Giorgio Marfella
So here we are and welcome everybody. Good afternoon.
My name is Giorgio Marfella and I'm the chairperson of the Architects Registration Board of Victoria.
As always, I'd like to commence this webinar by acknowledging the traditional owners of the lands in which we are today in particular, I mean the land of the Wurundjeri People of the Kulin Nation and take this opportunity to pay my respects to the Elders, past and present.
So welcome back to another ARBV webinar which is valid for CPD continuing professional development. Now, in order to participate, we are about to share now a QR code that you can see in the screen, and there will be also opportunities throughout the presentation to scan for those who may be coming along the way.
Also to mention the fact that this Webinar will remain available for 24 hours for those who may not be able to attend it live.
Like most of you right now here and you will be receiving a certificate upon the completion of the questionnaire that is provided today.
Also to remind you that CPD is mandatory in Victoria.
It's a requirement for all the architects that are registered in our state, and the ARBV monitors and audits the Compliance with this requirement.
Now we are obviously here today with some guests. We are committed to continue to provide this webinar on a fairly, you know, recurrent frequency or on a monthly basis primarily.
And our intent is always to provide support to architects and ensure that we give you awareness of potential risks as well as responsibilities that we all do as architects.
So, in this line today, we have two guests.
We have Paul Viney and Jenine Birney who are here to talk about business management and potential risks that may relate to this, to those and also to give us an overview of the legal obligations that architects have in fulfilling their roles, particularly in roles of leadership and in management of practice.
And so Paul Viney is probably known to many of you because he is one of the leaders of a of a peak body of the architectural profession, the Association of Consulting Architects, and Paul is the national President of the ACA at the moment, and Jenine Birney is the finance manager and a senior principal at Lyons.
So with this I can simply hand over to Paul and then I'll be back as always for some Q&A towards the end. So, thank you Paul.
Paul Viney
Thank you Giorgio. We appreciate the opportunity to present today.
Just a quick background on the ACA.
The ACA is the registered employer body for industrial relations in Victoria as part of the modern awards.
And it has also concentrated largely on the business of architecture for the last 15 years.
We have several key planks including being a voice.
A voice for the architectural businesses through thought, leadership and advocacy. We provide support to business with industrial and employment advice. We've developed a range of business support tools for practices of all sizes. We provide access to industry research data and best practice benchmarking. We represent employers in discussions with the Government and the Fairwork Commission. Ultimately, the ACA's mission is to assist architects to run successful, sustainable and profitable businesses, and thus the conversation for today.
What are our obligations?
So what are the legal obligations in an architectural practice? And they vary, and I'll be touching on those that relate to the registration process and the Registration Act, the Regulations and the Code of Conduct. And Jenine will be talking about those obligations with respect to various other legislations that we all comply, that we need to comply with.
So, Victorian Architects Act 1991 revised on the 13th of November last year and it was revised largely to adjust the structure of the Board. What's its purpose?
It's for the registration of architects, the approval which is different to registration of partnerships and companies providing architectural services, is to regulate the conduct of architects, is to handle complaints against the architects, to regulate the use of the terms of Architect, Architect Services, Architectural Design Services and Architectural Design, so there can be clear differentiation in the industry as to who is an architect, who is not, and it also established the Architects Registration Board of Victoria.
Now I'll open another perspective on what the intent of the Architects Act is.
It's not just about the protection of architects. In fact, it's quite the reverse. It is actually consumer protection Legislation that enables the consumer to understand who are they employing. Are they employing someone who has adequate skills and training to call themselves an architect and a professional, or are they getting someone of lesser skill?
So it is very clearly legislation to enable differentiation, not protection and we need to be very careful about this going forward.
The Registration and Approval of Architects and Entities.
There are several classes of registration. We have a practising architect who must hold qualifications, be insured and be actively working as an architect. We have non-practising architects who retain registration but are no longer working. Now, in order to be registered which a lot of you will be well aware of, you need to complete an approved qualification in architecture, you need to pass the architectural practice examinations, and then you need to maintain professional indemnity insurance. Now that can be directly or via your employer.
You need to notify the Board of any change in your registration details and you must pay registration fees within the prescribed time. That was one of the other changes that has been made, that you can be suspended if you don't pay your fees on time.
And then the Board also approves, not registers, but approves companies and partnerships as architectural companies, but they must have a director or a partner as a registered architect.
I will also look at restriction on provision of architectural services by companies and partnerships.
So companies and partnerships cannot provide architectural services at
1. unless they're an approved company.
2. unless the approved company must provide, unless a director of the company who is a registered architect is responsible for carrying out the services and that any services that are carried out within the company are carried out by or under the supervision of a registered architect.
