Introduction
Construction is one of the riskiest activities that any individual might be involved in. With the urge to make a living, a person ends up being in the same environment. Risks are many but the main objective is to get the daily bread. The people involved, are allocated different responsibilities and roles, to make them more efficient. The hierarchy of tasks is also very important. There are set standards that govern the roles and responsibilities between the employer and the subcontractor.1
Duplication of tasks carried out by these individuals should be avoided. With the proper relationship guidelines, fewer conflicts arise, and handling them becomes an easy task. When tasks are duplicated, they slow the working system and sometimes confuse the course of the work. The duplication also leads to the wastage of money and resources. It also wastes time, leading to a project taking longer than the original time frame for its completion. When proper guidelines regarding the work relationships are provided, very few conflicts arise and even if they arise, they are easily solved because there are proper guidelines.2
Construction work that is handled by the construction law covers almost all types of work, including building and engineering work. The laws and contracts in our attention are of much importance in the current industrial environment. The laws involving construction have played a big role in merging lawyers and construction professionals. There is a need for these interactions because they aim at finding resolutions to problems arising from the construction industry.
This paper tries to explain the variation in roles and responsibilities of these individuals, with the modification from domestic to nominated subcontractors. It also lays down the differences under law as viewed by the UAE civil code and under common English law. The paper will also clarify the working of the employer and the subcontractor. Finally, the correlation between the different views is then used to give a common conclusion about these variations.
Changes in roles and responsibilities between the employer and the subcontractor
In any construction setting, the whole work is assigned to the main contractor. It is in the mandate of the main contractor to let a portion of the initially assigned task be performed by a sub-contractor. This case is common in situations whereby, the need for additional special skills is a key requirement. Subletting a contract is wise but it must be given consent by the employer. The employer works for hand in hand with the contractor, to avoid any disputes that may arise in their dealings. In the whole dealing, the sub-contractor remains under the command of the contractor.3 Though there is subletting a contract, there are some standards set to restrict this action in the construction industry. For instance, the JCT relates to the action without the consent of the architect. However, in some cases, subletting is allowed without consent.
All this is laid down in the clauses involved. Without proper adherence to the standards, subletting has proven to be the best method, though dangerous in cases of conflicts. It may give rise to several losses in cases where there is no agreement. This is so because; most engineering sub-contractors are specialists, limited to a given fraction of work. Our analysis is based on the FIDIC international conditions, which are also recommended for use in the domestic setting.
The FIDIC outlined the standards in four categories, but we focus our attention on the New Red Book. In this standard form, we have the conditions of contract for construction of building or construction work that is designed by the employer or his representative, the engineer. Before we make a detailed analysis, we will have an overview of the New Red Book, which was revised in 1999. To make my analysis clear, I will mention some of the clauses that touch on the roles and the responsibilities of the employer and the subcontractor.
Generally, The New Red Book is made up of 20 clauses. Each clause is meant for a different purpose. For instance, Clause 2 carries the consolidated provisions which handle the rights and the duties of the employer. A simple example of a statement from the clause is as follows,
“The employer shall submit, within 28 days after receiving any request from the contractor, reasonable evidence that financial arrangements have been made and are being maintained, which will enable the employer to pay the contract price (as estimated at that time) by cl.14… if the employer intends to make any material change to his financial arrangements, the employer shall give notice to the contractor with detailed particulars.”4
In clause 3, there is a setting of the provisions, which handle the role of the engineer whom the employer appoints to perform the assigned contracts. The engineer has the mandate to delegate some of his/her powers to the junior assistants. Looking into construction, it is the wish of every contractor to remain fully glued to a domestic sub-contractor, for example, a non-nominated subcontractor. It is only in special kinds of work, that nominated sub-contractors are absorbed in.
Most of the clauses referred to in this work are provisions of the JCT management contract. The coming in of these sub-contractors is also guided by special clauses. For instance, the cll58 and 59, give an extensive provision to govern the rights of the parties involved. Regarding these dynamics, the contractor plays a big role. According to clause 59, the following provisions are given regarding the nominated sub-contractor: the terms which the contract is entitled to have in any nominated sub-contract, powers for the engineers in cases of disagreements between the parties, limitations of the contract’s liability in case of a default payment details of the sub-contact work, and consequences of termination of the sub-contract.5
From some of these provisions, it is clear that the employer has the mandate to carry out re-nomination if the subcontract is terminated by the nominated sub-contractor. If the termination was given consent by the engineer, then the engineer must recover any losses. This is a great advantage to the employer. Some defaults caused by nominated sub-contractors may not lead to termination. Let’s consider a portion of clause 59, which states,
“Except as otherwise provided in Clause 58(3), there shall be responsible for the work executed or goods materials or services supplied by a nominated sub-contractor, employed by him as if he executed such work or supplied such goods or materials.”6
Whenever there is a change of design from domestic to nominated sub-contracts, most of the roles are shifted into the mandate of the contractor. For instance, the nomination procedure doesn’t require much from the employer. The common procedure of bringing in a nominated sub-contract requires the engineer or the architect to find competitive quotations of the work from other sub-contractors, and then with the powers in the main contract, instruct the contractor to place an order with a chosen tenderer. The terms of the nomination are based on the standard form, but the contractor and the sub-contractor are at ease to make any alterations or amendments. The contractor is secured by being entitled to object to any nomination that doesn’t contain beneficial terms.
