By Shane Ulyatt, Special Counsel, Axia Litigation Lawyers – 28th January 2026

A recurring (and often misunderstood) issue in Queensland construction law is whether a party without a Queensland Building and Construction Commission (QBCC) contractor licence can lawfully enter into a head contract for building work.

This commonly arises in commercial projects, where the contracting entity does not intend to physically perform the building work, and instead proposes to subcontract the works to appropriately licensed contractors.

Under current Queensland law, contracting without a QBCC licence may be lawful in limited circumstances, including where a specific statutory exemption applies. This article explains the relevant framework, focusing on Schedule 1A, section 8 of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act), including the exemption’s scope, strict limits, and practical risks.

This article is intended as general legal information only and does not constitute legal advice. Legal outcomes depend on specific facts and current law.

The starting point is section 42(1) of the QBCC Act, which provides that a person must not carry out, or undertake to carry out, building work unless the person holds a contractor’s licence of the appropriate class.

The prohibition can apply broadly. Under the QBCC Act, a person may be taken to “carry out” building work not only by physically performing construction activities, but also by:

• directly or indirectly causing building work to be carried out; or
• providing building work services, including management, administration, or supervision.

This wide definition reflects the protective purpose of the QBCC licensing regime, that is, to ensure building work in Queensland is performed by suitably qualified and regulated participants.

Despite the breadth of section 42(1), the QBCC Act contains a specific statutory exemption for certain head contracts.

Schedule 1A, section 8 of the QBCC Act provides that an unlicensed person does not contravene section 42(1) merely by entering into a contract to carry out building work if:

1. the building work is not residential construction work or domestic building work; and
2. the building work is to be carried out by a person who is appropriately licensed to carry out building work of the relevant class.

Section 8 extends beyond the mere act of contracting. It also provides that an unlicensed person does not contravene section 42(1) merely because the person:

• directly or indirectly causes the building work to be carried out by an appropriately licensed contractor; or
• enters into a subcontract with an appropriately licensed contractor to carry out the work.

However, the exemption is conditional and strictly limited.

The exemption under Schedule 1A, section 8 ceases to apply if:

• the unlicensed person causes or allows any part of the building work to be carried out by a person who is not licensed to carry out building work of the relevant class.

Further, section 8(4) provides that the exemption does not apply in circumstances prescribed by regulation.

The QBCC has published guidance confirming that:

• an unlicensed person may enter into a principal contract for commercial building work;
• the unlicensed person must not personally carry out building work; and
• all building work must be performed by contractors holding the appropriate QBCC licence class.

This guidance aligns with the statutory language of Schedule 1A, section 8 and reflects the regulator’s current enforcement approach.

While there is limited appellate authority directly interpreting Schedule 1A, section 8, Queensland courts have consistently emphasised that:

• licensing provisions are to be interpreted strictly; and
• exemptions to licensing requirements are construed narrowly, consistent with the consumer-protection purpose of the legislation.

Courts have also made clear in other licensing contexts that contractual structures designed to circumvent regulatory regimes are unlikely to be upheld if they defeat the statute’s intent.

Even where an unlicensed entity lawfully enters into a head contract under section 8, it may still be deemed the principal contractor for the purposes of the Work Health and Safety Act 2011 (Qld). This carries significant obligations in relation to site safety, coordination and risk management.

Unlicensed head contractors should also consider:

• contractual liability for delays, defects and non-performance;
• limitations in available insurance products; and
• certification and approval obligations under the Building Act 1975 (Qld).

The section 8 exemption addresses only licensing offences under the QBCC Act, it does not mitigate broader commercial or regulatory risk.

Reliance on Schedule 1A, section 8 requires strict compliance at every stage of a project. Key risk areas include:

• verifying subcontractor licence classes;
• managing scope changes that may fall outside a subcontractor’s licence; and
• maintaining clear contractual boundaries between coordination and performance of building work.

Since 2020 there has been active legislative and policy attention on the head contractor exemption. In 2020 the Government moved to reform building industry regulation, and proposed changes prompted industry concern that the exemption might be removed or narrowed. Those reforms led to further consultation and subsequent amendments that preserved the core exemption while expressly providing a regulation making power to exclude the exemption in specified circumstances. The practical effect is the statutory exemption remains available, but with an express option for the Government to limit it by regulation in particular classes of work.

Currently the exemption remains in force but its limited and technical in nature. The primary mechanism for any further restriction is expected to be subordinate regulation rather than primary purpose repeal, regulations could target “high-risk” classes of work if policy makers consider it necessary. There are practical compliance risks when relying on the exemption head contractors need to be aware of, in particular, robust licence checks, strict subcontracting controls, clear contractual drafting to avoid performing building work personally and careful WHS and insurance arrangements.

For practitioners and contracting parties, the important practical takeaway is twofold:

(a) the exemption can be relied on for non-residential head contracts only if all statutory conditions are satisfied and the arrangement is implemented strictly; and

(b) the regulatory landscape remains subject to change, with the Government empowered to prescribe circumstances where the exemption will not apply.

For any tender or mobilisation that depends on the exemption, we recommend contemporaneous verification of the legislative and regulatory position and, where appropriate, requesting written confirmation from QBCC or obtaining a tailored legal opinion based on the full project documentation.

Under current Queensland law, contracting without a QBCC licence may be lawful in strictly limited, clearly defined circumstances. Schedule 1A, section 8 of the QBCC Act provides a narrow exemption for non-residential / non-domestic building work, provided all physical work is carried out by appropriately licensed contractors and no unlicensed work occurs.

However, the exemption is technical, conditional and unforgiving of error. Parties considering reliance on it should proceed with caution and obtain tailored legal advice based on the full scope of works, contractual structure, and regulatory environment.

Context note: In this FAQ, “Schedule 1A, section 8” refers to Schedule 1A of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act).