NEC3 ECC: Construction Act Payment Notice & Payless Notice

Under the amended Act / Scheme if a contractor fails to give a Payment Notice can the Contractor rely upon being able to issue a Pay Less Notice (after the date at which the Payment Notice should have been issued & before the Final Date for Payment)using the subcontractors application as the starting point? Personally I currently believe not & the Payment Notice must be raised. The Pay Less Notice is only required if the Payer intends to pay less than the sum previously Noticed.?

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Based on the standard provisions, if the subcontractor was obliged by the subcontract to submit an application and did so within the prescribed timelines then the application becomes the Default Payment Notice ie the amount to be paid. If, for valid reasons, you intend to pay less than the application then you would need to issue a valid Pay Less Notice to the subcontractor.

The answer is yes, the contractor can issue a Pay Less Notice.

Under the Act you will have a payment notice which will be either that raised by the payer (here the contactor) or, if no such notice is given, the payment notice will be the application by the payee (here the subcontractor). The payless notice then calculates against the payment notice (whether the payment notice was generated by the payer or the payee). A payless notice is required if the payer intends to pay less than the amount stated in the payment notice.