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Accountants, auditors or solicitors External to your organisation providing professional services to the business. Contractual services provided which are not under your control or direction.
Apparatus, machinery or plant repairs Sub-contractor is hired to repair a pipeline in a chemical plant. The agreement includes the provision of previously fabricated pipework, materials to undertake the repair as well as the services of a fitter or technician to undertake the repair. The value of the materials required is substantial and is greater than the cost of the services provided by the fitter or technician. The labour cost is less than 50% so the agreement is not "mainly" for labour.
Asbestos removal sub-contractor Contracted to remove and dispose of asbestos and provides all labour, decontamination units (specialist equipment), protective clothing, and tools to dispose of the asbestos safely and legally. Asbestos removal is usually so specialised that the workers will ordinarily be directed and controlled by the contractor. Additionally, it is unlikely that labour would represent most of the cost of the service and/or that the cost attributable to the labour element of the contract could not be identified or estimated.
Cleaning services sub-contractor Supplies its own cleaning materials and solutions including a cleaning team which works under the supervision of the sub-contractor. The services are not provided under your control or direction.
Crane operation contractor Contracted to lift apparatus and machinery into place at a new build plant and supplies all labour, plant and specialist equipment. The worker is, however, under your direction and control. It is unlikely that the cost of the worker would be higher than the cost of hiring equipment of this nature, or it may be impossible to say one way or the other.
Demolition contractor (plant intensive) Contracted to demolish an exhaust stack of a chemical plant and supplies all required labour, plant and specialist equipment. The contractor is responsible for the health and safety of the operation and is also responsible for the disposal of hazardous waste. The responsibility for the execution and management of the contract is under the sub-contractor's control and direction. It is also likely that the labour element could not be identified or estimated, or, if it could be, that it would not account for more than 50% of the cost.
Design engineering contractor Contracted to provide a full design package, including feasibility studies, front end engineering design and detailed design, for a modification to apparatus and plant on an oil refinery. This is likely to be project work, where you set out the required objectives and the contractor uses its own management and resources to achieve those objectives.
Drainage inspection company Contracted to examine blocked drains on a site and compile a report with recommendations. They supply all labour and specialist camera equipment. This is project work where the contractor is required to manage its resources to produce the end product, in this case, a report.
Engineering sub-contractor Hired to install a steam turbine. He supplies the turbine, pumps, valves, heat exchangers, instrumentation and control items and pipework (the main materials) as well as ancillary fixing materials such as brackets and supports. This is likely to be project work with control and direction of workers being exercised by the contractor only. Further, it is unlikely that the labour cost would amount to more than 50% of the total expenditure in a project of this nature.
Mechanical engineering sub-contractor Hired to install the pumps and valves in a pipe run and supplies all the pumps, valves and pipework as well as the ancillary brackets, supports and nuts and bolts. Although each of the individual items supplied are not large, together they amount to more than 50% of the value of the contract. The contract is not wholly or mainly a contract for labour and so is not a labour-only agreement.
Plant-hire sub-contractor Contracted to provide various pieces of plant with operators on a hire basis. In many cases, these sorts of arrangements will not be labour-only, i.e. where the labour element is not more than 50% of the cost or where the labour element cannot readily be identified or estimated.
Radiation monitoring contractor Contracted to measure, record and report radiation levels at a particular site using specialist equipment. This is likely to be project work, where you only set out the required objective, and the contractor uses its own management and resources to achieve those objectives. Further, it may be impossible to identify the labour element within the total cost.
Specialist welding contractor Hired to undertake high integrity pipework joints in a turbine, and provides the specialist welding set for such conditions. The equipment and materials are provided by the contractor and together the cost of materials and plant hire account for 60% of the contract price. Labour costs amount to less than 50% of the total and so there is no labour-only agreement.

 

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