Now, that similarly applies to a partnership where one member of the partnership must be a registered architect, and again the services must be carried out directly under the, or by, under the supervision of a registered architect.
The Board also has powers which are very important to understand that there is an opportunity for the public to make complaints against the architectural profession, and this is the process that then can be carried through. That the Board on its own initiative or on a complaint, may determine that inquiry should or should not be held as to an Architect’s fitness to practice or for professional conduct.
Now they have the power to refer a complaint to a mediation. They have the power to determine inquiry should be held and importantly, they actually have the power to refer the matter to a tribunal to conduct an inquiry on behalf of the Board. Now that tribunal is independent of the Board and I don't think that is well understood in the industry. And they also have the power, subject to the findings of any tribunal, they have the power to suspend or cancel the registration of an architect, which is a very severe penalty given the commitment we all go through to get registered.
Interestingly, the way in which the legislation is structured is the Victorian Architects Regulations 2015, the authorised version is in May, they actually prescribe underneath the Registration Act what an architect can and can’t do. So, what its objective? It is to regulate the professional conduct of architects to ensure we're acting appropriately. To prescribe procedures for the registration of architects and the approval of partnerships and companies. It prescribes annual fees for application registration or approval, and it prescribes the fees for application. It also prescribes the procedure for nomination of architects to the Registration Board, which did change significantly in the last Act update and describes the professional code of conduct for which an architect is bound.
What are our responsibilities? Our responsibilities under and the Architects Regulations 2015 Professional Conduct, and this is very important. Architects must adhere to high professional standards, including
Standard of Practice: Compliance with the Victorian Code of Professional Conduct, Unprofessional Conduct: Breaches of code or failure to comply with the registration requirements may lead to disciplinary actions, and that's where the Board comes back into play.
Board Oversight: The Architects Registration Board of Victoria may issue guidelines, provide compliance advice and conduct inquiries into potential misconduct.
Where we get down to the nitty gritty is really when we look at the code of conduct which is schedule one of the regulations. Now they define it under 5 categories.
But what it does it defines the, it establishes the ethical and professional standards that architects in Victoria must follow.
So Division 1 sets out, and we will go through these individually.
Division 1 is architectural services, client relations, architectural practice, approved partnerships with companies and approved companies, and duties to the public and the profession.
I think it's really important to understand that our duty as an architect goes far beyond that of just providing services to a client. We have social and we have ethical obligations that override these things, that we can't just do something because someone tells us that what they want done. We need to make decisions in our own right as to the appropriateness of what we're doing.
Architectural Services Responsibilities, broken down into four parts.
Reasonable standards of conduct, and again, this is a straightforward but is absolute fundamental to what we do. We must act honestly. We must take reasonable care, and that term reasonable as, again, is a term defined by law, and we must comply with all laws which we're going to outline a whole lot of these today.
We need to have suitability to perform and knowledge of the services.
Architects must ensure they have appropriate skills and experience and the services must be provided promptly and within agreed timeframes. Again, as architects, we have to be very careful that we do not just accept commissions because we can.
We need to make sure that we do have the resources, we do have the expertise and we do have the time in order for us to perform the duties. Architects constantly fall into problems when they take on a project of which they had no prior experience and then things go wrong.
Architects must also have approval of the documents, and architects must not sign off on documents they have not reviewed or supervised. You cannot take another parties work from a third party, and put your signature to it, or put it under your name.
So we've got to be very careful that we do not use our name on others work, but we also need to be very careful that when we are signing off documents, we have actually checked those documents. You can't sign off a document that you haven't had direct involvement on. So again, that's a danger with the way we use CAD these days because we often have on our title blocks, the signature's already there.
So we have to be very careful when not breaching code in that sense.
We have significant client relations responsibilities defined by the regulations.
One of the areas where we have most problems is written agreements.
All work must be based on a formal contract, which should outline scope of works, fees and payment terms, timeframes and procedures for change to the contract. We cannot act on written, sorry on the verbal request, we must do everything in a written contract and the number of times we see that this is occurring, this is where we end up with architects in all sorts of bother. When we're administering a building contract, we need to be very mindful that we, although we are paid by the client, we must act independently in the process, if we're administering the contract, we must act fairly, diligently and impartially. We're, in fact, the arbitrator of the situation, so we cannot favour either party in any decision that we make.
Fees and costs. We must regularly invoice our client, and the fees must not exceed the agreed amount.
So again, we need to make sure we have a contract in place.
We have terms and conditions for, for being paid and we follow those terms and conditions so we don't hijack the client at the end of the whole lot of variations to our scope, that he’s unaware of.
