Hiring a new contractor

Sometimes it makes sense to take on some extra help to share the work load or complete a large job. Depending on the requirements of the job, you may want to hire:

  • permanent employees (full-time or part-time)
  • casual employees
  • trainees or apprentices
  • contractors
  • temporary employees.

All of these arrangements result in different responsibilities for you. The taking on an employee checklist can help you work out the arrangement that suits your situation.

If you're in the construction industry and want to take on a new contractor, read this information for tips on how to protect your business.

1. Get to know the contractor

Having a conversation and asking questions can help you and your contractor decide if your work standards match and if your working relationship will succeed.

Start by asking the person about:

  • their skills, qualifications and experience
  • whether they will be doing the work themselves or sub-contracting to someone else
  • what their process is for progress checks
  • their payment terms
  • what materials they use and where they source their supplies
  • if they have the right insurance for the situation
  • if there any types of insurance you need to organise.

2. Do your research

Before entering into an agreement you should get some background information.

Ask your contractor for references and details of previous work they have completed. Consider going to see an example of their finished work. Contact referees and ask questions such as:

  • would they recommend the contractor?
  • what kind of work the contractor completed for them?
  • did the contractor finish on time and within budget?
  • were there any problems?
  • did they follow Australian building safety standards?
  • did the contractor listen to concerns and willingly make any necessary changes?
  • were they satisfied with the contractor’s work and how it was done?
  • were there any issues with communication or any other problems?

Check your contractor's business or company details:

  • Search for the contact numbers and addresses provided by the supplier on available directories. It's important to have a physical street address to ensure you can locate your contractor if necessary.
  • Do an internet search or visit their website and social media pages to check for reviews.
  • Check that the business is registered for GST on the Australian Business Register.
  • Find free information about companies, business names and licences from the Search ASIC's registers on the Australian Securities & Investments Commission’s (ASIC) website.
  • Search ASIC’s banned and disqualified register for information on people or organisations.
  • Check their licences, qualifications and registrations details with the relevant state or territory bodies.
  • Search the Bankruptcy Register Search (BRS) to find out if they're bankrupt.
  • If your contractor is a company, check whether they have gone into liquidation using ASIC's Published notices search.

3. Negotiate a contract

A well planned contract will allow you and your contractor to clearly establish the working relationship, rights and responsibilities, and expected outcomes before starting work.

Verbal contracts are legally binding, but can be risky so it’s best to get your contract in writing. If a written contract isn't possible, make sure you have some documentation that will help you identify what was agreed: emails, quotes, specifications and even notes about your discussions.

Your contract should specify:

  • the scope of the work
  • commencement and completion dates
  • inclusions and exclusions
  • who will be doing to the work
  • payment terms
  • arrangements for progress checks
  • an arrangement for settling disputes.

If you are unsure of the type of contract to use or what should be included, contact a building association, or consider getting legal advice.

4. Licences, insurance, workplace health and safety (WHS)

Licensing, insurance and WHS requirements differ depending on your state or territory. It's important to discuss these obligations with your contractor.

You can find information on your licensing, insurance and WH&S responsibilities in the Building and construction industry fact sheet.

What to do:

Thanks for your feedback. If you have any ideas on how we can improve, we'd love to hear them.

Please provide your comments in the feedback form.

You might also be interested in