14.2.

08T WORK STUDY

Work Study, developed in American industry in the 1920s, has been defined in British
Standard 3138 as follows:
‘A generic term for those techniques, particularly method study and work
measurement which are used in the examination of human work in all its
contexts, and which lead systematically to the investigation of all the factors
which affect the efficiency and economy of the situation being reviewed, in order
to effect improvement’.

Planning cannot be done unless one knows how long it will take to do a particular job.
Time is very important to the manufacturer who must keep his promise, to estimate
quantities, and to other industrial and business arrangements. The need for this managerial
tool arose in the middle of 19th century, when the greater use of machinery and increasing
size of manufacturing units necessitated a more efficient means of controlling production
schedules.

Objectives of Work Study

The reasons why Work Study techniques are utilized in production include the following:
1. To reduce wasteful work, as there will be less fatigue and delays will be cut out.
2. To improve working conditions, methods and layout.
3. To increase production as a result of better use of resources
4. To achieve production cost savings and increase profit margins. This ensures security for
workers as the company will be more successful.
5. To improve productivity of workers and machines thus producing a more efficient
organisation
6. To ensure a steady flow of materials and an equal reward for the same skill and effort.
There will be a happier atmosphere and site relationship with foremen.
7. To establish a standard rate or time for a job by providing information and revealing
inefficiency.
8. Laying down objective training.

Beneficial Results of Work Study

If put to proper use, work study mainly benefits three parties as seen below:
(1) To the firm or organisation – It helps in:
a reduction of cost for higher profits
b more competitive tendering
c better control of management
d proper use of resources
e giving better services to the clients

(2) To the supervisor – Helps him to:

a plan efficiently
b have better control of the operatives
c have easy supervision of work
d do a more rewarding job
e have no disagreements on bonus
 (3) To the operatives – Helps them to have:
a better working conditions
b steady income – bonus targets
c less fatigue at work
d good site relationship with foremen
e good security as the firm will be successful

History of Work Study

Work Study has a long and respectable history stretching back to the 18 th century. Its
development has been a constant process over the centuries, with man endeavouring to find
and improve ways of doing his daily work. Many of these improvements did not cause great
benefit on their own but have, over time, been collected and used by men with wide vision to
produce results and labour conditions of a very high order.
Certain periods in time have also been responsible for creating, through the imagination
of men, many advancements, e.g. the Industrial Revolution, when technical progress
developed at unheard of speed. Wars have also created situations which have produced ideas
at a far quicker rate than would have been expected normally.

Frederick Winslow Taylor (1856-1915): To achieve greater efficiency, the solutions

he came up with were based directly on his own experience at work, initially as a lathe
operator and gang boss at the Midvale Steel Company in Philadelphia, where, in 11 years, he
rose to shop superintendent. Here he investigated problems of industrial organisation, one of
which being the practice of ‘soldiering’, or taking things easy so that work-rates for the job
would be forced up. This resulted in the problem of doing a fair day’s work for a fair day’s
pay, the problem being what constituted a fair day’s work. Taylor tackled this and produced,
after detailed analysis of jobs, ‘standard times’. Unfortunately, the values used for the new
system of payment were based on the performance of the best workers; this created
discontent amongst the average and slower workers, but his work laid the foundation stone of
work measurement.
In 1889 he moved to the Bethlehem Steel Company, where he consolidated his ideas
and conducted some of his most famous experiments in improving labour productivity.

Henry Lawrence Gantt (1861-1919) was a close colleague of Taylor at the Bethlehem
Steel Company, and developed a payment system that allowed even the slowest worker to
benefit while best workers qualified for a handsome bonus. Better use was made of the
foremen because they were sought after by individuals who needed further instructions or
help with faulty machines. As a result, supervision improved, breakdowns were minimized
and delays avoided by all concerned. Eventually individual workers learned to cope on their
own with routine problems.
Possibly Gantt’s production programmes, for which he is remembered, were his biggest
contribution. These are used in industry today and are known as Gantt Charts and show
planning in graphical form in terms of times and the extent to which tasks had been achieved.

Frank (1869-1924) and Lilian Gilbreth have a close relationship with the building
industry for he was a bricklayer in America in the mid-1880s.
As a result of analyzing, and subsequently redesigning, the working methods of typical
bricklayers he was able to reduce the number of movements in laying bricks from 18 per
brick to 5 per brick, with the result that these bricklayers, when re-trained, increased their
output from an average of 175 to 350 bricks per hour. The study of task movements, or
‘motion study’ as it was known, was a development of Taylor’s ideas and represented the
Gilbreths’ major contribution to basic management techniques. He also developed a scaffold
that could be continually adjusted so that the materials and wall being built were always at
the most efficient height to reduce unnecessary bending and stretching.

14.2.08T12 METHOD STUDY AND WORK MEASUREMENT

The natural division of work study falls between method study and work measurement.
The former is largely concerned with obtaining higher productivity by improving methods of
production. The latter is largely concerned with the establishment of yardsticks for human
effort and, as such, involves the measurement of the time that is required to carry out a
specific job under specified conditions. Either of these aspects of work study can be applied
to problem solving without the other, though often the best results are obtained by a carefully
planned combination of the two. The usual practice is for a method study of some kind to
precede a work measurement activity.

METHOD STUDY
This is the study and recording of an existing or proposed method of doing work, and
by careful and critical examination of the recording produces an easier and more effective
way of doing it.
Method study, when properly used, should result in:
1. higher productivity through an improved production facility (site) layout
2. a better environment for work
3. reduction of danger and fatigue
4. improved quality of work as a result of improved working procedures and use of
materials and manpower
5. better plant and equipment design and use.

Procedure for Method Study

The basic procedure is to:
i) Select the work, operation or process to be studied: The emphasis is usually that of
greater potential cost reduction – direct or indirect. The importance of improving conditions
under which operatives undertake their work should not be overlooked as an indicator for the
priority of selection. Other factors considered are those concerned with reduction of waste
materials, reducing idle time, relieving fatigue and monotony, smoothing the flow of
materials, eliminating unnecessary movement of all resources by improved layout, improving
the quality of productivity and reducing the working capital required to finance work in
progress.
ii) Record all relevant facts relating to current or proposed methods of work. Much of the
data collected is presented in a flow chart form.
iii) Analyze and examine critically the data obtained especially in relation to purpose,
sequence, place, person and means, even to the extent of questioning the very purpose of an
activity, to eliminate unnecessary activities and delays. ‘Is this activity necessary?’ ‘Is this
the most economical sequence of events in the process?’ ‘What are the alternative ways of
conducting this operation?’
iv) Develop best method of working, which may be simpler and easier to adopt, taking all
the circumstances into account, thus leading to higher productivity.
v) Install new method into operation making sure everyone knows and accepts their new
role(s). Re-training of personnel may be necessary and care may be required in gaining the
cooperation and assistance of those operatives affected by the changes.
vi) Maintain the new method, making sure system does not slip back into old method.
This involves the monitoring and modifying required to keep the method operational.

WORK MEASUREMENT
Work measurement is defined in BS 3138 (1969)as
The application of techniques designed to establish the time for a qualified
worker to carry out a specific job at a defined level of performance.
Work measurement techniques usually follow or overlap with a method study, and are
employed to
1. improve methods of working by the use of comparative times
2. improve planning and control of production and costs
3. reduce costs of resources by providing established yardsticks
4. develop a sound basis for incentive schemes.

Procedure for Work Measurement

When work measurement is linked into a method study, it is introduced at the ‘develop
best method’ stage.
i. describe the method or job to be measured, logically from beginning to end – if
someone is to measure an operation, he must be clear what the operation is.
ii. break job into its elements based on time taken. These elements typically last no
more than 30 seconds.
iii. measure performance of operator – record observed time for each element
generally using a stopwatch for the purpose.
iv. rate performance (basic time). This stage is most vulnerable to mistakes or errors
on the part of the investigator who is required to ‘rate’ the worker, i.e. to decide how
quickly (or slowly!) the worker is working compared with a standard.
v. determine standard time.

PROCESS CHARTS
Process charts provide diagrammatic means for recording the sequence of activities in
an existing method under study. In this way it is possible to have a visual aid to the overall
conception of the method and a sound basis on which to effect improvements. Process charts
of all types are constructed by using five different symbols linked together to represent the
sequence of individual events or activities in the total operation under study. The total
operation must be clearly defined before the study commences, as must be the points where it
commences and where it finishes. The ASME symbols were derived by a committee of the
American Society of Mechanical Engineers from those originally used by Gilbreth, and are
now shown.
Symbol Meaning
Ο Operation (i.e. doing something e.g. laying a brick, knocking in a nail)
→ Transport (i.e. moving something – plant, labour or material e.g. pushing a barrow,
hoist by crane)
 Storage (permanent) i.e. material kept and protected until wanted for use e.g.
cement in silo, brick stacks)
D Delay or temporary storage (i.e. when next operation cannot take place e.g. hoist
waiting to be loaded, operatives awaiting material, an excavator awaiting a lorry to
load)
□ Inspection (i.e. examining for quality and/or quantity e.g. measuring opening,
checking the weight of ballast at the concrete mixer, checking the vertical height of
courses in brickwork)

◘ Combined activity (i.e. two activities performed at the same time or by same
operator e.g. loading aggregate into weigh batcher)

Process charts can be very useful in assisting with the establishment of an economic
layout for workshops and yards where a repetitive process is to be undertaken. For example,
the layout of a concrete pre-casting yard, an area in which steel reinforcement will be stored,
cut and bent or the layout of a stores compound which is often provided for some of the more
valuable building materials. The charts can be drawn at varying levels of detail depending on
the scope of the process to be recorded.

14.2.08T13 TIME AND MOTION STUDY

Time study is a work measurement technique for recording the times and rates of
working for the elements of a specified job carried under specified condition and for
analyzing the data so as to obtain the time necessary for the carrying out of the job at a
defined level of performance.
This can be carried out quite often by the use of an ordinary wristwatch or stopwatch and
is possibly the most useful form of work measurement used in the building industry; it can be
used on both single operatives or gangs, as required. Stages in time study are:
1. Timing
2. Rating
3. Normalizing
4. Allowances

Timing is the actual taking of the time to complete an operation. The degree of accuracy in
timing will depend upon the task being recorded.

Rating: This is the allocating to a worker a relationship to a standard. The Standard Rating
of 100 in BS 3138 is equivalent to the ‘average rate at which qualified workers will naturally
work at a job, provided they know and adhere to the specified method and provided they are
motivated to apply themselves to their work’. An employee adjudged to be at a slower pace,
he may be rated at, say, 80. The skilled, efficient worker can achieve over 100.
Normalizing: This is the time that in the judgement of the work-study man an element
should be performed. Normalized time is referred to as basic time and is obtained by a simple
formula:
Observed Time  Observed Rating
Basic Time 
Standard Rating

Example: If an element took 1.4 min and an employee is given a rating of 90, then
1.4  90
Basic Time   1.26 min , which represents the time it would take if a worker
100
was working at a normal rate.

Standard Time: The time in which an average worker can work continuously under
standard conditions without adversely affecting his health.

Allowances: Can be divided into two groups:

1. Process allowances
2. Rest allowances

PROCESS ALLOWANCE
A process or unavoidable delay allowance is given so that the worker will not lose earnings
due to an enforced delay over which he has no control, e.g. the cleaning of tools or plant.

REST ALLOWANCE
Rest (or relaxation or fatigue) allowance is the time that an operator is allowed for
his personal needs and for fatigue. Varies with every performance and condition of work,
and are added so that a worker can keep physically and psychologically fit to perform an
operation for an allotted time.

Contingency allowance: This is a special allowance applied to various tasks that have to be
carried out by the worker who will not be doing a productive job e.g. a joiner sharpening saw
or chisels, consultation with supervisors, obtaining special materials/tools from stores. These
allowances should not exceed 5% and should only be applied to justifiable cases.
A final allowed time for a task can now be ascertained by the simple calculation shown.

Example: Basic Time: 1.26 min

Relaxation Allowance: 30%
Contingency Allowance: 2%

100  Total % allowance

Standard time  Basic time 
100
100  32
 1.26   1.66  say 1.7  standard minutes
100
Example
The work of a certain plumber fixing pipes on walls near the floor level was timed and rated
for three complete cycles as shown in table 1. Using the allowances given in table 2,
calculate the standard time. (20 marks)
Solution
Table 1
Description: Fix water pipe to wall near floor level
ELEMENT RATE WATCH READING
IN MINUTES
check time 0.00
1. measure pipe 95 1.25
2. cut pipe 100 2.30
3. thread pipe 105 4.60
4. fix pipe 90 7.10
5. join pipe 95 16.50
light cigarette - 24.10
1. 100 27.00
2. 105 28.25
3. 100 30.40
read drawings - 33.25
4. 95 35.00
5. 95 43.25
1. 105 50.30
2. 100 51.25
3. 100 53.50
4. 95 57.00
5. 100 66.15
75.05
check time 76.00

Table 2
Element personal body effort heat concen-
No. Description needs position ration
1. 3 0 4 0 3
2. 1 2 4 1 1
3. 1 2 4 1 1
4. 2 1 4 0 3
5. 1 1 4 0 3

Solution
ELEMENT RATING WATCH READING OBSERVED TIME BASIC TIME
check time 0.00 - -
1. measure pipe 95 1.25 1.05 1.00
2. cut pipe 100 2.30 2.30 2.30
3. thread pipe 105 4.60 2.50 2.60
4. fix pipe 90 7.10 9.40 8.50
 5. join pipe 95 16.50 7.60 7.20
light cigarette - 24.10 2.90
1. 100 27.00 1.25 1.25
2. 105 28.25 2.15 2.30
3. 100 30.40 2.85 2.85
read drawings - 33.25 1.75
4. 95 35.00 8.25 7.80
5. 95 43.25 7.05 6.70
1. 105 50.30 0.95 1.00
2. 100 51.25 2.25 2.25
3. 100 53.50 3.50 3.50
4. 95 57.00 9.15 8.70
5. 100 66.15 8.90 8.90
75.05 0.95
check time 76.00

Average Basic times

1 1.00 1.25 1.00 3.25 3 1.08

2 2.30 2.30 2.25 6.85 3 2.28
3 2.60 2.85 3.50 8.95 3 2.98
4 8.50 7.80 8.70 25.00 3 8.33
5 7.20 6.90 8.90 23.00 3 7.60

1 3 0 4 0 3 10 1.08 0.11 1.19

2 1 2 4 1 1 9 2.28 0.21 2.49
3 1 2 4 1 1 9 2.98 0.27 3.25
4 2 1 4 0 3 10 8.33 0.83 9.16
5 1 1 4 0 3 9 7.60 0.70 8.28
24.37
Personal allowance 6% 1.46
Contingency allowance % 2.07
27.90
Say 28 standard minutes to fit 1 pipe

Q. Explain the two methods of timing used in time measurement using a stopwatch.

A. Flyback timing: before the start of the next element the hand is returned to zero. Every
time hand returned to zero at start of each element.
Cumulative timing: watch started and hand runs without being returned to zero. In the
beginning of each element the watch reading is noted. Time for each
element is obtained by subtraction.
Selective timing: Used to time an isolated element. Watch is started at the beginning of the
element till the end.
Differential timing: an element is observed and timed with an adjacent longer one…

INCENTIVE SCHEMES

‘Introduction to Work Study’ by the International Labour Office states that an incentive
scheme is:
Any system of remuneration in which the amount earned is dependent on the
results obtained, thereby offering the employee in incentive to achieve better
results.

