UK: Construction Sector Employment – Requires Planning, Building And Maintenance

An employer in the construction industry should treat its employee relationships as it would a building project: the contract must be designed to specification, the foundations laid, walls built and each relationship then maintained to avoid damage and the need for restoration.

In order to lay the right foundations for each employment relationship, the challenge for infrastructure firms is to consistently follow a fair and transparent recruitment process. By way of example (and in what is a not an uncommon issue for a stereotypically male dominated industry), employers must take care to avoid any allegations of sex discrimination. In such circumstances, liability can be created anywhere in the process: from the language and imagery of job advertisements through to an inadvertently leading question at interview. Although, at this stage, individuals are not yet employees, they can still bring discrimination claims if they believe they were treated less favourably because of their sex (or other protected characteristics such as age, disability, race, religion or sexual orientation) during the recruitment process.

Self employment in the construction sector

Contracts of employment and engagement are the walls underpinning each individual worker relationship. However, just because a contract labels an individual as an independent contractor does not necessarily make it so for employment and tax purposes. In the current market, there are an unusually high number of self-employed individuals working in the construction industry – the benefit of this self-employment being reduced National Insurance contributions (NIC's) for employers and NIC and income tax savings for employees. However, for a number of years, HMRC have been concerned about the number of cases of "false self-employment" within the industry, particularly through the use of on-shore employment intermediaries. New laws came into effect in April 2014 to seek to tackle this issue by making the intermediary responsible for accounting for tax and NICs. Further reporting requirements are slated to be introduced later this year which will make it more difficult still for employers on the one side, and individuals and their own intermediary companies on the other, to cheat the system. The challenge for employers will therefore be satisfying HMRC as to the bona fides of the status of their independent contractors or, in the alternative, offering sufficient remuneration so as to encourage would-be contractors to sign up as fully fledged employees.


As the employees start arriving at the front door, a further challenge for employers is making sure that each individual has the legal right to enter. The construction industry attracts workers from all over the world so any offer of employment should be made conditional upon an employee having the right to live and work in the UK. Illegally employing a foreign national could result in civil and criminal penalties and therefore it is therefore vital that immigration status is checked both at the outset and throughout each employment relationship. The challenge for employers, particularly those with large and fluid workforces, is to create a system that will ensure that no one slips through the net.

New employees may also enter via the back door, perhaps induced by a member of staff or joining as part of a wider team acting together to leave their current project. In particular, the defection of teams can create breaches of any number of interlocking employment related rights (from fiduciary duties to post termination and confidentiality restrictions) which could create costly and time consuming litigation – often in the High Court.

Leave and salary entitlements

As in every job, workers do need to escape the building for some fresh air now and again – indeed all workers in the UK (which may include consultants and contract staff as well as standard employees) have the right to take a minimum of 20 days holiday on top of eight bank holidays each year. However, following recent European and UK judicial decisions, the pay that workers receive whilst spent on holiday must now take account of commission and/or overtime in addition to basic salary. Given the frequency with which overtime, in particular, is required on construction projects, these decisions could have significant consequences for the industry in terms of worker wages, recruitment, overall project costing and even decisions as to whether to invest in the UK.

Support, trust and whistleblowing

Finally, if trust and confidence between employer and employee is not preserved, the employment relationship can fall into disrepair. Workers who raise concerns in relation to health and safety issues should not therefore be ignored or subsequently treated in any way which may amount to a detriment as it is likely that such concerns will amount to protected disclosures for the purpose of the whistleblowing legislation. If a worker is subsequently dismissed or subjected to detriment as a result of blowing the whistle, an employer could face a claim for uncapped compensation in the tribunal.

As with any construction, employers should remember that employee relationships need care and maintenance and it is only by adopting this mind-set that employment related issues can be minimised. The challenge for employers in the industry is to ensure that this policy is adopted across all sites and at all levels of seniority.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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