Could you please advise me if there is a time limit on the issue of a certificate of non-completion under JCT contracts? We recently received one for a contract 16 months after the completion date had passed. At the time, there was a verbal agreement that the client did not wish to levy liquidated damages. The client has since changed his mind.
The JCT standard form of contract implies that a certificate of non-completion should be issued as soon as the completion date has passed and the works have not been completed. This is regardless of whether the employer wishes to deduct liquidated damages. The issue of the certificate of non-completion is an administrative function to be undertaken by the architect and it should not have waited 16 months. However, there is no express time limit on the issue of a certificate of non-completion within the JCT form unless specifically included in your contract.
Since the only purpose of the certificate is to trigger the employer's right to charge liquidated damages, its late issue does not put you in any worse position than you would have been had the certificate been issued at the correct time.
On the other hand, the JCT form obliges the employer to notify the contractor of its intention to charge liquidated damages before the issue of the final certificate. So, if your final account has been settled, the employer may be too late to comply with the procedural requirements that it has to go through in order to validly deduct liquidated damages.
As to the verbal agreement not to levy liquidated damages, the employer may be stopped from going back on its word, particularly if you relied on it. However, this will depend on the manner in which the assurance was given to you – whether it amounted to a binding agreement – and, of course, whether you can prove it was given.
Wriggling out of handcuffs
I am a surveyor for a facilities management company. A month ago, my main commission was lost and I was told that I had no guarantee of job security. I have since received a job offer elsewhere, which I have accepted in principle.
However, my firm has now informed me that there is job security on another commission. If I leave, my employers will enforce two contracts that are open to management discretion. I shall be liable for the remainder of the lease of a company car (£1900) and for course fees (£1600) for my part-time building surveying degree. This appears obstructive considering four weeks ago I had no job security and was facing possible redundancy.
Your employer did the right thing by warning that you might be made redundant: it might have helped you avoid unemployment, and it might have helped your employer avoid a claim for unfair dismissal. As redundancy did not occur, the terms of your contract of employment remain unaltered. With regards to payment for the car, I assume that you are only required to contribute should you wish to keep the vehicle, and this would be perfectly lawful. If company cars have previously been given to departing employees, this would be contractually binding only if such a custom or practice was reasonable, notorious – that is, well known – and certain.
However, your employer may require you to pay the degree course fee only if, before beginning your course, you agreed to do so in writing. Even if you did, you may still be able to argue that the agreement is indirectly a restraint on trade, because its effect would be to deter you from leaving your employer. Such an arrangement may only be enforced if it is reasonable at the time it was made, and here, the maximum length of time for which you could have been required to repay the money is of crucial importance. The longer the time, the more likely it is to be judged unreasonable.
Mercenaries in our ranksWe are a subcontractor working for a contractor that owns an employment agency. It has, under pressure from its client, provided labour to the site without our requesting it. It has agreed hours and rates with the operatives for work contracted to us and set off those monies, about £25,000, from our account. We have signed no sheets and no notice of this has been given. Can it do this without any agreement and without seven days’ notice?
The contractor has omitted certain works from your subcontract and awarded them to an alternative subcontractor (labour employed by its own agency). In circumstances where it has done this without your agreement and without notice, its actions will almost certainly constitute a breach of contract entitling you to recover your loss of profit on the omitted works. You may also be entitled to recover additional costs in the form of loss and expense if the carrying out of the omitted works has disrupted the regular progress of your works. The contractor will have no right to set off the £25,000 against your account in these circumstances and you will be entitled to sue for your losses. The rule is that, in the absence of express contractual terms to the contrary, once a party has contracted to do a certain quantity of work, it alone has the right to do that work.