There are two types of incentive: financial and non-financial. The objects of incentives in
the building industry:
1. to increase efficiency by reducing cost of building
2. to increase individual and collective production through more effective use of
labour
3. to provide opportunity for increasing earnings
If these objects are achieved, it follows that in any proper incentive scheme, payments
should be strictly related to production.

Financial Incentives
Profit Sharing: Often used in smaller concerns and as a method of holding labour for a
given period, say 6 to 12 months, with the incentive being a reasonable cash settlement at the
end of this period, related to the success and profits of the company.
Disadvantage: ‘Old soldier’ types will benefit from the efforts of the hard worker and a hard-
working productive supervisor will have to carry supervisors on other sites who are not so
industrious.

Hourly plus rate: Used by many companies to attract labour, especially if in short supply. It
may also be used when the quality of the work in hand is more important than the quantity
produced.
Disadvantage: The employer has no guarantee that the extra rates are producing the required
extra increase in production.

Bonus Schemes: The most common type of financial incentive used in the industry, for it
does relate earnings to effort if correctly applied.
There are various schemes used to obtain the required results and these should be carefully
studied in relation to the type of project on hand. Basic principles should be applied on all
these bonus schemes to ensure that it runs successfully:
a Scheme should be simple to understand so that operatives can assess increased
earning, remembering to keep tasks small.
b Output and quality of work based on the average operative working under average
conditions – work measurement can be applied here.
c The percentage saving achieved on a target to be paid out to the operatives must be
agreed before commencement of scheme. This can rate from an operative receiving
100% of saving to only 50%.
d Targets should be set down in writing. No changes without approval of both parties.
 e Targets should not be altered unless upwards; it may possibly be better, therefore, to
start low and increase bonus earnings if necessary.
f Payments should be made when due or at regular intervals, e.g. once a week.
g Losses of one week should not be deducted from gains in other weeks.

Once a scheme is in operation, great care must be exercised to ensure that the incentive
scheme does not produce any running down of standards in the following:
- Safety of the operatives as laid down in the Construction Regulations
- The material waste of normal working is not increased
- The required standards of workmanship are still operational – payments should
not be made for poor work
- Plant used in process is used efficiently and for the purpose it was intended
- The training of apprentices should still continue to a satisfactory standard

To help control standards, it is generally agreed that site supervisory staff whose
duties are purely supervisory should not be included in schemes. A simple method of
recording and calculating a bonus scheme suitable for house development is shown as
follows:

SCHEDULE OF BONUS RECORDINGS

Labour Week ending
Gang A and B 21 May 2007

No. of units Target hours Total target Man hours Hours Bonus hours
completed each hours worked saved 75% saving
First floor joist 12 5 60 44 16 12
Boarding Ground floor 8 6 48 36 12 9
Roof Carcass 4 30 120 100 20 15
Total - - 228 180 28 36

It is recommended that the target should be such that the average worker should be able to
earn 20% bonus under normal conditions.

Non-financial Incentives
It is not always necessary to give extra payments to motivate people. This can be seen
in all industries where in certain areas the wages are not as high as local competitors, but
labour relations and working conditions are good.
Working Conditions: the general conditions in which a worker has to perform his allotted
tasks: on the building site it can generally be seen by the standard of the site layout and
offices, materials and the general appearance of the job.
Promotion: always an incentive to the ambitious man is a chance of getting to the top, and to
achieve this promotion a man will put extra thought and effort into his daily work.
Security: Possibly one of the best known and sought-after non-financial incentives,
especially when operatives have family commitments, also when unemployment is prevalent.
The firm that offers continuity of work will always attract a steady labour force.
Safety: unfortunately this is not one of the industry’s best selling points and many workers
will work more confidently and willingly if they feel safe getting to and from their place of
work and whilst they are carrying out their productive operations.
High class Work: will often act as an incentive to men for the honour of working on a
building of, say, national importance.
Other non-financial incentives include:
a Social activities
b Pension schemes
c Extra holidays
d Provision of meals
e Training

Example
(a) State five principles of a good financial incentive scheme. (5 marks)
(b) A gang of masons on a contract was given a target of 90 man-hours to build walls. The
gang consisted of a charge hand paid at 1½ shares, two masons at 1¼ shares each and two
labourers at 1 share each.
The following record shows the time booked to each man including stoppages:

Charge hand 2 days at 10 hrs each day

Mason No.1 2 days at 10 hrs each day
Mason No.2 2 days at 8 hrs each day
Labourer No.1 2 days at 10 hrs each day
Labourer No.2 1 day at 10 hrs (first day only)

Work was held up for four hours on the second day due to bad weather.
If the basic rate of pay was sh20 per hour for an 8-hour day and overtime was paid at 1¼
times, calculate:
(i) Bonus per share
(ii) Bonus earned by each man
(iii) Total earnings for each man in the gang. (15 marks)

Solution
(b) Note: 4 hrs must be deducted from the hours booked against each worker for the
stoppage on the second day due to bad weather.

Chargehand Actual hrs 10 + 6 = 16

Mason No. 1 ” 10 + 6 = 16
Mason No. 2 ” 8+4 = 12
Labourer No.1 ” 10 + 6 = 16
Labourer No.1 ” 10 = 10
Total = 70 hrs

Hours saved = 90 – 70 = 20 hrs

Basic rate of payment is sh20 per hr
Bonus earned by the gang = 20 × 20 = sh400
Total share = 16×1½ +16×1¼ + 12×1¼ + 16 ×1 + 10× 1
= 24 + 20 + 15 + 16 + 10
= 85
 (i) Bonus per share = 400/85 = 4/705 = 4/71
(ii) Chargehand 4/71 × 24 = 113/00
Mason No.1 4/71 × 20 = 94/20
” No.2 4/71 × 15 = 70/65?
Labourer No.1 4/71 × 16 = 75/25
” No.2 4/71 × 10 = 47/10
400/00
(iii)Basic earning
1
Chargehand 2  8  20  2  2  20 1  300  100  420 / 00
4
1
Mason No.1 2  8  20  2  2  20 1  320  100  420 / 00
4
Mason No.2 2  8  20   320 / 00
1
Labourer No1 2  8  20  2  2  20 1  320  100  420 / 00
4
1
Labourer No2 1 8  20  1 2  20 1  160  50  210 / 00
4
Total  1790 / 00

Total earnings
Chargehand 113/00 + 420/00 = 533/00
Mason No.1 94/10 + 420/00 = 514/10
” No.2 70/55 + 320/00 = 490/55
Labourer No.1 75/25 + 420/00 = 395/25
” No.2 47/10 + 210/00 = 257/10
2190/00

14.2.08T MATERIAL HANDLING

Material handling is the preparation, placing and positioning of materials to facilitate

their movement, packaging or storage – from the raw storage through production to ultimate
consumer with the least expenditure of time and effort, so as to produce maximum
productive efficiency at the lowest material handling cost.

Need for efficient material handling

The objectives of material handling include:
1. Reduction in wastage of machine time. Proper material handling system would ensure
regular supply and distribution of raw material and finished product. This will not
create the problem of idling of machine and eliminate problem of wastage of machine
time.
2. Reduction in manufacturing cycle time. Keeping the loading and unloading time of
machine at minimum enables the completion of manufacturing cycle at reasonably
short time.
 3. Avoid disruption in production schedule. In mass production system, all parts or
materials must come in the assembly line in correct quantity and at precisely the right
time to avoid risk of shut down.
4. Safety and safe working conditions. Correctly designed material handling system
enables utilization of proper material handling device and training workers in safe
material handling practice. It is tangible saving in reduced insurance rates, payment of
compensation and boost to workers’ morale.
5. Enhances productivity and avoids high cost
6. Brings customer satisfaction. Regular market supplies, by avoiding disruption in
production schedule, shortening manufacturing/construction cycle time, timely
deliveries lead to customer satisfaction a key to business success.

Basic rules for material handling

1. Materials should be moved over the shortest distance possible. Short movements
require less time and cost less money than long movements.
2. The aim of material handling system should be to move in forward or in clockwise
direction, do not retrace your path.
3. Terminal time (time taken for picking up the finished product) should be kept as short
as possible.
4. Loads should be carried both ways on material handling trips whenever possible.
5. Partial loads and manual handling should be avoided.
6. Utilise gravity as moving force as far as possible.
7. Utilise containers and unit loads. The unit load means the product to be moved should
be grouped into units of a large and constant size
8. Materials should be already marked to help save time in sorting and avoiding mixing
up.

Revision Questions
1 a) With respect to work study:
i) Define Relaxation Allowances
ii) Outline FIVE constituents of Relaxation Allowances (8½ mks)
b) State any FIVE benefits of Work Study to a Construction Company. (5 mks)
c) If an element took 20 minutes and was given a rating of 80, calculate the basic time. (3 mks)

c) Sketch the SIX symbols used in a flow process chart and explain their meaning. (6 mks)

2 a) Outline the procedure for method study (7 mks)

b) In a work-study exercise, the observed time for a certain task is recorded as 5 minutes. Determine the
standard time for the task using the data given:
Data
Observed rating = 85 (0/100 scale)
Relaxation allowance = 35%
Contingency allowance = 3% (5 mks)

3 a) State FIVE objectives of method study (5 mks)

b) Prepare an outline process chart for transporting concrete mix from a mixer 10 m away from the
building into formwork at the fourth floor (by barrow and hoist).
(5mks)
c) Briefly explain the following terms as used in work study:
i) Observed time
 ii) Basic time
iii) Standard time
iv) Allowed time (6 mks)
d) Calculate the standard time given the following:
- Basic time 4.55 minutes
- Rest allowance 20%
- Contingency allowance 5% (4 mks)

4 a) Explain the TWO methods of timing used in time measurement using a stopwatch.
(6 mks)
b) In an incentive scheme the target set is Ksh 200 per 1000 bricks laid. A gang of 4 bricklayers and 2
labourers laid 4 000 bricks in a week. Calculate:
i) Total pay earned by the whole gang
ii) The earning of a bricklayer and a labourer if the ratio of earning is 4:3 respectively
(5 mks)
c) Target set for a gang of masons is 100 man-hours to put up a wall. The gang consists of two masons paid
1¼ shares each and two labourers paid 1 share each. Time booked for each man is as follows:
Mason No. 1 2 days at 8 hours
Mason No. 2 2 days at 6 hours
Labourer No. 1 2 days at 8 hours
Labourer No. 2 1 day at 6 hours
If the agreed bonus payment is 10/= per hour saved calculate bonus earned by each man.
(10½ mks)

5 a) Outline the procedure followed in method study. (7 mks)

b) Table 1 shows the time study data for a certain operation. Using the allowances given in Table 2,
determine the standard time for the operation. (8 mks)

Table 1
Elements of the operation Rating Observation time (mins)
1 90 2.00
2 100 1.50
3 85 2.60
4 95 3.20
5 110 1.20
6 105 2.60

Table 2
Element Relaxation Allowance (%) Contingency Allowance (%)
1 15 3
2 17 0
3 23 4
4 12 2
5 14 0
6 15 2

6 a) State any SIX objectives of work-study. (3mks)

b) Outline the FOUR stages in time study. (8mks)
c) The work of a carpenter to fix a door has been timed and rated as shown in
Table 3.
Table 4 shows the allowances
Calculate the standard time. (9mks)
 Table 3 – FIXING OF A DOOR
No. ELEMENT OR WR
1 Collects tools and start - 8.00
2 Measure opening 90 8.02
3 Prepare timber (lining) 80 8.12
4 Form holes in wall 80 8.32
5 Fix lining 90 8.44
6 Prepare to fix hinges 80 8.50
7 Hang door 85 9.10
8 Fix architraves 90 9.14
9 Fix locks 95 9.34
Table 4
No. TOTAL ALLOWANCE
1 25
2 5
3 10

7 The data in Tables 5 and 6 was collected during the fabrication of piggy banks (money boxes) using pre-
prepared pieces of timber.
Given that the cost of timber used to make one box is sh30, cost of labour is sh180 per day and cost of
other required materials is sh10. Establish the price of ONE box. Make any necessary assumptions.
(20mks)
Table 5
WORK STUDY SHEET
ELEMENT RATING OBSERVED TIME (MIN)
1. Collects timber pieces 80 2.00
2. Walks to work bench 90 0.35
3. Assembles box 120 2.10
Talks to colleague 2.00
4. Sand papers box 100 3.40
5. Applies varnish and stores 80 2.00
Admires work 1.00
1. Collects timber pieces 110 1.35
2. Walks to work bench 80 0.44
Smokes 3.60
3. Assembles box 75 3.33
4. Sand papers box 80 4.35
5. Applies varnish and stores 120 1.26

Table 6: Allowances %
PHYSICAL WEATHER
ELEMENT MONOTONY
EFFORT CONDITIONS
1 2 5 2
2 2 5 2
3 5 5 2
4 5 5 2
5 - 5 5

8 a) Briefly explain the following terms as used in work study:

i) observed time
 ii)basic time
iii) standard time
iv) allowed time (4 mks)

b) The work of an operative pre-casting the concrete saddles for the pipeline is subject of work
measurement study and the preliminary information has been entered on the work-study sheet shown in
Table 8. Using the allowances given in Table 7, calculate the standard time.
(16 mks)
Table 7 ALLOWANCES
Body Muscular Heat and Mental
Element Personal Monotony Contingency
Position Position Humidity Strain
1 6 2 1 4 1 0 8
2 6 2 2 4 2 0 8
3 6 2 3 4 2 0 8
4 6 2 2 4 1 0 8
5 6 2 1 4 1 0 8

Table 8 WORK STUDY SHEET

ELEMENT R WR
Check time 00.00
1. Clean mould 80 03.05
2. Insert reinforcement 75 14.25
3. Places concrete 70 23.50
4. Vibrates 75 27.00
5. Trowels level 75 31.15
Lights cigarette - 33.20
1. Clean mould 90 37.50
2. Insert reinforcement 80 48.75
Speaks to man mixing - 56.50
3. Places concrete 75 61.00
4. Vibrates 75 64.00
5. Trowels level 75 69.00
1. Clean mould 80 71.50
Looks around at others - 81.75
2. Insert reinforcement 90 93.00
3. Places concrete 90 97.15
4. Vibrates 95 102.00
5. Trowels level 80 105.15
Check time - 107.00
9 a) List SIX aims of work-study. (3 mks)
b) Briefly explain the use of process charts in recording data in method study. (7 mks)
c) In a work-study exercise, the time taken to complete a certain task was observed to be 4.3 minutes.
The work-study man rated the operatives effort as 95 (on a 0/100 scale). Determine the standard time
for the task using the allowances given:
Relaxation allowance = 27%
Contingency allowance = 4% (4 mks)

10. The following is a FLOW PROCESS CHART that shows the information on reinforcement, which is being
used for the construction of reinforced concrete beams. Copy the chart and show the flow as indicated by the
various processes and complete the titles of the FIVE symbols and the summary. (11½mks)
 FLOW PROCESS CHART
STUDY NO….:……………………….CHARTERED BY…………….……………….DATE………………
SHEET NO……………
OPERATION DESCRIPTION………………………………………………………………………………….
MAN/MATERIALS/PLANT
PRESENT/PROPOSED.

DISTANCE
ITEM No.

