Tradesmen are 'last to get paid'
Christchurch plumber Peter Diver is calling on subbies to boycott and even picket Mainzeal sites where jobs are taken over by other companies that do not pay the existing subcontractor claims.
The call comes as the receivers of New Zealand's third-largest construction company say a few companies are interested in buying Mainzeal or its contracts.
Diver is not revealing the total amount his company, Diver Plumbing and Drainage, is owed by Mainzeal, but said Mainzeal was holding "a quarter of a million [dollars]" in retentions that are paid after a job is complete.
They can be 10 per cent of the job up to the first $200,000 of a job and 5 per cent for the rest.
"I don't want to reveal what they owe us because I'm ashamed of it,'' Diver said.
"But you can imagine if we've got a quarter of a million dollars in retentions what the other end of the scale is."
He said subcontractors just about had to get on their knees and beg for their retention money, and if one subcontractor did a poor job, all retentions were withheld till a code of compliance was secured.
His company is now run by his son and has about 80 employees.
It had a lot of work with Mainzeal.
The Mainzeal collapse would cause "some huge cashflow problems that's going to chain-react right through to merchants", Diver said.
He would talk to his accountant today because "it is quite serious for our company".
Diver admitted a boycott sounded "a bit draconian".
However, he was sick of receiverships dumping on subcontractors, who had few protections in the law.
It was too easy for companies to go into receivership and leave subcontractors to deal with the fallout, he said.
"I've withstood so many redundancies it's not funny."
He said an easy solution was that owners of a building project must tell subcontractors when they had made a progress payment to the main contractor and then should ring a week later to check if subcontractors had been paid.
The main contractor should have to justify a further progress payment and confirm whether subcontractors had been paid.
"That's pretty simple, isn't it?" Diver said.
He put a notice in The Press yesterday calling on subcontractors on Mainzeal sites to a meeting "to instigate a boycott of any jobs taken over that does not pay out for outstanding claims".
"If necessary, the jobs will be picketed."
Diver had not received any response yesterday, but had been successful before.
He recalled NZI Finance placing one of its companies in receivership, leaving the PricewaterhouseCoopers building in Christchurch incomplete.
"At that stage, I then went on to the news and said they needn't think they're going to get that building finished unless they paid the subbies. It ended up all the subbies got paid,'' he said.
"The government was so quick to bail out the finance companies and the banks, and yet they bury their heads in the sand when it comes to tradesmen.
"And tradesmen seem to be the last ones to get paid on receiverships and I guarantee 99 per cent of the time they get nothing. It just seems too cruel."
- © Fairfax NZ News
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