Our history is one of advocacy and engagement in the many areas that affect subcontractors and the wider construction industry.
Changing the construction industry is a slow incremental process that requires tenacity and a long term view. Much of our work is carried out through our participation in or collaboration with other groups. We can often achieve much more by being part of a larger group rather than as a lone voice.
Some Areas of Our Work
Construction Contracts Act
Our efforts to improve conditions within the construction industry led to the Construction Contracts Act 2002. While this represented a major change, further refinements were needed and our efforts have so far contributed to the Construction Contracts Regulations 2003 and the Construction Contracts Amendment Act 2015.
Construction Contracts (Retention Money) Amendment Bill introduced in 2021, if enacted as proposed, will address the outstanding issues raised by STCF in their 2019 letter to the minister. See our “LEGAL” page for links to these.
Historically retentions were used by contractors as unsecured long term interest free financing of their operations. This enabled inadequately funded contractors to continue trading. When contractors failed and were placed in receivership, it was very rare for any subcontractor to receive even a portion of their retention money that the contractor was to have been holding on their behalf.
The STCF has been fighting for protection of retentions. The Construction Contracts Act and subsequent regulations and amendments attempted to address this issue but with only partial success. Continued lobbying by STCF has led to the introduction of the Construction Contracts (Retention Money) Amendment Bill to remedy the issues.
Head Contract Conditions of Contract
The conditions of contract between the head contractor and their client flow through to the subcontractors. The most commonly used conditions of contract for head contracts is NZS3910. NZSTCF was represented on the 2013 revision of NZS3910 and is involved in the 2021 update.
Conditions of Subcontract
It was normal practice for head contractors to develop their own conditions of contract for subcontractors. These were principally to protect the interests of the head contractors and transfer as much of the risk as possible to the subcontractors. They referenced the head contract and its conditions but subcontractors were not able to properly assess the full implications of several hundred pages of head contract documentation.
Many years of effort resulted in developing a Standard Subcontract Agreement jointly with Registered Master Builders. It was updated in 2017 and is available electronically for general use without payment on condition that, other than filling in the editable fields, no changes are made to the document. It highlights the specific conditions that are most relevant to the subcontractor. It is an easy to read document that helps reduce disputes.
STCF supported a Supreme Court hearing that reversed an untenable Appeals Court ruling that had allowed receivers of construction companies to claw back payments that had been made to subcontractors up to a year before the receiver was appointed. Without this Supreme Court ruling, subcontractors were legally obliged to repay monies they had received for work previously completed.
STCF is constantly monitoring the construction environment for issues where we can work towards making a positive change and making submissions. We are constantly engaging with Government, government agencies, construction service providers and peer groups on topics including health, safety, wellbeing, industry training and qualifications, application and development of NZ Standards, performance benchmarking, Building Code amendments and other legislation and regulations.