STATUTES AMENDMENT (OCCUPATIONAL LICENSING) BILL

Introduction and First Reading

Received from the House of Assembly and read a first time.

Second Reading

The Hon. G.E. GAGO (Minister for Agriculture, Food and Fisheries, Minister for Forests, Minister for Regional Development, Minister for the Status of Women, Minister for State/Local Government Relations) (17:52): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation inserted in Hansard without my reading it.

Leave granted.

I move that the Bill be now read a second time.

This Bill amends the—

Building Work Contractors Act 1995

Plumbers Gas Fitters and Electricians Act 1995

Security and Investigation Industry Act 1995 (as being retitled by the Security and Investigation Agents (Miscellaneous) Amendment Act 2013)

Second-hand Vehicle Dealers Act 1995

Land Agents Act 1994

Conveyancers Act 1994

Fair Trading Act 1987

In 2012, Consumer and Business Services (CBS) undertook a process improvement review of the occupational licensing legislation it administers.

This included industry round table discussions with peak construction industry representatives to identify areas requiring regulatory reform. Additionally, feedback was sought from CBS employees about ways to improve the administration and regulation of all occupational licensing legislation.

The result is a collection of reforms, contained in this Bill, that are aimed at reducing regulatory costs for business by removing unnecessary red tape and improving administrative efficiencies for CBS.

A reform that will be of particular benefit to business is to remove the requirement that building work contractors may only nominate their directors or employees to be building work supervisors. This will enable contract workers to be nominated for this role. Currently over 6,400 building work contractors require a nominated building work supervisor. This reform will significantly reduce staffing costs for industry as it will give people maximum flexibility in the way they can structure their business.

Another red-tape reduction initiative relates to the simplification of audit requirements for land agents and conveyancers. If their trust accounts had no activity within an audit period, they will simply be required to submit a declaration to that effect. This is instead of the current requirement of being required to go to the expense of having their accounts audited and a report lodged with CBS, despite the fact that there has been no activity.

Another reform that will be of benefit to business is to enable builders, plumbers, gas fitters and electricians, who are the subject of a bankruptcy order, to work as sub-contractors. Currently a person is not entitled to hold a licence under the Building Work Contractors Act 1995 or the Plumbers Gas Fitters and Electricians Act 1995 if they become bankrupt and CBS is required to take them to Court to cancel their licence. This reform will enable many tradespeople to continue to work in their field and make a living despite being declared bankrupt. Restricting their licence to that of a sub-contractor only, will ensure consumers remain protected as they will not be entering into contracts with bankrupt persons. The main contractor will be responsible for the sub-contractor. This reform will also assist to reduce skills shortages across the state.

The powers of the Commissioner for Consumer Affairs are proposed to be increased to improve administrative efficiencies and increase consumer protection. Generally, only the Court has the power to cancel, suspend or impose a condition on an occupational licence. The Commissioner has the power to suspend a licence in urgent circumstances, to prevent significant harm, for a period of six months under the Building Work Contractors Act 1995, the Plumbers Gas Fitters and Electricians Act 1995 and the Second-hand Vehicle Dealers Act 1995. Additionally, conditions may only be imposed at the time of granting the licence and may only be amended by application of the licensee. Initiating proceedings in the Court to cancel, suspend or impose a condition on a licence is a lengthy and costly process for CBS. Enabling the Commissioner to take disciplinary action against licensees, such as imposing conditions to restrict the type of work they can perform or suspending a licence if the person becomes no longer eligible to hold a licence, will reduce costs for Government, reducing the burden on Courts, and significantly improve protection for consumers, as the speed at which this action may be taken against licensees will be increased. This will be evidence based action and the rules of natural justice and procedural fairness will apply. More serious breaches or disciplinary matters will still be referred to the Courts.

It is also proposed to increase the Commissioner's powers under the Fair Trading Act 1987 to require a trader to personally attend a compulsory conciliation conference arranged to resolve a consumer dispute. This is because face to face conferences have been found to be much more effective in bringing about the speedy resolution of disputes between consumers and traders. A party will be able to seek approval from the Commissioner to attend the conference by telephone in certain circumstances such as remoteness of their location.

