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
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
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
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
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
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
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Performance management is seen as "daunting" because of the negative connotations typically associated with the process.
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