Contractors and subbies are entitled to walk off site if they haven’t been paid, but they have to stick to the rules…
Securing payment is more difficult now than at any time in living memory. We are all familiar with the thousand and one excuses provided as to why the payment which was due hasn’t arrived.
The general feeling among contractors and subcontractors, experiencing difficulties with payment, is that they should down tools and walk off the site until payment has been made.
Whilst this is a natural reaction, it is important to understand that whilst under the Construction Act there is an overriding entitlement to stop work, if payment hasn’t been made on time, it comes with a set of rules which must be followed if work is to be suspended.
It is necessary for the contractor or subcontractor to serve a written warning notice and if seven days have elapsed and payment still hasn’t arrived, then there is an entitled to suspend work.
Without the warning notice, the contractor or subcontractor, who suspends work, can find itself in the wrong and on the receiving end of a delay claim, despite the failure to pay on time.
If the suspension of work could result in late completion of the project with resultant loss or inconvenience to the employer, the threat to suspend work often results in the arrival of the money.
Where a contractor or subcontractor correctly suspends work, there is an entitlement to an extension of time for completion.
Some conditions of contract also provide for contractors and subcontractors to receive payment for the loss and expense incurred as a result of the suspension.