Using contractors and subcontractors

Protect your business from rogue contractors

Finding reliable contractors to work for your business requires that you take some precautionary steps to avoid doing business with unscrupulous outfits.

There are plenty of ways for you to get assurance about the competence and integrity of contractors. Some factors that will help give you the confidence to deal with a contractor include:

• Membership of a trade or professional association or other recognised body.
• Status as a licensed labour provider with the Gangmasters Licensing Authority (GLA), in the agriculture, shellfish and related processing and packaging industries. The GLA operates as of 1 April 2005. Once licensing comes into force in 2006, it will be an offence to set up an arrangement with an unlicensed gangmaster. A separate register is held for licensed gangmasters in Northern Ireland.
• Quality standards, such as British Standards and ISO standards for management systems. See our guide on quality management standards.
• Personal recommendations.
• References.
• Sight of previous work.

Many associations and bodies set membership criteria and minimum standards in areas such as:

• quality systems and training
• health and safety
• environmental management
• deliverables and technical capabilities
• financial stability

Search for a trade association at the Trade Association Forum website.

Read FAQs about the Quality Mark Scheme at the Quality Mark Scheme website.

Recommendations from business or personal associates are often good indicators. Try to see for yourself examples of the contractor's previous work.

It is good practice to obtain at least three quotes or estimates. Make sure you understand the terms, any technical details and any aspects that could change such as:

• material prices that vary
• overtime
• night rates

Even if you get personal recommendations, follow up all references provided. Here are some tips when taking up a reference:

• let the contractor know you are following up a reference
• contact referees in good time so as not to delay your project start
• ask specific questions about information the contractor has provided
• ask about personal qualities, safety record, work standards, any legal case the
• ontractor is, or has been, involved in
• check the authenticity of telephone references and take notes during the call

Subjects covered in this guide

• Introduction
• Contractors and subcontractors - the difference
• Pros and cons of using a contractor or subcontractor to provide staff
• Employment status - implications for tax and worker rights
• Health and safety requirements for employing contractors
• Other legal points to consider when employing contractors
• Get the most from contractors and subcontractors
• Protect your business from rogue contractors
• Here's how the use of a short-term contractor added value to a project

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