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Australia

Construction

The long-awaited amendments to the Building and Construction Industry Security of Payment Act 2002 have come into force in Victoria in respect of construction contracts entered into on or after March 30 2007. Many of the changes make the act unique in Australia and very different from the construction industry payment legislation in other states.

The Victorian Supreme Court has given further support to superintendents and contract administrators granting an extension of time under Australian Standards 2124 and 4300 when they decide it is just and equitable to do so, even if the extension of time claim would otherwise be time barred.

A recent decision demonstrates how a latent conditions claim can be pursued successfully by the contractor against the principal under the Trade Practices Act. It also highlights the broad nature of potential relief for contractors and liability for principals under Sections 82 and 87 of the act.

The Queensland government has implemented the Queensland Building and Other Legislation Amendment Act 2006. The act amends the Building Act 1975, consolidating provisions set out in various pieces of legislation to establish a framework for the process of making, assessing and ruling on a building application through to the certification of building work.

It is illegal for a union to threaten or take action with an intent to coerce or apply undue pressure to make or prevent a collective agreement. If an employer in the building industry considers that it has been the target of such action, it can notify the Australian building and construction commissioner to apply for an order against that union.

The federal government has announced that its National Code of Practice for the Construction Industry and the implementation guidelines for the code will remain in force despite the introduction of Work Choices on the Building and Construction Industry.

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Franchising

A recent prosecution by an Australian workplace safety regulator has highlighted the increasing responsibilities which franchisors operating in Australia may have under occupational health and safety legislation. In the case, the way in which the franchisor conducted its own business gave rise to a duty to employees of the franchisee.

The English Privy Council recently concluded that a franchisee was in fundamental breach of the franchise agreement and that the franchisor was therefore within its rights to terminate that agreement. The court found that strong action can be taken after a fundamental breach by the franchisee, even where a dispute exists on other issues.

Compliance is an important factor in the success of a franchise system. Legal compliance is often overlooked, and may be just as important as systems compliance in terms of penalties and damage to brand image. The Australian Standard on Compliance Programme establishes the structural and operational elements of a successful compliance programme.

There is considerable uncertainty about what constitutes unconscionable conduct. Recent case law suggests that the scope of the unconscionable conduct provisions found in the Trade Practices Act may be narrower than previously thought and franchisors must tread carefully in commercial dealings.

On December 21 2001 new national privacy laws applying to private sector organizations came into effect in Australia. These new laws regulate the way that businesses collect and handle personal information and will affect the way in which most franchisors and franchisees operate in Australia.

The Trade Practices Act regulates the franchising sector in Australia and is critical to the structure and operation of franchise systems. Executives of franchise companies can no longer rely on having a superficial understanding of the act. Compliance programmes are essential and must extend beyond the Franchising Code of Conduct to the pricing, supply and conduct aspects of the act.