Christmas leave and shut-down periods can pose significant challenges to businesses in managing the risk of payment claims under the Building and Construction Industry Payments Act 2004 (BCIPA). Although the BCIPA provides some respite over this period, companies may still be exposed where managers and employees are on leave and adequate arrangements are not put in place to manage the risk of payment claims over the holidays.

It is an increasingly common tactic of claimants to 'ambush' respondents at this time of year, when a lack of resources due to holidays can lead to payment claims going unnoticed.

You should implement the following strategies over the Christmas period to best protect against 'ambush tactics' and secure your business' cash flow.

  • Be prepared. The definition of 'business day' under the BCIPA excludes public holidays and 27, 28, 29, 30 and 31 December. Respondents should carefully calculate timeframes for responses under the BCIPA by factoring in those excluded days. For example, if a payment claim is received on 24 December 2010, the respondent's payment schedule will be due on or before 17 January 2011. If a payment claim is received between 25 December 2010 and 3 January 2011, it will be deemed to have been received on 4 January 2011, and a payment schedule will be due on or before 18 January 2011.
  • Monitor each way in which a payment claim may be served. The accepted methods of service are by delivering, posting or faxing to a head office, registered office or principal office. Be aware that in some circumstances adjudicators have accepted that payment claims can also be served by email, particularly if the contract allows the use of email or that has been a practice of the parties in the past. Where your registered office is external (eg an accountancy firm), you should contact that office to ensure arrangements are put in place to monitor the receipt of any communications over the Christmas period. Be aware that claimants will often go to great lengths when delivering a payment claim to avoid the claim coming to the attention of the respondent.
  • Ensure that your staff, including accounts, can identify a payment claim and implement a plan for checking and dealing with claims over the Christmas period. Ensure that someone regularly checks your business' foyer, front desk, mailroom, fax machine and email inboxes. It is prudent to check for correspondence that may be sent to those employees who are away and may receive a payment claim. Where claims may be received by email, you should arrange access to the inboxes of those staff who are on leave during the Christmas period to ensure that payment claims are not missed. The words that are indicative of a payment claim under the BCIPA that employees must be aware of are 'This is a payment claim made under the Building and Construction Industry Payments Act 2004'. However, words of a similar nature may be of the same effect and should be treated accordingly. A failure to respond within 10 business days (or an earlier period stipulated under the contract) with a payment schedule may mean that the claim becomes a statutory debt, requiring you to pay the full amount of the claim irrespective of merit.
  • Subject to the terms of your contracts, agree when and how claims will be submitted so that they are sent to an employee who is available over the Christmas period. However, do not be caught out, and monitor each way in which a payment claim may be served on your business. Many times an agreement on payment has 'almost' been reached and respondents are caught out. Do not let that be you.

    If we can provide any assistance to you in relation to the BCIPA over the Christmas period, please do not hesitate to contact us.


© DLA Phillips Fox

DLA Phillips Fox is one of the largest legal firms in Australasia and a member of DLA Piper Group, an alliance of independent legal practices. It is a separate and distinct legal entity. For more information visit www.dlaphillipsfox.com

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances.