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ACT INQUIRY INTO BUILDING AND CONSTRUCTION OH&S The ACT Government has announced an inquiry into Occupational Health and Safety in the building and construction industry.

EDITION 6-2012 http://www.mba.org.au/ files/view/?id=594 MASTER BUILDERS EXECUTIVE COUNCIL President – Ross Barrett Treasurer – Simon Butt Chair, Commercial Builders’ Sector Council – Valdis Luks Chair, Suppliers and Subcontractors’ Sector Council – Grace Ferreira Chair, Residential Builders’ Sector Council –Frank Porreca Chair, Civil Contractors’ Sector Council – Andy Crompton Chair, Professional Consultants’ Sector Council – Hans Sommer MASTER BUILDERS MANAGEMENT TEAM Executive Director – John Miller Deputy Executive Director – Jerry Howard Director Industrial Relations – Mike Baldwin Senior Management Accountant – Louise MacCallum Senior Manager - Marketing & Membership Services – David Leitch MASTER BUILDERS GROUP TRAINING General Manager – Wendy Tengstrom

Master Builders Association of the ACT 1 Iron Knob St, Fyshwick ACT 2609 PO Box 1211, Fyshwick ACT 2609 Tel: (02) 6247 2099 Fax: (02) 6249 8374  Email: canberra@mba.org.au Web: www.mba.org.au

The Gallagher Government has also announced it will establish an Industrial Magistrates Court to hear workplace safety matters if it is re-elected in the ACT election in October. Attorney-General Simon Corbell said the Government would appoint a specialist magistrate to handle matters such as workplace accidents and deaths. Mr Corbell has announced that former ACT Public Service Commissioner Lynelle Briggs will chair the OH & S inquiry, supported by ACT WorkSafe Commissioner, Mark McCabe. The inquiry will have powers under the Work Safety Act to take submissions, call for papers and question witnesses. There are no plans for the inquiry to hold public hearings but evidence will be protected from defamation, criminal and other legal action. The Government flagged the inquiry in July. "Since December last year there have been four workplace deaths, three of which have been on construction sites, and this is, put simply, four too many," Mr Corbell said. "This inquiry is specifically designed to look at issues of health and safety closely as well as where there can be tighter regulation to better protect workers who work in this high risk industry. "The inquiry will consider issues including issues of compliance with current laws and regulatory regimes, on-site behavioural or cultural issues, training requirements or participation rates and powers available to WorkSafe ACT, and other regulatory bodies." Mr Corbell said the Government had consulted with unions and industry stakeholders in developing the terms of reference. "It is important that we take a wide ranging look at this industry and I am pleased that all groups who represent both employers and employees have cooperated during the formation of this inquiry and I look forward to their contributions to it."

"The inquiry will engage with a range of employers, workers, occupational health and safety professionals and other industry stakeholders, including the ACT Work Safety Council.

"The Government sees any death on a worksite in Canberra as unacceptable and this inquiry will have all the necessary powers available to it that are required to ensure no stone is left unturned," he said. On the Government’s election promise of an industrial magistrate, Mr Corbell said an existing magistrate would be appointed to the role, meaning the ACT Government would not have to provide any extra funding to establish the new jurisdiction. He said the plan was to develop expertise in workplace health and safety law and improve the ACT's understanding of issues that arose in this area. The ACT and Tasmania are the only jurisdictions that do not have specialist arrangements in place for work safety matters that come before the Magistrates Court, he said. The ACT Magistrates Court currently hears civil cases involving claims of up to $250,000 and can deal with some criminal offences. The ACT Supreme Court handles criminal matters involving harm to a person where the maximum penalty is over 10 years' imprisonment. Mr Corbell said there would be consultation before the ACT Government decided on the exact model for an Industrial Magistrates Court.


THE

HAMMER hits the nail on the head

UNIONS For some, flagrantly breaking the law isn’t a problem. In the case of the Unions, it never has been. There’s always an excuse for it. Not only that, there are plenty willing to continually excuse them. It’s part of the great Aussie tradition. “Ahh, they’re unions, they’re meant to behave like that.” It’s a bit like the legend of Ned Kelly. “Yeah, sure, he killed a few coppers but he was really a good bloke.”

Is it by accident or is it by design? There’s no question that many would go for the latter. How this continued escalation of industrial disharmony can be allowed to flourish at precisely the time that business, consumer and investor confidence is at its lowest ebb is staggering. Surely it is way past time for some leadership in this country to ensure that we don’t follow some European countries down the drain.

These double standards would be laughable if they weren’t so serious. Media coverage of the recent Grocon dispute in Melbourne has all but put the CFMEU on a pedestal. No highlighting the fact that this was just blatant violation of the law. The media focus was the supposed newsworthy sensation of Police being at the site on horseback and the threats and heckling by a group of aggressors toward those legitimately wanting to get to work so they can feed their families. There was no real focus on the complete disregard for the law.

The situation where the rule of law is overlooked by those who should have great interest in having it work for the benefit of the country needs urgent attention. This country just cannot afford to stop working. So much is written about where we go when the mining boom ends. The less reliable we are seen by the international community, the less we are going to see them investing in Australia. It’s as simple as that. As it stands, we are standing on the precipice and if we don’t get it right then we will fall right over the edge.

Ironically, data has just been released to highlight the growing workplace disputation in this country such as witnessed at Grocon and earlier at Lend Lease sites. The old chestnuts are coming out, educators and health workers all taking a stand. Christmas is coming again and beer and planes will probably be in short supply when demands aren’t met.

What some don’t seem to realise, or don’t want to realise, is that you might have once been able to survive with the reckless type of behaviour displayed recently and seen so often before in the building and construction industry. In a world where what was once never considered possible, anything is possible. Flat pack housing, modular buildings being imported, kitchens and bathrooms ready to assemble; it’s all possible and it’s happening.

Sure, we can go on creating havoc for ourselves, sending businesses to the wall through intimidation and illegal behaviour. This is death by a thousand cuts. It won’t necessarily change overnight but the change is occurring. It remains to be seen how this can be good for future generations and just what future generations will make of such action. The sooner someone takes greater control of the propensity of protestors and their organisers to flout the law at will, the better off the country will be now and well into the future. The reality is that to continue to turn your back on the problem and live down the back garden with the fairies will mean future generations are going to be hammered.


COMPANY TAX CUT PLAN SPARKS

OPPOSITION

The Australian Government’s Business Tax Working Group has recommended the Government fund a cut in the company tax rate by reducing business tax deductions, particularly those for the mining industry. However the deductions proposed for debate as to whether they should be abolished, also include changes to – or abolition of – depreciation allowances for buildings.

Among deductions listed for possible abolition or change are: •

depreciate buildings over effective lives

remove building depreciation deductions

allow a uniform rate of depreciation of 2.5 per cent per annum

The Working Group’s proposal, contained in its discussion paper ahead of a draft report in October and final report in December, sparked understandably strong reaction from those business sectors that would be adversely impacted. The Australian Industry Group said, "A very careful assessment is needed of the costs and benefits of the options put forward in the paper. Not all proposals to broaden the tax base will be worth the reduction in the company tax rate that they will finance.” Australian Chamber of Commerce and Industry economics director Greg Evans said, "It's like turkeys voting for Christmas." He asked "Why would business sign up to any process that helps the government identify and take away important tax arrangements with the outside chance of a company tax cut?" The Business Tax Working Group was established after the Tax Forum in October 2011. The Government told the Working Group business tax cuts should be financed from the business tax base. The discussion paper notes, “The Working Group’s terms of reference stipulate that in order to pursue the economic benefits associated with a reduction in the company tax rate, savings should be identified from within the business tax system in order to progress reforms in a cost neutral way.”

It does not nominate a specific company tax rate cut but notes, “A lower company tax rate has consistently been regarded as central to Australia’s international competitiveness through its attractiveness as an investment destination.” The paper provides an extensive list of options for cutting deductions and the revenue costs of the deductions. It says, “It is inevitable that a company tax rate cut funded through measures that broaden the corporate tax base will generally involve a redistribution from those who benefit from existing concessions to the broader corporate taxpaying base, at least in the short term. It is often easier to identify those who stand to lose from base broadening measures, compared to those who stand to gain (perhaps marginally) by a lower corporate tax rate.”

Other deductions listed for consideration by the Review include: •

cap interest deductions for all business taxpayers (excluding banks)

cap interest deductions for all business taxpayers

reduce the diminishing value rate for depreciation from 200 per cent to 150 per cent

remove the capped effective life provided to certain depreciating assets

remove the capped effective life used in non specified industries


POOL SAFETY AND ACT PROVISIONS IN THE NCC Jason Grieves - Technical Services Manager

We are about to welcome in Spring and these warmer weather temperatures are generally followed by an increase in pool and spa installations. Pools that are not demountable are required to be installed by a licensed individual who is endorsed under their licence category to install these structures. However the following points may come in handy for builders and other trades where there is a pool associated to a project.

Development Approvals

Pool fencing and Barriers

Like other class 10 structures, swimming pools fall under provisions in Schedule 1 of the Planning and Development Regulations 2008 and may be exempt from Development Approval. The general requirements to keep in mind for exemption are:

The most important part of a pool structure is the compliance of the fencing or barrier provisions which as prescribed in the NCC at Part 3.9.3 are found in AS 1926 Part 1 and Part 2. A pool barrier (when it is not a boundary fence) must be a minimum 1.2m high measured from finished ground level, and be a minimum 1.8m high for a boundary fence acting as a barrier. Both types of barriers must have a Non Climbable Zone (NCZ) as set out in Fig 2.1 of AS 1926.1 (below). AS 1926.1 also illustrates requirements to deal with height transitions at ground level for stepped and sloping ground levels.

No part of the pool is forward of the building line.

No part of the pool is within 1.5m of a side or rear boundary.

No part of an associated structure (i.e. deck) is higher than 1m above finished ground level.

The top of the pool enclosure is not higher than 1.5m above finished ground level.

Building Approvals Most pools and spas require a Building Approval. The exemptions for Building Approval of pools and spas is located in Schedule 1 of the Building Regulations 2008 but a rule of thumb for exemptions are as follows: •

Holds less than 300mm of water.

Can be assembled or dissembled by hand tools without damaging the components (i.e. and inflatable or modular pool).

Doesn’t affect the structural integrity of a structure that has a Certificate of Occupancy.

Doesn’t affect a fire rating value on a floor wall or ceiling.

Doesn’t affect a fire protection or ventilation system.

Doesn’t affect a fire escape, lift or stairway.

Doesn’t reduce the compliance of provisions of the BCA of an existing building.

The 2012 edition of the NCC now alleviates confusion between the 2011 version and AS 1926.2. Amendment 2 of AS 1926.2 now reflects clause 3.9.3.0 (b) in not allowing a child resistant doorset to be used in a barrier for an outdoor pool. Prescribed pool barrier locations for outdoor pools can be found in figure 2.1 of AS 1926.2 (Illustrated). There are different requirements for indoor pools and these are illustrated in Fig 2.2 of AS 1926.2 (Illustrated).

ACT Provisions in the NCC The NCC contains provisions that are specific to the ACT at ACT 6. They state that where a pool exceeds a volume of 10m3, the pool must: •

Be of a reticulation type maintained through pumps with water being drawn from the pool clarified, disinfected before being returned to the pool reservoir.

Have a means of egress provided by way of a ladder or steps or a ramp in the floor of the pool.

Be capable of being completely emptied with any discharge, overflow or pool backwash connected to the sewer drainage system.


AS 1926.26 - 2007

AS 1926.2—2007

7 AS 1926.2 - 2007

AS 1926.2—2007

A2

P

P

B

B

Indoor P

B

P

HOUSE

O u to o r

(a) E xa m p l e 1

( b) E xa m p l e 2 (a) I n d o o r/o u td o o r p o o l

P

P

B

B P

(c) E xa m p l e 3

B

(d ) E xa m p l e 4

HOUSE

L EG EN D:

A2

P

Po o l

B

Building

( b) In d o o r p o o l exa m p l e 1

Child-resistant openable p o r ti o n of wi n d ow c o m p l y i n g wi th AS 19 26.1

W i n d ow o r d o o r

Pr o p e r t y b o u n d a r y

G a te c o m p l y i n g with AS 19 26.1

B a r r i e r c o m p l y i n g wi th AS 19 26.1 B

P B

FIGURE 2.1 TYPICAL EXAMPLES OF OUTDOOR POOL BARRIER LOCATIONS

HOUSE

A2

4.3 'Text deleted' 4.4 Indoor and indoor/outdoor pools (c) In d o o r p o o l exa m p l e 2

4.4.1 Indoor pool A1

2007 AS 1926.1—2007 Access to an indoor pool shall AS be 1926.1 via 7a -child-resistant doorset that complies with AS 1926.1. Where windows are present in the pool barrier, they shall be child-resistant in accordance with AS 1926.1.

L EG EN D: P

Po o l

B

Building W i n d ow o r d o o r

A2

4.4.2 Indoor/outdoor pools

C h il d - r e s i s t a nt o p e n a b l e p o r ti o n of w i n d ow c o m p l y i n g with AS 19 26.1

G ate c o m p l y i n g with AS 19 26.1

Pr o p e r t y b o u n d a r y

Barriers for indoor/outdoor pools shall comply with the following: (a)

The barrier for the outdoor portion of the pool shall comply with AS 1926.1 and shall not include a child resistant doorset.

C h il d - r e s i s t a nt d o o r s e t c o m p l y i n g wi th AS 19 26.1

Barrier complying with AS 19 26.1

(b)

The barrier for the indoor portion of the pool shall comply with Clause 4.4.1.

FIGURE 2.2 EXAMPLES OF BARRIERS WITH CHILD RESISTANT DOORSETS

An opening in a wall to allow access between the two portions of the pool shall not be required to comply with either Item (a) or (b). www.standards.org.au

Typical examples are given in Figure 2.2.

© Standards Australia

www.standards.org.au

Refer to Australian Standard® 1926.1 - 2007 and 1926.2 - 2007 Swimming Pool Safety Part 1. Safety Barriers for swimming pools Part 2. Location of safety barriers for swimming pools

DIMENSIONS IN MILLIMETRES

FIGURE 2.1 EXAMPLES OF NON-CLIMBABLE ZONES/NCZs

www.standards.org.au

© Standards Australia

© Standards Australia


REAL ESTATE INDUSTRY REJECTS NATIONAL REGULATION APPROACH State-based real estate industry organisations have rejected the state, territory and Federal Governments’ planned approach to developing uniform national regulation of their industry.

Most of the state and territory-based real estate institute chief executives have joined forces to condemn the Federal Government’s Regulatory Impact Statement (RIS) on a national licensing for the real estate profession. Institute CEOs from Queensland, the ACT, Tasmania, Victoria, South Australia, Western Australia and the Northern Territory have boycotted what they called the “survey monkey”, issued by the Council of Australian Governments, asking for feedback on the RIS. The issue has arisen as a result of COAG’s reform program aimed at greater national uniformity of business regulation and licensing. Real Estate Institute of Australia president Pamela Bennett said REIA was concerned about the pre-determined nature of the approach. “The survey monkey is nothing more than pushpolling and intends to coach responses. It doesn’t allow for any alternative under national licensing to what the RIS has set forward and further restrains our response to the proposed new regulations and the detail contained within them.

“We vehemently contest the dumbing down of standards for our profession, and the abolition of compulsory professional development will leave both agents and consumers worse off,” Ms Bennett said. “Reducing qualifications for real estate agents from Diploma to Certificate IV will deny them vital knowledge about running a professional real estate business,” she said. “We’re stunned that consumer benefits haven’t been considered in the quantitative analysis outlined in the RIS. Choosing where and how we live is a fundamental and crucial decision in anyone’s life. Shouldn’t it be handled by a highly qualified professional?” She said REIA called on the Government to immediately release the detail of the proposed legislation. She said: “How is our profession able to respond appropriately and fully without seeing the detail.”

“We vehemently contest the dumbing down of standards for our profession and the abolition of compulsory professional development will leave both agents and consumers worse off,” - Pamela Bennett, REIA President


CONDENSATION AND MOULD. Jerry Howard - Deputy Executive Director

Following on from our recent article in the Building News. I recently received a letter from a concerned Project Manager. Here is another example of how condensation & mould can have a dramatic effect on the health and wellbeing of the occupants. These problems should not be occuring in our industry in 2012.

Jerry, I’ve been given your details from (name withheld), hopefully you might be able to help me / guide me in the right direction with my ongoing problem. The story so far: I bought the unit as an off the plan purchase from X Group (company name withheld). The units façade is rendered blockwork with internal timber framing. The attached plan shows my unit layout (less the main bedroom window which was removed after I signed the contract, this was supposedly required to comply with section C of the BCA.) The units were ready for inspection at the end of July 2011 / early August 2011, my inspection was disappointing as the unit was unclean/ without power and of a poor finish. I moved in on the 13th August, immediately I had excessive condensation buildup on all sliding doors including the door frame and timber architraves. Early October I found the first instance of mould in the main bedroom (bedside table, under the bed, mattress, on shoes in the cupboard & on the doorframe) The builder’s representative (name withheld) from (company name wthheld) and a mechanical consultant came out in

November to take moisture samples and airflow tests, both of which were insufficient even coming into the warmer months. They noted that the toilet exhaust were inadequate, the solution given was to replace the fans and install a second extraction point. Further to this the mechanical contractor came out and found out the extraction point was painted shut and the flexible ducting to the ensuite bathroom was squashed by an electrical wire. This was rectified and was deemed satisfactory by (name withheld). Once the cooler weather came in 2012 the condensation came back with the same effect. I contacted (name withheld) again and told him the issue was still there. The new solution offered was to install security doors on the main bedroom and family room doors. The detail he received from his mechanical contractor was to leave the doors open during the day to dry the place out and close them at night, I saw this as a pointless exercise so I asked for the consultants report on this. After weeks of trying to obtain the report the builder said he was not going to release it as he had paid for it. We recommended that the builder look at an air exchanger as these seem to be specified in larger units to combat condensation. However the security doors were still the builder’s preferred option. As someone starting out in the industry my knowledge of these issues isn’t strong, yet I still feel the issue was always with the lack of ventilation in the unit.


A COMPELLING STORY about the need for Professional Indemnity Insurance.

Canberra

Christine Miliano, Austbrokers Canberra

This case is a very good example of how a person can be dragged into litigation, even though they have done nothing wrong. It also emphasises the importance of having Professional Indemnity Insurance. Our client is a building designer and for the purpose of the story his name is Robert. He prepared some plans for the second floor extension of a holiday house which included a staircase with landings and no winder. These plans were preliminary drawings for the purpose of obtaining a permit. They were not intended to be final working drawings. The owner of the property subsequently carried out the renovations, but did not use the staircase designed by Robert. The staircase was changed by the builder to include a winder. After the extensions had been completed, a family was staying in the holiday house. Early one morning the grandmother offered to take an infant from her mother. The grandmother took the baby and carried her down the stairs to the ground floor. In walking down the stairs the grandmother stumbled on the edge of a step at about the point of the winder. She fell in the darkness of the early morning. Unfortunately the baby’s head hit the floor and he suffered brain damage. The baby’s parents sued the grandmother on the basis of her negligence in failing to switch on the light so that she could see where she was walking down the stairs.

The matter became very complicated because the grandmother’s lawyers and insurer decided to join the builder, the firm which constructed the stairs, and Robert. Robert was alleged to be negligent because he had not designed enough risers in the drawing of the stairway in the first place. At the commencement of the proceedings we attempted to have the claim struck out against Robert on the basis that there was no proper cause of action. Robert had nothing to do with the design of the staircase that was ultimately installed. Unfortunately this motion failed as the judge said that although the prospects of the claim against Robert appeared slim, the case should be allowed to go to trial. The case was then listed for trial to determine liability only. The trial went for two weeks. The judge found in favour of Robert in relation to the design and construction of the stair case. The grandmother was found liable for not switching on the light. The Court ordered that Robert's costs (which by that stage were approximately $190,000) be paid on an indemnity basis.


2030

PLANNING STRATEGY OUTLINES

DENSER DEVELOPMENT The ACT Government has published the final version of its 2030 Planning Strategy, which foreshadows the development of 45,000 new homes in Canberra by 2030, with residential and commercial development focused around town centres. Releasing the Planning Strategy, Environment Minister Simon Corbell said he wanted more Canberrans to live closer to their places of work, and to use public transport corridors like Northbourne Avenue and Adelaide Avenue. "It is very important that the Planning Strategy protects the low rise residential nature of the suburban environment but recognises change will occur close to town centres like Belconnen, Woden and Tuggeranong as well as opportunities for development in the city centre itself," he said.

The strategy also focuses on providing more variety in sustainable housing stock and better public open space. The Plan contains nine key planning strategies including:

“Create a more compact, efficient city by focusing urban intensification in town centres, around group centres and along the major public transport routes, and balancing where greenfield expansion occurs”.

The Planning Strategy provides a high-level ‘vision’ for Canberra’s development through to 2030. According to the Strategy document, “The Strategy has no statutory effect and, as it is not part of the Territory Plan, it cannot directly affect decisions made under the Territory Plan. The Strategy may be used to amend the Territory Plan’s Statement of Strategic Directions, and every major review of the Strategy should trigger consideration of these. Implementation of the Strategy may require technical amendments or variations to the Territory Plan and perhaps amendments to the National Capital Plan.” The final Planning Strategy follows a public consultation (‘Time to talk’) on the Planning Strategy in 2011. Mr Corbell says the strategy will help guide Canberra's growth after the centenary of its establishment. "I look forward to seeing Canberra grow into its second century as a sustainable and welldesigned city that meets the needs of a growing population," he said. "We build a more sustainable city, we strengthen our ability to deliver public transport, but we also protect the beautiful garden city character of our suburban areas."

ACTIONS PROPOSED INCLUDE:

1.

Prepare a plan for City that articulates the vision, aspirations and the desired urban amenity for Canberra’s pre-eminent centre.

2.

Review the Woden Master Plan and prepare a master plan for Mawson group centre, including the Athllon Drive corridor, to initiate development that will support strategies for rapid public transport

3.

Review the Belconnen Town Centre Master Plan including transport, land use, open space and infrastructure planning with development on the University of Canberra campus and Lake Ginninderra.

4.

Develop more detailed plans and policies for urban intensification along Northbourne Avenue from City to Mitchell.

5.

Continue the development of Kingston Foreshore and prioritise development of East Lake .

6.

Continue the development of Molonglo Valley and Gungahlin greenfield areas, supported by the government’s land release program and infrastructure works, including the construction of the East-West Arterial Road from the Molonglo Valley group centre to Tuggeranong Parkway, the John Gorton Drive Bridge over the Molonglo River and the water quality control pond and a trunk sewer to serve Molonglo Valley.