One of the key areas for dispute, one of the key responsibilities as an Architect is to keep the client informed and provide timely response to enquiries. That's inquiries by both the client, by the authorities, by the builder. There's lots and lots of disputes that occur where the architect has been accused of not providing the information back in a timely manner, so we need to define that, and we need to ensure that the decisions required from the client are clearly communicated.
We need to use language that is easily understood. We need to put things in writing.
Architects must not disclose client information without consent, so we cannot put things up for awards, for example, without actually seeking the approval of the client.
We cannot publicize it without seeking approval. When we are putting on our website, again we should be again seeking their approval, and we cannot have a conflict of interest. Any actual or potential, and I will highlight, any potential conflicts of interest must be disclosed in writing. So, then it's a choice of the client as to whether they wish to proceed or not. Clients must provide written consent before proceeding with work that may involve conflicts and that might be having a relative with the building company that you're going to engage, or it might be that you're being involved in the selection process of a project where you know someone well, that’s putting in a tender.
So we have to be very careful of the advice we give, is independent, and we need to withdraw our services if we think that's not the case.
Changes in circumstance should, for example, the significant change in the structure of the office while the directors leave, or we change the address, we must make sure that we advise the clients and particularly if there is a consequence of us being able, if the expertise to that particular director that is left renders the office without the specific experience to do the project, we must advise the client, if we're unable to perform the services to the same level that we previously did.
Documents in record keeping. Maintain records for a period, now it does say in the Act 10 years, we would recommend 12 years only because of the change of limit of liability that occurred a couple of years ago. So, we think it's safe for you, to keep our documents for a minimum of 12 years.
Duty to disclose paid referrals. Have you been paid for referring a contract, by someone who's referring a contract to you? You must disclose.
Duty to disclose paid endorsements. Now this is a really important one. That we cannot specify a product or service for which you are assuming or expect to receive an inducement. Now that inducement might be in the way of money, it might be in the way of product, it might be in the way of discounts on product your receiving, or point score system that they use sometimes, often in the interiors industry where they will effectively gather points which will then enable them to select product from the showroom after they specified a certain number of products, we cannot do that. We cannot have, we are fee for service, and we cannot have any third party influence as to why we select products.
And we need to ensure if that's the case, we have the opportunity for withdrawal provision from the provisional services. If we're asked to do something by any party, particularly the client, and I highlight one where we were, we walked away from a major residential project because the client declared that he was going to get in early and adjust the levels on the block so that we wouldn't have to deal with the high limitations as set by Council. So, we resigned from the Commission straight away.
And it's something that we just need, we just need to be mindful of. We have to act in the best interest of more than just the client.
We have responsibilities to the public and the profession, and we need to conduct ourselves in a manner that ensures public confidence at all times in the profession.
And we need to uphold our standards.
We must ensure that actions do not compromise our reputation.
It's very easy, as we all know these days with social media, like for our reputation, to be tarnished very quickly and we have an obligation to protect this profession and ensure that we move forward with confidence from the public.
Other responsibilities.
Architectural practice - Notifications of qualifications and contact details.
Approved partnership and approved companies - Ensure that the Code of Conduct is equally applicable as to the company as it is to the individual. As we are registered we have different obligations, but our obligation is as a director is to ensure the code of conduct is equally appliable to everyone else as it is to the individual.
Architects and management roles must ensure that the firm follows legal and ethical obligations, in financial, contractual and project matters.
And those aside, we must ensure supervision of unregistered employees, particularly those that are looking to go through the registration process. And there's a little tip there on the ARBV Guideline on Supervision of unregistered employees.
So we do have a range of obligations that go far above the fact of being an architect.
Now just put this up for a moment for you to answer the question.
OK, moving on.
The answer is all of the above.
Summary. The Code of Conduct ensures that architects act ethically, transparently, which is really important we act as an open book, and professionally, protecting both the clients and the integrity of the profession, and be mindful if we don't comply, it may lead to disciplinary action by the Architects Registration Board of Victoria.
Of which none of us want to be in that position, but we have other reasons to do that was because we all want to act in the best interest of our of our planet and our people.
Just a second question.
OK, I'll move on.
OK.
Now I'm going to hand over to Jenine.
I'll stop sharing and Jenine will take over.
Jenine Birney
Thanks Paul.
So I'm going to be speaking on the next part of the presentation.
So we're looking at Architectural Practice Structures to start off with and there is three types of structures. So, Sole Trader, Partnership and Company.
Today we're going to look at sole traders and companies specifically.
Responsibilities of the sole trader. Under the, in Victoria, sole traders have specific legal obligations under the Corporations Acts of 2001 and the Business and Licensing Authority Act 1998. So as a sole trader you can operate under your own name without registering a business name. So, John Smith can open up a business and trade as an architect, within the industry and not register a business name.