Nomination terms are very critical when it comes to contracting and subcontracting. Nomination terms should be laid down to ensure that there is no confusion in handling the contract. If the terms are laid down well, there is little or no conflict of interest in the process of contacting and subcontracting. In this case, the nomination terms are guided by a standard form, which allows the contractor and the subcontractor to make any changes or alterations if they feel that the changes are necessary for them to make. These terms in most cases, favor the contactor because he can object to any nomination that does not benefit him, and this ensures that he maximizes his profits.
Whenever there are any nominations, the tussle is between the contractor and the engineers in charge. To illustrate this by an example, it is common knowledge that in such a situation, the materials will be chosen by the engineer or the architect, hence the main contractor will not be responsible for their suitability or fitness. Another problem arises regarding the nominated sub-contracts. That main problem is on determining the obligations of the main contractor, in respect of materials, and hence determination of the rights of the main employer in case of a default by the nominated sub-contractor.
On the other hand, if the nominated subcontractor causes some delay, then the main contractor remains liable, and may then forward the employer’s claim to the sub-contractor in default. In such a situation, the sub-contractor gets the command of the employer through the main contractor. In most cases of construction, the nomination is avoided because of its many defects illustrated in the analysis above. It is noted that it causes random changes and shifts of roles and responsibilities between the employer and the sub-contractor. No matter the changes were undertaken leading to nominations, the employer maintains most of the responsibilities. A better illustration is of the responsibilities as stated in the New Red Book Article 31. These areas quoted hereby,
“Under clause error, the employer shall carry out work on the site with his workmen, and he shall in respect of such work, have full regard to the safety of all persons entitled to be upon the site; and keep the site in an orderly state, appropriate to the avoidance of danger to such persons.”7
The perspective of the UAE civil code and the common English law
As laid down in the UAE Civil code, subcontracting is only allowed in a situation whereby the contractor cannot perform the task, depending on its nature. It is also stated that the contractor shall remain viable towards the employee. This denies the sub-contractor any chance to launch a claim against the employer for anything. This is only possible if he has made an assignment to the contractor against the employer. These two situations are well explained in detail by articles 890 and 891 of the UAE civil code.
On the other hand, the sub-contractor is still working under the employer and there between them exists a contract of employment. The contract lasts for a certain duration. One of the parties in this contract works for the benefit of the other. The contract terminates after the agreed duration. If the nature of the work is repetitive, then renewal of the contract is allowed. This allows the sub-contractor to continue working for the same employer for longer than the earlier estimated time. The sub-contractor, who remains under the employer, should carry out his roles and responsibilities and still adhere to the proper morals. Any behavior change might lead to the termination of the contract.8
Among the obligations laid down in the UAE civil code and article 905, we have the following obligations for the employee, who is the sub-contractor: performance at work, observation of proper morals, obeying orders of the employer, being preservative at the place of work and keeping of industrial secrets. While in contract with the employer, the sub-contractor is barred from being in other activities during work time. In addition, in case of shortfalls or damage, the sub-contractor is liable to the employer. On the employer’s side, he is entitled to pay the agreed remuneration to the contractor when tasks have been completed.9 This should be done at the right time and right place. It is his responsibility to ensure the security and the safety of those working under him. All these are as per the articles in the UAE civil code.10
Conclusion
This paper has given a detailed explanation of the different roles that are played by construction professionals. It has outlined some of the guidelines and procedures that govern transitions within the industry. From the analysis, it is clear that some of the situations that arise, cause variations and changes that are inevitable. With the current environment, it is common to face the illustrated situations, which involve shifting of tasks between the contractor and the employer. With properly laid down standards, it is easy to handle conflicts that may arise. The paper also focuses on the nominated sub-contractors and elaborates on how to avoid the option. It is also clear that with several shortcomings, the nominated sub-contracts are not the best alternative.
Proper planning is key to ensuring that abnormalities are avoided in any industrial system. The whole paper gives a detailed understanding of the difference between the perspective of the UAE civil code and the General English law. The exhaustion of this case gives a better understanding of the employer-subcontractor relationship.
It also brings out a better understanding of the shared responsibilities between the sub-contractor and the employer, with transitions from domestic to nominated sub-contractor. The analysis gives us the chance to scrutinize the impacts of shortcomings that accrue to sub-contracting. Some of these include delays and termination of contracts prematurely. The employer has the mandate to ensure that the contract is a success because most of the risks that might hit the whole project will be a waste of time and resources. The whole analysis is clear and points out the way forward to managing the remedies of sub-contracts and the dynamics.
Bibliography
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Chappell, D, Construction contracts, Routledge, London, 2010.
Cushman, RF, Construction Law Handbook, Aspen Publishers, New York, 2004.
Cushman, RF & JJ Myers, Construction Law, Aspen Publishers, New York, 1999.
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- Chappell, D, Construction contracts, Routledge, London, 2010, p. 20.
- Cushman, RF, Construction Law Handbook, Aspen Publishers, New York, 2004, p. 25.
- Uff, J, Construction law: law and practice relating to the construction industry, Sweet & Maxwell, London, 2005, p. 30.
- Ndekugri, I & M Rycroft, The JCT05 Standard Building Contract, Elsevier Science, Amsterdam, 2009, p.3
- Quail, GP, The building contract, Building Publications, New York, 1981, p. 40.
- Rostron, J & RH Pickering, Dictionary of property and construction law, Spon Press, London, 2001, p. 4.
- Samuels, BM, Construction law, Prentice-Hall, New York, 1996, p. 20.
- Siegfried, SM, Florida construction law, Aspen Publishers, New York, 2001, p. 34.
- Cameron, JG, A practitioner’s guide to construction law, ALI-ABA, Philadelphia, 2000, p. 36.
- Cushman, RF & JJ Myers, Construction Law, Aspen Publishers, New York, 1999, p. 33.