THE LATEST NEWS FROM YOUR BUILDING SUPPLIES SPECIALIST
Answers from Ask an Advisor 03
Highlights
New app helps tradies fight tool theft 17
Are slow times coming for tradies? 23
The limitations to variations 20
A 20 PR 20
ISSUE 90
That ain't a boat... this is a boat! 26
SAFETY
INDUSTRY NEWS
Answers from Ask an Advisor
App helps tradies to fight tool theft
03-05
17
LBP CODEWORDS
PROMOTION
Continuing to improve the Building Code
Sika adhesives and promotion
07-08
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LBP CODEWORDS
LEGAL
Timber joinery and NZS 4211
Variations: The limits on what the client and the contractor can ask for
09-10
20-21
PROMOTION
BUSINESS ADVICE
Robinhood kitchen packs
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Are slow times coming for tradies?
23-25
INDUSTRY NEWS
FISHING
Foundation rules shake-up
12
That ain't a boat...this is a boat!
26-27
PROMOTION
FISHING
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Start small to make big changes
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INDUSTRY NEWS Housing shortage a myth?
14 UPDATED: Due to the lockdown, all promotions and prices have been extended until May 31st, 2020.
HIGHLIGHTS LBP Codewords articles and quizzes
P07
Robinhood kitchen packs
App helps tradies to fight tool theft
Are slow times coming for tradies?
Matt's new boat
P11
P18
P23
P26
Building Business contributes towards your LBP skills maintenance requirement. Ensure you log this into your ITM diary or the ITM App today. Building Business is a bi-monthly magazine produced by ITM Support Office. For feedback or address updates contact: ITM Support Office, PO Box 101556, North Shore, Auckland. Email: buildingbusiness@itm.co.nz Ph: 09 415 2787.
ISSUE 90: APR 2020
In this issue
Can I wear a baseball cap under my hard hat?
What PPE is mandatory on a construction site?
Do I need an endorsement for working in a quarry?
Do I need to wear a harness in a scissor lift?
Can I wear shorts to work in summer?
Site Safe gets a number of questions from people in the construction and building sector via their ‘Ask an Advisor’ website page. We've selected some of the most common and useful questions and answers.
CONTINUE >>
SAFETY
Answers from Ask an Advisor
03
04
SAFETY
Caps under hard hats
For more on wearing hard hats, go here:
Q: An electrician who wears a baseball cap under their hard hat for personal comfort and hygiene reasons says the safety inspector on his construction site told him to not wear it.
www.sitesafe.org.nz/guides--resources/practical-
The sparky asks: “Is it lawful to forbid wearing a baseball cap under a hard hat? The Site Safe website says it is recommended you do not wear clothing items on your head.”
couple of reasons it advises against baseball caps
Site Safe’s advisor says: Your company’s Safety Inspector is correct in issuing the non-compliance notice. The use of safety helmets requires the harness to be in direct contact with the skull to be most effective and usually a baseball cap will impede performance. This is outlined in NZ Standards and will also be part of the company’s safe work practices. The reason the wording on our website is “recommended” is because there are exceptions. If you read further down the information sheet on Safety Helmets, you will also note the guidance to check with the manufacturer regarding advice on wearing the hard hat. You mention the reason for the cap is comfort and hygiene. Safety helmets are designed to be comfortable – if yours is not then you should try a different design. Hard hats are a bit like shoes; there is not one design that will suit everyone. The hygiene issues should be addressed by cleaning and the regular change of the sweatband. There are no regulations specifically for hard hats; however regulation 18 of the Health and Safety at Work (General Risk and Workplace Management) Regulations 2016 require workers to wear or use the personal protective equipment in accordance with any information, training, or reasonable instruction by the Person Conducting a Business or Undertaking (PCBU).
safety-advice/hard-hat-basic-safety/ Additional note: Hard hat manufacturer Honeywell says there are a being worn with hard hats. ☐ It will interfere with the suspension and shell which work together to reduce the force of an impact. ☐ The peak of the baseball cap worn under a hard hat won’t allow the head protection to sit level on the head in the work position.
Mandatory PPE Q: Is there a mandatory Personal Protective Equipment (PPE) code for NZ construction sites? Site Safe’s advisor says: There is no mandatory PPE requirement. Each construction site will determine its own PPE requirements based on the risks that are present on the site and the controls that have been determined in the safety plan for those risks.