Should he want to add architect to his name, so John Smith Architect, he would then have to register that as a business name because it's extending off his actual name.
So the under the ASIC you would search business names, see if that was available to you to take up, and apply for registration.
Once accepted you can apply for a three or five year registration renewal and I would suggest putting a reminder into your calendars around about that time to look out for the renewal, because if you miss the renewal date and your business name expires then you have to go through the process of re-registering and hoping that you can get the same business name once again.
Australian Business Number, so this is an 11 digit business number that is available to sole traders with or without a registered business name.
It provides you with the ability to invoice under a tax invoice. That means even if you are not registered for GST, you still provide a tax invoice, and that way you receive 100% of the payment that you've issued on the invoice, rather than the client or the payer withholding part of that invoice and sending it off to the tax office. The ABN also gives you ability to interact with government bodies.
Tax and financial obligations.
As a sole trader, you would report your business income as part of your personal income tax return. So, no separate income tax return is required, it's all part of your personal.
You may or may not be required to register for GST, if your annual turnover is less than 75,000, then you would not need to register for GST. So, your code would be GST not registered. And but again, you're putting your ABN on to your tax invoice and being paid 100% of your invoiced amount.
Pay as you go Instalments.
This is like a prepayment if you like, for your future income tax return that you're going to submit.
So the tax office will notify you if you become part of the PAYG instalment system.
And they will either send you a notice, an instalment notice to pay. This could be quarterly, or it could be annually.
Or whether or not you're part of the GST system. And if you're part of the GST, then it would be on that statement, on your BAS statement.
Superannuation contributions for sole traders is not mandatory, so you don't, as you're not an employee of yourself, you're not required to make superannuation contributions under the SGC. However, you could make personal contributions, and I'll leave that one to the side. But if you do hire employees to work for you in your business, then you would need to withhold superannuation from their salary or sorry, not salary, pay it on behalf of them as part of their salary, to their specified superannuation fund.
You need to comply with Fair Work legislation so workplace conditions, employee entitlements. They’re all listed under the Fair Work Act of 2009.
Work cover insurance.
So where your employing people to work with you within your business, you're required to take out a work cover policy through WorkSafe Victoria.
Now there is an eligibility criteria, so if your remunerations are under 7500, you may not need to apply for work cover. However, you would need to go through and research that and make the application through WorkSafe just to make sure that you are complying there.
Payroll Tax is another Victorian tax that's governed through the State Revenue Office.
That is, has a threshold of 900,000 annually. So, if your remunerations are below 900,000 annually then you won't need to register for payroll tax. But should they be in excess of that, then you need to apply to be part of the payroll tax system and comply with the lodgements of and payment of tax.
When employing people, there is under equal opportunity, so employers have a responsibility to recruit staff in a non-discriminatory way and maintain a workplace that is safe and free from discrimination.
They also have a responsibility to make sure the workplace is safe and free from sexual harassment or victimisation.
Employers can be held legally responsible for workplace incidents of discrimination, bullying, racial and religious vilification, sexual harassment and victimisation.
It's really important to note that you as an employer, it's not, you're not only bound by what happens within your office, you're also bound by what happens out externally on site, where you've got employees interacting with clients or consultants.
It's just about providing a safe working environment for everybody.
Consumer Law.
Under Australian Consumer Law, including fair trade, fair trading, refunds, and advertising rules, more information on this can be found in schedule 2 of the Competition and Consumer Act of 2010.
Privacy laws.
If you're collecting customer data, you need to comply with Australian Privacy Act.
It's mindful that you also have a requirement to collect employee information and respect privacy around that as well.
Occupational Health and Safety.
Employers have a responsibility to provide a safe workplace and comply with WorkSafe Victoria regulations.
This can be in a physical office or working remotely, and I just want to pause there for a minute just to reflect on working remotely. So, whilst everybody understands that you know in an office you provide a desk, you provide a chair, and you provide a safe working environment to conduct your business. But when you have, allow, or when people have a remote working environment, that also becomes an extension of your office. So, you need to ensure that their desk is set up ergonomically, they have correct lighting, there's no trip hazards around the space that they're working.
A good suggestion on how you could become more aware of these remote working environments is to provide a checklist. There's various checklists on the WorkSafe websites and also providing that checklist and backing that up with photo evidence of where they're working, how their desk is set up, so that you can put that on file should anything occur outside of your physical working office.
Architects have an obligation to ensure safe and design safe building, they design safe buildings and structures, including workplaces.
Personal Liability and Risk.
As a sole trader, you are personally liable for your business debts.
Income insurance.
Consider public liability, professional indemnity and income protection.
