Construction businesses, it is time to change your contracts – how to deal with the skilled labour shortage

17th October 2014

The Royal Institute of Chartered Surveyors (RICS) released the results of their construction market survey this summer. Over the course of the first two quarters of 2014, it revealed an increasing shortage of skilled labour as workload increased in the construction market.

Jagdip Bains, associate solicitor in the dispute resolution team at Ansons Solicitors, explains the effects of these changes and what construction businesses should be doing to keep up with the changes to help avoid disputes.

The results show the total workload in construction has increased hugely throughout 2013 and 2014. In the Midlands alone workloads have risen at a record pace, putting pressure on the resources of construction professions.

Over 51 per cent of respondents reported skilled labour shortages had impeded higher growth in the second quarter of 2014. Only 7 per cent reported this issue in the same quarter last year. Those operating in the construction market should consider how to deal with these changes as winter approaches.

While employment is expected to grow in the coming months, you should consider the effect that the skills shortage has on project fees when entering contracts and alter fixed fees to reflect the changes. Look at varying the terms and conditions of contracts, which will afford you more protection on contract completion. Our expert corporate and commercial solicitors can carry out this review and advise you on contract terms.

Unfortunately, disputes can arise where businesses have failed to properly prepare for the market upturn and struggle to cope with the workload increase. Problems can arise simply from failing to adhere to agreed time frames due to the shortage in the industry.

It is important that you understand what the variation terms require you to do, and whether an extension of time should be requested in accordance with the contract. The dispute resolutions lawyers at Ansons Solicitors are well placed to advise on either side of disputes of this nature, as well as offer advice on contract terms and conditions.

For further advice about any contractual disputes or construction issues, please contact Jagdip Bains in the disputes resolutions team, on 01543 267 196 or email Ansons Solicitors has offices in Cannock and Lichfield, Staffordshire.