Some reforms, proposed to be included in the regulations, are aimed at improving clarity. For example, the definition of 'building work' will be expanded to include those tasks already considered by CBS and the general public to constitute building work, like the installation of solar panels or an air-conditioning system.

Most significantly, the Bill proposes to increase the maximum penalties that may be imposed on a person for trading unlicensed in accordance with the penalties regime proposed under the National Occupational Licensing System (NOLS). Currently the maximum penalty that may be imposed on a person for unlicensed trading under the occupational licensing legislation is $20,000. The exception is the Second-hand Vehicle Dealers Act 1995 where the maximum penalty is $100,000. These penalties are considered to be inadequate to deter licensees who seriously and repeatedly breach the legislation. Such conduct poses significant risks to consumers and offenders enjoy the opportunity to make significant profits. Therefore it is proposed to pre-emptively introduce the penalty regime proposed under NOLS as follows:

$50,000 for 1st or 2nd offence for an individual.

$50,000 and/or 12 months imprisonment for 3rd or subsequent offence for an individual.

$250,000 for a body corporate.

A similar penalty regime is proposed to be introduced under the Second-hand Vehicle Dealers Act 1995, which is not currently proposed to be included under NOLS.

These penalties were included in the Occupational Licensing National Law (South Australia) Act 2011. That Act passed through Parliament in February 2011 and was proclaimed so as to establish the national licensing authority, but the majority of its provisions were suspended pending the commencement of NOLS. A commencement date for NOLS has not yet been set. It is understood that the penalties were determined after analysing current jurisdictional penalties and other national schemes.

Additionally, it is proposed to increase consumer protection under the Building Work Contractors Act 1995 and the Plumbers, Gas Fitters and Electricians Act 1995 in relation to charging clauses in contracts that give contractors the right to lodge a caveat over residential property on which they are performing work to secure the debt.

The reform is proposed in response to complaints received by Consumer and Business Services from consumers in relation to solar rental company contracts. The contracts in question contained charging clauses that led to a number of caveats being lodged over various properties.

It is proposed to require a contractor to ensure that a contract with a charging clause explains the purpose of the charging clause, explains the effect of a caveat, explains that the charge created by the clause entitles the contractor to apply to the Courts for the sale of the property to recover their debt, and advises the consumer to seek independent advice should they have any concerns.

The reform is proposed to be included in the regulations of both Acts. Whilst the Building Work Contractors Act 1995 already enables this, the Plumbers, Gas Fitters and Electricians Act 1995 is silent on the requirements for domestic contracts. Therefore the Bill amends that Act to enable the proposed variation to the regulations.

Striking the balance between proper consumer protection and making things simpler for business is difficult. However, through our engagement with industry, the Government has identified areas where unnecessary red tape and regulatory costs can be removed, so as to better support business and industry, without exposing consumers. A number of reforms will provide stronger protection for consumers and improve the integrity of industry by cracking down on people trading unlicensed or in breach of licence conditions.

It is anticipated that the Bill will have widespread benefits for business, industry, Government, consumers and the general community.

I commend the Bill to Members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

3—Amendment provisions

These clauses are formal.

Part 2—Amendment of Building Work Contractors Act 1995

4—Amendment of section 3—Interpretation

This clause makes a minor amendment to make it clear that a 'building' includes a wall.

5—Amendment of section 6—Obligation of building work contractors to be licensed

This clause increases the penalty for unlicensed building work contractors.

6—Amendment of section 7—Classes of licence

This clause allows the imposition of conditions on a licence at any time on application by the licensee.

7—Amendment of section 9—Entitlement to be licensed

This clause alters the provision relating to granting a licence to a natural person who is or has been, or to a company with a director who is or has been, an insolvent under administration or a director of a body corporate wound up for the benefit of creditors, to reduce the waiting period before there can be an entitlement to be granted a licence and to allow the grant of a conditional licence.

8—Amendment of section 13—Classes of registration

This clause allows the imposition of conditions on a registration at any time on application by the registered building work supervisor.