TIME
M
DESCRIPTION REMARKS

1 BARS SELECTED FROM STORE O □   D LABOURER

2 TAKEN TO BENDING AREA 15 O □   D LABOURER
3 LENGTH OF BAR CHECKED O □   D STEEL FIXER
4 RING CUT TO LENGTH O □   D STEEL FIXER
5 RINGS CHECKED O □   D STEEL FIXER
6 BARS AND RINGS MOVED TO ASSEMBLY POINT 25 O □   D LABOURER
7 AWAITING ASSEMBLY O □   D
8 MADE UP INTO BEAM ASSEMBLY O □   D STEEL FIXER
9 CARRIED TO LOCATION 20 O □   D LABOURER
10 AWAITING FIXING O □   D
11 FIXING OF BARS IN POSITION O □   D STEEL FIXER
12 WIRED TO MAIN STEEL BARS O □   D STEEL FIXER
13 CHECK FOR PLUMBNESS & LEVEL O □   D STEEL FIXER
14 FINAL CHECK BY FOREMAN BEFORE CONCRETING O □   D FOREMAN
SUMMARY: SYMBOLS
O……………………………………………
……………………………………………
D……………………………………………
□……………………………………………
……………………………………………

TOTALS
 14.2.04T CONTRACT PLANNING
THE CONCEPT OF PLANNING
Planning is a well thought out guess which aims to lay down directions in which a move is
made forward, taking into account the resources available. In order to make logical satisfactory
plans, all the relevant information has to be collected, analysed critically and used to make
calculated plans to a high degree of accuracy and foresight of the problems and possible
delays. In the building industry, there are a number of types and methods of planning.

1. Policy Planning
Concerned with the operation of an organization as a commercial undertaking, it is the task of
the top management and considers the past and the present and survival to plan for the future as
far as trends, markets and finance are concerned. Some policies are necessary for the success of
any organization. A policy of any organization will generally include:
a) The objective of the business: what will the company do?
b) Financial structure e.g. total working capital and the expected profit returns relative
to the number of projects that the company could undertake
c) Time scale: regular reference is made to policy to ensure that the forecast is going
ahead as planned
d) Overall activities of the business: whether to be general building contractors, a
plumbing sub-contractor or a specialist in carpentry and joinery
e) Purchases: a policy in purchase of plant, equipment, formwork, scaffold etc with
special consideration on whether to buy or hire
f) Organization: the general set up of a business to include the allocation of the heads
of departments, the personnel policy (to include items on training, promotions,
pensions schemes etc) and the like with special emphasis on the need to keep
overheads as low as possible yet remain efficient.

2. Technical Planning
Associated with the technical processes, and concerned with the various methods of arranging
and employing money, materials, personnel and plant (all of which are called resources) to
carry out the day-to-day operations of the company.
The use of planning methods may be divided, very broadly, amongst the following two stages
of the overall construction period:
a) Pre-tender period – the period between the receipt of the tender enquiry at the
contractor‟s office (or advertisement) and his submission of the tender
b) Contract period – the period between the acceptance of a tender and the
completion of the site works. (Sometimes this later period is divided into the pre-
contract period, which is between the tender acceptance and the commencement of
work on the site, and the contract period of work on the site)

14.2.04T11 PLANNING STAGES IN THE CONTRUCTION PROCESS

PRE-TENDER PLANNING
All that which a builder will skillfully do, after the receipt of tender notice and before
submitting the bid, in order to win a competitive approval to perform a construction activity.
Activities involved include:
1. The client advertises the work in the media or may invite certain contractors to tender for a
project. The architect and his team of professionals are involved.
2. The contractor decides on whether he wishes to tender for the project or not. If he decides
to tender, he responds by
- paying a given fee
- collecting and carefully studying the tender documents and drawings to find out the
quantities of each item of work, materials, time limit and other conditions of work.
- visit the proposed site
- submit back the costed tender documents

At pre-tender stage, all the facts that are possible to gather are collected and critically
examined for the intended purpose of preparing estimates – estimate build-up. Various
departments are normally involved in order to reduce the risks of inaccurate decisions. An
example of a systematic procedure of a tender is as follows:
I The pre-tender report (site investigation)
II Method statement
III Plant schedule
IV Site organisation structure and site on-costs
V Sub-contractors and suppliers
VI Outline programme
VII Final estimate (for Board‟s decision)

I. PRE-TENDER REPORT
A comprehensive document detailing all the required information regarding the area and
general site conditions. Though in most cases it would give general basic information, each
company would develop its own to suit the nature of the company and the types of contracts
undertaken. A typical example is as follows:

A.N. OTHER GENERAL CONTRACTORS

PLANNING DEPARTMENT
SITE INVESTIGATION REPORT
PROJECT
PREPARED BY DATE

1. SITE
i. General description of project
ii. Local Authority
iii. Access
iv. Temporary roads
v. Distance of site from main road
vi. Working space for siting offices
vii. Trespass precautions
viii. Police regulations
ix. Concealed services
x. Nearest Bench Mark
xi. Photographs

2. SUB-STRATA
i. Types of soil
 ii. Stability
iii. Anticipated water table
iv. Source of water
v. Pumping
vi. Disposal of water

3. SERVICES AUTHORITY NEAREST SUPPLY

i. Water
ii. Electricity
iii. Telephone
iv. Gas, petrol/diesel, oils & lubricants

4. LABOUR
Availability -Skilled
- Semi-skilled
- Unskilled

5. TIPPING FACILITIES AND RESTRICTIONS

6. LOCAL SUB-CONTRACTORS

7. OTHER SPECIAL DETAILS

Local weather

II. METHOD STATEMENT

This is a worked out best way and means of carrying out a process of construction, carefully
weighing the various alternative methods that could be adopted; what plants to be used and
what qualities are involved. In developing a method statement, consideration has to be given to
whether the cheapest or fastest method is required for a particular construction activity for it
may be expedient to spend a little extra at one stage to finish early so that other operations can
be started. A typical method statement is shown below:

METHOD STATEMENT
CONTRACT PREPARED BY
CONTRACT NO.
SHEET NO. DATE

PLANT
ACTIVITY METHOD REMARKS
OUTPUT
EXCAVATION
Site Stripping Bulldozer - CAT D4 50m3 / hr Soil to be moved approx. 30m

3
Foundation CAT 950E 2.5m bucket Haul to land fill 1km away in a disused
3 3
and Drain shovel loading 5m tipper 30m / hr quarry
trenches

CONCRETE
Foundations 7NT mixer with loading Required for first 5 weeks
hopper concrete discharged 3
2.4m / hr
direct to wheelbarrows
III. PLANT SCHEDULE
Prepared on the completion of the method statement and gives a detailed summary of all the
plants of and equipments required for the construction to completion of the works, repair of
machines, testing facilities etc, shown below:

PLANT SCHEDULE
CONTRACT PREPARED BY
CONTRACT NO.
SHEET NO. DATE

AVAILABILITY
No. DESCRIPTION WEEKS MAINTENANCE REMARKS
OWN HIRE
1 Tractor CAT Type 1 - √
D4 Bulldozer -

1 CAT 950 E 2.5 m 2 √ - Daily and weekly routine

bucket shovel

1 7NT Bedford 10 √ -
-Do-
Concrete mixer

IV. SITE ORGANISATION AND ON-COST

These are items covered as site overheads and cannot be priced in the course of normal
productive work but still have to be charged to the project. Included are the site staff required
for administration, temporary roads, site huts, hoardings, offices, stores, power, water,
telephone etc. Site supervisory or technical staff costs are calculated in relation to their
administrative time. An example of site on-costs is shown:

SITE ON-COSTS
CONTRACT
CONTRACT NO. 10/07 CONTRACT PERIOD 16 WEEKS

SITE STAFF PERSONNEL FOREMAN

General Foreman 16 weeks
Site foreman (Brickwork) 8 weeks
Site foreman (C&J) 6 weeks
Quantity Surveyor 6 weeks
Site Clerk 14 weeks
General Office Cleaner 16 weeks

SITE HUTS, OFFICES AND ACCOMMODATION

1 No. Foreman's Office 16 weeks Telephone installed
1 No. COW's Office 16 weeks -Do-
1 No. General Office 16 weeks -Do-
1 No. Operatives Hut 16 weeks Tables and chairs
1 No. Plant Stores 8 weeks
 1 No. General Stores 16 weeks Include lock up box
3 No. Latrines 16 weeks
Compound 16 weeks 20m  20m Open mesh

2 No. NOTICE BOARDS

PLANNING DPT
PREPARED BY
DATE

V. SUB-CONTRACTORS AND SUPPLIERS

A list of the required sub-contractors and suppliers is drawn up and enquiry forms are sent out
to ascertain their availability on dates required and their ability to complete work in whatever
time has been roughly allocated on the pre-tender programme and to obtain quotations. More
detailed questionnaires are sent to selected sub-contractors if a tender is successful for the
purpose of obtaining more detailed and definite information for producing a master plan.
Enquiries to supplies should be more specific about prices, delivery dates and whether the
quantity and quality can be maintained. A sample of sub-contractor‟s questionnaire is shown
below:

SUB-CONTACTORS QUESTIONNAIRE SHEET

JOB FIRM TRADE DATE

QUESTION ANSWER
1. How long will it take you to complete the whole works?
2. What is your proposed sequence of work?
3. What labour strength do you intend to employ on site?
4. How many visits would you have to make to complete the works?
5. Do you require additional information before commencement on site?
6. What is the minimum notice which may be given for commencement?
7. State your storage requirements
8. What attendance of facilities do you require?
9. Do you agree to comply with conditions of the main contract?
10. Do you agree to enter into a standard form of sub-contract?

VI. OUTLINE PROGRAMME (PRE-TENDER PLAN)

Produced from the estimated information. It is not a detailed plan but an outline of the main
operations and sub-contractor‟s work. It enables all parties concerned in the pre-tender
preparation to coordinate their activities and to assess the times required for plant, use of site
huts and supervisor‟s duration on site. It is based on a bar or Gantt chart, developed by Henry
Gantt around 1919.
 PRE-TENDER PROGRAMME
CONTRACT No. FOR: PLANNING DPT
DATE: SHEET No.
PREPARED BY
DURATION IN WEEKS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
1 Setting out
2 Exc. of Found & Drains
3 Drainage
4 Siteworks to d.p.c.
5 Framework, B'work struct
6 Roof
7 Installations, 1st Fix plaster
nd
8 2 Fix, Decoration
9 Services
10 External works, clear

Revision Questions
1 a) List any TEN items of information that are included in a site visit report.
b) Draw a proforma to show a method statement schedule for construction work.

2 a) Define the following as used in pre-tender planning:

i. Pre-tender report
ii. Staff requirement schedule
iii. Plant schedule
iv. Final estimate
b) i. Explain the relationship between pre-tender planning and successful completion
of contract work.
ii. State TWO characteristics of good planning.

PRE-CONTRACT PLANNING

A successful tenderer upon signing the contract documents, becomes a contractor for the
project and will be allowed a short period of time, “the pre-contract period” to make
preparations and organize his resources before actual commencement of work.
During the pre-contract period, the parties concerned: client, builder and architect on one
hand and planning dept and other departments within the company on the other, usually get
very busy in meetings to streamline all matters relating to the contract. The site supervisor is
involved in most of these meetings and in those other departmental meetings within the
contractor‟s organization in order to get to grips with problems and matters relating to the
contract, as he is the one to deal with all parties concerned. From all the above and the past
planning, a sound planning for the contract period can be done. The major items considered at
this stage include:
1. Site layout and general organization
2. Labour and plant requirements schedules finalized
3. Contract (Master) programme preparation
 The use of a checklist at this stage is important as possibilities of items being forgotten are
minimized.

A.N. OTHER CONSTRUCTION COMPANY LTD

PLANNING DEPARTMENT
CONTRACT CHECK LIST
DATE
JOB No.
Responsibility Action Date Termination
By Clearance

I. INSURANCES Company Secretary

1.Guarantee bond
2.All risks
3.Fire/third party
Value of contract
Period of contract
4.Special
Demolition
Difficult excavation etc
II. WATER FOR WORKS Supervisor
Application
Value of contract
Block plan
Offices supply
Information to plumber
III. TELEPHONE Supervisor
Application
IV. CROSS OVERS
1.Application
2.Hoardings
3.Gantries
V. SEWER CONNECTION Supervisor
1.Application or quote from L.A.
2.Notice required
3.Sketch of drains run
VI. NOTICES Supervisor
1.Commencement notice to LA.
2.Factory Act Form Safety Officer
3.Registration of office Form Company Secretary
VII. SERVICES Supervisor
1.Electrical
a Supply to offices
b Building Service shops
2.Gas and fuels
Services as necessary
VIII. SIGN BOARD Supervisor
Sign required
Architect details
Sub contractors‟ names
IX. SAMPLES
Name of suppliers Buyer
Type required
Dates for approval
X. FIRST AID Safety Officer
As per construction Regul.
XI. SITE RECORD BOX Planner
As check list

Contract Programme
The more complex the job, the more difficult it is to complete within the specified time, the
more the risks involved. In order to minimize this, a matter plan is prepared which shows all
concerned what should happen, when it should happen and by whom it is carried out. This is
carried out using any of the many forms of planning techniques, which ultimately shows the
project activities and their related information. The outline programme worked out in the pre-
tender stage will be used as a foundation in the preparing of the more detailed master plan.
Two forms of the master programme:
i) Bar / Gantt chart
ii) Arrow network (critical path diagram)
Whichever method is used, certain characteristics are essential to both.

Characteristics of a Good Plan

1) It should be based on clearly defined objectives
2) Simple to understand
3) Flexible, so that alterations and alternatives can be easily made
4) Provide standards so that control can be maintained
5) Provide a suitable balance of work so that labour, once off the job, need not return
6) All resources should be used to the full and not left standing waiting for other activities
to be completed.
7) It must be suitable for use as a control tool against which progress can be measured
8) It must be sufficiently accurate to enable its use for forecasting requirements of
materials, manpower, machinery and money
9) It must provide for difficulties likely to be encountered in future in respect of quantity,
scope, processes etc and for making remedial measures.

14.2.04T12 PROGRAMME CALCULATION SHEETS (Preparation of Programme)

The more information available to the planner at this point, the more reliable and accurate will
be his forecast and resulting programme. The use of the bills of quantities to prepare a list of
programme elements generally proves very satisfactory. To assess the duration of an element
the itemized details produced by the quantity surveyor in the bill be collected under the general
heading. For example, under the heading of “Brickwork” would also be collected damp-proof
course, reveals to openings, placing of airbricks and lintels, etc. It will be realized that these
items will have an effect on the output per hour in laying bricks and it is the planner‟s job to
assess this output. This will occur for all project elements and takes the form of a calculation
sheet, an example of which is shown below. (A calculation sheet is a proforma into which a
master programme‟s elements are entered, i.e. all interrelated items in the bill of quantities are
collected under a general heading in the calculation sheet)

CALCULATION SHEET
CONTRACT……………………. PREPARED BY. …………
CONTRACT No…………………
SHEET No……………………….. DATE ……………
PROD. LABOUR/PLANT DURATION
ACTIVITY QUANTITY OUTPUT
HOURS REQUIREMENTS DAYS REMARKS

Preparation of Contract Budgets

Just as site production is programmed so that progress can be checked, i.e., estimated time
against actual time, so must the cost of actual work be checked against estimated (tender) price.
Having the master plan now prepared, labour requirements estimated, materials and plant
assessed, a weekly or monthly estimated cost can be calculated. To this must be added such
items as overheads, on-costs, insurance etc.

