A culture of non-payment of bills is strengthening across the construction sector, threatening the viability of subcontractors – and driving younger workers to emigrate, industry stakeholders told the Sunday Independent.
Larger contractors – even those working on government contracts – are now routinely haggling over prices for completed jobs, leading to a deepening crisis for many smaller firms working as subcontractors.
Brian Coogan, of the Irish Plant Contractors Association, said that while the problem has long been widespread in the industry, it has gotten much worse recently – and subcontractors are not receiving the full amount owed to them.
“We are heading into a period of uncertainty. The industry is very nervous and companies are trying to protect themselves and delay or stop payment until there is more certainty.
“It’s become part of the fabric of the sector and its household names do – but it’s wrong. They rely on you not to take them to court because if you do, you’ll get paid – but you won’t get a job anymore.”
Most prime contractors do not own their own plant machinery or employ operators. They rely on subcontractors for machines and drivers.
“But if they don’t pay on time, it puts these companies at risk – and they have to fire guys.
“This comes at a time when we desperately need the construction sector to be in overdrive, particularly in residential construction. But a lot of these young workers just pack it up and head to Australia.”
That Sunday independent is aware of various ongoing disputes and legal threats.
“They’re almost all in,” another source said. “When a prime contractor chooses a subcontractor, they use a number of criteria.
“First, are you capable? Second, do they have the resources to get the job done? And third, how much can we charge them with and take from them what is theirs?
“If you are owed €50,000, you may receive €30,000 with no explanation. The margins are so tight that if you don’t take it you’ll be at a loss.
“They use that to put you in a tight corner where you don’t have money to pay wages unless you agree to take some of what’s owed to you.”
https://www.independent.ie/business/small-business/growing-payment-crisis-threatens-to-cripple-building-industry-and-send-young-workers-abroad-42207681.html The growing payment crisis threatens to cripple the construction industry and send young workers abroad