Shorts for summer Q: As a company, we supply PPE that is fit for the requirements of the role. However, we are being asked by staff if we will supply them with shorts for the summer? The people asking are a team based at a port and our cold store/yard team. Both are exposed to fullday varying weather conditions (currently the heat) and are in and out of forklifts (so I am concerned that some shorts are ill fitting and will catch when moving around equipment). In the winter months we supply overalls. Site Safe’s advisor says: The choice of clothing fit for the job is a decision for the PCBU. The PCBU must engage workers and involve them in any decisions affecting their health and safety, and this includes clothing. Your question specifically relates to supplying shorts. Note that these are generally considered to be standard clothing not PPE; so the PCBU is not obligated to supply them. You are correct in identifying any risks that might arise. Poorly fitting clothing (potential catch/snag while getting on and off plant) is potentially a risk but this applies to any ill-fitting clothing and the answer is to make sure that clothing provided fits correctly. Other risks to consider: ☐ Protection from (or exposure to) UV;
05 ☐ Work activities that might expose bare skin to projectiles or chemicals
☐ Exposure to cold temperatures. So unless the shorts are being supplied for safety reasons, the PCBU is not obliged to provide them. However, you may decide to provide them and even make them part of a uniform or dress code. Consider whether shorts are appropriate for the work activities and environment (based on risk assessment and consultation with workers). There is more about PPE from WorkSafe here: worksafe.govt.nz/topic-and-industry/personalprotective-equipment-ppe/protective-clothing/
Quarry work Q: I am an electrician in the New Zealand Defence Force and need to service a generator in a quarry. I was told that to inspect the generator, I needed a particular endorsement due to it being in a quarry, however I am just required to service it.
Q: Is wearing a harness necessary in a scissor lift when working at a height of 5m or less and not leaning out? Site Safe’s advisor says: Wearing a harness in a scissor lift is not required unless your risk assessment has identified circumstances where they are necessary (which may include leaning out).
SAFETY
☐ Work environments where bare skin may come into contact with sharp or abrasive surfaces
Harness use
From the Best Practice Guidelines for Mobile Elevating Work Platforms (MEWPs): “Before starting work, a hazard assessment should be completed to decide whether a harness system will be needed to complete the job safely.” The height you are working is not a consideration except for calculating fall clearance for a fall arrest system. If you would like Site Safe advice, go to www.sitesafe.org.nz/Portal/customer-care/ask/ to Ask an Advisor.
Site Safe’s advisor says: As a qualified electrician, you will be able to work on the generator. The fact that it’s in a quarry should be irrelevant. Ensure you have been provided a safety induction for the worksite and that you follow any lock-out, tag-out procedures included in the quarry safety procedures.
Q&A's compiled by Bill O'Byrne Communications Advisor Site Safe New Zealand Inc
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The Building Code is required to evolve over time to meet the needs of New Zealanders. To achieve this, the Ministry of Business, Innovation and Employment (MBIE) is holding biannual consultations and Code reviews.
The New Zealand Building Code is performancebased as opposed to prescriptive. A performancebased Building Code provides choice and flexibility in demonstrating compliance.
There are various compliance pathways that may be used to demonstrate that building work meets the minimum performance requirements set by the Building Code. Compliance pathways that must be accepted as complying with the Building Code, which include: ☐ Acceptable Solutions – simple step-by-step instructions that describe specific solutions for complying with the Building Code ☐ Verification Methods – test or calculation methods for complying with the Building Code. The Building Code, Acceptable Solutions and Verification Methods documents require updating regularly to remain current with sector innovations and best practice.
CONTINUE >>
In New Zealand, building work must meet mandatory requirements. These are laid out in the Building Act 2004 and its supporting regulations – the Building Code.
Options for demonstrating compliance
07
LBP CODEWORDS
Continuing to improve the Building Code
08 Consulting on change
After the consultation closes and all submissions are analysed, Acceptable Solutions and Verification Methods are updated and published in June and November each year. The purpose of these biannual updates is to ensure effective administration of the Building Code documents. MBIE is committed to updating these documents twice a year so that the Building Code keeps pace with innovation, current construction methods and the needs of modern society. It also provides clarity, certainty and consistency to the building and construction sector. The first biannual update changes were published in November 2018, followed by a second set in June 2019. The most recent round was published in November 2019.
Latest changes The November 2019 changes are to: � Support safer and more resilient foundations for buildings on liquefaction-prone ground
Codewords Quiz 1. How often are the Building Code, Acceptable Solutions and Verification Methods documents updated? a. Once every 2 years. b. Twice a year. c. Every time the Building Act is updated. 2. Acceptable Solutions are: a. Simple step-by-step instructions that describe specific solutions for complying with the Building Code. b. Test or calculation methods for complying with the Building Code. c. The only solution that will be accepted under the Building Code. 3. How can you make submissions on a Building Code consultation? a. By writing a letter to the Minister. b. Through the consultation section of the MBIE website.
� Improve consenting efficiency for steel-framed housing by introducing a new steel frame Acceptable Solution. The change to foundation requirements on liquefaction-prone ground is already in place in the Canterbury region and will now be extended to all of New Zealand. This will provide clarity to both councils and engineers, ensuring new buildings are being built safely and strongly enough to withstand liquefaction risks. MBIE is also making the National Association of Steel Framed Housing (NASH) standard an Acceptable Solution rather than an Alternative Solution. This will help support higher-density housing by increasing the number of construction DESIGN EXTERNAL material options available in compliance pathways. PLASTERING
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ADD TO LBP ACTIVITY LOG
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More information For more information, you can check out the updated Acceptable Solutions and Verification SITE BRICK & BLOCK LAYING Methods on the Building Performance website. If you would like to receive email updates on changes to the Building Code, and when consultations are open, subscribe to the Building Code Controls CARPENTRY FOUNDATIONS Update newsletter. www.building.govt.nz This article is relevant to these classes:
Answers: 1.B, 2.A, 3.B
LBP CODEWORDS
MBIE consults on the Building Code twice a year, every February/March and August/September. The consultation runs for 6 weeks, and stakeholders are invited to make submissions through the MBIE website on a range of issues raised for discussion.
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Timber joinery and NZS 4211 Timber joinery products can meet the requirements of the current Building Code if you know what to look out for. Following tried and trusted standards can give you confidence that you are following good practice.
Many benefits of timber joinery Timber joinery provides many benefits: ☐ Higher thermal resistance compared to some commonly used building products. ☐ Condensation is reduced or eliminated with double-glazed timber joinery. ☐ Joinery details that closely mimic the traditional appearance of timber joinery, allowing replacement and renovation work to blend seamlessly. ☐ Surface coatings that can be repaired relatively easily on site and colours that can be changed to suit the client’s needs. ☐ Added design flexibility due to the relative ease in modifying timber profiles. ☐ Reduced carbon footprint as the product is manufactured from renewable timber resources, and with the proper maintenance, it can last 50plus years.
Specify the right product for your job In New Zealand, testing the weathertightness performance of individual windows and doors for external use is done using NZS 4211:2008 Specification for performance of windows. This standard also includes glazing systems. Windows and doors that pass NZS 4211:2008 testing can be labelled as being in accordance with NZS 4211:2008. This includes the appropriate air leakage and wind zone rating for the product, as established through the testing. Generally, when specifying windows and doors using NZS 4211:2008, the following steps should be taken: 1. Establish the appropriate wind zone in accordance with NZS 3604:2011 Timber-framed buildings section 5. 2. If the wind zone is beyond that given in NZS 3604:2011, see section 10 of NZS 4211:2008. 3. Select a window that has been tested to NZS 4211:2008 and is labelled as suitable for the relevant wind zone. CONTINUE >>
LBP CODEWORDS
Timber joinery is a feature of New Zealand heritage architecture and is a relevant part of building and renovation today.
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Some NZS 4211:2008-compliant timber joinery suites have been tested beyond the extra high wind zone, so specifying these can give you additional confidence in performance.
Easy to identify NZS 4211:2008-compliant joinery It is easy to tell the difference between NZS 4211:2008-compliant timber joinery and other timber joinery. NZS 4211:2008-compliant joinery will be fitted with identification tags that show relevant wind zone and air leakage ratings:
Example NZS4211:2008 compliant timber joinery tag It also has a unique identification number that can be traced back to the original registered manufacturer. Tags are typically installed on the frame in the rebate of an operable door or window sash, like those found on fire doors. Registered manufacturers of NZS 4211:2008-compliant timber joinery must work to a manufacturing standard to ensure quality. Structural members within the joinery are individually calculated using specialist software and engineered calculation charts. Timber species and size can be altered to ensure relevant wind zone requirements are met.
Codewords Quiz 1. What is the simplest way to check that timber joinery is manufactured to NZS 4211:2008? a. Measure window profile sizes and check the designer’s plans. b. Locate the identification tag on the door or window frame. c. Contact the manufacturer. 2. Can NZS 4211:2008-compliant timber joinery be used in an extra high wind zone? a. Yes, if has been tested and certified for this use. b. No. c. Only if the homeowner signs a disclaimer. 3. How do you determine the wind zone of a property? a. By using the procedure laid out in NZS 3604:2011 Timber-framed buildings. b. You need to measure the wind levels on site. c. By checking the weather forecast.
More information online NZS 4211:2008 is one of the standards funded by the Ministry of Business, Innovation and Employment (MBIE) to support Building Code compliance. The NZS 4211:2008 standard can be downloaded free of charge on the Standards New Zealand website.
Answers: 1.B, 2.A, 3.A
LBP CODEWORDS
In May 2014, the wind zones in NZS 4211:2008 were revised to align with the wind zones specified in NZS 3604:2011. This incorporates the extra high wind zone for more exposed building sites.
NZS 4211:2008-compliant timber joinery product and installation details can also be downloaded from the Joinery Manufacturers’ Federation website: jmfnz.co.nz/installation-preparation-information/
ADD TO LBP ACTIVITY LOG This article is from Codewords Issue 94. Use the ITM App to log your activity today.
The documents available on the website outline opening trim preparation, flashing details, fixing methods and seal locations. They will assist in both detailing and installing timber joinery to appropriate standards.