PROBATIONARY PERIODS UNDER CONTRACTS OF EMPLOYMENT Under the Fair Work Act, contractual probationary periods are unenforceable and cannot exclude notice of termination entitlements. Under the Fair Work Act, contractual probationary periods are unenforceable and cannot exclude notice of termination entitlements. This is a major change from the Workplace Relations Act, under which probationary periods could exclude notice of termination. Under the Fair Work Act, all employees are entitled to at least one week of written notice of termination (or payment in lieu) during their first year of employment, up to a possible five weeks for longer service (section 117). However, although probationary periods are no longer enforceable, the Fair Work Act does provide for a related concept, the ‘minimum employment period’, during which an employee cannot make an unfair dismissal claim (Fair Work Act, sections 23, 383). Defined as one year where an employer has less than 15 employees (a ‘small business employer’) or six months where an employer has 15 or more employees (including casuals and employees of associated entities) the minimum employment provides employers with an essential opportunity to test the suitability of employees for their business.

Unfair dismissal law generally requires that an employer have a) a ‘valid reason’ for a dismissal and b) provides ‘procedural fairness’ to the employee prior to making the decision to dismiss them (Fair Work Act, section 387). Poor performance and serious misconduct will generally constitute valid reasons for dismissal. However, for conduct-related dismissals, procedural fairness broadly requires that an employer provide their employee with notice of the allegations against them, thoroughly investigate those allegations and give the employee an opportunity to respond, before deciding whether termination is called for. For performancerelated terminations, procedural fairness requires that an employer warn the employee about their unacceptable performance and give them a chance to improve – in other words, ‘performance manage’ them. Ideally, employers should also always invite an employee to have a support person with them during disciplinary meetings (and must be provided with one if they request it) and written records should always be kept. Employers might also like to have their own witness present.

Although the concept of an employee being ‘on probation’ is now out-ofdate, during a minimum employment period, employers should still treat their employees as being ‘on probation’. While notice of termination must still be provided (even during the minimum employment period) it nevertheless enables employers to dismiss employees without strictly abiding by court-room etiquette. Of course, employers must comply with any disciplinary/termination policies adopted in a particular workplace, which are often enforceable under contract. Master Builders also recommends that employers always actively performance manage underperforming employees and give them a chance to respond to any allegations of misconduct.


SELF-MANAGED SUPER FUNDS

CHANGES TO THE HIGH INCOME THRESHOLD

The Government has gazetted a new regulation requiring trustees of Self-Managed Superannuation Funds to consider their members’ needs for insurance as part of the fund’s investment strategy.

From 1 July 2012, the high income threshold under the Fair Work Act 2009 (Cth) has increased to $123,300. Employees, who have an annual income above this threshold and who are not covered by a modern award or enterprise agreement, cannot make an unfair dismissal claim (see Chapter 3.2: Unfair dismissal and general protections and 13.4.1: Unfair dismissal under the Federal System – Key elements).

TO BE REQUIRED TO CONSIDER INSURANCE NEEDS OF MEMBERS

The regulation also requires trustees to keep money and other assets of an SMSF separate from those held by a trustee personally and by a standard employer-sponsor or an associate of a standard employer-sponsor and require SMSF assets to be valued at market value for reporting purposes. The regulation says trustees are required to consider whether the fund should hold an insurance contract for one or more members of the fund. “This will ensure that members consider their personal circumstances in regards to their need for insurance cover such as life insurance.” The Government has also begun consultations on new, proposed changes to the Superannuation (Supervision) Act (SIS Act) which will give the Tax Commission a wider range of penalties short of disqualification of SMSF trustees, which is currently the only penalty available for SMSF trustees. According to the Government, the changes will give the Tax Commissioner more flexibility in dealing with contravention of the law by SMSF trustees. However the material prepared as part of the consultation also notes that the new arrangements will cost around $40 million over five years to implement and that this increased cost will be recovered by levies on SMSFs.

In calculating an employee’s annual earnings employers must take into account: •

wages;

superannuation contributions above the minimum requirements, such as through top-ups or salary sacrifice; and

the value of non-monetary benefits, such as cars, mobile phones and laptops.

