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Guide to consultation questions

July 23, 2019

This guide has been published by HIA to assist members to provide a response to the consultation paper released by the Department of Environment, Land, Water and Planning (DELWP) about the proposed scope of regulations for the registration and licensing of trades.

The consultation questions asked by DELWP seek to obtain information from the building industry about the following matters:

  • What building trades are involved in the completion of building work?
  • How do builders prefer to engage trades – as contractors or employees? And do trades prefer to be engaged as contractors or be employed?
  • What training and experience should trades who are to be registered and licensed be required to have?
  • What factors or criteria should the Victorian government use to decide which trades should be registered and licensed first.
  • Are the proposed arrangements for trades to transition to being registered or licensed sufficient? In other words, do they allow enough time for a trade without registration at the moment to obtain the government approval they need to continue working as a contractor or as an employee?

Part 1 Questions

Question 1 - What building trades perform building work in Victoria? What activities are included within the work they perform?

This government is asking which trades should be considered for regulation by registration and licensing.

Members could list the different trades that work on building sites but it would be helpful for government to try to avoid generic descriptions such as carpenter and instead try be more specific when describing the tasks that different trades are engaged to carry out.

The current Building Regulations list 29 types of domestic builder – limited. This might be the government’s starting point for identifying trades. This list is however of limited use for identifying trades as many of the domestic-builder - limited classes are actually linked to specific tasks –such as fitting external fittings, floor and wall tiling, erecting poles masts and antennas, and earthworks and excavation works.

The definition of a trade is not necessarily fixed and can vary depending on a person’s perspective. There are broad descriptions of trades, such as carpentry, bricklaying, plastering, concreting etc. There are also subsidiary trades, such as cabinet maker, cladder, framer, joiner and roofer as subsidiaries of the carpentry trade. There also specialist trades, such as elevator mechanics, stonemasons, demolition contractors, and asbestos removers. There are cases when some trades undertake a combination of these for builders.

The work undertaken by some people can be difficult to link to a particular trade. For example, is a labourer a trade when they are carrying out some work that could also be carried out by a traditional trade? Also, is a supervisor a trade when they may carry out some building work as well?

HIA’s view is that it is not necessary for the government to compile a list of building trades. The government should instead be identifying building work carried out by trades that justify possible further regulation. Once the relevant building work is identified then the trades requiring possible regulation can be listed.

Question 2 – What is the preferred method of engagement of each trade (i.e. contracted, subcontracted, employed or a combination) and why?

The government seems to be trying to find out if builders prefer to contract or employ trades. Generally they do prefer subcontracting for the efficiencies this provides - but this question is difficult to answer with a simple yes or no answer. There may be different answers for different builders or different projects or different types of trade work.

HIA’s view is that many builders prefer to engage trades as contractors. The question seems to assume that the trade does not get a say in whether they are engaged as a contractor or employed. Builders will appreciate that many trades have a strong preference to work as a contractor and the builder’s own preference is not always satisfied.

Question 3 – For each trade listed, what should the minimum training and experience requirements be for (i) provisional registration and (ii) full registration?

At the moment the government has provided in the Building Act 1993 that the minimum requirement for registered trades is a DB-L or CB-L. This is a very high bar and this question is welcomed by HIA as it suggests the Victorian Government is open to amending the Building Act 1993 and Building Regulations 2018 to fix this current legislative requirement that a registered trade be a registered building practitioner. The question about full registration would not otherwise be asked.

Many trades currently working as subcontractors will not have the full qualifications required to obtain domestic builder – limited registration. This is not surprising as many trades usually do not work directly for a consumer. Many work for builders only therefore the experience and training required to work with consumers is not needed for provisional registration. Provisional registration should be focused on ensuring that the trade has the practical skills to carry out the trade. Any business management skills required to obtain domestic building – limited registration can be obtained over the 5 year lifespan of provisional registration.