Short Term Planning

During the course of a project problems, delays, alterations, shortage of labour, bad
weather, etc, may seriously affect the running and completion of the job. This will be shown in
the loss of progress on the master plan. To keep up with this plan each operation is examined in
fine detail by taking a „Forward View‟ of work to be carried out over a shorter period of time,
generally 4 – 6 weeks under the direction of site agent or general foreman.
The assessment of labour, plant and materials, plus the careful co-ordination of sub-
contractors, is a vital part of short term planning if work is to be carried out economically so
that the careful balancing and phasing in sequence, the various operations and labour are
essential. The reason for preparing programmes every 4 weeks for a 6-week period is to give
an overlap at the end of each period because of difficulties that would be met if programmes
were end on; it also provides a buffer period. In this system of planning, the workers are
provided with weekly plans, the object being to ensure that progress is being maintained, that
targets set the previous week have been accomplished and new targets set.
Daily planning forms part of weekly planning. The overall aim of short term planning is
updating of progress of the master plan.

Revision Questions
1. a) To achieve maximum efficiency of operations on a construction site, site layout
planning must aim at maintaining desired output of the planned activities throughout
the working day.
State FIVE site planning measures that may be taken to achieve this. (5 marks)
b) Outline any FOUR factors to be considered in the site layout planning. (8 marks)
2. a) State SIX activities involved in pre-contract planning. (6 marks)
c) List FOUR activities which go on in each of the planning stages in the construction
process.

3. a) State FIVE characteristics of a good master plan. (5 marks)

b) Explain what will happen in the event of the following:
i) the contractor completes the work on time
ii) the contractor completes the work before the end of the contract period.
iii) the contractor completes the work after the completion date. (6 marks)

14.2.04T13 CONSTRUCTION PROGRAMMING METHODS

NETWORK ANALYSIS
Network analysis is the term used to embrace a number of techniques for the planning and
control of complex projects. The two most frequently used forms of network planning are CPM
- Critical Path Method – and PERT – Programme Evaluation and Review Technique. CPM was
developed in 1957 by James E. Kelley, then of Remington Rand and Morgan R. Walker of Du
Pont Engineering Services to help schedule maintenance in chemical plants. PERT was
developed in 1958 by the US Navy‟s Special Projects Office in cooperation with Booz, Allen
and Hamilton, a Management Consulting firm. It was developed as a network flow chart with
time as the critical factor for planning and controlling the development of the Polaris missile, a
massive project with about 3000 contractors and agencies and its application is credited with
saving two years from the original of five years required to complete the project.
The major difference between these two forms is that CPM assumes that the time required to
complete an activity can be predicted fairly accurately, and thus the costs involved can be
quantified once the critical path has been identified, whereas PERT assumes that time has to be
estimated in drawing up the critical path. CPM tends to be used in large or complex projects in
construction and manufacturing. PERT tends to be applied to one-off projects of a complex
nature or to projects where time or cost are of overriding importance.
The basis of both CPM and PERT systems is the network diagram.

Network (or

Arrow) Diagram
When the sequence or logical order of activities has been worked out, the duration times for
each separate activity can be calculated and a critical path determined (a path that governs the
project duration).

Advantages of Critical Path Method (over Gantt Chart Method)

1. To the programmer, the job sequence or logic can be completely divorced from the time
element in the preparation of the plan.
2. The critical activities are clearly shown and can be altered easily if other activities
become critical because of delays.
3. The non-critical activities can, with due examination, result in a more economical use
of resources.
 4. Non-critical activities can be delayed or performed more slowly so that resources may
be used for more critical events, provided that they are not delayed so long that they in
turn become critical.
5. The interrelationship between all the activities is clearly shown by the flow of the
network.

Principles of Network Construction

The sequence or logic diagram is set out by a series of connecting arrows, the planner
questioning each activity as follows:
i) What other activities must be completed before this one can start?
ii) What other activity can be done at the same time?
iii) What activity cannot start until this one is completed?

BASIC DEFINITIONS
Activity – is a time-consuming element of the programme. Also represents the consumption of
certain resources such as labour, money, or the use of plant or materials. Represented by arrow
of any length; each operation having its arrow. The length of the arrow has no bearing on the
duration of the activity. Direction of the arrow simply indicates the direction of workflow. Its
tail marks the starting point, and the head the completion point.
Events or Nodes – are circles at the start and end of an activity. They have no duration. Inside
is an identity number of the activity. This enables operations to be identified easily by their
start and finish numbers instead of lengthy titles. These are termed i-j numbers.
A B C

Sequential Activities – Activities that can proceed in correct order, one after the other.

Parallel Activities – Activities that can be carried out independently of others at the same
time. It is possible that an event in a diagram will not be reached until a number of activities
preceding it have been completed.

ACTIVITY i-j Number

A 1–2
B 2–3
C 2–4
B and C are parallel activities but they both depend on activity A D 3–5
finishing first. E 4–6
F 5–6
Dummy Activities
Consider the network below.
If the activities are identified by their i-j notation it will be seen that three of the activities bear
the same i-j configuration. To correct this situation, logical restraints called dummies are added
to the diagram to maintain the unique numbering system. The dummy represents no
consumption of time or resource (itself it is not an activity). It is shown in a diagram by a
broken line.

Float – The difference between the time available to do activity and the time required to
complete the activity. It is thus time by which the activities can be delayed without delaying
the completion of the project.

PREPARING AN ARROW DIAGRAM

1. Logic
The procedure or order in which a project is to be tackled. It is arrived at by discussion with all
the concerned parties taking into account no time durations.

2. Time
After the logic diagram, time elements are added to suit the project. This requires accurate
determination of the activity times.

3. Analysis Sheet
Produce an analysis of event times to see along which path of activities the critical line must
follow.
Starting Times
a) Earliest Starting Times (EST)
This is the earliest time an event can occur and is the first calculation to be worked out; this is
done by taking into account all preceding activities on the logic diagram and adding them
together. For example: from the figure given, event 3-4 cannot start until events 0-1, 1-2, 1-3
and 2-3, have been completed, remembering that the longest duration times or longest path on
the logic diagram gives the EST for preceding activities. This is because the shortest time
activities can be done in the longest time but the longest path activities cannot be done in the
shortest time!
e.g. Event 0-1 = 0 days EST
Event 1-2 = 5 days EST
Event 1-3 = 5 days EST

Event 2-3 = 5+2 = 7days EST

Event 3-4 = 5+2+4 = 11days EST

ACTIVITY ANALYSIS SHEET

Events Earliest Latest Critical Total
i-j Description Dur Path Float
Start Finish Start Finish
0-1 Site Preparation 5 0 5 0 5 * 0
1-2 Exc. Drain Trenches 2 5 7 5 7 * 0
1-3 Exc. Founds 3 5 8 8 11 3
2-3 Drains & M. Holes 4 7 11 7 11 * 0
3-4 Founds 4 11 15 11 15 * 0
4-5 Brickwork 12 15 27 15 27 * 0
5-6 Roof Structure 3 27 30 27 30 * 0
5-7 Partitions 2 27 29 28 30 1
5-8 Frames 3 27 30 29 32 2
6-7 Dummy - - - - - -
6-11 Roof Finish 2 30 32 40 42 10
7-10 First Fix 4 30 34 30 34 * 0
8-9 Glazing 2 30 32 32 34 2
9-10 Dummy - - - - - -
9-13 External Painting 3 32 35 42 45 10
10-12 Plaster 6 34 40 34 40 * 0
11-13 Ex. Plumb 3 32 35 42 45 10
12-13 Int. Finish 5 40 45 40 45 * 0
13-14 Clean 4 45 49 45 49 * 0

Activity 3-4, therefore, cannot start until day 11, for this is the shortest time that all the
preceding activities can be completed; i.e., path 0-1, 1-2, 2-3, NOT path 0-1, 1-3, as this only
takes 8 days and 11 days‟ work is to be done before activity 3-4 can be started.

b) Latest Starting Times (LST)

This is the latest time an activity can start in order to be completed on time. It is found by a
process identical to that used for EST, only now working backwards (backward pass) through
the diagram from the completion date.
An activity is critical if the earliest and latest starting times are the same, as in events 0-1, 1-
2, 2-3, etc. If a difference occurs in time between the two times, as in event 1-3, this is called
the “float”; in this instance, event 1-3 gives LST 8 – EST 5 = 3 days float time. The float will
enable:
1. Resources to be used to the full
2. Rearrangement of labour to complete more critical activities if production falls below the
set rate but so long as it is not overdone i.e. to an extent that other activities become
critical.

The completed arrow diagram indicates how relevant information can be shown. As site
supervisory staff may not be familiar with CPM, a bar chart may be produced from the arrow
diagram to show activities in a similar form as the Gantt or bar chart. Advantage of the bar
chart is it clearly indicates critical activities, slack or float time and non-critical activities.

Example
Build a concrete block wall with an opening in it for a door. Cast the concrete lintel on the
opening. Make and fix the door lining, plaster wall, fix architraves and skirting, hung the door,
paint the woodwork and paint the wall.

LOGIC
The first step is to consider the precedence or the order in which the work is to be tackled.
This is arrived at by discussion with all concerned until a suitable order of activities is agreed
upon. Remember that at this stage duration times are not taken into account.
The logic for the project may be as follows:
A – Build up the wall to the lintel
B – Cast lintel
C – Build up wall to full height
D – Make door lining (This must be ready in time)
E – Fix door lining
F – Plaster walls
G – Fix architraves These are independent but must
H – Fix skirting be fixed before painting
J – Hung door
K – Paint woodwork
L – Paint walls
TIME
The next step is to add the time elements to suit the project e.g. hours, days or weeks. This
requires accurate determination of activity times as in the case of any programme.
Times determined for the project are:

i-j Time (days)

A Build up wall to lintel 1-2 6
B Cast lintel 2-3 26
C Build up wall to full height 3-4 3
D Make door lining 1-4 7
E Fix lining 4-5 3
F Plaster wall 5-6 12
G Fix architraves 6-9 2
H Fix skirting 6-8 2
J Hung door 6-7 3
K Paint woodwork 9-10 4
L Paint wall 6-10 4

ANALYSIS
The next step is to produce an analysis of event times as shown below to find out which line
of activity is critical so that the critical path may be drawn. The earliest start time is the first
calculation to be worked out and this is done by taking into account „all preceding activities‟
on the logic diagram and adding them up. Remember the „longest duration‟ times or longest
path on the logic diagram is the earliest starting for preceding activities.

The idea of a dummy activity is represented by a broken arrow which shows a relationship
between events but there is no time element. The latest time an event can start is known as the
latest start and finding the earliest start, only this time working backwards through the
diagram towards the starting date. An activity is critical if the earliest and the latest start times
are the same.
If a difference does occur between these two times, this time is called float. The float time
may be used to enable resources to be used to the full and a re-arrangement of labour to
complete more critical activities if production falls below a set rate.
 After completion of the analysis this information is transferred to the network with earliest
start put in square and latest start in a triangle Δ. The critical path is also shown in the
diagram.

ANALYSIS SHEET
Events Earliest Latest Critical Total
i-j Description Dur Path Float
Start Finish Start Finish
1-2 Build up wall to lintel 6 0 6 0 6 * 0
1-4 Make door lining 7 0 7 28 35 29
2-3 Cast lintel 26 6 32 6 32 * 0
3-4 Build up wall to full height 3 32 35 32 35 * 0
4-5 Fix lining 3 35 38 35 38 * 0
5-6 Plaster wall 12 38 50 38 50 * 0
6-7 Hung door 3 50 53 50 53 1
6-8 Fix skirting 2 50 52 51 53 * 0
6-9 Fix architraves 2 50 52 51 53 1
6-10 Paint wall 4 50 54 53 57 3
7-9 Dummy 0 52 52 53 53 1
8-9 Dummy 0 53 53 53 53 * 0
9-10 Paint woodwork 4 53 57 53 57 * 0

Q. (a) State FIVE demerits of the critical path method of programming in comparison with
the Gantt programming technique.
(b) The table below shows the event, activity and duration for construction project.
i) By means of a network diagram, calculate the earliest and latest event times and
show the critical path.
ii) Prepare a table of the analysis to show the following:
- Earliest starting and finishing time
- Latest starting and finishing time
- Total float.

EVENT ACTIVITY DURATION (DAYS)

1-2 A 3
2-3 B 2
2-4 C 4
2-6 D 5
3-5 E 6
4-7 F 7
5-9 G 6
 5-10 H 2
6-5 Dummy -
6-7 I 4
7-8 J 4
8-11 K 3
9-11 L 1
10-11 M 5

Q. Identify the critical path in the network shown, and determine the project completion time.

TIME-COST OPTIMIZATION WITH NETWORK ANALYSIS

The policy of any organisation is to reduce the target completion time by employing
additional resources, so that the time saved may be utilized somewhere else to get additional
production. This is referred to as crashing the project. In such situations, the cost of expediting
the activities has to be taken into account.
In order to crash a project successfully, we need to examine the network, note its activities
(both critical and non-critical) and compare normal costs with crash costs for each activity.
Normal cost is the direct cost associated with finishing the project in the normal time. The
crash time estimate is the minimum time that would be required if no costs were spared in
trying to minimize the completion time. It is that time beyond which the duration of the project
cannot be reduced by any amount of increase in resources. The crash cost is the direct cost
associated with doing the job on a crash basis.
The total project cost is the sum of two distinct costs:
1. Direct cost which includes the cost to the contractor of the labour, plant and materials
and, if need arises, of employing a subcontractor, to carry out the activity.
2. Indirect costs generally consist of those costs which are incurred in direct proportion to
the length of time that the contract takes – for example, the wages of the site staff or the
head office expenses. Others can be those incurred by a penalty or bonus clause in the
terms of the contract.

The minimum cost associated with construction work rarely coincides with the minimum
duration that is necessary to complete the work. The motives regarding minimization of cost
with respect to time, therefore, clash when considering direct and indirect costs since, in the
former case, minimizing duration will almost certainly increase cost, and in the latter,
increasing duration increases total indirect costs. Some balance between the two must be
struck.
 The activity time-cost relationship is shown.

Procedure for time-cost optimization

1. Establish direct cost-time relationship for various activities of the project by analyzing
the past cost records.
2. Determine the cost slope for various activities and arrange them in ascending order of
cost slope.
3. Determine the total cost (direct cost + indirect cost) from the network of normal
durations. If the network is not given prepare it.
4. Using the network of normal durations crash the activities in the critical path in
ascending order of cost slope
5. Successively, keep on crashing critical activities as in 4 above and determine respective
project durations and total costs. In case more than one path becomes critical, crashing
will have to be done along all such critical paths, simultaneously – till a stage is reached
beyond which no further crashing is possible.
6. Tabulate various project durations and the corresponding total costs. The optimum cost
and time may be determined by inspection.
7. Draw the total cost-time curve. From the curve the minimum total cost is the optimum
cost and the time duration corresponding to this cost is the optimum duration.

Example
For the project network shown and data given below, determine the optimum time duration and
optimum cost. Also plot a total cost-time curve and indicate on it the optimum time and
optimum cost.

Data:
Normal Crash time Normal cost Crash cost Cost slope
Activity
time (days) (days) (Ksh) (Ksh) Ksh per day
1-2 4 3 400 600
2-3 5 2 300 750
2-4 7 5 360 540
3-4 4 2 500 1000
Indirect cost = Ksh 250 per day
Activity Cost slope Ksh/day
1-2 600  400
 200
Solution 43
2-3 750  300
 150
Crash cost  Normal cost 52
Cost slope 
Normal time  Crash time 2-4 540  360
 90
75
3-4 1000  500
Consider the network of normal durations Fig (a).  250
42

Critical path is 1  2  3  4.
Time duration  4  5  4  13 days
Total cost  Direct cost  Indirect cost
  400  300  360  500    250  13
 1560  3250  Ksh 4810

Consider the “all crash” network. Critical path is 1–2–4. Fig (b)
Time duration = 8 days
For computing total cost, the activity 3–4 may be completed in 3 days instead of 2 days (as it
has a float of 1 day) without altering the time duration of 8 days.
Total cost   400  200 1   300  150  3   360  90  2    500  250 1   250  8 
 2640  2000  Ksh 4640.

In the network of normal durations critical activity 2–3 has the least cost slope. Crash 2–3 by 2
days as shown in Fig (c).
Time Duration  11 days
Total Cost  400   300  150  2   360  500   250 11
 1860  2750  Ksh 4610
Both paths have become critical and hence further crashing will have to be done on both paths.
Crash activity 1–2, common to both paths by one day as shown in Fig (d).
Time duration  10 days
Total cost   400  200 1   300  150  2   360  500   250 10 
 2060  2500  Ksh 4560.

In the network shown in Fig (d), crash activity2-3 by one more day and activity 2–4 also by
one day as shown in Fig (e) as both paths are critical.
Project duration (days) Total Cost (Ksh)
13 4810
11 4610
10 4560
9 4550
8 4640

Time duration  9 days

Total cost   400  200 1   300  150  3    360  90 1  500   250  9 
 2300  2250  Ksh 4550

Prepare table of Total Cost and corresponding Time as shown above. Plot the Total Cost –
Time curve as shown below.

Example
For the network shown, determine the optimum cost and optimum time.
 Normal Crash
Cost slope
Activity Time Cost Time Cost
Ksh per week
(weeks) (Ksh) (weeks) (Ksh)
1-2 3 12 000 2 16 000 4 000
1-3 6 18 000 3 24 000 2 000
2-4 2 20 000 1 23 000 3 000
3-4 4 16 000 2 21 000 2 500
4-5 5 30 000 4 35 000 5 000

Indirect cost = Ksh 3 000 per week

Solution
Cost slopes are already given in the data.
Consider the network of normal durations as shown in Fig (a) below

Time duration  15 weeks

Total cost  12000  18000  20000  16000  30000  3000  15
 96000  45000  Ksh 141000

Consider “all crash” network as shown in Fig (b)

Time duration = 9 weeks
For calculating Total Cost, activity 2–4 may be completed in 2 weeks and activity 1–2 may be
completed in 3 weeks without affecting project completion time.
Total cost  12000  24000  20000  21000  35000    3000  9 
 11200  27000  Ksh 139000
In the network of normal durations (Fig (a)), crash critical activity 1–3 by 3 weeks (it has least
cost slope) as shown in Fig. (c). The critical path remains the same.

Time duration  12 weeks

Total cost  12000  18000   2000  3  20000  16000  30000    3000 12 
 102000  36000  Ksh 138000
In the network (Fig (c)), crash critical activity 3-4 by 2 weeks as shown in Fig (d). The critical
path 1–3–4–5 continues to be critical although path 1-2-4-5 also becomes critical after this
crashing.
Time duration  10 weeks
Total cost  12000  24000  20000  21000  30000    3000 10 
 107000  30000  Ksh 137000 .

In the network in Fig (d) since both paths, 1–2–4–5 and 1–3–4–5 are critical, compression of
completion time can only be achieved by simultaneous crashing on both these paths. Along
path 1–3–4–5, activities 1–3 and 3–4 have already been crashed to the full extent. Hence, the
only possibility is to crash activity 4–5, which is common to both by 1 week, as shown in Fig
(e).
Duration Time Total cost
(weeks) (Ksh)
15 141000
12 138000
10 137000
9 139000
Time duration  9 weeks
Total cost  12000  24000  20000  21000  35000    3000  9 
 112000  27000  Ksh 139000
Plot the total Cost-Time curve as shown below

From the graph, optimum duration is 10 weeks and optimum cost is Ksh 137000.

RESOURCE ALLOCATION
So far network analysis has been considered using one resource only, that is, it has been a
time-only network. The resource of money has entered into the consideration of the network
only in so far as the duration has to be optimized or costs have been collected. At the time of
preparing the network usually it is assumed that all resources needed such as men, materials,
plant/machinery, finance and space, are available in plenty and no consideration of resource
constraint is taken into account, but at the time of execution of the project some resources fall
short of the requirement. In such situations the duration of the project may increase, which will
also escalate the cost of the project.
Large fluctuations in the demand for resources may cause problems in project execution.
Project activities have, therefore, to be scheduled in such a manner that the demand for various
resources is fairly uniform over the entire project duration, with a smooth increase in the
numbers required at the beginning of the contract and a smooth tailing-off at the end. The
smoothing or levelling that will be achieved will almost never be perfect, but a solution is
sought as near the optimum as possible.
In a project, many activities may have to be undertaken simultaneously. The requirement of
resources for doing this may exceed their availability and levelling is carried out by delaying
some of the non-critical activities which have float. If two or three or more activities compete
for the available resources, the resource will be allocated to that activity with the least total
float, the total float being used as a measure of the criticality of any activity. In this process, the
float is utilized by delaying the activities to cut down the demand for the particular resource.
For a given project, a scaled version of the network is drawn, adopting earliest start times for
all activities. Using this network, cumulative requirement of various resources is determined
for each unit time (day/week/month etc) of the project duration, histograms of which are
prepared, which clearly depict fluctuations in the demand over time. Large variations in the
demand for various resources call for resource levelling.

Example
The time of completion of different activities of a project and the number of labourers
required are shown in the table below. Re-allocate the resources.

Activity Expected time No. of labourers

required
1-2 3 4
1-3 2 5
1-4 5 7
2-7 6 6
3-5 4 2
4-5 3 4
4-6 1 2
5-7 4 5
6-7 2 3

Solution
The network is drawn with the help of data of columns 1 and 2. The earliest start time, the
latest allowable time and total float are determined and then the EST and LST are indicated on
the network as shown below.
 Earliest Latest Critical Total
Activity Dur
Start Finish Start Finish Path Float
1-2 3 0 3 3 6 3
1-3 2 0 2 2 4 2
1-4 5 0 5 0 5 * 0
2-7 6 3 9 6 12 3
3-5 4 2 6 4 8 2
4-5 3 5 8 5 8 * 0
4-6 1 5 6 9 10 4
5-7 4 8 12 8 12 * 0
6-7 2 6 8 10 12 4

From table and network diagram shown above, the critical path is 1–4–5–7 and the project
duration is 12 days.
The EST and the labour requirement for each activity is as shown on the bar chart below. The
requirement of labour ranges from 5 to 16. Thus there is much fluctuation in the demand of the
labour. The activities 1–4, 4–5 and 5–7 being critical, their completion duration cannot be
changed. However activities, which have float can be changed in such a way that the total
demand of labour may remain practically the same. The activities 1–2 and 2–7 both have a
float of 3 days and their start times may be delayed by 3 days.

DAY
ACTIVITY 1 2 3 4 5 6 7 8 9 10 11 12
1-2
1-3
1-4
2-7
3-5
4-5
4-6
5-7
6-7
TOTAL LABOUR
BEFORE SMOOTHING 16 16 13 15 15 14 13 13 11 5 5 5
TOTAL LABOUR
AFTER SMOOTHING 12 12 11 13 13 8 13 13 11 11 11 11
Labourers required

1 2 3 4 5 6 7 8 9 10 11 12
Time (days)
Example
The network for a job is shown below and data regarding requirement of manpower for the
various activities is given in the following table. Carry out resource allocation/levelling for the
job.
 Requirement per day of Activity
Activity i-j Duration (days) Bar-benders (B) Labourers (L)
1-2 2 2 2
1-3 4 - 3
2-3 8 6 5
2-4 5 3 4
3-5 7 2 1
4-5 2 1 2
5-6 2 3 3

Solution
The critical path for the network is determined and shown in thick lines. The critical path is
1–2–3–5–6.

Earliest Latest Critical Total

Activity Dur.
Start Finish Start Finish Path Float
1-2 2 0 2 0 2 * 0
1-3 4 0 4 6 10
2-3 8 2 10 2 10 * 0
2-4 5 2 7 10 15
3-5 7 10 17 10 17 * 0
4-5 2 7 9 15 17
5-6 2 17 19 17 19 * 0

A time-scaled version of the network is prepared adopting earliest start times for all activities
and the critical path is shown along a horizontal line. A table is prepared showing the
cumulative number of bar-benders and labourers required on each day, during the project
period.
 B 2 2 9 9 9 9 9 7 7 7 2 2 2 2 2 2 2 3 3
L 5 5 12 12 9 9 9 7 7 5 1 1 1 1 1 1 1 3 3
Day 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
B – Bar-benders, L – Labourers
Histograms are prepared for the cumulative requirements of bar-benders and labourers using
the table prepared above.

It may be seen from the histograms in thick lines that the requirement of bar-benders and
labourers fluctuate substantially over the project duration of 19 days. There is, therefore, a need
to carry out levelling of these resources. The levelling process is carried out for the
requirement of bar-benders because this category of skilled labour is difficult to arrange on a
day-to-day basis. Levelling of the requirement of bar-benders is achieved by adjusting the start
times of non-critical activities as follows:

Non-critical Adjusted
Activity Start time Finish time
2-4 11th day 15th day
4-5 16th day 17th day

This adjustment also affects the requirement of labourers. The scaled version of the network
and the cumulative requirement of bar-benders and labourers, after levelling are shown below:
 B 2 2 6 6 6 6 6 6 6 6 5 5 5 5 5 3 3 3 3
L 5 5 8 8 5 5 5 5 5 5 5 5 5 5 5 3 3 3 3
Day 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Histograms of the cumulative requirement of bar-benders and labourers after levelling are
shown in dotted line. It may be noted that fluctuations in the requirements of bar-benders and
labourers are considerably reduced after the levelling process.

Revision Questions
1 a) Describe each of the following:
i) Short term planning
ii) The significance of a calculation sheet in planning. (6 marks)

b) Table 1 shows the activities involved in a small building project.

i) Draw an arrow diagram of the activities
ii) Prepare an analysis sheet and show the total floats of all activities
iii) Identify the critical activities. (14 marks)
Table 1
Activity Duration (weeks) Preceding Activity
A 3 -
B 4 A
C 6 A
D 0 B
E 6 B
F 4 C, D
G 3 E
H 4 E
I 0 F, G
J 6 F, G
K 4 H, I
L 5 H, I
M 4 J, K
N 3 L
O 2 L
P 5 M, N
Q 2 O, P
2. a) State FIVE needs of planning in the construction industry. (5marks)
b) Using the data given in Table 2, prepare,
(i) the network diagram and analysis of float
(ii) the bar chart showing all the activities at the earliest times
(iii) the distribution and resources allocation under the bar chart. (15 marks)

Table 2 ACTIVITY OPERATION DURATION MEN REQUIRED

1-2 A 5 10
1-3 B 4 20
2-4 C 2 4
3-4 D 9 2
3-5 E 5 5
4-5 F 3 4

3 a) List four activities which go on in each of the planning stages in the construction
process. (7½ marks)
b) Table 3 shows the activities of a project as extracted from a calculation sheet:
i) prepare a critical path diagram and indicate the critical path
ii) prepare an analysis sheet and calculate the total float for each activity.
iii) Construction plant used in event (1–4) breaks down and is replaced after two
days; what effect will this have on the contract programme?

Table 3

DURATION
ACTIVITY
(DAYS)
1-2 3
1-3 2
1-4 4
2-4 2
2-5 1
3-4 1
4-5 0
4-6 1
5-6 2

3. a) Table 4 shows the activities and durations of a project.

(i) Draw the network diagram
(ii) Determine the duration of the project. (9 marks)
Table 4
Activity Duration (weeks)
1-2 4
1-3 3
1-4 6
2-5 0
 2-7 7
3-5 5
4-5 4
4-6 2
5-7 5
6-7 3

b) Below is an output statement for works in a foundation. Use the information to:
i) Calculate the construction time for the three activities
ii) Show the three activities in form of a Bar Chart
- 900 m2 of foundation brickwork
3 Bricklayers and 1 labourer
Output of 10 m2 per day per man

- 1 excavator output of 10m3 per hour

1000m3 excavation

- Laying concrete in foundation trench

100m3, 2 concretors, output 2m3 per hour for each operative
Take one day to be 7 hours (11mks)

5 a) Table 5 shows the operation, duration and labour for construction of a reinforced
concrete column.
i) Prepare a bar chart from the given information
ii) Under the prepared chart show the labour distribution (10mks)
Table 5
No. Operation Duration Labour
1 Excavate base 6 days
2 Reinforcement 6 days
3 Concrete bases 6 days
4 Column reinforcement 12 days
5 Formwork - fixing 12 days
6 Concrete columns 6 days
7 Formwork - strike 6 days

Labour Schedule
Excavation gang 1
Steel fixers 2
Concrete gang 3
Carpenters gang 1 4
Carpenters gang 2 4

b) Table 6 shows activities, normal time, crash time, crash cost and normal cost for a
project.
i) Using the normal time calculate how long the project will take
ii) Show the critical path
iii) Calculate how much it will cost to reduce the project time to 12 weeks (10mks)
 Table 6
Activity Normal time Crash time Crash cost Normal cost
1-2 5 3 2 400 2 000
2-3 8 2 4 500 2 500
2-4 6 4 4 500 3 000
3-5 5 3 3 500 2 250
4-5 4 4 2 000 2 000
TOTAL 16 900 11 750

6. The following data is necessary for planning of the completion of a project.

NORMAL CRASH
ACTIVITY
Cost Time Cost Time
A 1-2 20 000 10 24 000 6
B 2-3 25 000 16 45 000 4
C 2-4 30 000 12 45 000 8
D 3-5 10 000 10 35 000 6
E 4-5 20 000 8 20 000 8

a) i) Using the normal time, prepare the network

ii) Calculate the total float
iii) Show the critical path (10marks)

b) i) If it is required that the contract duration be reduced to 24 (twenty-four) weeks,

then determine how much it will cost to effect this.
ii) Show the crash network. (10 marks)

7 a) Table 7 shows the activities of a project, their duration and logical sequence of
execution.
i) Develop the mode of connectivity (in the form [i, j]).
ii) Prepare a Critical Path Network diagram, and indicate the critical path. (14mks)
Immediately
Activity Duration
Preceding
description (Days)
Activity
A 5 -
B 5 A
C 3 A
D 4 B
E 8 B, C
F 6 B, C
G 7 F
H 6 D
I 9 D
J 5 E, H
K 4 G
L 5 J, K
 14.2.07T MATERIALS

14.2.07.T11 MATERIALS COMPUTATION

The documents used in materials computation are:

1. Bill of quantities
2. Specifications
3. Contract drawings (Working drawings)

Factors to considered when computing materials needed include:

i) Work content
ii) Type of material as quantities vary due to storage, wastage, shrinkage etc.
Wastage is classified into two major categories:
(a) Unavoidable wastes
(b) Avoidable wastes
Unavoidable wastes include:
 Cutting waste e.g. timber, timber products etc
 Breakage during transportation and handling
 Handling e.g. when concreting
 Residual waste e.g. for adhesives, paints etc

Avoidable wastes may be due to:

 Poor instructions
 Incomplete information
 Poor storage leading to deterioration of condition and/or theft
 Poor workmanship and negligence

Shrinkage is governed by type and nature of material e.g. bulking of sand.

