I have sent my builder a notice of breach of the contract, referencing the breaches in the contract and giving them 14 days to remedy or else I will be reconsidering their employment
Well we all know that often terms on contracts are made to mislead people so to simplify the term "employment" I think you still regard it as a term of contract between the employed business and you, it couldn't be an employment because you don't pay them a salary, superannuation, work injury insurance etc. etc.
The letter has been sent registered post to the address noted on the contract being the physical address of the builder's factory even though he has a PO BOX on his invoices
That's the first bell ring, I would personally check the physical address and see if there is a real functioning office in there or just a dummy rented room.
what happens if there is an attempted delivery to the factory and a card is left by auspost but the builder refuses to collect it from the post office?
The post office will notify you regarding the failed delivery, nothing more can be done at this stage. You need to send a second letter of demand and keep record of everything and not, I wouldn't send it to PO BOX because no one will sign the delivery.
Does the 14 days still count from the day of attempted delivery?
The 14 days start from the date of the letter and excludes weekends and public holidays.
I wish this matter won't go into legal means but if it does, you need to take it to the Court.
The builder could still refuse to accept Court's papers but that (together with the 2 failed demand letters) will count against his company in the following legal actions.
Regarding serving Court papers you should "employ" (which doesn't mean employment) a "licensed process servers", be careful because there are thieves out there asking $300-400 for just one attempt!