This article is relevant to these classes:
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12 INDUSTRY NEWS
Foundation rules shake-up Rules about foundations for new homes on liquefaction-prone sites are being extended to the rest of the country, after applying in Canterbury for the last decade following the earthquakes there in 2010. Councils have been given two years to map areas prone to liquefaction within their jurisdictions. Unsurprisingly, Wellington is the region likely to be affected most by the new rules; it is considered the riskiest city in New Zealand for earthquakes, and liquefaction is a well-known issue. Wellington council has already mapped liquefaction prone areas in the central business district, which is affecting the types of foundations required there. Dave Robson, manager of building performance and engineering at MBIE, said there was a range of “raft foundation” solutions designed by the engineering community for liquefaction prone land.
Experts have estimated that foundations for land with a minor risk of liquefaction will cost approximately 20% more than a standard reinforced concrete slab. However, the cost implications for land with a high risk of liquefaction will be significant. Site-specific geotechnical investigation and specific engineering foundation design will be required. Foundations for such land could be three to six times more expensive than a standard slab.
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14 INDUSTRY NEWS
Housing shortage a myth? We’ve been told for years now that New Zealand has a huge housing shortage, but some property experts are claiming it’s all a myth. In fact, according to one recent news report, the city with the biggest problem, Auckland, has a surplus of around 7000 houses. How can that be? Ashley Church, former CEO of the Property Institute of New Zealand and One Roof columnist, argues that there has been a fundamental miscalculation by successive governments and that the figures touted about the housing shortage are wildly inaccurate. Church says there are two key indicators that reveal the true picture: “The first is population data and the population count, and the second is a census measure which tells us the average number of people occupying a Kiwi home at any given time.” “Dividing one by the other tells us how many houses we have at any particular point in time.”
The real numbers For example, in 1986, the population of New Zealand was 3.24 million, and based on census data that year, there were 3.29 people per dwelling. “By simply dividing the population figure by the average household figure, we know that there were almost 985,000 occupied houses in New Zealand in that year,” says Church. “Fast forward to 2013 and we find that the population had increased to 4.45 million and that the average household occupancy number had actually dropped to 2.87 people per household.” “This means that the number of occupied dwellings had grown to 1,550,000, an increase of 565,000 dwellings over 26 years, an average of 21,000 new dwellings being built per year.” “So we built almost 200,000 more homes, over that 26 year period, than we needed to just stand still.” “Not only do we not have a housing shortage, but also the market has actually been supplying more homes than we’ve needed for almost 33 years.”
The real problem Church acknowledges that there are high levels of homelessness and that the numbers of people
on the Social Housing Register – those wanting to rent a home from the State – have dramatically increased. “But these things are symptomatic of socioeconomic issues, not a shortage of housing. For example, people register for social housing not because there are no homes to rent, but because they can’t afford market rate rents.” The same week Church’s article appeared in the NZ Herald, another story made the news proclaiming that Auckland currently has a surplus of over 7000 homes. The story quoted the Salvation Army’s annual State of the Nation report assessing how New Zealand is progressing socially, based on a number of indicators. In the housing section, the report concluded that based on provisional population estimates from Statistics NZ, Auckland's housing shortage "has now, at least statistically, become a housing surplus". The Salvation Army's conclusion was based on a revision in October last year by Statistics NZ of Auckland's estimated population. In the correction, the number of people estimated to live in Auckland in 2018 dropped by 77,500, compared to the previous estimate. The report says “the more accurate housing story in New Zealand is not about increasing housing supply, but more about household income levels and high housing costs".
15
The average floor area of homes consented in 2019 was 42 square metres smaller than the peak of 200 square metres in 2010, according to Statistics NZ.
Floor sizes of consented homes in 2019
And while building more apartments in cities like Auckland had an effect on the statistics, the main driver of the change was traditional stand-alone homes.
180 sqm
“The drop in new home size is primarily due to stand-alone houses getting smaller,” construction statistics manager Melissa McKenzie said.
80 sqm
INDUSTRY NEWS
NZ homes shrinking The median floor sizes of newly consented homes across New Zealand's districts. 240 sqm 220 sqm 200 sqm 160 sqm 140 sqm 120 sqm 100 sqm 60 sqm 40 sqm 20 sqm
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17 INDUSTRY NEWS
App helps tradies to fight tool theft Kiwi thieves will find stealing work tools a little harder thanks to an Aussie mother of four who created an app to foil their plans. There’s nothing worse than getting back to your ute to find some grub has stolen your power tools. Unfortunately, it’s an all too common story that has likely already burnt you or one of your mates. But when this next happens, are you ready and able to give all your tool details to police and insurance companies?
An idea was born Gayle Neville from Brisbane came up with the novel idea to create a virtual toolbox where tradies could register all their equipment, including serial numbers, in one safe location. In the event of items being stolen, the records stored on the Tool Protect app could be accessed quickly and tools later identified if recovered. The idea by Gayle was hatched after listening to her husband Dan, a police officer, talk about his frustration at how little could be done to recover stolen tools. With the help of her four adult sons and their wives, Tool Protect was developed and then released onto the Australian market in June 2019. Already 2,300 tradies have signed up to trial the app.