Bill of Quantities
A bill of quantities is a written document which contains a complete description of
labour, materials and plant required, contained, outlined and depicted in the architect’s or
engineer’s drawings and specifications where-in under each separate work title. A bill is
prepared containing a complete and tabulated list of detailed items, together with their
respective quantities and full description.

Purposes of a Bill of Quantities

1. It enables all contractors tendering for a job to price.
2. It provides a basis for the valuation of variations which often occur during
progress of the work.
3. It gives an itemized list of the component parts of the building with the full
description of each part and in this it may assist the successful contractor in
ordering materials and assessing the labour force in the contract.
4. It, after being priced, helps in cost planning and analysis.
5. It is used in preparation of interim certificates and also the final account.
Specifications
These are writings by the architect specifying the quality of the materials to be used
and the quality of the work to be carried out. In a bill of quantities there is always a
detailed specification covering the quantity of all the materials and workmanship for all
the trades and sections. The specification helps the contractor during tendering as in the
specifications more description is given to an item e.g. Hard-core filling:
Hard core filling shall be composed of good hard stone, ballast or quarry
waste to the approval of the architect, broken to parts not greater than
150mm ring or to be 75% of the finished thickness of the layers being
compacted whichever is lesser and layers compacted to an average of
225mm thickness.

Computation from Bill of Quantities

Example 1
Using the information given in the table below calculate the quantities of cement,
sand and ballast required.

Description Quantity Units Rate Ksh Cents

Construct a foundation
footing: 50m long
0.6m wide
0.2m deep
mix ratio 1:2:4 8.4 m3

Given sand bulking = 15%

Shrinkage = 35%
Wastage = 5%
Density of cement = 1442 kg/m3
Density of sand = 1600kg/m3
Density of ballast = 1300kg/m3

Solution
Volume of concrete required = 50 x 0.6 x 0.2
= 6m3 Add 40% shrinkage + wastage
= 8.4m3
In the 1:2:4 concrete mix there are 1+2+4 or 7 parts of ingredients of which cement is 1
part, 2 parts sand and 4 parts ballast.

Amount of cement required

1 8.4 1442
   34.61  35 bags
7 50
2 8.4 1600 115
Amount of sand required     4.42 tonnes
7 1000 100
 4 8.4 1300
Amount of ballast required    6.24 tonnes
7 1000

Computation from Drawings

The elevations, plans and sections of architectural drawings show all the dimensions
and wall details (plus openings etc.). We then can calculate the required quantities of
materials (stones, blocks, sand, cement etc.) from them. The drawings do also show roof
and services details and hence can also be similarly computed.

Example 2
Using the given drawing and the data below, calculate the materials to be ordered for
the substructure work.

Data
1. Block size 390 x 190 x 190 4. Shrinkage 35%
2. Thickness of mortar joint 10mm 5. Waste 5%
3. Density: Sand 1600 kg/m3 6. Bulking of sand 15%
Cement 1442 kg/m3
Ballast 1300 kg/m3

Solution
FOUNDATION CONCRETE
Volume  l  w  h
Mean girth
L W
Dry volume  19.24  0.6  0.2  2.31 m3
6000 1,500
Allow for shrinkage and waste = 40% +2,500
2.31140
  3.234 m3 4,000
100 +6,000
1 3.234 1442 10,000
Amount of Cement    13.32 bags ×2
7 50
20,000
2 3.234 115
Amount of sand    1600  1.7 tonnes -760
7 1000 100 Less 4×190 19,240mm
4 3.234
Amount of ballast   1300  2.4 tonnes
7 1000
FOUNDATION WALL
Area of walling  Mean girth  height
 19.24 1.80  34.632 m2
Area of walling
No. of blocks 
Area of 1 block including mortar joints
34.632
  432.9  433 blocks
 0.39  0.01   0.19  0.01
105
Allow 5% for wastage: 432.9   454.545  455 blocks
100

Mortar
Area of mortar joints  No. of blocks actually used  area of mortar joint
 433   0.4  0.2 - 0.39  0.19   2.55 m 2
Vol. of mortar joints  2.55  0.19  0.485 m3
140
Allow for shrinkage and wastage: 0.485   0.679m3
100
Mixing ratio 1:4 = 5 parts
1 0.679
Amount of Cement   1442  3.916 bags
5 50
4 1600 115
Amount of sand   0.679    0.999  1 tonne
5 1000 100
(allowing 15% bulking)

FLOOR
Hardcore
Vol. of hardcore (allowing for, say, 30% compaction)
  3.12 1.5  2.12  5.62  0.3 
130
 6.47m3
100
total volume 6.47
No. of lorries  
capacity of lorry capacity

Blinding

Vol. of blinding   3.12 1.5    2.12  5.62   0.05 

130
 1.08m3
100
Allowing for compaction, say, 30%
Damp proof membrane
Coverage area   3.12 1.5    2.12  5.62  
105
 17.424m2
100
Allowing for end and side laps, say 5%
Concrete floor slab (mix 1:3:6)
Vol.of concrete   6  2.5   3.5 1.5  0.1
140
 2.835m3
100
40% shrinkage and waste
1 1442
Amount of cement   2.835   8.176  9 bags
10 50
3 1600 115
Amount of sand   2.835    1.565tonnes
10 1000 100
(Allowing for 15% bulking)

Computation from Specifications

Example 3
Take a pit latrine, constructed of:
i) Walls - masonry stones 230mm thick
- mortar ratio 1:4
ii) Floor slab - slab 100mm thick ratio 1:2:4
- B.R.C. (mesh wire)
- Cedar posts 4 No.
- Screed 1:1
iii) Roof - G.C.I. sheets gauge 30
- timber – cypress
- wall plate 100mm x 75mm
- Rafters 100mm x 75mm
- Purlins 50mm x 50mm
- fascia board 175mm x 25mm
iv) Door - frame – cypress
- 100mm x 50mm (rebated)
- R.B. door

General Information

Width of cement mortar joint = 10mm Shrinkage = 35%

Surface area of quarry stone = 460 x 235 mm2 Waste = 5%
Roof overlap = 75mm Bulking of sand = 15%
Density: Sand = 1600kg/m3 One 7-tonne lorry →6” stones = 400 r.f.
Cement = 1442kg/m3 →9” stones = 300 r.f.
Ballast = 1300kg/m3
WALLS
wall S.Area  opening 2  3  2   2  2 1
No. of stones  
stone S. Area stone surf. Area
18m 1000
2 2
  167stones
460  235
Number of lorries
(i) 230 mm stones (300 r.f. per 7-tonne lorry)
1 ft  12"  25.4 12  304.8 mm (1 inch  25.4 mm)
300 ft of stones in lorry  304.8  300  91440 mm when full
Total length of stones  450 167  75150mm
No. of lorries required for stones 450mm long each
167  450
  0.82 lorries
91440
105
Add 5% waste  0.82  0.87 lorries
100
Amount of mortar required
Area of mortar joints  No. of stones  Area of mortar joints for a stone
 167   460  225 10   6850mm 2 167
 167  6950mm  1143950mm2
1143950  230
Vol.of mortar   0.263m3
10003
Add 5% and 35% for waste and shrinkage respectively.
140
 0.263   0.368m3
100
Amount of cement required (mix ratio 1:4)
1 0.368 1442
   2.12 bags
5 50

Amount of sand required

4 0.368 1600 115
    0.54 tonnes
5 1000 100
FLOOR
Concrete floor slab (Ratio 1:2:4)
Slab volume (Assume no opening)
 3  2  0.1  0.6m3
140
 0.6   0.84m3 (allowing for 40% shrinkage and waste)
100
Amount of cement required
1 0.84 1442
   3.46, say 3.5bags
7 50
Amount sand required
2 0.84 1600 115
    0.44, say 0.5tonnes (allowing for 15% bulking)
7 1000 100
Amount of ballast required
4 0.84 1300
   0.624, say 0.7tonnes
7 1000
Cedar post = 4 No.

Screed (mix 1:1)

Interior floor area  2.54 1.54 i.e 3  2  0.23  2  2  0.23
140
Vol. of screed  2.54 1.54  0.04   0.219m3
100
Amount of cement required
1 1442
  0.219   3.16 bags
2 50

Amount of sand
1 1600 115
  0.219    0.2tonnes
2 1000 100
ROOF
Timber
(Stud x 2) + wall plate + Rafters size 100 x 75 mm2
1m + 10m + 3m + 12.4m = 26.4 m
size 50mm x 50mm purlins
4m  2  8m
fascia board 175mm x 25mm
4m  2  8m
G.C.I sheets
Mesh 0.5 x 3m to BS

Example 4
a Given the surface area of a quarry stone wall is to be 60m2, calculate the number of 7-
tonne lorries required.
 Data
i) The wall is to be constructed using 150mm thick stones
ii) Quarry stone surface area is 460 x 235mm2. (6 marks)

b. Calculate the amount of sand and cement required for the quarry stone wall in (a)
above
Data
Width of cement mortar joints = 10mm
Density of sand = 1600 kg/m3
Density of cement = 1442 kg/m3
Shrinkage = 35%
Waste = 5%
Sand bulking = 15%
Mortar mix ratio = 1:4 (14 marks)

Solution
a) No. of quarry stones required
Wall S. Area 60 10002
   555tonnes
Stone S. Area 460  235
Hence No. of 7-tonne lorries required to carry 150mm thick stones is: (assume 400
r.f./7-tonne lorry)
400  25.4 12  121920r.mm
Hence No. of lorries required to carry 555 stones of 450mm long each will be
555  450
  2.05 lorries, say 2 lorries
121920

b) Amount of mortar required

Area of mortar joints  No.of stones  Area of mortar joints for stone
 555   460  235  10  3,857, 250mm 2
3,857, 250 150
Vol. of mortar required  3
 0.58m3
1000
Add 5% and 35% for waste and shrinkage respectively i.e.,
 40 
0.58   0.58    0.81m
3

 100 
1 0.811442
Amount of cement required    4.7, say 5 bags
5 50
Amount of sand
4 0.811600 115
    1.19, say 1.2 tonnes
5 1000 100

Revision Questions

1. The following information was obtained from a bill of quantities on the construction of
a church building:
 Volume of concrete in foundation bed = 5m3
Area of block wall in foundation = 90m2
Using the data given, calculate the quantities of the following materials required:
a) Cement in 50 kg bags
b) Sand in tonnes
c) Aggregates in tonnes
d) Number of 390x190x190 mm blocks (20 marks)

Data
- Concrete mix 1:3:4
- Cement: Sand ratio in mortar 1:4
- Density of cement = 1400kg/m3
- Density of sand = 1600kg/m3
- Density of aggregates = 1500kg/m3
- Concrete shrinkage = 20%
- The blocks are to be laid on a 10mm thick mortar
(Make reasonable assumptions for information not given)

2. A 200mm thick concrete base of 1:3:6 mix is to be laid at the bottom of a trench
800mm wide by 1,000m long. Using the given data, calculate the amount of:
i) cement in 50kg bags
ii) sand in tonnes
iii) course aggregate in tonnes
Data:
Density of cement 1,440kg/m3
Density of sand 1,600kg/m3
Density of aggregate 1,300kg/m3
Shrinkage 33⅓%
Wastage 5%

3. It is proposed to lay a 200mm thick concrete base of a mix 1:3:6 to the bottom of trench
800mm wide for 1000m long pipeline. Using the given data, calculate the required
amount of:
i) cement in 50kg bags
ii) sand in tonnes
iii) course aggregate in tonnes
Data:
Density of cement 1,440kg/m3
Density of sand 1,660kg/m3
Density of aggregate 1,330kg/m3
Shrinkage 33⅓%
Wastage 5% (10mks)
14.2.07.T12 ORDERING AND SUPPLYING OF MATERIALS

For construction projects to proceed, they require a satisfactory supply of raw

materials, so that besides the careful phasing and planning of material required by the
builder, it is to his advantage to foster a good relationship with his suppliers, many of
whom will have proved reliable over many years.
The quantities of materials required are computed from contract documents such as
schedules of materials prepared by a material scheduler from drawings and specifications.
Usually bulk quantities are taken from bill of quantities.
It is the responsibility of the buyer to ensure that the architect receives any samples
from the suppliers in the very early stages of contract procedure to satisfy him of the
relative merits of the material. In most cases, a buyer will send enquiries to two or three
suppliers or in some cases direct to manufacturers for such items as sand, gravel, bricks,
cement etc regarding descriptions, prices, delivery dates and such for use by the estimator
at the estimating stage of the project in the preparation of the tender figure.
If a builder is then successful in his bid for the work, he will place his orders with the
suppliers of his choice by comparing the various quotations received in relation to the
following:

Factors considered in the selection of material suppliers

1. Has the supplier been used before?
2. If so, was he reliable?
3. Is the material suitable for the project?
4. Can the material supply be maintained in quantity?
5. Delivery dates
6. Price including (a) Trade discount (b) Cash discount (c) Bulk discount
7. Delivery conditions
8. Do materials measure up to Kenya Bureau of Standards (KEBS), British Standards
(BS) or other tests that may be required?
9. Any special considerations

Upon the above factors proving satisfactory, a definite order will be placed and, upon
acceptance, a contract is formed.
The dates the materials are required are taken from the project/contract programme.
The management should confirm delivery with supplier at some reasonable time before
they are required. Storage areas for materials should be allocated when planning site
layout. On arrival, check that the stores are available, that the quantity and quality are
correct. The site foreman should then sign for delivery and retain a copy of the delivery
note, which is later sent to Head Office accounts department for payment.

14.2.07.T13 MATERIALS PROCUREMENT DOCUMENTS

Documentation in the supply of materials include:

1. Requisition/Order/Local Purchase Order (L.P.O.)
This is a document used by the site to obtain sundry items from the central stores on a
day-to-day basis, or from suppliers or from manufacturers.
 A.N. OTHER LTD
INTERNAL REQUISITION
To. ……………………………………………
From ………………………………………… Contract No. ……
Date. ………………………………………… № 1234
Please supply or order for the above Site/Department, the following which
are required by (enter date)
Quantity Enter full Description of Materials

FOR OFFICE USE ONLY

Date received Action by Order placed
Order No.
Goods delivered

2. Advice note
This is sent by works or supplier to site, stating date, method of transport and
description of goods dispatched. This will enable site supervisory staff to make adequate
preparation for unloading and storage.

A.N. OTHER CO. LTD № 1234

ADVICE NOTE
INVOICE TO. …………………. DELIVERED TO………………

Dispatched by: Lorry Consignment No. Date

Customers Order Date

QUANTITY DESPATCHED RETURNS

NOTE: If the above are not received within TEN DAYS from the date of this
ADVICE NOTE kindly advise us, otherwise we cannot accept responsibility

3. Delivery note
This is the document from suppliers, manufacturers or central stores that accompanies
the delivered goods to the site. It must be signed by the foreman when he has unloaded
the goods stated on the note and is satisfied with their condition. Careful check must be
made to ensure that all the goods are there and undamaged. Two delivery notes will be
supplied by the transport driver: one for himself as a check to his employer that he has
made the delivery satisfactorily, and one for site reference.
If goods are missing or damaged, this should be clearly shown on the delivery note
and an appropriate letter sent as soon as possible to the supplier, manufacturer or central
store. If goods are returned for any reason with the delivery lorry, the driver should be
asked to sign correction on the delivery note.