9—Substitution of section 14

This clause substitutes a new section 14 allowing people registered under Part 3 of the Plumbers, Gas Fitters and Electricians Act 1995 to be taken to hold building work supervisors registration (subject to the regulations).

10—Substitution of section 16

This clause introduces a fit and proper person requirement for registration.

11—Amendment of section 19—Approval as building work supervisor in relation to licensed building work contractor's business

This clause deletes the requirement currently contained in section 19(4)(b) of the Act that a building work supervisor for a building work contractor be either a director of the contractor (if it is a body corporate) or an employee and also consequentially deletes subsection (6) of that section. The clause also contains some minor amendments to clarify the wording of subsection (8).

12—Substitution of Part 3A

This clause substitutes new Parts 3A and 3B as follows:

Part 3A—Suspension or variation of licence or registration in urgent circumstances

19A—Commissioner may suspend or impose conditions on licence or registration in urgent circumstances

This section is based on the current section 19A but applies to registration as well as licenses and allows for the imposition of conditions on a licence or registration as an alternative to suspension.

Part 3B—Cancellation, suspension or variation of licence or registration

19B—Commissioner may cancel, suspend or impose conditions on licence or registration

This section gives the Commissioner a new power to make a determination to cancel or suspend a licence or registration or to impose conditions on a licence or registration where the licensed or registered person no longer meets the criteria in the Act for entitlement to be granted a licence or registration (as the case may be). The section also grants appeal rights to the District Court.

Part 3—Amendment of Conveyancers Act 1994

13—Amendment of section 5—Conveyancers to be registered

This clause increases the penalty for unregistered conveyancers.

14—Insertion of Part 2A

This clause inserts a new Part 2A as follows:

Part 2A—Cancellation, suspension or variation of registration

9AA—Commissioner may cancel, suspend or impose conditions on registration

This section gives the Commissioner a new power to make a determination to cancel or suspend a registration or to impose conditions on a registration where the registered person no longer meets the criteria in the Act for entitlement to be granted registration. The section also grants appeal rights to the District Court.

15—Amendment of section 24—Audit of trust accounts

This clause inserts a new subsection (1a) providing that if no trust money is held in a conveyancer's trust account during an audit period, then no audit statement is required in relation to that period (but instead there must be a declaration as to why no trust money was held). The clause also makes 2 consequential amendments.

16—Amendment of section 49—Disciplinary action

This clause allows for the imposition of conditions on a conveyancer's registration in disciplinary proceedings before the Court.

Part 4—Amendment of Fair Trading Act 1987

17—Amendment of section 8A—Conciliation

This clause makes it clear that the parties to a conciliation are not entitled to have the conciliation conference conducted by telephone or other electronic means - it is for the Commissioner to determine whether that will be appropriate in the particular case.

Part 5—Amendment of Land Agents Act 1994

18—Amendment of section 6—Agents to be registered

This clause increases the penalty for unlicensed agents.

19—Insertion of Part 2A

This clause inserts a new Part 2A as follows:

Part 2A—Cancellation, suspension or variation of registration

11C—Commissioner may cancel, suspend or impose conditions on registration

This section gives the Commissioner a new power to make a determination to cancel or suspend a registration or to impose conditions on a registration where the registered person no longer meets the criteria in the Act for entitlement to be granted registration. The section also grants appeal rights to the District Court.

20—Amendment of section 22—Audit of trust accounts

This clause inserts a new subsection (1a) providing that if no trust money is held in an agent's trust account during an audit period, then no audit statement is required in relation to that period (but instead there must be a declaration as to why no trust money was held). The clause also makes 2 consequential amendments.

21—Amendment of section 47—Disciplinary action

This clause allows for the imposition of conditions on an agent's registration in disciplinary proceedings before the Court.

Part 6—Amendment of Plumbers, Gas Fitters and Electricians Act 1995

22—Amendment of section 6—Obligation of contractors to be licensed

This clause increases the penalty for unlicensed contractors.

