Subcontracting raises risk for ASTP contractors. Careful consideration is needed to ensure all the required legal and contractual obligations can be met.
Approval to subcontract must be obtained from the ASTP. The ASTP reserves the right in its absolute discretion, not to approve an application for subcontracting.
The following requirements must be met by contractors when subcontracting services:
- subcontracting cannot occur without approval from the ASTP
- a contractor cannot subcontract to more than one level (does not apply to taxi bailee drivers, clause 25.4 of the Contract Agreement (PDF 1063.54KB))
- the contractor must ensure the subcontractor is aware and complies with all obligations under the Contract Agreement
- approval to subcontract does not relieve the contractor from obligations under the Contract Agreement
- the contractor is responsible for ensuring the suitability of any subcontractor
- ASTP may withdraw its consent to subcontract if the requirements of the Contract Agreement are not being met
- where the subcontractor has employees, the contractor is required to obtain and retain for their records a statement from their subcontractors to comply with s175B of the Workers Compensation Act 1987, schedule 2 Part 5 Payroll Tax Act 2007, and s127 Industrial Relations Act 1996.
Approval to subcontract should only be sought in specific circumstances. In seeking approval the contractor must follow these steps:
- Seek independent legal advice and then contact the ASTP to enquire if subcontracting is suitable for your business
- Complete the subcontracting approval application form (PDF 131.23KB)
- Email the ASTP at email@example.com
- Remember to attach the completed application form.
Following receipt of these details the ASTP will contact the contractor to discuss the next steps.
Where a contractor has obtained approval to subcontract they must use the standard subcontracting template (DOC 275KB). Once completed and signed by both parties, a signed copy must be provided to the ASTP.
The template is designed to ensure that both the contractor and the subcontractor agree to the ASTP service requirements.
The ASTP does not review or approve any additional terms included in the subcontracting template nor offer any legal advice supporting the use of this template.
Where required, contractors must seek their own legal advice on the arrangements for subcontracting.
Following approval to subcontract, contractors will be audited to ensure compliance with the Contract Agreement.
Things to remember
Not having approval to subcontract while subcontracting will result in substantial contractual penalties including the possible termination of the head agreement.
When considering if subcontracting is required, ask the following questions:
- Am I able to ensure the quality of the subcontractor's services and willing to accept responsibility for their actions?
- Can I ensure that the subcontractors and their employees are paid the required award rates?
- Is subcontracting suitable for my business and worth the risk?
- Do I have the level of resources required to audit the subcontractor to ensure compliance with the Contract Agreement?