NECA calls for expanded unfair contracts legislation

In the lead-up to July’s federal election, the National Electrical and Communications Association (NECA) is calling on all major parties to adopt an expansion of Unfair Contracts Terms legislation.

The government’s Treasury Legislation Amendment (Small Business and Unfair Contract Terms) Bill 2015 was derived from a promise at the 2013 federal election to offer fairer contract terms for small business when dealing with larger business entities, similar to protections that exist for consumers.

After significant debate, this legislation was finally passed in October 2015 and is due to take effect from 12 November 2016. The legislation defines a small business as employing fewer than 20 staff and is characterised by the upfront value of the contract not exceeding $300,000 or more than $1 million if the length of the contract exceeds 12 months.

“Whilst NECA supports the enactment of this legislation and believes it’s certainly a good start, we suggest that its limit on definition on business size and contract value is overly prescriptive and curtails its effectiveness,” said National Electrical and Communications Association CEO Suresh Manickam.

“Our members have told us that a $300,000 contract barely scratches the surface given the significant and complex projects that electrical contractors carry out in this day and age. At present, the limits placed on business size and contract value makes the legislation irrelevant for many across our sector.

“NECA has recently adopted a new policy position which expands the business size to 100 persons employed and increases the upfront price payable threshold from $300,000 to $3 million for contracts of less than 12 months and from $1 million to $9 million for contracts that run longer. These changes reflect a far more realistic value on the price of contracts across the country and particularly serve the many SME contracting businesses where large numbers of staff are involved in time-consuming and complex project scales,” Manickam said.

“Whilst we note that the original intent of this legislation to be directed more towards smaller enterprises, we don’t believe its practicalities will resonate with electrical contractors.

“We call on both sides of politics to expand this legislation such that it will deliver more beneficial outcomes for members of the electrical contracting sector,” said Manickam.