BUSINESS AND TRAINING 15
Note: The Department of Justice in South Africa issued a directive on 03 May 2013 where the employer is an Organ of State, and that dispute resolution procedures in a SfCC | SfSC must be used in preference to litigation, allowing for a settlement by: I. Mediation – quick and inexpensive II. Adjudication( provided for in the draft CIDB ' s‘ prompt payment’ best practice guidelines, yet to be published) to resolve payment and other technical issues speedily
III. Arbitration – as a determination is ' final ' without going to litigation;
Note: Litigation is complex, time-consuming, expensive with no‘ win in court’ guarantee – a last resort.
The Construction Adjudication Association of Southern Africa( CAASA) is actively promoting the concept of‘ low value dispute adjudication’ championed in the UK by the Royal Institution of Chartered Surveyors( RICS).
In short:
• A relatively informal process: The adjudicator may make a‘ desktop determination’ based on the information provided by the parties, or may call a joint meeting with the parties before deciding
• Does not meet separately with each party as in a mediation
• The adjudicator may be assisted by‘ experts’ if requiredAdjudication is primarily intended to resolve‘ technical’ rather than‘ interpretation’ issues within a specified period( 25 working-days for business)
• The determination must be implemented by the parties on the award
• Either party may dispute a determination by notice within the specified period after providing a’ guarantee’ for the value of the monetary award
Consider that the building industry to a greater extent, and the civil engineering contracting firms to a lesser extent, rely on subcontractors to provide specialised construction skills – sometimes involving sophisticated product-specific construction equipment.
The industry generally has a poor track record of looking after subcontractors
• Not using SfSC to appoint‘ domestic’,‘ nominated’ or‘ selected’ subcontractors
• Issuing a letter of appointment with unilateral clauses purely in the principal contractor’ s favour
• Unfair clauses include the introduction of‘ pay when paid’ terms
• A guarantee for payment is rarely provided
• Performance guarantees are generally required – and often retention is deducted – but the balance of amounts still withheld at the final account stage, is not repaid
• Subcontractors, for fear of losing work, accept such unfair employment conditions and are not offered an original unaltered SfS to sign( and given a reference copy) and don’ t form a united front on behalf of their industry
Application in SfSC
• Insist that each subcontractor is appointed before subcontractworks commence, using an unaltered and recognised SfSC
• Understand your respective obligations and responsibilities described in the tender documents
• Create and maintain a comprehensive record of all communications PA
January 2026 Volume 31 I Number 11 www. plumbingafrica. co. za