Now available in NZ They have now launched in New Zealand and are excited to offer Kiwi tradies the opportunity to fight back against tool theft. “Police often come across rooms full of power tools but are unable to reunite these with their owners as they don’t often keep the serial numbers or an upto-date list of their tools,” said Neville. “I just thought, tradies love their phones, they just need an app to make it easier to store details of their tools and report theft!” “I wanted to catch these thieves who are ripping people off like my son, who also happens to be a tradie.”
Get back to work faster Tool theft is a growing problem in New Zealand, with equipment often stolen from the back of
utes, cars and even construction sites. The theft of power tools is also a common currency for drugs. The impact of such a crime isn’t limited to cost of replacement, it can also mean jobs need to be cancelled until new equipment is purchased, impacting livelihoods. Claiming on insurance can be a lengthy process and unless proper records are kept, the full repayment value may not be paid. Tool Protect allows information to be stored in one convenient place with information ready to be quickly sent to police, insurers and even tool shops where they can be repurchased. Tradies take a photo of each tool which is recorded with its serial number and any other identifiable marks.
Making it harder for the criminals “It will make stealing tools harder because the serial numbers of stolen tools will be available to police,” Neville said. “It will shut down stolen tools sold through second-hand stores. I really want to make it harder for these grubs to steal equipment from honest and hardworking tradies – we want to be able to fight back.” For a short time only, Tool Protect is offering a trial of Tool Protect free! In the future, it will be 1-month free trial and the annual subscription will be $28.
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Variations
LEGAL
The limits on what the client and the contractor can ask for. Variations to the scope and specifications of the building project as originally agreed, occur on virtually every project, and they complicate what would otherwise be a straightforward process. Variations occur for a variety of reasons, including the discovery during construction that aspects of the design are impractical or can be improved upon, site conditions proving to be more difficult than anticipated, clients changing their mind about structural or aesthetic components part-way through, some of the intended materials becoming unavailable, or the Council insisting on changes. In the larger commercial projects in the highly competitive construction sector, contractors often underbid to secure the job and then hope to make up the deficit in variation claims. There is a rigid process for directing and pricing variations, and either party can end up missing out if they fail to follow the rules. The project then becomes a fractious contest where competing teams of designers, quantity surveyors and lawyers battle it out on a more or less continuous basis from commencement to practical completion. In the residential sector, the process is a little less formal and changes are often requested by the clients or recommended by the contractor, on the spot and without any formal documentation or pricing. In both fixed price projects and cost reimbursement projects, these variations are often
responsible for the price ballooning out beyond the parties’ expectations, frequently leading to payments being withheld and disputes having to be resolved.
Variations aren’t automatic It might surprise you to know that under the common law, a variation that is insisted upon by just one of the parties, is unlawful. That is because a deal is a deal, and the deal the parties struck at the outset of the project was to build – and pay for – the structure that was originally designed and specified. Unless you have a contract that allows for variations, or you both agree, then the clients cannot make the builder deviate from the plans and specifications, and neither can the builder do so at his own discretion. For that reason, and because there is usually a sensible reason for variations, all of the standardform building contracts in common use in New Zealand allow the client to require the contractor to carry out variations to some extent or other. The contractor is then entitled (or obliged, in the case of variations which make the job cheaper) to adjust his charges accordingly, and to claim an extension of time. However, even if there is a variation clause in the building contract, there are still limits on what the building owner can demand of the contractor – unless the contract makes it very clear that there are no such limits. If that isn’t made clear, then the common law will not permit the owner to direct variations that place an unreasonable burden on the contractor or require the contractor to do something well outside the general nature of the responsibilities the builder took on at the outset.
21 Nor will it allow the owner to remove work from the builder’s scope so that he can do it himself or give it to another contractor.
The New Zealand Standards (“NZS”) suite of commercial building contracts limit variations to those “within the scope of the contract”. The NZS Housing, Alterations & Small Buildings Contract, and the New Zealand Institute of Architects contracts, prohibit variation orders which are so peculiar, unexpected or different from what was anticipated that the scope of the builder’s responsibilities is significantly altered. In the Master Builders contracts, the builder must give reasonable consideration to the owner’s written request for a variation, and cannot arbitrarily withhold consent. And in the Certified Builders contracts, the builder must carry out all requested variations provided they don’t impose an unreasonable burden on the builder. Sometimes the contractor does something that is not found in the agreed plans and specifications and yet it is not a variation. That commonly happens where the plans are simply not detailed enough, so the contractor has to use his own initiative or call for more detail from the designer, but what the contractor ends up doing is still consistent with the original design. In those cases the contractor might be denied an extra payment and extension of time, unless he can prove that his pricing simply could not have contemplated the additional work that the extra design entails. What if the building contract specifies a process for directing and claiming variations, but the parties ignore it? For example, they don’t record the variation in writing, the contractor doesn’t price it before starting work on it, the contractor doesn’t claim an extension of time until a dispute arises, or the parties don’t observe the time limits in the contract. All of those are very common in residential projects where the parties aren’t that familiar with the contractual terms, but it is surprising how often it happens in commercial projects too. The short answer is that where the Principal knows about the informality or lack of process but goes along with it, it will be too late to deny the contractor an additional payment or a time extension simply on a technicality, if a dispute erupts later.
