HGCR Act 1996 - Classification of Sites

© Daniel Atkinson 2001 29 September 2001

SUMMARY

Generally the subcontract should be considered separately from the main contract. If the main contract is excluded because for instance it is a PFI contract, this does not for that reason alone exclude the subcontracts. The Act envisaged that there might be mixed sites.

Where the subcontract works are preparatory works under Section 105(1)(e) of the Act, then the main contract operations will need to be considered, but only in order to interpret the Act. The categorisation of the main contract is not determinative of the subcontract status under the Act.

In Palmers Limited v ABB Power Construction Limited (Aug 1999) TCC Palmer’s scaffolding work was not the main operation, but an operation that either was preparatory to or for rendering complete ABB’s work of installing the boiler. It was argued that since ABB’s work was excluded by Section 105(2)(c), as was common ground, and therefore not a “construction operation” in consequence Palmer’s work could not be a “construction operation”. This was not accepted.

One of the important features of Section 105 is that some operations which fall within the definition of Section 105(1), are not construction operations under the Act as a result of Section 105(2). This is because Section 105(1) states “subject as follows”. This means that Section 105(1) applies unless Section 105(2) applies.

When considering Section 105(1)(e) the relevant words were “preparatory to such operations as are previously described in this subsection”. In this case ABB’s work was encompassed by Section 105(1)(b) but was not a “construction operation” by reason of Section 105(2)(c). Did the reference to “operations as previously described” refer to ABB’s work or not? It was held that the meaning was not clear.

It was held that the more natural meaning of the phrase was that Section 105(1)(e) referred to all operations in Section 105(1) including those in Section 105(2) as not being “construction operations”. It would have been more natural to use language such as “such construction operations as are previously defined by this sub-section”. By using “operations” instead of “construction operations” and “described” rather than “defined”, the meaning was widened. In other words

“...scaffolding which is preparatory to an excluded construction operation, may, nonetheless, itself be a construction operation”

Although this might lead to a contractor’s main contract being outside the Act and his subcontract within the Act, such a possibility was already envisaged by other provisions of the Act and indeed by the debate in Parliament. It was also held that if only some of ABB’s work is a “construction operation” under 105(1) then

“... only scaffolding services provided for that part of ABB’s work could qualify as construction operations.”

If that were the case the “statutory blue pencil” would be required. That was not the case with ABB’s work.