In Queensland’s construction industry, holding the correct licence is not just a matter of best practice it is a strict legal requirement. A key piece of legislation governing this is section 43 of the Queensland Building and Construction Commission Act 1991 (Qld) (the QBCC Act). This provision places a firm responsibility on contractors to ensure anyone they engage to perform building work is appropriately licensed. Failing to comply can lead to significant financial penalties and disciplinary action.
This article will break down the essentials of section 43. We will explore its purpose, what it means for contractors and subcontractors, and the serious consequences of non-compliance. Understanding your obligations under this section is crucial for operating a lawful and successful construction business in Queensland.
What is Section 43 of the QBCC Act?
At its core, section 43 prohibits a person from engaging another individual or company to carry out building work unless that other party holds the correct contractor’s licence for the work they are being hired to do.
The provision is clear: the responsibility for verification rests with the person or company engaging the services. You cannot simply assume a subcontractor is licensed. You must take active steps to confirm their licensing status before they commence any work. The QBCC enforces this rule strictly to maintain safety, quality, and accountability across the industry.
Why Does Section 43 Exist?
The primary purpose of section 43 is to uphold the integrity of the building and construction industry in Queensland. By mandating that all building work is performed by licensed professionals, the legislation aims to:
- Protect Consumers: Licensing ensures that individuals and companies performing building work have met minimum standards of technical qualification, experience, and financial stability. This protects homeowners and investors from shoddy workmanship and financial loss.
- Maintain Professional Standards: The licensing system promotes a high level of skill and professionalism. It ensures that those responsible for building projects are competent and knowledgeable about relevant codes and regulations.
- Ensure Safety: Construction can be dangerous work. Licensed contractors are expected to be aware of and comply with all workplace health and safety requirements, creating a safer environment for workers and the public.
- Provide Accountability: When things go wrong, the licensing framework provides a mechanism for recourse. The QBCC can investigate complaints against licensed contractors and take disciplinary action, which may include fines, licence suspension, or cancellation.
By making the engaging party responsible, section 43 creates a chain of accountability that strengthens the entire regulatory system.
Implications for Contractors
If you are a head contractor, builder, or developer, section 43 has direct and significant implications for your business operations. When you subcontract parts of a project, you become the ‘person’ referred to in the legislation who is ‘engaging another’ to carry out building work.
This means you have a legal duty to:
- Verify Licences Before Engagement: Before you sign a contract or agree to have a subcontractor start work, you must check their QBCC licence. This is not a one-time check. It’s a requirement for every new subcontractor on every project.
- Check Licence Classes and Conditions: It is not enough to know a subcontractor has a licence. You must ensure it is the correct class of licence for the specific work you are engaging them to do. For example, a subcontractor with a waterproofing licence cannot be lawfully engaged to perform structural landscaping. You must also check for any conditions or restrictions on their licence.
- Confirm the Licence is Active: Licences can be suspended, cancelled, or expired. You must confirm the licence is current and active at the time of engagement. The QBCC website offers a free online licence search tool for this purpose.
Ignoring these duties exposes your business to considerable risk. The QBCC actively prosecutes breaches of section 43, and ignorance of the law is not a valid defence.
What About Subcontractors?
While section 43 places the obligation on the engaging party, subcontractors are also affected. Carrying out building work without the appropriate licence is a separate offence under section 42 of the QBCC Act. This is known as unlicensed contracting.
Therefore, subcontractors must ensure they:
- Hold the correct licence for the work they perform.
- Do not accept jobs that fall outside the scope of their licence class.
- Keep their licence current and comply with all conditions.
Working without a licence not only exposes a subcontractor to penalties but can also impact their ability to get paid. Under section 42(2) of the QBCC Act, a person who carries out unlicensed building work is not entitled to any monetary or other consideration for doing so.
Penalties for Non-Compliance
The penalties for breaching section 43 are severe and can have a major impact on a contractor’s business and finances. A breach can result in the QBCC issuing a fine or commencing a prosecution.
The consequences may include:
- Financial Penalties: Fines can be substantial, scaling with the severity and frequency of the offence. These penalties apply directly to the contractor who failed to verify the subcontractor’s licence.
- Disciplinary Action: The QBCC may take disciplinary action against the licensed contractor who committed the breach. This can range from a formal reprimand to the suspension or even cancellation of your own contractor’s licence.
- Reputational Damage: Being prosecuted by the QBCC can damage your business’s reputation, making it harder to secure future projects or attract skilled, reliable subcontractors.
These penalties underscore the importance of having a robust compliance system in place for every project.
Practical Steps for Compliance
To protect your business and ensure you meet your obligations under section 43, you should integrate the following practices into your standard operating procedures:
- Develop a Pre-Engagement Checklist: Create a formal checklist that must be completed before any subcontractor is engaged. This should include a mandatory step to verify their QBCC licence.
- Use the QBCC Online Licence Search: Make it a non-negotiable step to use the free QBCC online search tool for every subcontractor. Search by name, licence number, or ABN.
- Save a Record of the Search: When you perform a licence check, print the results page to a PDF or take a screenshot. Save this record with the project and subcontractor files. Date the record to prove the check was done before the work commenced.
- Review the Licence Details Carefully: Do not just glance at the result. Confirm the name matches the subcontractor’s business entity, check that the licence is current, and, most importantly, verify that the licence class covers the scope of work in your contract.
- Train Your Staff: Ensure any staff involved in procurement, contract administration, or project management are trained on the requirements of section 43 and your company’s internal compliance procedures.
By embedding these steps into your workflow, you create a documented trail of due diligence that can protect you in the event of a dispute or QBCC audit.
Final Thoughts
Section 43 of the QBCC Act is a cornerstone of Queensland’s building regulation. It establishes a clear line of responsibility, compelling contractors to be proactive in ensuring every person working on their site is properly licensed. While it may seem like an administrative burden, its purpose is to safeguard the quality, safety, and integrity of the entire industry.
For contractors, compliance is not optional. The risks of overlooking this duty are too high. By implementing simple, consistent verification processes, you can protect your business from penalties, uphold professional standards, and contribute to a more reliable and trustworthy construction sector in Queensland.
This is general information only and does not constitute legal advice.
If you or someone you know would like more information or require advice about anything raised in this article, please contact us on (07) 2146 2995 or email mklein@kleinlegal.com.au