Even if the subcontract does allow the head contractor to direct the subcontractor to carry out variations, sometimes that isn’t as easy as it seems, as was illustrated by the 1984 South Australian case of Chadmax Plastics Pty Ltd v Hansen and Yuncken (S.A.) Pty Ltd. Hansen and Yuncken won the head contract to construct an 8 storey office building. The design called for the stairwells and corridors to be coated with Wallflex and the head contractor subcontracted that work to Chadmax. Then the Principal changed its mind about the wall coating and directed Hansen and Yuncken to paint the walls instead. Both the head contract and the subcontract provided that all variations had to be within the general scope of the contract and be of a character and extent that is contemplated by it. These were standard form contracts in common use in South Australia at the time. Ironically, the change in wall coating was held to be within the general scope of the head contract (because it was only a minor change to the overall project) but the Court said it was not within the general scope of the subcontract (because it meant deleting 98% of Chadmax’s work, which it was already committed to). That put Hansen and Yuncken between a rock and a hard place, because it had to comply with the Principal’s variation, but could not impose it on Chadmax. So it ended up paying damages to Chadmax, which it was not able to recover from the Principal. What do we take from all of this? First, even standard-form construction contracts can let you down at times. And secondly, there is a limit to the extent that your superior can order variations that either increase or decrease your work.
by Geoff Hardy Auckland Commercial Lawyer
Variations under subcontracts Interestingly, in a subcontracting situation if there is no formal subcontract other than the initial quote (which is frequently the case), then technically neither the head contractor nor the subcontractor can force the other to accept a variation. However, the form of subcontract in most common use in New Zealand (SA 2017) allows the head contractor to direct the subcontractor to do any kind of variation,
lawyers
Geoff Hardy has 45 years’ experience as a commercial lawyer and is a partner in the Auckland firm Martelli McKegg. He guarantees personal attention to new clients at competitive rates His phone number is (09) 379 0700, fax (09) 309 4112, and e-mail geoff@martellimckegg.co.nz This article is not intended to be relied upon as legal advice.
LEGAL
What the standard contracts say
and can even terminate the subcontract if the Principal removes that work (or a substantial part of it) from the head contract. The subcontractor is left with no claim for damages or loss of profit, unless the head contractor can claim them from the Principal.
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As you read this, keep in mind I’m a business coach, not an economist. I’m sharing what will help you as a trades business owner in this new season. As I write this in early March, Coronavirus has started a chain reaction of events, including shortages of some products. Public events are being cancelled. Banks are worried and are watching their customers closely. The economic environment is changing. Time will tell how it all plays out. If you’ve been in business a while, you’ll recognise there are always ups and downs. Some bigger than others. It's part of the economic cycle. It’s part of being in business. However, it’s important to ensure you’re ready. Are you prepared for what's coming next?
Here’s 7 things to know:
1
Downturns weed out the crap I was talking with a seasoned tradie about this the other day. His strategy: “Don’t waste a good recession.”
Your competitors who are doing a poor job, pricing too cheap, taking the quick buck and burning their reputation? Many of them will disappear. Ultimately leaving more room for you. The top tradies always have work. In any industry, the best are always in demand, regardless of what the market is doing. It’s a chance for you to get better, more efficient, become leaner and resilient. Systemise your operations. Sharpen yourself up for the next phase. When things bounce back, you’ll be ready to dominate, and have less competition.
2
Those who are slow to react are the worst hit Listen up, because this one is important: You MUST be proactive with decision-making. Watch the numbers closely. Look for the early signs so you’re not surprised. Don’t rely on backlogs of work that may dry up or disappear. Make sure you are doing all you can to keep the work flowing in. If your efforts aren’t reflecting, and you need to cut overheads and possibly staff, as painful as it is, do it early. Not after you haemorrhage a heap of cash first. Identify options ahead of time. Have a Plan B for all scenarios, such as an overdraft facility or cash buffer in the bank. CONTINUE >>
23 BUSINESS ADVICE
Are slow times coming for tradies?
Sure, it’s harder to get work when times are slow. However, everyone is in the same boat.
24 BUSINESS ADVICE
3
Some of your customers will go broke Have you ever been stung by a large bad debt? Most tradies have. That’s in good times. It’s even more likely to happen in a downturn. I often see tradies rely too much on one or two big clients. It’s risky. As a rule of thumb, your biggest client ideally wouldn’t be more than 30%-40% of your business.
steady work, all will be okay. You must know at exactly what point the job is not worth doing. In hard times, lots of tradies will do anything to get (or keep) the work. They are the ones that get into trouble first. Know your margins. Quote too cheap and you will feel it down the line with tight cashflow and higher debt. That’s not sustainable.
Assess now: If your biggest client disappeared, would you still be ok? We’ve all seen bigger companies fold and little guys get hurt.
