonably be considered to be for your direct or indirect benefit.
Consequences for the Client
The most important effect of hiring an unlicensed contractor for your building or fire protection work is the risk of getting non-quality or non-compliant work. Licences are designed to ensure that the contractor working on your specific project has the right expertise and knowledge to perform the work correctly and safely. Without these licences, you lose that guarantee.
You might also be fined if the unlicensed work you commissioned resulted in danger to others. For instance, a Queensland company was fined for hiring an unlicensed technician to perform fire protection work, which resulted in the release of the regulated fire extinguishing agent and synthetic greenhouse gas, HFC-227ea.
The unlicensed technician was permitted to work on a tugboat's fire suppression system, resulting in the release of 247 kg of HFC-227ea into the atmosphere. This equates to more than 795 tonnes of CO2 emissions.
The company was found to have violated the terms of the regulations' Extinguishing Agent Trading Authorisation.
The company was issued a $13,320 infringement notice for engaging in conduct that resulted in the extinguishing agent being released into the atmosphere, as well as a $444 infringement notice for failing to implement a risk management plan.
If you need to check the contractor that you engage does actually hold the appropriately licence, then you can use this resource from the QBCC- Licence search click here