Remember, as a sole trader, you're not an employee of the company, so therefore Workcover would not apply to you. So, you would need to ensure that you're protected from an income protection policy potentially.
Contracts. Ensure clear terms with suppliers, clients and employees to protect your business.
I'll just give you a moment to read the question and answer.
Directors Duties under the Corporations Act.
So we're moving away from being a sole trader and moving into being a director of a company, so a Company Pty Ltd. As a director, you must
Act in good faith and best interests of the of the company and make decisions that benefit the company and its shareholders, not personal interests.
Exercise care, skill and diligence.
Act responsibly to ensure the company is managed properly.
Prevent insolvency. You must not allow the company to trade if it cannot pay its debts. Personal liability can arise if you continue to trade whilst insolvent.
Avoid conflict of interest. Disclose any personal interest that may conflict with company affairs.
Ensure financial records are kept. Maintain a proper accounting record and ensure annual financial reports are prepared and if required, audited.
Just to pause on there for a moment.
So when you do prepare your company tax return, maintaining records, post your last tax return lodge, so if you lodge your 2024 tax return, the tax office has a five year record keeping requirement. So that would mean anything beyond pre 2019, technically would not need to be kept. As a conservative accountant, I always urge on the seven-year rule.
Ensure the company complies with the laws.
The company must also follow tax laws, employment laws, consumer laws and industrial relations.
As being a part of a company, as being a company you are registered with ASIC as a company, you are required to lodge an annual return with ASIC. This details the directors, the shareholders, and the company's secretary.
It has the registered office and business address, so for any official notifications that need to be sent out. And also, if you are changing directors or shareholders or making any changes to updating addresses, things like that, those changes need to be notified to ASIC within 28 days.
Taxation and Financial Responsibilities.
As we talked about Australian business number there, it's the company this is moving away from sole trader, so as a company you would have a company ABN, you would have a company tax file number and lodge a company tax return.
Company income tax is a flat rate of 25% for small businesses presently.
Goods and services tax, so if your company is turning over more than 75,000, you must be registered for GST.
PAYG Withholding.
This is moving away from the instalment. This is about being an employer, an employee, so having employees, directors can be employees of a company as well, they must withhold and remit PAYG tax to the tax office either seven days after you have processed a payroll, depending on the size of the company or as part of your BAS statement.
Superannuation Guarantee. The company must contribute 11.5% to a superannuation fund of the employee’s choice, or a part of what is the within the default fund within the award.
Fringe Benefits Tax. If a company provides a benefit to an employee, they must register or they must submit a FBT return.
And just to complicate things, the FBT year runs from the 1st of April to the 31st of March and doesn't follow a financial year and we've just finished the FBT year now, so everyone that is required to submit an FBT return would be getting the information gathered to be able to complete that return.
Fair Work Compliance. So under the Fair Work Ombudsman that sets out the minimum wages conditions, unfair dismissal protections and under Fair Work Act 2009.
So the Fair Work Ombudsman sets the minimum standards under the NES, however if there is an industrial award, so for the architectural award, they may have more standards within that award that exceed what is the minimum through the Fair Work Ombudsman. For example, within there's 10 minimum standards, and one of them does talks about the maximum working week, it talks about reasonable additional over, reasonable additional hours, but it doesn't refer to what over time is to be paid at. Within the architectural award, it specifies if someone works overtime, they had to be paid at 1.5 percent. So at 1.5 times their ordinary earnings, so 150%.
So, whilst it's always good to have your awards on hand when making payments to employees to know that you're meeting the Industrial Awards standards as well as the minimum set out by the Fair Work Act.
Work cover is mandatory for when you're employing staff, people through your company, that they've got employees in your company, it can include contractors and subcontractors, so just be mindful of that and check the definitions under their work cover insurance policy.
Payroll tax. So, if your wages exceed 900,000 annually in Victoria, you're required to be registered for payroll tax and payroll tax is paid monthly by the 7th day after the new month. So, 7th of April has just passed payroll tax would have been due to be paid on the 7th of April.
Risk and Management. Risk management and personal liability.
Directors Penalty Regime. You can be personally liable for unpaid PAYG withholding, GST and superannuation.
So the just because you're operating in a Pty Ltd Company does not exclude you from being personally liable for some things.
Personal Guarantees. If you personally guarantee a company loan, you are liable for that if the company defaults on that loan, directors can be disqualified, as it can ban you from managing companies if you breach director of duties or engage in illegal conduct.
Insurances. As we talked about, public liability, professional indemnity, but you also as a company might want to consider directors and officers liability insurance.
I'll just give you a moment to answer the question.
I'll hand back to you, Paul.
Paul Viney
Thanks Jenine.