23—Amendment of section 7—Classes of licence

This clause allows for conditions to be imposed on a licence at any time on application by the licensee.

24—Amendment of section 9—Entitlement to be licensed

This clause alters the provision relating to granting a licence to a person who is or has been an insolvent under administration or a director of a body corporate wound up for the benefit of creditors to allow the grant of a conditional licence.

25—Amendment of section 13—Obligation of workers to be registered

This clause increases the penalty for unregistered workers.

26—Amendment of section 14—Classes of registration

This clause allows the imposition of conditions on a registration at any time on application by the registered worker.

27—Substitution of section 16

This clause substitutes a new section 16 which introduces a fit and proper person requirement for registration.

28—Substitution of Part 3A

This clause substitutes new Parts 3A and 3B as follows:

Part 3A—Suspension or variation of licence or registration in urgent circumstances

18A—Commissioner may suspend or impose conditions on licence or registration in urgent circumstances

This section is based on the current section 18A but applies to registration as well as licences and allows for the imposition of conditions on a licence or registration as an alternative to suspension.

Part 3B—Cancellation, suspension or variation of licence or registration

18B—Commissioner may cancel, suspend or impose conditions on licence or registration

This section gives the Commissioner a new power to make a determination to cancel or suspend a licence or registration or to impose conditions on a licence or registration where the licensed or registered person no longer meets the criteria in the Act for entitlement to be granted a licence or registration (as the case may be). The section also grants appeal rights to the District Court.

29—Insertion of sections 33A and 33B

This clause inserts a new provision requiring a contractor's licence number to be included in published advertisements (other than ones of a kind specified in the proposed provision) and a new provision imposing requirements on contracts to perform plumbing, gas fitting or electrical work on domestic property where the contracts contain a charging clause.

Part 7—Amendment of Second-hand Vehicle Dealers Act 1995

30—Amendment of section 7—Dealers to be licensed

This clause increases the penalty for unlicensed dealers.

31—Insertion of Parts 2A and 2B

This clause inserts new Parts 2A and 2B as follows:

Part 2A—Suspension or variation of licence in urgent circumstances

14A—Commissioner may suspend or impose conditions on licence in urgent circumstances

This section is based on the current section 25A (in Part 4A) but allows for the imposition of conditions on a licence as an alternative to suspension.

Part 2B—Cancellation, suspension or variation of licence

14B—Commissioner may cancel, suspend or impose conditions on licence

This section gives the Commissioner a new power to make a determination to cancel or suspend a licence or to impose conditions on a licence where the licensed person no longer meets the criteria in the Act for entitlement to be granted a licence. The section also grants appeal rights to the District Court.

32—Repeal of Part 4A

This clause makes a consequential amendment. Part 4A is repealed because the material in that Part will now be dealt with by proposed new Part 2A.

33—Amendment of section 31—Disciplinary action

This clause allows for the imposition of conditions on a licence in disciplinary proceedings before the Court.

Part 8—Amendment of Security and Investigation Industry Act 1995

34—Amendment of section 3—Interpretation

The definition of security agent is amended to include hiring out or otherwise supplying persons for various purposes already referred to in the definition.

35—Amendment of section 6—Obligation to be licensed

This clause increases the penalty for unlicensed agents.

36—Amendment of section 7A—Licence conditions

This clause amends section 7A (to be inserted by the Security and Investigation Agents (Miscellaneous) Amendment Act 2013) to allow for the imposition of conditions (at the request of the licensee) at any time after the licence has been granted.

37—Insertion of Part 3A Division A1

This clause inserts a new Division in Part 3A as follows:

Division A1—Cancellation, suspension or variation of licence where eligibility criteria no longer met

23AB—Commissioner may cancel, suspend or impose conditions on licence

This section gives the Commissioner a new power to make a determination to cancel or suspend a licence or to impose conditions on a licence where the licensed person no longer meets the criteria in the Act for entitlement to be granted a licence. The section also grants appeal rights to the District Court.

38—Substitution of heading to Part 3A Division 1

This clause makes a consequential amendment to a heading.

Debate adjourned on motion of Hon. T.J. Stephens.