There are better ways to win work and keep your margins strong. Even when things are quiet. Even when competitors are undercutting you.
Don’t let it happen to you: Make sure you aren’t carrying late payers and have solid terms of trade.
7
4
Never stop marketing A lot of tradies I talk with are busy. Why should you market if you have more work than you can handle? That’s now. In a downturn, things can change quickly. Assess: Is your work coming from just one source currently? It’s not a good idea to rely on only one stream to feed jobs through. What if your biggest customer had their work dry up? Or went broke, and you had to deal with the receiver who didn’t want to pay you? What if they changed owners? Or their project manager (that dishes out the work) decided he was going to use your competition instead? This can happen (and does). Especially if word of mouth is the only way you get leads, build a larger number of sources. There are so many different and effective ways for tradies to market their services. Then even if some dry up, you will still have other streams of work. In slow times, you can also diversify (into other types of jobs you can make money on). As well as specialising in what you are good at. Do both! Spread your risk.
5
What if your suppliers or bank went broke?! Those who do not study history are doomed to repeat it. In 1992, Westpac got into serious trouble and almost went under. In the global financial crisis in 2008 the 4th largest US bank, Lehman Brothers went bankrupt. So yeah, these things can really happen. I don’t know which banks are safer than others these days but be aware that they’re often connected. If American banks end up in trouble again, a chain reaction to the banks down under is likely. An experienced mortgage broker told me she’s advising clients to spread the risk by having different banks. One for your home loan, and another for the business. Wise advice. Same with suppliers. Having more than one who knows you (and that you buy from regularly) is a smart move. Suppliers will be cautious of new accounts when things get tight. Also, keep your account paid up to date, so you have a good track record if you need more credit in the future. Many suppliers now run on “just-in-time” ordering and don’t carry much stock. Ask them how much stock they have of the materials you most often use. So you don’t get caught short. Of course, stock up if needed.
Cut the fat I mean, this is something you should be doing at least once a year anyway.
Let’s sum up
Cash is king, and you want as much of it available as you can. Reduce overheads. Work on becoming more efficient.
When the economy changes, things become unpredictable. What worked yesterday doesn’t work the same today.
Reduce debt as much as possible. In a recession, banks tighten up lending and overdrafts. Be aware of your ability to pay back current debt.
Principles will always stay the same (like don’t carry unnecessary debt). But strategies will change to the circumstances (like which customers are risky to deal with, e.g. if they are likely to become over-exposed).
6
Under-pricing leads to problems later On some jobs, to keep the work, you might have to sharpen your pencil. Be. Very. Careful! Don’t make the mistake of assuming if you have
Make time your friend, not your enemy. We all have 24 hours in a day. Business owners who carve out time for regular strategic thinking will see the opportunities and take advantage of them.
25 If the pie is smaller, just take a bigger slice.
BUSINESS ADVICE
In a recession there are always opportunities. But most people are too busy scrambling or freaking out, to see them.
by Daniel Fitzpatrick
You can’t do it alone. Build strong connections. That includes staff, customers, suppliers, bank, and bringing in the right expertise at the right time. Are we headed into a recession? There are some strong signs that we are. My clients, rural builders Barney & Wendy faced a downturn in their region and were able to thrive using these strategies. They didn't have to lay off staff like they had in previous hard times and came out in good shape. Prepare well, maximise your opportunities and don’t stress. Even in the Great Depression money was still changing hands. Less. But people were still paying their rent, buying food, getting repairs done.
Daniel Fitzpatrick is a business coach for trades & construction business owners. Find him at NextLevelTradie.co.nz
Want a fresh pair of eyes on your situation? Need a custom-built plan to figure out what to do next and how to respond? Go here to book a free no-strings chat: www.nextleveltradie.co.nz/nextstep
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26
That ain't a boat... THIS is a boat!
FISHING
Y’know, you’ve got to be careful how you define success. If you were to measure the success of ITM Fishing in growth, following and longevity, on all counts you’d say it’s successful. But what does that mean for me? Success to me means I get to keep doing the job I love, but the more successful ITM Fishing becomes, the less days I get to go fishing. Hmmm I’m not sure that’s what I’d call success.
Eliminate issues
But hey, I’m not going to complain, particularly to someone doing footings in the mud or roofing in the scorching sun. So, as ITM Fishing grows and my fishing time reduces, I have to make the most of every minute I get fishing, particularly on the few days I get to go fishing without a camera crew. So, the design and innovation that has gone into my new boat is all about getting maximum enjoyment and minimum niggle for every minute I spend fishing. I’ll break it down for you and you might get some nuggets to help with your boat set-up.
a good boat with proven performance and the
Before we start on the fancy gear and things to catch more fish, eliminate all the things that can ruin your day. The best way to do this is to get highest build quality. I’ve got a Stabicraft so I’m covered there. Same goes for the trailer. If you are going to get your boat wrecked, or even get seriously hurt, it’s more likely to happen while you are towing your boat to the ramp. Get a decent trailer with quality components, and tow it with a wagon that’s capable of towing it. I’m covered here with Hosking Trailers and the undisputed king of wagons, the Toyota Landcruiser. Next the outboard. What you want is reliability, performance, economy and low emissions. The G2 Evinrude E-tecs are best in class on all of these. Yep, these two-strokes are more powerful and more economical than the leading 4-strokes. So that’s the gear I’ve chosen to make up the bones of the boat, based on not having things go wrong – less time fixing stuff, equals more time fishing. Now for the stuff that makes the fishing experience better, best explained by the presenting
The new boat has got instant fishing-mojo, Matt and the boys got this 98.6kg tuna to open the new season.
the problem, and the solution I came up with using technology and design.