So we've gone through both the requirements under the Registration Act, legislation well regulations and code of conduct. We've now gone through a lot of the requirements to run any business, not just an architectural business but any business. But there are also a couple of other things we need to be able to deal with, such as the Competition and Consumer Act 2010.
Now that’s administered effectively through the Australian Competition and Consumer Commission (the ACCC), which has been involved actively in the architectural industry for some time, particularly going back to when we had a scale of fees, going back some years and it was withdrawn after suggestions by the ACCC that it was, it was an anti-competitive behaviour.
So what does it mean to us? We have to act fairly in our business practices.
Is a prohibition of anti-competitive agreements.
(sorry, my camera's off, sorry about that).
Prohibition of anti-competitive agreements. So, we can't enter into agreements where we limit the opportunities for others to fairly compete. And we have to have fair pricing in competition. So, we can't do cartels, we can't work out who else is putting in a tender for that project, give them a ring and say well, what are you pricing? This is what I'm pricing, you win this one, I’ll win the next one, which has happened in the building industry in the past. Nor am I suggesting the architectural industry, but certainly in the building industry. So, we have to be completely transparent about the way in which we price things, the way which we bid for things, and we must always act in the best interest of the client. If we don't, we run the risk of being in breach of the ACCC and looking liable for penalties.
Can I have the next slide please?
What's our responsibility under Competition Law.
Specific examples of issues. Price-fixing which has happened, market divisions where we separate out who can and can't do it, putting contract clauses that preclude, and I've seen some recently where there's been projects put out where they've limited the minimum size of an office to be able to compete on a project. Not about whether the office had a capacity to do the project, but deliberately limiting the size of it and misleading or deceptive conduct.
Now the other thing that we need to talk about is the architectural competitions and it's very traditional way of government delivering projects in the past, was to go out to the marketplace, do a short listing process and then seek competitive bid, seek designs for projects. And as it's been in the newspapers there have been instances where architects have not acted necessarily in the most appropriate ways, so we've got to be very transparent if we're ending the competitions, we must be completely isolated in our approach. We cannot approach or talk to our competitors during the period of that competition, and we need to make sure that we are doing it in an open and fair way.
We must comply with the rules and the criteria for judging. Now, the best competition to those that have actually got endorsements, such as to the AIA where they actually go to government, has gone and asked them to do endorsements.
So in working in competitions which has been a regular way for architects to get work, we still have obligation and we also have obligations to make sure that the competition is being held in appropriate spirits, where there have been some that have sought to take the IP from the competition and reserve that to the Council in this case, where they were prepared to say, look, we'll get all the designs and we'll decide which one we like, but we might not appoint the person that has done that design.
So there's two parts to that, but the part we've got to be very mindful under law is that we cannot be anti-competitive in any way. We have to act in true transparency. We have to act honestly. Which is the fundamentals of our regulation, the fundamentals and the ethos of us working as architects.
I think that's the last slide, isn't it? It is.
Giorgio Marfella
Thank you, Paul. Thank you, Jenine.
Quite a lot of information. I suppose that reminds us of all the many obligations we have in our profession.
Now I've got several questions that came up.
I've tried my best to go through all of them, but might be a bit tight.
There's a couple of themes for the first one relates to one point you made Paul, about the role that architects have, as an independent professional figure in the contract administration context, where you have to somehow detach yourself from your responsibility towards the client you know whilst administering a contract. And there's a question here that I think stemmed out of that comment, which is by the way is also incorporating to our code of conduct which specifically mentions this, in the context of contract administration.
The question is when an architect is novated to the builder, do they still retain the role as an independent arbiter?
Paul Viney
That's a very good question and it's and there's several answers to it.
It depends upon the nature of the novation contract that they've entered into and the contract that they've originally had with their clients.
So some clients can insist on the architect maintaining a role through the construction process.
A lot of novation contracts, unfortunately don't do that, where then the architect has no control within that process.
They are not a superintendent.
And in fact, there's been number of instances where architects were asked to sign novation contracts that precluded them going onto sites during the construction period.
So the answer is they shouldn't be accepting contracts ideally of that nature.
But the role does vary depending on the contract that you sign.
Giorgio Marfella
Yeah. And of course it's a dilemma as well because the builder becomes a client.
So in essence, in a novated environment that the architect ends up having two clients, but as you pointed out, there could be mechanism incorporated in the deed of novation where some of the scope of work still requires the architects to sort of revert back to its initial capacity to advise the client or to list provide advice, to the effect that it can be seen independent from the role of providing services to the builder.
Certainly is a difficult position and by the way, we have touched novation ultimately, we also know it's a very sensitive topic at the moment in the industry.
The next question is actually two questions that I'm going to try to sum up a bit.
