NEWS

Building and Construction Update 2017

Building and construction 

Update 2017


On Tuesday 9 May our firm hosted the Building and Construction Update 2017 Seminar, which covered health and safety, construction disputes and preparing for the bust in the construction industry.

We have included a summary of each of the topics covered below. If you know of anyone who would benefit from reading this then please feel free to share it with them. Finally, if you would like to discuss anything further then please email bronwen@dhlawyers.co.nz.

Health and Safety

Speaker: Bronwen Newcombe


The construction industry has one of the highest rates of workplace injuries. If you work in the construction industry you are more likely (than in almost any other industry in New Zealand) to come home from work with an injury, serious injury, or to not come home at all.

The more self-regulation a company has in relation to the health and safety of its workers, the safer the workers are. This self-regulation must come from the leaders of the company (top-down approach). A business cannot expect its workers to take health and safety seriously if the leaders do not lead by example.

The new Health and Safety at Work Act 2015 introduces the concept of a 'PCBU', which is a person conducting a business or an undertaking. Under the Act, the PCBU holds the primary duties and responsibilities in relation to health and safety. However, the Act also places direct due diligence obligations, and personal liability for failing to meet such obligations, on directors and officers of a PCBU. An officer of a PBCU is defined as anyone who holds a very senior position in the PCBU and has the ability to significantly influence the management of a PCBU.

To protect your business you should:
  1. Make the safety and health of your workers a core value of your business;
  2. Lead from the top;
  3. Understand the law/legal requirements;
  4. Document everything;
  5. Review your employment agreements to ensure they comply with the new Health and Safety at Work Act 2015;
  6. Review your company policies to ensure they are up to date with the relevant work of your business; and
  7. Be proactive, not reactive. 

Construction Disputes: Lessons from coal face 

Speaker: James Skinner

The construction industry is busy and stressful, which can often lead to oversight. Three steps were recommended which may help to avoid disputes - these are to limit your risk, establish a good payment regime, and avoid conflict. 

  1. Limit your risk
  • Keep written contracts which are signed by both parties
  • Record in writing any variations to agreements
  • Take photographs throughout the project
  • Always follow up discussions between parties with an email
  • Ensure you have the appropriate insurance.
  1. Payment regime 
  • It is crucial to have a good payment system in place
  • If parties do not agree on the number of payments, the intervals of the payments, or the payment amounts under the agreement then the Construction Contracts Act will be the default and govern this area of the relationship.
  1. Minimise conflict
  • If you receive a complaint do not ignore it.
  • It is best if you organise a meeting with the other party and try to work through the issues in a methodical manner.
  • In order to help avoid conflict, ensure there is a clear written project timeline between the parties

 Preparing for the bust! 

Speaker: Mike Atkinson

The construction market is currently booming, but profit margins are tight. This is partly a result of pricing for projects occurring today, but the projects do not get underway for a few years. Some of the key take away points are: 

  1. It is important for you to understand your supply chain risk in order to be able to pay off your debt, especially if one or two customers make up a large portion of your revenue.. 
  2. You must review your overheads and consider what are the necessities in order to keep your business profitable. 
  3. Your balance sheet is the most important financial statement – if you don’t understand it, find someone who can assist you.
  4. Keep a clear business strategy that is easy to understand and implement.
  5. Ensure your business has a good governance system in place, as it will help to make your business stronger and safer. An example of this could include an advisory board.

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