27
Problem solving the perfect trailer boat Problem: I do all styles of fishing, so need a boat suitable for casting lures and big game fishing. Solution: Full walk around with rail that makes for hands-free movement around the entire boat.
Problem: I like a nice cold draught beer while watching cricket, while fishing… on the boat. Solution: Installed a 2 keg tap beer system on the boat that’s full portable to go anywhere tap beer is essential.
Problem: I want to do some overnight or multi-day trips, but 90% of the time it’s day trips, so don’t want to compromise space and fishability by having bunks and a closed in cabin. Solution: Fold out fore-birth that converts to a double bed and bench seat that folds into a bunk, removable clears that fully enclose the cabin. 650 litre underfloor fuel tank to allow for 4-5 days at sea. Problem: Once it gets dark it’s time to head in, but it’s just when the fish are biting. Solution: Hella lighting throughout the boat and underwater lighting that not only brings up the fish, the lights strobe in time to the music cranking out from the 7 speaker Fusion system, handy for a dance party…… if you aren’t already watching the rugby.
Matt with one eye on the lures, one eye on the live cricket, and one hand on a cold beer.
Problem: I need to find and catch fish quickly. Solution: Furuno Bird Radar that will mark individual birds, Furuno TZT true-chirp sounder with definition that will show a freckle on a snapper's bum. And Wassp sounder that models the seafloor in 3D everywhere I go.
There’s no need to rush home when it starts getting dark. This boat has all the comforts of home, including Sky Sport.
Problem: I’m having mid-life crisis but don’t like sports cars or motorbikes. Solution: A full carbon fibre wrap on the boat and outboards. Just looking at this boat makes men happy.
FISHING
Problem: It’s a great day for fishing but I don’t want to miss the live cricket or rugby. Solution: Sat receiver and Sky TV installed on the boat.
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29
LegaSea is pleased to be partnering with ITM because this gives us the resources to develop a range of programmes, like FishCare, that benefit our marine environment.
Respecting our marine resources
FishCare – The school of best practice is one our most important projects. Launched in 2017, it has now evolved into a key feature of our event planning.
FishCare Principles
FishCare forms a big part of our conversations when we attend events alongside ITM, especially the Fieldays every June. When we combine the conservation message with the ITM Sea Wall, where people can write a message on chosen fish and staple it to the wall, it’s a hit.
2. Maximise the survival rate of fish released after capture.
To understand people’s recreational fishing practices, a baseline survey was conducted in 2017. Repeating the survey over time has provided an indication of how the FishCare messages are shifting awareness and improving the practices of recreational fishers and those who interact with New Zealand’s marine waters.
New Zealand’s marine fisheries resources are highly valued and unique, and people expect them to be well managed and sustained long-term. To help develop our FishCare messages, we first developed a set of principles.
1. Reduce wastage by protecting small and juvenile fish from capture and incorrect handling.
3. Maximise the use of all fish caught and kept. 4. Minimise the impacts of fishing on marine life and the environment. 5. Return home safely. Maximise your safety while fishing on or near the water. LegaSea believes that our collective action can make a big difference to the fishery we care so much about. It is our goal to not only educate people so they adopt these principles, but to inspire you to become an advocate and help your fellow fishers to do likewise. While the programme covers many areas, it is best to start small – you don’t have to change everything at once (although that would be great). Even small changes can make a big difference over time; from hook selection and handling techniques to fish processing and careful interactions with mammals and birds.
What is FishCare?
There are a lot of areas where fishers and boaties can be vigilant and proactive. Go to it.
FishCare is a core LegaSea educational initiative. It is aimed at giving people like us simple tools and tips on how to look after the fish we catch and reduce our collective impact on the marine environment. The desired outcome is more fish in the water for us and future generations. People who fish are naturally inventive. We’re always seeking ways to outwit our prey, to put food on the table or to enjoy bragging rights amongst our crew. The social element of fishing is a major contributor to our overall wellbeing, as evidenced by the smiles on the faces of people returning home, even those with an empty chilly bin. Most of us would say that a day’s fishing beats working any day.
FishCare promotes best-practice techniques to help people contribute to fishery and environmental sustainability. Latest news Yellowtail kingfish best-practice guide. www.fishcare.co.nz/kingfish-best-practice-guide www.fishcare.co.nz
FISHING
Start small to make big changes
From humble beginnings
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