The recent suicide of the boss of a Perth-based ceilings contractor has shone a light on the underlying stresses which are being placed upon many within the industry, especially subcontractors.
According to a report in the Australian Financial Review, Ross McGinn, the 53-year-old chief executive officer of mid-sized Perth-based ceiling contractor Acrow Ceilings tragically took his own life after his company hit trouble and bled cash following disputes and payment delays during work on the state government’s new children’s hospital project managed by John Holland.
According to McGinn’s family, the pressures associated with forking out cash in wages and supplies in order to continue work on the project despite the company’s own cash flow situation – and eventually, the strain of having to lay off workers – played a role in his death.
The tragic case underscores the extent of stresses being placed upon contractors, subcontractors and workers in a sector in which the suicide rate among its workforce is double that of the general population and where high rates of self-harm are thought to reflect not only the demographic profile of the sector’s workforce but also the stresses of the job. Those stresses can include long working hours, long periods spent away from family, tight deadlines, uncertainty over future employment and a plethora of other factors.
In Western Australia’s case, such stresses are set to intensify in coming years. Conditions within the building sector are expected to deteriorate as resource work comes off the boil, new housing starts drop back and pressure on revenue, margins and employment security intensifies. Between 2013/14 and 2016/17, for example, the Australian Construction Industry Forum expects the sector in Western Australia to shed a net of around 30,000 workers, or almost a quarter of its workforce.
Furthermore, there are issues surrounding pressures upon subcontractors. While principal contractors are usually required to put aside retention money from which to pay subcontractors, this money in Western Australia does not sit in a separate trust but rather can be used directly by head contractors for their cash flow. In other cases, subcontractors complain about having to sign on for liability for any defects in design work which is actually carried out by the head contractor.
In Perth, subcontractors are often subject to a ‘time-bar clause’ requiring them to make variation claims with full and appropriate documentation within just two business days or forfeit all claims for payment for the variation in question. Even when paperwork is in on time, head contractors have been known to stretch dispute negotiations beyond the 28-day period, during which a rapid adjudication process applies, and to stretch out payment disputes beyond the length of time in which subcontractors can stay in business.
McGinn’s case is a tragic one, and one that has highlighted the pressures many, especially subcontractors, continue to face.