It's the idea of how to manage temporary contractors, in particular from the perspective of a sole practitioner. Where notoriously sub practitioner the definition, may not have the environment of an office or a company in which contractors can be somehow embedded.
So the questions asked here, what is the best way to hire staff as temporary contractors when you're a sole trader without a physical space?
That's one component and the other components, what about engaging subcontractors on a project specific only?
What are the, what is the best way to handle this and what are the potential pitfalls as well that that we can recommend?
I can I start with Jenine, perhaps on this one, and Paul also feel free to feed into it.
Jenine Birney
Sorry, just repeat the question for me again.
Giorgio Marfella
So the first question is, what is the best way to hire staff as temporary contractors when you're a sole trader and you don't have you do not have a physical office space?
Jenine Birney
Mm hmm.
Yeah. So even if you do not have a physical office space where they work, if you're hiring people to work in a business that you're operating, then it's a good practice to get a checklist and WorkSafe have a checklist to ensure that they have a safe working environment.
Take photos of their working environment to ensure, to satisfy yourself that you are providing a safe place for them to work.
And therefore, I mean ideally in the best practice, you'd go out and inspect the workplace, but that's not going to happen every time.
So photos and checklist just to and to keep those on file should something happen to that person that’s working for you.
Giorgio Marfella
So even if it's a temporary contract, it does not change really the responsibility.
Jenine Birney
No, you still have a responsibility for anybody that you're engaging to work in your business.
Paul Viney
Yeah.
Giorgio Marfella
Yeah, yeah.
And there's another side.
There's a different question, but I think on the similar topic, which is if a sole trader engages in a subcontractor, but on a project specific only, so this seems to be more of a case of say for example.
Jenine Birney
Is that a subcontractor to a project where that's and that's not exactly what I was sort of getting to, no.
Giorgio Marfella
Yeah, that was exactly, that this is a more of a consultant arrangement or some sort of, yeah.
Jenine Birney
Correct.
Paul Viney
A little to that under the modern award, there's, you have a casual employee that you can appoint someone on an hourly rate base for a defined period or a defined project.
Jenine Birney
Yeah.
Paul Viney
So two ways you would look to do that.
You can define, do you have a full definition of the scope of work you can then subcontract it to a third party.
And that third party takes on a scope of works for a defined sum of money.
Or you can employ them as such as a casual to which you employ them on a defined hourly rate, whether they are in your office or as Jenine's described in a remote office, then your obligations remain the same whether they are remote or whether they are in your office.
Giorgio Marfella
Yeah.
Paul Viney
I agree 100% with what Jenine said.
Giorgio Marfella
Perfect. Yeah.
So obviously there's two options. One is the external consultant pathway, but casual or non-casual, once it becomes an employee, you have all the responsibilities we’ve highlighted and recently I suppose that the threshold also a responsibility for casual has been rising tradition.
Paul Viney
Correct.
Jenine Birney
Yes.
Giorgio Marfella
So we have to be more aware.
Paul Viney
Correct.
Giorgio Marfella
And again on similar issue of workplace matters, this is a more specific question about how can you reasonably assess the work condition from home where people have young children.
How often are employees reasonably required to check on conditions?
I think we touched a bit on this, Jenine, but would you like to add anything else?
Jenine Birney
Yeah, look, ideally every three to six months you would do another check on their working environment and it might, and again, it will be just a checkbox and photos, or yearly.
So ,if someone's with you for on a yearly basis and permanent employee, yearly is fine. If someone's coming in and out of your business, then each time they come in and out, I would be suggesting that you ask them to update it.
Let's not redo it but update it.
Giorgio Marfella
Very good.
Paul Viney
But.
Giorgio Marfella
Paul, any anything else to add on that? No.
Paul Viney
I think that is good advice. So, keep it very simple.
Giorgio Marfella
Yeah.
Paul Viney
You can only do what's within your control. I think that Jenine has identified that well.
Giorgio Marfella
Now there's also another question that it's a bit long and talks about GST.
So I don't know if you had a chance to read it. Jenine you're probably my best point of contact for this.
Jenine Birney
I haven't.
I haven't read it yet.
Giorgio Marfella
So it's a question I'd probably ask an accountant, and I'll just read it for context.
Jenine Birney
Mm hmm.
Giorgio Marfella
So in relation to GST as a sole trader, what happens if the income from previous years are below $75,000?
So the GST had not been charged in invoices paid today.
But it happens at the income this year has gone over $75,000. So, the question is, I suppose it's like how do you manage the transition from a non-GST practitioner into a GST practitioner? And does this have some retrospective effects?
