NEC ECC: Under Option C are agency staff considered as Subcontractor or People Cost, when considering the application of the working area overhead?

NEC3 ECC - option C - payment application

We have been informed by the Client that Agency Staff fall under the definition of Subcontractor and not People Cost -therefore accordingly the working area overhead cannot be applied .

Client Justification:

  1. Agency staff fall under the definition of Subcontractor , specifically 2nd bullet point of 11.2(17) "Provide a service necessary to Provide the Works "
  2. The Contractor cannot seek payment under item14 of the SCC and in accordance with item 44 of the SCC because in accordance with item 14 , Agency Staff are not people paid by the Contractor , they are paid for by the Agency as a Subcontractor to the Contractor.

We believe this is incorrect ?

This question has been discussed previously, see the following link;

This is an issue which is often debated on NEC ECC projects but if you apply objective tests to the status, then this could assist in determining how the cost should be treated.

This ‘evidential’ approach should help in discussions to determine and agree the status with the Project Manager / Client.

Hi Andrew

I have a similar issue on a contract that I am currently working on and would be really interested to read the discussion but unfortunately the link doesnt appear to be working anymore.

Would you be able to copy the discussion over to this thread, or perhaps summarise?


The updated website seems to have changed the link, see the following instead;

Within the NEC3 ECC Guidance Notes for Clause 11.2(17) it states "This definition of a Subcontract does not include a supplier to the Contractor as stated in the clase. ‘Labour-only’ subcontractors are not Subcontractors under this definition.