Problem: Main contractor has approached operatives and asked them to work directly for them
I started my business earlier this year, the reason being is that I had an opportunity of a large contract with the promise of a good return. The business specialises in spray-painting composite door frames. The business opportunity that I was presented with, meant that I would be a sub-sub-contractor, with my client working directly for the main contractor.
I commenced working on the contract and during the work I was receiving regular payments against my invoices. After about 5months, my client said to me that because there was very little profit in it for him, he wanted to transfer me directly to the main contractor. I agreed to this and started to work and invoice the main contractor direct. However, the main contractor started to amend my invoices and insert lower rates, and there was also a delay in getting paid. This put enormous pressure on my business in terms of cash and I, therefore, had no choice but to pack up and leave the site.
Subsequently, the main contractor has approached my operatives and asked them to work directly for them. Can they do this? They have also been in contact with my material supplier seeking the colour codes. I am still owed a considerable amount of monies, even if the lower rates are accepted.
Response: Was there a written agreement on rates beforehand?
Many more facts are required before any meaningful advice could be given. Like for example, when you agreed to work directly for the main contractor, did you enter into a written agreement or at least agree on the prices for your supply? If you agreed on the rates beforehand, then the main contractor has no right to discount these.
If there is a lack of written terms, you will have terms that are implied into your contract, for example under the Sale of Goods and Services Act. The Housing Grants, Construction and Regeneration Act (as amended), will also be implied into your contract and this would have given you some considerable protection. I say would have given you some considerable protection, as you could have suspended works where there has been a failure to pay and/or your works carried out has not been valued correctly, plus you also have the right to adjudicate. The problem you now have is that you have packed up and left the site, which means that to all intent and purposes you have abandoned your contract, thus the main contractor could view this wrongful repudiation, accept the breach and bring your employment under the contract to an end, and then perhaps pursue you for damages.
You need to urgently seek the advice of a construction lawyer, who will then be able to consider all of the facts and advise you accordingly.
© Michael Gerard 2018
The advice provided is intended to be of a general guide only and should not be viewed as providing a definitive legal analysis.