An employee’s earnings do not include: •

payments that can’t be fixed in advance, such as commissions, bonuses or overtime;

reimbursements; and

superannuation contributions at the minimum requirements.

Employees who are covered by a modern award and who have a written guarantee of earnings above the high income threshold will not receive entitlements under the modern award which covers them (see Chapter 3.2: Safety net – Legislated minimum standards, awards and minimum wages, 3.6: Modern awards and 7.1: Guarantee of annual earnings). However, the employee can claim for unfair dismissal. The maximum amount of compensation an employee can receive for an unfair dismissal claim is capped at either half the high income threshold ($61,650), or 6 months of the dismissed employee’s wage – whichever is less. A written guarantee of earnings is a promise in writing between an employee and an employer to pay the employee for work over a period of 12 months or more. The employee must be covered by a modern award, agree in writing to accept the work and to accept the amount of earnings.


COMING EVENTS FOR 2012 ANNUAL DINNER

Date: Wednesday 17 October 2012 I

Where: Hotel Realm, Barton

The Master Builders Association of the ACT will host our Annual Dinner this year at Hotel Realm in Barton. This is a fantastic opportunity for members to network and enjoy the company of their industry peers. SAFETY CULTURE & LEADERSHIP FORUM

Date: Monday 22 October 2012 I

Where: National Convention Centre, Canberra

During National Safety Week we have assembled a group of industry experts and we want them to challenge the current approach to safety. There are two sessions on the day aimed at workers onsite, managers, safety representatives and company executives.

TRAINING DATES FOR 2012 ASBESTOS AWARENESS

Date: 23 October / 15 November(Contact Norma Inglis at ninglis@mba.org.au to book) The aim of this course is to provide learners with the knowledge and skills to identify when and where Asbestos may be present and the precautions that need to be taken to safely remove and dispose of the Asbestos.

ACT OHS INDUCTION CARD Date: 8 October / 8 November (Contact Norma Inglis at ninglis@mba.org.au to book) Current legislation requires all persons to complete OHS Induction Card Training before entering a construction site. This course prepares participants for the construction site through understanding of their OHS responsibilities and the skills to identify hazards. RESTRICTED HEIGHT SCAFFOLD

Date: 16 October (Contact Cecilee Miller at cmiller@mba.org.au to book) This course is particularly useful for construction industry personnel with minimal experience in erecting and dismantling scaffolding, who wish to further improve their skills and understanding.

SECTOR COUNCIL MEETINGS 2012 COMMERCIAL

23 OCT

CIVIL

27 NOV

RESIDENTIAL

TBA

SUB-CONTRACTORS & SUPPLIERS

16 OCT

PROFESSIONAL

17 OCT

28 NOV

12 DEC

ACT PRIVATE SECTOR BUILDING ACTIVITY $120 $100

MILLION

$80 $60 $40 $20 $0

Sep-11

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12

Aug-12

The above graph and table below summarise private sector building activity for the various building sectors in the ACT over the past 12 months. The values for each month are depicted in millions of dollars. // To Insert New Data Goto Object/Graph/Data

• Copy and Paste Pivot Table Data into Data Additions and Alterations (Residential) Commercial Building Work Garages, Pools, Decks and Similar Structures Multi Unit New Housing

Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 5.52 0.3 0.6 0.58 0.82 1.00 2.00 5.5 5.8 5.2 7.91 85 60.9 17 8.19 51.5 19.02 14.3 39 80.2 7.0 7.35 10.5 7.1 9.02 7.05 0.64 1.7 9.0 10.2 96.0 7.7 24.89 15 13 16.5 1.8 0.13 34.5 33.1 5.5 1.07 2.8 0.4 1.8 11.4 3.7 40 53 49

Jul-12 6.3 83 9.5 5.5 67

Aug-12 5.3 17.1 15.0 0.5 17.2


On-Site Insight 6-2012