If a Subcontractor applies for more money than you consider he is entitled to, then is it necessary to issue a Payless Notice, or should you issue an Interim Certificate setting out your assessment, in accordance with the timescales set out in the Subcontract and only issue a Payless Notice if there are sums to be subsequently deducted as a result of the Subcontractor failing to perform and thereby causing the Contractor to incur additional cost (ie Set-Off)?
If we assume an unamended nec3 ECS then the Contractor assesses the amount due at each assessment date 50.1. It is not mandatory for the Subcontractor to have to submit an application for payment.
However in assessing the amount due the Contractor considers any application for payment clause 50.4 and gives the Contractor details of how the amount due has been assessed.
It would be usual for the Parties to discuss and talk through the assessment of the amount due.
A Payless Notice is only relevant if the Contractor plans to withhold sums from an amount certified see clause Y(UK)2 Y2.3