DELIVERY NOTE № 1234

Received from. ……………… A.N. OTHER BUILDERS MERCHANTS LTD

MESSRS…………………..……… YOUR ORDER No. …………………..

…………………………………..… DATE……………………………….

Please receive the under mentioned goods.

REMARKS RECEIVED BY:

4. Invoice
This is very similar to delivery note, the only difference being that the price of the
goods is now clearly shown for payment. This document is sent to the head office where
it is checked against the delivery note which has been sent from the site. If they agree,
payment will be made.

INVOICE № 1234
A.N. OTHER GENERAL MERCHANTS
ACCOUNT TO …………………. YOUR ORDER № ……………………..
DELIVERED TO. ………………… DATE. ………………………….
Your
Quantity Description Price Value
Ref. No

TOTAL

5. Payment Voucher
This is a written document, which is kept on record as a proof of payment. After the
payment of the bill of the contractor or supplier, and duly acknowledged, the bill
becomes a voucher.

14.2.07.T14 RECORDS OF MATERIALS

1. Materials record book

This is a complete record of all materials received on site and must be filled in before
delivery notes are sent to head office. Entries should be made on the day of delivery from
the information taken from the delivery notes. The prices and amounts are filled in
against each item at Head Office. A running total cost of materials for a project is easily
and quickly obtained.
A.N. OTHER LTD Date
DAILY RETURN №
Delivered Ticket Office Use Only
Date Material
To. No. Sh Cts

2. Materials Delivery Book

Often used on site to show clearly when deliveries are due, general bulk phased
deliveries, quite often simply a ruled blackboard on which is chalked amount and date of
delivery.

3. Materials transfer forms

This document is a company document for internal use when materials are moved
from one site to another for any reason. Its correct use ensures that charges for materials
can be made to the receiving project and deducted from the site supplying the goods. In
the accounts, the site giving will be credited, the site receiving will be debited.

A.N. OTHER LTD MATERIAL TRANSFERS

BUILDING CONTRACTORS
To From
Department or Department or
Co. Contract No. Co.
Contract No.
Date № 1234
Quantity Enter full Description of Materials For Office Use Only

FOR OFFICE USE ONLY

Date Co Main Sub- DR CR DR. COSTED
Code code Contract Contract

Priced By
CR. COSTED
Extended
By Total Per Transfer Note

4. Inventory
14.2.07.T15 STORAGE OF MATERIALS

Storage of materials can be defined as the provision of adequate space, protection and
control for building materials and components held on site during the construction
process.
The main objectives of material storage include:
(a) To see that materials that have been carried into the stores are made available
whenever they are required in a perfect and serviceable condition.
(b) To protect the materials so as to maintain their value and quality
(c) To protect the materials from all kinds of damages and spoilage.

The need for storage and control of materials held on site need the following
considerations:
1. Type of material – size, shape, weight and mode of delivery will assist in
determining the safe handling and stacking method(s) to be employed on site, which
in turn will enable handling and storage costs to be estimated.
2. Organisation – this is the planning process of ensuring that all the materials
required are delivered to site at the correct time, in sufficient quantity, of the right
quality, the means of unloading is available and that adequate space for storage or
stacking has been allocated throughout the duration they are on site.
3. Protection – building materials and components can be classified as durable or
non-durable; the latter will usually require some form of weather protection to
prevent deterioration whilst in store.
4. Security – many building materials have a high resale and/or usage value to
persons other than those for whom they were ordered and unless site security is
adequate material losses due to theft and pilferage can become unacceptable.
5. Costs – to achieve on economic balance of how much expenditure can be allocated
to site storage facilities the following should be taken into account:
(a) Storage areas, fencing, racks, bins, etc
(b) Protection requirements
(c) Handling, transporting and stacking requirements
(d) Salaries and wages of staff involved in storage of materials and
components
(e) Heating and/or lighting if required
(f) Allowance for losses due to wastage, deterioration, vandalism and theft
(g) Facilities to be provided for subcontractors
6. Control – checking quality and quantity of materials at delivery and during storage
period, recording delivery and issue of materials and monitoring stock holdings.
The following are the common methods of storage of common building materials:

1. Timber and Joinery Items

From its very nature, timber is highly susceptible to insects, rats, fungi and
water/moisture. It should be stored about 15 – 20 cm above the ground horizontally in
order to protect it from moisture. A rack of scaffold tubulars with a sheet roof covering
makes an ideal timber store. The various section sizes allow good airflow around the
timber and the roof provides protection from the rain and snow.

2. Cement
Whichever type of cement is being used it must be properly stored on site to keep it in
good condition. The cement must be kept dry since contact with any moisture whether
direct or airborne could cause it to set. A rotational used system should be introduced to
ensure that the first batch of cement delivered is the first to be used.
For small contracts: Stacked on a dry, raised platform of timber bearers or sleepers
with a polythene or similar waterproof cover weighted down around edges.

Medium-size Contracts: Cement should be stored in specially constructed stores made

of fireproof ‘sheds’ of galvanized steel sides having damp proof floors, waterproof walls
and leak proof roofs. Cement stacks should be raised leaving a clear distance of 0.3m
from the wall of the room. Height of the stack should not exceed the height of 15 bags.
Width of the stack should be limited to 3m. Stocks received first be issued first with
preferably two door system to facilitate this.

Large Contracts: For bagged cement, watertight container as above. For bulk delivery
loose cement, a portable cement storage silo. Not only does the use of bulk cement offer
ease of handling and compactness of storage, it also ensures that the cement is used in the
order in which it is received, thus reducing the risk of deterioration during the storage on
site. Furthermore the silo is completely waterproof and waste due to broken bags, spillage
and pilfering is eliminated. As silos are filled with weight batchers the older practice of
batching according to a bag of cement is replaced by one which allows mixer to be
charged to its rated capacity. In this way the mixer is neither over- nor under-loaded.

3. Sand and Aggregates

Essentials of storage are to keep different aggregate types and/or sizes separated by
sleeper or concrete block walls constructed high enough to prevent overspill from one
compartment to another. Store on a clean, hard, free draining surface which drains away
from stored aggregates and to keep the stored aggregates clean and free of leaves and
rubbish.

If there is no really suitable place on the site put down a 100mm layer of lean
concrete, which should be a high point in the batching area with falls towards the mixer
where there should be proper drains provided for mixer wash water. Alternatively the
water/cement ratio of the mix can be checked and adjusted.

4. Bricks, Blocks and Stones

These should be stacked in alternate directions to form end columns in rows in stable
piles on a level and well-drained surface to prevent shrinkage, near to point of use to
reduce double handling to a minimum. Facing bricks and light-coloured blocks and
stones can become discoloured by atmospheric pollution and/or adverse weather
conditions; in these situations the stacks should be covered with polythene sheeting or
similar cover weighted at bottom.

5. Roofing Tiles
These may be supplied loose, in plastic wrapped packs or in unit loads on timber
pallets. They have a greater resistance to load when it is imposed on the edge; for this
reason tiles should be stacked on edge and in pairs head to tail to give protection to the
nibs. An ideal tile stack will be 5-7 rows high with end tiles laid flat to provide an
abutment. The fittings such as ridge and hip tiles should be kept separate and if possible
placed on end.

6. Pipes and Drainage Goods

Drainage pipes are supplied loose or strapped together on timber pallets. They are
enclosed by loose bricks forming end ‘column’ or driven-in timber stacks forming end
restraint. May be stored in an open compound; they should be stacked with their barrels
horizontal and laid with spigots and sockets alternatively reversed or placed in layers
with the spigots and sockets reversed in alternate layers with socket ends projecting
beyond spigot ends. Fittings should be kept separate and those like gullies, which can
hold water, should be placed upside down and supported to remain level.

Large items like baths can be kept in the compound and suitably protected, stacked
or nested vertically or horizontally on timber battens. Basins should be stored similar to
baths but not more than four high if nested one on top of another.

7. Reinforcement, Corrugated and Sheet materials

All metals are more or less liable to corrosion. They should be stored flat according to
sizes or gauges on a level surface raised from the ground and covered with a protective
polythene sheeting in a weather proof shed to make them rust and corrosion proof.
8. Scaffold tubes and fittings
Scaffold tubes: store racks for each size in a weatherproof shed.
Fittings: Immersed in oil (in drums), in boxes or packing cases. Should be kept in sets.

9. Ironmongery and Small articles

Ironmongery hand tools and paints are some of the most vulnerable items on a
building site. Small items such as locks, power drills and cans of paints should be kept in
a locked hut and only issued against an authorized stores requisition.

14.2.07.T16 MATERIALS CONTROL RECORD

The prime function here is to ensure that materials are ordered in good time, and that
a very close watch is kept upon planned delivery dates. Schedules are required here so
that quick reference can be made as to when and from whom deliveries are required.
(Schedules are aids often used in materials ordering, usually produced by the quantity
surveyor or by the material scheduler, by systematic analysis of the bill of quantities and
contract drawings.) Material in short supply or late delivery should be chased up
immediately, with possible alternative materials or suppliers being sought.
Control on site must be exercised in respect of waste, deterioration, pilfering and
misuse. Careful checks should be made to ensure correctness of orders and that materials
delivered can be properly stored and unnecessary handling avoided. Standard quality of
materials should be maintained through checking against samples or specifications. Many
materials used on site can be tested quite simply without the use of expensive laboratory
facilities such as would only be found on the very large complex projects.

14.2.07.T17 CONTROL IN THE USE OF MATERIALS

A big problem on most building sites is the large amount of material that, due to
varying circumstances, becomes classed as waste. Basically this is a problem of the site
supervisory staff to control and wherever possible eliminate; it requires a supervisor to be
constantly on the lookout for loss who should constantly impress up operatives the
importance and value of all materials.

Measures to reduce material waste

1. Ensure that materials are delivered as required so that site storage time is cut to a
minimum. This requires careful phasing of deliveries between site and supplier.
2. Ensure that materials delivered are those specified for that particular job.
3. The issuing of just the right amount of materials with only a reasonable allowance for
wastage to workmen.
4. Ensure that workmen are not producing excessive amounts of ‘off cuts’.
5. Allocate and prepare storage areas. This can be done by marking on the site plan the
exact layout of all material storage areas to facilitate easy and safe delivery and
unloading of materials.
6. Make sure that when materials are stored, they do not deteriorate.
7. Collect waste, e.g. half bricks, and use to prevent more cutting – a few by each
bricklayer’s spot will suffice.

Ways of minimizing theft and pilferage of materials

Many items of building material and small hand tools are lost through pilfering and
theft by the operatives. This may be controlled by adopting the following procedures:
1. Items that are small, e.g. door furniture, should be issued by store men, foreman or
the like and a record kept
2. Accurate stock control must be maintained with regular checks.
3. Compounds and storage sheds should be kept locked after issue of materials
4. Cars, wherever possible, should be allocated space away from the construction so that
‘loot’ cannot quickly be hidden in car boots.
5. Site supervisors must set an example by practicing what is preached.

14.2.07.T18 SECURITY OF MATERIALS

Site security can cause many problems and it becomes very difficult to lay down hard
and fast rules and precautions that can be followed because of the considerable difference
in sites, type of building and the firm’s efficiency in these matters. The problem is that of
keeping the professional criminal out, also the vandal or onlookers and curious visitors
who trespass upon the site and often cause much damage due to ignorance. Security has
to guard against two separate problems:
(a) Theft, especially of high value materials such as copper and lead, that not
only results in loss of money but may also cause delay in construction.
(b) Damage due to unauthorized persons being on site, whether willful or
accidental.

Constructing a hoarding around the site may stop the curious sight-seer but will
present little deterrent to a criminal as they are usually easy to scale, and the unwelcome
visitor, once inside, can work undetected as he cannot be seen through the protecting
hoarding. Opening hoarding such as a chain link fence, and with the addition of a few
strands of barbed wire at the top reasonable protection should result.
Inside the site, all movable items and small pieces of plant, equipment and materials
should be locked away and key safely kept and, with careful ordering, stock will only
need to be kept to a minimum, which in itself is a deterrent to a would-be thief as he may
consider the site not worth breaking into as rewards are small. Floodlighting on the site
during the hours of darkness helps to deter the criminal as he can easily be spotted.
Night watchmen may not apprehend a criminal but can disturb him and then have
means of raising the security alarm. A decrease in the use of night watchmen has taken
place with the introduction of guard dogs similar to those on military installations.
The problems of site security are many and varied but it must be remembered that
often the police will be able to offer invaluable advice, especially if the site is situated in
a heavy crime density area.

Revision Questions
1 (a) Sate any EIGHT factors that a contractor may consider in choosing the best quotation
from material suppliers. (4mks)
 (b) With the aid of a sketch, explain each of the following documents used in supply of
materials:
i) requisition
ii) advice note (10mks)
(c) List THREE factors which influence the storage facilities of any particular material.
(3mks)
(d) State TWO storage requirements for each of the following:
i) small components
ii) sand and aggregates (4mks)

2 (a) List FOUR documents that are used in materials procurement. (2mks)
(b) Outline FIVE measures to be observed in combating security problems on materials
storage on site. (7½mks)
(c) With the help of a labeled sketch, explain how each of the following materials may be
stored on site:
i) cement
ii) scaffold tubes and fittings
iii) timber
iv) PVC pipes (10mks)

3 (a) Explain THREE factors to be considered when selecting a materials supplier. (3mks)

(b) Briefly describe the following documents as used in materials procurement:

i) requisition
ii) delivery note
iii) enquiry form (6mks)
(c) Briefly explain FOUR ways of reducing materials waste on a large construction site.
(8mks)
(d) Explain how the following materials are stored on site:
i) Cement
ii) Diesel (3 mks)

4 (a) Outline the materials procurement procedure for a small construction site. (9mks)
(b) State the information that should be included in an enquiry to supplier to enable a
realistic quotation to be submitted. (4mks)
(c) Briefly explain how each of the following materials may be damaged, stored and
protected on site:
i) bagged cement
ii) blocks
iii) scaffolding
iv) timber joists
(6mks)
 7/25/2018

The Nature of Law

B. Architecture.
 Law can be described as a collection of rules of human
conduct prescribed by human beings for the obedience of
ABA 2508- BUILDING LAW AND human beings.
CONTRACT ADMINISTRATION  The laws of any country are said to be to some extent to be
an expression of the morality of that country.
 Rules of law should aim to achieve justice. The function of
SOURCES OF LAW the courts is to administer justice according to the law.

Classifications of Law
2. International law
 The law is broadly classified into two categories: State and
international law.
 consists of that body of law which regulates the relations
between states. It is based on customs, treaties and
1. State law conventions.