Jenine Birney
So I don't believe there wouldn't be retrospective. So, the date that you identify that you're going to exceed the 75,000, you register for GST, once you're registered for GST at that point on invoices you would charge GST and remit GST, so you wouldn’t go back prior to registration.
Giorgio Marfella
Yeah.
Jenine Birney
It's only got only looking forward. So, it's identifying when you are coming close to that threshold, registering and for moving into the GST BAS Compliance.
Giorgio Marfella
Very good.
Now this another one that just came up, where a register, I'll read it live, so bare with me. We're a registered architect, made a director in a medium to large company that hasn't got any other architects involved and who may not have any effective control influence in the company, is the architect in that case in breach of the Act? Is the company in breach?
I'm trying to understand this, so as an architect, a medium to large company that has no other architects involved, and who may not have any effective control.
Well, I'm. I'm not sure.
I mean, I suppose you were talking about probably a company here that is not providing architectural services, because by definition, a company already providing architectural services should have at least one director already there.
Jenine Birney
Correct.
Giorgio Marfella
So I'm. I'm not sure if I can. Do we want to comment on that.
I suppose there's another comment as well that we made the role of architects in companies that are not necessarily providing architectural service traditionally, but they may still have architects employed.
Jenine Birney
Mm hmm.
Giorgio Marfella
How do we treat those cases?
Paul Viney
I'll probably tell you, from a director Georgio, that one of the problems.
Giorgio Marfella
Paul, this is probably for you.
Paul Viney
I mean, originally there used to be a definition that 2/3 of the directors were required to be architects on any on any practice. That changed. So there's no limitation.
You can have one director, but the regulations still require you to act as an architectural company and the thought put to that is that if you have a registered architect as a director, but you also have a registered architect supervising directly any project that has been put out as an architectural project or a project from an architectural company. And if you do not have that then then you are I believe in breach. The company's not acting in accordance with their requirements.
Giorgio Marfella
Yeah.
Paul Viney
I don't believe necessary, the individual is necessary in that case, but if they are a director then they will be coming into breach because of their role as a director.
Giorgio Marfella
Yeah.
Very good.
There's another few, so I'll pick one here. I think we spoke about contractual obligation with architects, sub-engineering consultants.
This is similar to what we touched on before, but this will be more specific.
I suppose this is the idea of engaging engineers within your scope of works as consultants, you know, and there's a traditional two methodologies about obviously consultants right through the client, where normally architects often provide advice and some recommendation who should be given the job, but ultimately the contract between the architect and the consultant separately.
But I believe here is a question about having consultants under your responsibility, so to speak.
Would you like to comment on that, Paul?
What is good advice to mention?
Paul Viney
There are very clearly two ways to approach it.
There's the secondary and sub consultants.
Secondary consultants are when they're engaged by the client.
Sub consultants are when they're engaged by the architect.
Traditionally, there has been a push for secondary consultants, but the reality of the world is that the great majority of projects in the government sector and in the larger projects, the engineers are subsets of the principal design consultant basically.
Now they are a consultant. There's a necessity to ensure back-to-back agreements with them, so you have matching PI policies that you can't limit. You can't allow them to limit their liability if you don't have the same limit of liability.
So there's a whole lecture you could do on that one, but the reality is in terms of our responsibilities, you need to ensure that they are appropriately skilled to carry out the work that they, that you're undertaking, that you're not just picking them because they're the cheapest engineer you can buy.
They're picking them because their value for money and can do the work and basically, you will carry the responsibility for them down the track, so if there are mistakes or errors, they're seen as your errors. They're not, they're not, they don't go back to the engineer and sue them, they sue you, to which you have to then sue the engineers.
Giorgio Marfella
Yeah. So it's a high risk.
Jenine, would you have to add anything on there?
No, it's quite clear.
Jenine Birney
Nothing Paul covered that.
Giorgio Marfella
Yes. And as a point Paul, that that is probably worth thinking of a separate discussion and the relation with consultants of course and particularly understanding how they may vary in the context of different procurement methods.
There’s quite a few scenarios that perhaps we have to give it a bit more time in the future.
Now we reached 1:00 o’clock, so I'll take this and I apologise for those who I didn't have a chance to perhaps read your last comments, but I will take the opportunity to thank again Paul and Jenine for their support to us, to the ARBV, and I hope this was useful.
Certainly was for me, and it was a good reminder and we hope is going to assist you, obviously providing better architectural services.
I just wanted to remind you that there's an opportunity to complete the questionnaire for another 24 hours.
So if you also have colleagues who are not able to be here today, you might want to remind them to take this webinar as well.
So with this, I'll see you next time, probably in a month or so and have a good afternoon everybody.
Bye for now.
Paul Viney
Thanks all.
Jenine Birney
Thank you.
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