Contractor's Rights to Supplement a Subcontractor's Labour

Do Contractors have the right to supplement a Subcontractors Labour?

So, is the Main Contractor entitled to act in this manner and make such changes?

There are a number of remedies and rights to consider here and, as always, it depends on what is agreed in the contract. It is possible for a clause to be incorporated into the Contract entitling the Main Contractor to supplement the Subcontractor's works. A clause of this type is likely to be expressed as "in the opinion" of the Main Contractor, works are not progressing adequately; the Main Contractor can supplement the labour at the expense of the Subcontractor. This is perfectly legal; if you are a Subcontractor you should beware of this type of clause as it will cost you.

In the absence of a clause to supplement the labour the Main Contractor may run the risk of breaching the Contract. In Sweatfield v Hathaway Roofing (1997) the relationship between the parties was strained, Main Contractors Sweatfield gave notice to Hathaway that they were not progressing "regularly" and "diligently". Hathaway responded by saying they were being hampered by the poor workmanship of Sweatfield. Sweatfield then instructed Hathaway to increase its labour. Hathaway refused saying it was impractical. Sweatfield took matters into its own hands and brought labour onto the site. Hathaway reacted by withdrawing from the site citing that the bringing onto site of the Sweatfield labour was a Breach of Contract. So, Main Contractors should take care when considering forcing the issue of more labour; this could well result in the payment of damages, in addition to delayed completion and increased productivity costs.

In conclusion, a Main Contractor who brings labour onto the site or introduces another Subcontractor to supplement the work risks a claim for Breach of Contract from the official Subcontractor. However, if a clause has been drafted into the Subcontract giving the Main Contractor express power to bring in extra labour, there will be a right to do so. Depending on the wording, the right to employ and set off will be to the Main Contractor’s advantage.

It should be noted that if a Subcontractor is failing to proceed regularly and diligently with the Subcontract work, there is usually an entitlement to terminate the Subcontract.

As a footnote, the legal meaning of "regularly and diligently" and the extent of "failure" to allow termination are the subject of a further, more complex, area of Construction Law!