Last edited 15 Feb 2021

Direct employment

Direct employment (sometimes called direct labour) is a situation in which an organisation employs operatives directly rather than relying on sub-contractors or self-employed operatives. For example, a contractor may employ bricklayers themselves, rather than subcontracting out bricklaying to another organisation. It is quite common for local authorities to have their own direct labour department to undertake building work and to pay their wages.

Civil Engineering Procedure, 7th edition, published by the Institution of Civil Engineers, defines the term ‘direct labour’ as: ‘A promoter’s (client’s) own employees employed on construction, sometimes under the internal equivalent of a contract, otherwise as a service department.’

Britain emerged from the Second World War with a construction industry dominated by very large contractors that had grown from war time work and were rebuilding a country ravaged by the Blitz. Wimpey were the biggest of these contractors, directly employing most of the labour necessary to execute its projects. Taylor Woodrow, even with half the annual turnover of Wimpey, employed 40,000 people.

Today however, as buildings have become more complex, it is less and less likely that any one contractor will have the required skills to carry out all of the works necessary to construct them, and it does not make good commercial sense to take on new employees for one project that would then have to be laid off for the next. Increasingly therefore, contractors use sub-contractors to carry out particular elements of the works.