HIA is of the view that with full registration the government should first review the current legislation requiring that a registered trade be a domestic builder – limited or commercial builder - limited. Until this is done the legislation has already locked in the training and experience requirements unless the Building Regulations 2018 are changed. Once this fix is made the question of minimum requirements can be resolved. It is not necessary however for a registered trade who works only for builders to be required to hold business management skills better suited to builders working for consumers and applying for building permits.

Question 4 - For each trade listed, what should the minimum training and experience requirements be for (i) provisional licensing and (ii) full licensing?

The regulations will set criteria for provisional and full licensing. Licenced trades can only be employees.

HIA’s view is for provisional licensing a trade should need to demonstrate they are undertaking of have undertaken work in that trade. For full licensing a trade should be required to demonstrate practical experience in the industry or have completed an apprenticeship.

It is unnecessary for the licenced employee to be required to have the business management skills required of a registered trade.

However, it is arguable in the longer term that licenced employees should have the same training and experience requirements for their trade skills as registered trades.

Part 2 Criteria

This question seeks feedback on the factors or criteria that the Victorian Government should consider to decide which trades are registered and licensed first. The factors are:

  1. The number of people in each trade.

    If a trade has too many people it will be more difficult and expensive to have them registered and licensed. The government may struggle with the number of people seeking registration and licensing if too many trades are applying at the same time.

    Ideally trades with smaller numbers could be given priority.
  2. The number of people likely to enter or start in the trade in the future.

    Some trades, such as stonemasons, will have few entrants while others such as plastering may have a lot of new entrants in the future. While the VBA may struggle to manage trades with a lot of new entrants the risk of unqualified workers entering these trades may be an issue.
  3. Whether there are courses, apprenticeships or other training options available to a trade.

    This suggests that trades with existing courses available will be prioritised for registration and licensing. It could be argued however that trades without training options possibly need to subject to registration and licensing to ensure that they are properly qualified. Otherwise there is a risk that trades with qualifications will be registered and licensed first even though they are probably the trades where the need for such action is low.
  4. Whether the trades will be able to obtain registration to remain as a trade or licensing to be an employee.

    This factor is probably not that relevant as the problem with the current registration model is that it requires a trade to be a domestic builder – limited to be a registered trade. This is unlikely to be materially different between trades as there as relatively few domestic builder – limited practitioners at the moment.
  5. Whether poor work by the trade to result in building work that is high risk if defective or not to standard.

    That a trade’s work if performed badly is more likely to cause a high risk is a relevant factor. Examples include, failing wet areas, plaster ceilings falling down, and fire separation inadequate.
  6. Whether the work performed by the trade is complex and needing high qualifications.

    A person needing more qualifications to work in their trade is more likely to already be well qualified and this trade does not necessarily need to be prioritised for registration and licensing.
  7. Will the registration and licensing of a trade cause labour and skills shortages.

    This seems to be a factor of low significance as requiring registration and licensing for any trade is likely to result in labour shortages. It should however be taken into account.
  8. How often does poor work by a trade in a particular area cause defective building work.

    The government is likely to rely on data from the VMIA (which manages domestic building insurance claims), the VBA (which manages complaints about builders) and DBDRV (which manages consumer disputes with builders) to answer this question. HIA notes however that its experience is that problems with waterproofing, concreting, and plumbing seem to make a significant portion of defective work.

The Victorian government also seeks suggestions for other criteria that should be considered. HIA will consider this issue when making its submission.

HIA is of the view that the criteria all have some relevance but criteria 4 and 7 have limited value as they apply to all trades. Criteria 3 and 6 are relevant but not necessarily in the way the government considers they are relevant.

Part 3 Transition

This question is about two issues.

  • Is one year from commencement of a trade being regulated to enough time apply for one of registration, provisional registration, a licence or a provisional licence?
  • If a person has provisional registration or a provisional licence is five years enough time to apply for a full registration or full licence?

HIA is of the view that these periods are sufficient. A trade who holds provisional registration or a provisional licence and who cannot obtain the qualifications to be registered or licensed within five years is unlikely to be able to obtain these qualifications later if given more time.