The Security of Payment NSW Act was brought into legislation in 2000 to ensure that contractors and sub-contractors in the building and construction industry were paid fairly and on time. This is because they do not operate with regular wages like most employees, but are paid at certain stages of a building's development. But quite often they do not get paid either the right amount or on time and sometimes they do not get paid at all, and so must resort to the Act for adjudication or else go to court, which is usually a lengthy and costly procedure.
Such adjudication processes need to be quick and efficient so that the contractors can be paid quickly. They too have their bills to pay and cannot do this until they have been paid. Not getting paid creates a flow-on effect until it effectually holds up the whole work process.
Adjudication must also include alternative dispute resolution ADR - which includes mediation and neutral evaluation of the problem, professional appraisal of the case and hopefully, conciliation. If the non-payment problems can be solved without going to court, the process is facilitated much more quickly. Everyone can get paid what they are owed and there are no costly delays. People do not have to be put off work and then re-employed at a later date or replacements found for those who have gone elsewhere to seek employment.
Legislation requires that this Act is reviewed every two years to ensure it still meets the needs of those who use it. Amendments in 2002 have seen the whole process undergo streamlining, making it more efficient and easier to use. The users of the adjudication process then doubled in the next two years and it has been used successfully by all levels of workers who were owed anything from around $800 to some millions of dollars.