Subdivided into two categories: public and private law  Disputes between states can be settled in the international
 Public Law-the State has an interest in. Includes; Constitutional Law, court of Justice at the Hague in Holland but litigant states
Administrative Law, Criminal Law. must consent to its jurisdiction. There is also Private
International Law concerned with determining what system
of State Law shall apply in a case which contains of a foreign
 Private Law-concerned with rights and duties of persons towards element.
persons. Includes; Law of tort, law of contract, law of property and
law of succession.
 7/25/2018

The Sources of Kenya Law

3. Subsidiary legislation
Stipulated under Sec 3 of the Judicature Act ,CAP 8 of the laws of 4. The substance of the common law, the doctrines of equity and
Kenya. It includes:
the Statutes of general application in force in England on the
1. The Constitution of Kenya 12th Aug 1897. It should be borne in mind that these only apply
2. Legislation which includes; “so far only as the circumstances of Kenya and its inhabitants
i. Acts of the parliament of Kenya permit and subject to such qualifications as those circumstances
ii. Specific Acts of the Parliament of the UK cited in the schedule may render necessary.
to the Judicature Act and the Law of contract Act. 5. African customary law
iii. One Act of Parliament of India
iv. English statutes of general application in force in England on
12th August 1897

The Constitution of Kenya  Some constitutions are written while others are unwritten
e.g. in the UK. The constitution of Kenya is a written
 Document having special legal sanctity
constitution originally enacted on 12th December 1963.
 Sets out the framework and principal functions of the organs
of government of a state  The current Constitution of Kenya was enacted on
Independence Day, December 12, 1963. It was amended
 Declares the principles governing the operations of the
organs on 12th December 1964 so as to establish a republic with a
president as head of state.
 Brings out linkages and interrelationships between the
different arms of government  Since then, the Constitution has been amended several times,
 Supreme law, taking precedence over all other forms of law, with the most current and effective Kenya Constitution being
written or unwritten. revised in 2001. In November 2005, in a nation-wide
 If any other law is inconsistent with the constitution, the
referendum, Kenyan voters rejected a government-backed,
constitution prevails and the other law to the extent of the proposed new constitution.
inconsistency is void.
 7/25/2018

 In Aug 2010, another referendum was held in which a

proposed new constitution was passed.
 The main feature of the new constitution is the change in the  Chapter 1 of the laws of Kenya has eighteen chapters covering;
structure of the government and parliamentary system.  Sovereignty of the people and supremacy of the constitution
 Constitutional amendment requires a vote of 65% of all  The Republic
members of the National Assembly.  Citizenship
 The bill of rights
 Land and environment
 Leadership and integrity
 Representation of the people

Legislation
 The legislature
 The executive  By legislation is meant Statutes or Acts of Parliament.
 The judiciary  The legislative power of parliament is exercisable by Bills passed by
 Devolved government the national assembly.
 Public finance  When a bill is passed by parliament it is presented to the president
 National security for his assent. When this assent is given, it becomes law and by
 Commissions and independent bodies definition an Act of Parliament.
 Amendment of constitution
 General provisions and
 Transitional and consequential provisions
 7/25/2018

 A bill must receive three readings in the National

 A new Act binds all people in Kenya.
Assembly. The second and third readings are occasions
for wide debates on the main objects of the Bill under  An Act may come into operation either at the time of
discussion. assent or at a later date to be determined by ministerial
 Detailed consideration is left to a committee stage order.
which takes place either in a select committee or the  As parliament is sovereign, it can make, amend or
national assembly itself. repeal any law subject to the constitution.
 Thereafter the president must give his assent to the Bill
before it is passed into law.

 Specific Acts of Parliament of the United Kingdom

These are cited in the schedule to the Judicature Act and include:
 The Admiralty Offences (Colonial) Act, 1849.
 The Evidence Act, 1851, sections 7 and 11.  English statutes of general application in force in England on
 The Foreign Tribunals Evidence Act, 1856.
 The Evidence by Commission Act, 1859.
12th August 1897 that are applicable only to the extent that
 The British Law Ascertainment Act, 1859. they are acceptable to Kenyans given the circumstances
 The Admiralty Offences (Colonial Act), 1860.  The reception date of 12th August 1897 is important as the
 The Foreign Law Ascertainment Act, 1861.
English statutes applicable in Kenya are in the form they had
 The Conveyancing (Scotland) Act, 1874 Section 51.
 The Evidence by Commission Act, 1885. at the reception date. This means that any amendment of such
statutes in England have no effect in Kenya.
 Certain Acts of Parliament of India
The Transfer of Property Act, 1882 of India contains the
procedural law applicable where the Registration of Titles Act, the Land
Titles Act and the Government Lands Act are applied.
 7/25/2018

Subsidiary /Delegated Legislation Reasons for delegated legislation

 Subsidiary legislation is part of the written law and is, therefore,  Parliament has no the time to enact all rules; otherwise the
a source of law. It is also known as delegated legislation . parliamentary machine would break down.
 Local authorities, statutory boards, professional bodies exercise a  The technicality of legislation; allows for consultation with
delegated power to legislate. outside bodies
 The need for flexibility outdated rules can be more easily
 Must not be inconsistent with any statute
changed
 Parliament delegates its legislative authority because:
 It lacks enough time to enact rules on all aspects of national issues.
 The impossibility of seeing all contingencies in the initial or
 Some of these aspects are technical in nature hence require experts enabling statute.
outside parliament  Opportunity for experiment
 Its also impossible to foresee all contingencies when enacting a statute.
 Need for rapid action e.g. in times of emergency

Delegated legislation has been criticized for  If Subsidiary legislation conflicts with a statute, the
the following reasons: statute prevails. Otherwise, subsidiary legislation takes
 Legislation is passed in skeleton form, leaving matters precedence over judge made law.
of principles to be decided by delegated legislation  All subsidiary legislation is made under the express
 Inadequate parliamentary control authority of an Act of Parliament and must comply with
 Delegated powers are so wide, thus adding to the any procedure laid down by the Parent Act.
uncertainty of the law
 Delegated powers are loosely defined, thus detracting
from judicial control
 Lack of publicity and advance consultation with
interests affected
 Lack of judicial control
 Retrospective operation
 7/25/2018

The substance of common law and doctrines of Doctrines of Equity ctd…

equity Remedy for violation is a right calling for payment of
damages, irrespective of how unjust the plaintiff has acted
 Applicable only to the extent that they are acceptable to Kenyans and whether or not the damages will make good the loss
given the circumstances suffered.
 Common law- entails practices of any society and evolve out of • Equity refers to fairness or natural justice.
usage and culture and consists of the ancient customs and usages
of England which have been recognized and given the force of
law.  remedy for breach is discretionary, depending on the
 The common law has been developing for nearly a thousand justice of the cause and includes injunctions and
years and is embodied in the reported decisions of English
courts stretching back to the 13th century. Specific performance.
 The common law is in itself a complete system of law both civil Equity emerged after citizens became dissatisfied with the
and criminal. judgments of the English common law system.

Doctrines of Equity ctd…  The actual decision affecting the parties

 The principles of law which have caused the judge to
 Common law may mean rules developed through arrive at that decision.
precedents rather than created by Acts of Parliament.
 Where the case concerns facts or situations which are
 Precedent- when a judge gives his decision in a case comparable with earlier cases heard by the courts, the
before him, this has two elements: judge will normally apply the principles from earlier
cases.
 The English common law and doctrines of equity
remain a source of the Law of Kenya but “ so far only
as the circumstances of Kenya and its inhabitants
permit and subject to such qualifications as those
circumstances may render necessary”
 7/25/2018

Question of binding decision and

 The common law of Kenya has its roots in the English Precedence
Common Law, but the decisions of East African courts
are related to East African conditions. The body of the  The doctrine of “stare decisis” requires that a court
Kenya Common Law is also swollen by a substantial having once decided a case in a particular manner
number of Kenya cases interpreting Kenya Statutes. should follow the decision in all subsequent cases
involving the same legal issues.
 The doctrine also requires that inferior courts are
bound by the decisions of superior courts where the
decision is relevant to the issue before the court.
 Decisions of the court of appeal of Kenya are normally
binding on itself, subject to what has been said, the
High court and the Magistrate’s courts. Decisions of the
High Courts are binding on the magistrate’s courts.

Advantages of the system of precedent

African Customary Law
 One of the greatest advantages of the system of binding
precedent is that the rules have evolved from real life  Before the adoption of English law, there were rules applicable to
cases and are therefore practical. the different ethnic groups in Kenya and these rules formed what is
described as African Customary Law.
 It promotes certainty, allows for growth and contains a
wealth of detail.  African Customary law- applicable in civil cases in which one or
more parties is subject to it or affected by it. Customary law will
Disadvantages of the system of precedent apply only if it is not “repugnant to justice and morality or
inconsistent with any written law”
 Once a rule has been laid down, it is binding even
 Limited to matters relating to;
though the decision was wrong  Land held under customary law
 It creates a bulky system.  Marriage , divorce, maintenance or dowry
 Seduction or pregnancy of an unmarried girl or woman.
 The system can at times be very uncertain due the role
 Enticement or adultery with a married woman
played by judges.  Succession
 7/25/2018

Islamic Law Hindu Law

 Islamic law is applied by Kadhis courts where both parties  Hindu customary rites are a source of Kenyan Law only for
profess the Muslim faith. purposes of solemnizing Hindu marriages and divorce and
 Limited to matters relating to; succession among the Indians.
 Personal status
 Marriage
 Divorce
 Inheritance

The Law Reform Commission Common Law of Kenya

 Established in 1982 to review all laws of Kenya,ensuring;  Rapidly emerging source
 Systematic development and reform
 Integration ,unification and codification  Not spelt out in the Judicature Act.
 Elimination of anomalies
 Repeal of obsolete and unnecessary enactment
 Based on decisions made by East African and Kenyan courts.
 Simplification and modernisation
 7/25/2018

THE SUPREME LAW

Acts of parliament relating to Constitution of Kenya 2010 is the supreme law of the land and the supreme source of other laws. All other laws derive
their legitimacy from it and must agree with it otherwise they are null and void. It was made by Kenyans directly and

Construction industry LEGISLATED LAW

as such represents their will.

 Physical planning act 1986 Revised 2009

All Acts of Applicable British Applicable Indian Acts of International Law Delegated Legislation
It provides for the physical development planning for the whole country, region towns
etc. Parliament of Acts of Parliament Parliament (applicable treaties and (made with the
Kenya. statutes) authority of
Parliament)
 Occupational Safety and Health Act, 2007
This replaced the factories and other places of work act, chapter 514 CASE LAW

Case Law or Judge made Law under the doctrine Common Law i.e. unwritten Doctrines of Equity i.e. English
of Judicial Precedent (Stare Decisis). Courts English way of life (rigid Principles of fairness and
 The Employment Act Cap (226) and the regulation of wages and conditions of employment Act interpret law and in the process make law established customs & rules justice (came up to
Cap (229) (binding decisions/authorities) practiced in courts of law) supplement common law for
the sake of fairness, justice and
Makes rules governing wages, housing, leave, health and safety, the special position of equity).
juveniles and women and termination of employment.
 The National Construction Corporation Act OTHER SOURCES (LIMITED TO PERSONAL LAW ONLY)
CAP. 493-1985 ACTS IN KENYA

An Act of Parliament to provide for the establishment of the National Construction

Corporation to assist persons engaged in the construction industry and for purposes incidental African Customary Law (limited to only Islamic Law. Only applied in Hindu Law. Limited only to
thereto and connected therewith non-repugnant personal law & to specific Personal law matters between civil personal law (marriage,
community) Muslims in kadhi courts. divorce & inheritance)
 LAW OF TORTS
⚫ A tort is a civil wrong which gives rise to an action at common law for
unliquidated damages.

⚫ The rules of the law of tort determine when one party can be compensated
for the behaviour of another.

⚫ The right of action in tort springs from the breach of a duty which a person
owes to another person in general.

Nature of torts
⚫ Law of tort is concerned to compensate victims who have suffered harm.
⚫ Tort liability is imposed by law
⚫ The compensatory function of the law of tort is an award of damages
or an injunction

Motive and Malice

⚫ Motive is the reason behind the act of the defendant.
⚫ As a general rule, motive is not relevant in deciding whether a person is
liable in tort.
⚫ The general irrelevancy of evil motive is observed in Bradford Corporation
V Pickles (1895) A.C 587.
⚫ Malice in itself is not a tort, although it will be an essential element in
certain torts e.g. malicious prosecution; cases of defamation etc.

GENERAL DEFENSES TO TORTS

For the plaintiff to succeed in action in tort, he must prove the essential elements
of the tort in question. If he fails, then judgment will be given for the
defendant
1. Self defence
⚫ A person is entitled to defend himself or members of his family and his
property.
⚫ The main criterion here is one of reasonableness.
⚫ In defending himself, a man may use such force as is reasonably necessary
and the means of defence must be related which would otherwise be
suffered.

2. Volenti non fit injuria

⚫ The defence of consent.
⚫ This is the defence that the plaintiff both knew of the risk he was
running and willingly consented to run the risk.
⚫ Simple examples are found in the world of sport e.g. football, rugby,
boxing etc.
⚫ The consent to the risk can be either expressed or implied.
⚫ It is implied in the case of sporting events or express where it was
stipulated in the contract.
⚫ The knowledge of the risk does not necessarily amount to consent.

3.Inevitable accident
⚫ This is an accident which is “not avoidable by any such precautions as a
reasonable man, doing such an act then and there could be expected to
take”.
⚫ Stanley V Powell (1891)
⚫ Inevitable accident is no defence to action under the rule in Rylands V
Fletcher

4. Act of God
⚫ In the words of sir Charles Newbold, P in Ryde v Bushell (1967) E.A,
⚫ “Nothing can be said to be an act of God unless it is an occurrence due
exclusively to natural causes of so extraordinary a nature that it could
not reasonably have been foreseen and the results of which occurrence
could not have been avoided by the person who seeks to avoid liability
by reason of the occurrence”
⚫ In the case in question the defendant was unable to prove that a deluge
of rain which swept away coffee plants was of such an extraordinary
nature as could amount to an act of God.
⚫ The defence can apply to damage caused by floods, earthquakes,
hurricanes, lightning etc.
 5.Act in respect to Statutory Authority
⚫ When a statute authorizes the commission of what would otherwise be a
tort, then the injured person is remediless.
⚫ Of the many statutory corporations which act in pursuance of statutory
powers and duties, local authorities are given the greater scope for
interfering with the rights of the individual.

6. Necessity
Where intentional damage is done so as to prevent greater damage the defence of
necessity can be raised.
If damage is caused to avoid greater damage, it becomes a good defence.

7.Mistake
Mistake whether of law or facts is usually no defence to an action in tort.

Mistaken belief that a prisoner was not due for release was no defence.
It can be relevant on malicious prosecution and false imprisonment

8. Capacity
⚫ The general rule is that all persons can sue and be sued in tort.
⚫ Where two or more persons assist each other in the furtherance of a
common design and commit a tort, they are known as joint tortfeasors.

9. Insanity
⚫ Insanity is not a defence to an intentional tort.
⚫ What is essential is whether D by reason of insanity was capable of forming the intent to commit
the tort.

10. Infants
⚫ Minority is not a defence in torts.
⚫ What is essential is whether D understood the nature of his/her conduct.
⚫ Hart V A-G
⚫ 5 year old boy was held liable
11. Discipline
⚫ A parent may use reasonable and moderate force to discipline a child.
 ⚫ What is reasonable will depend on age, mentality and physique of child.
⚫ Provocation
⚫ Is not defence in tort law.

VICARIOUS LIABILITY
⚫ The word ‘vicarious’ means in place of another person or in substitution for the proper
person.
⚫ The person who commits a tort is always liable, but sometimes another person who
did not commit a tort is also liable.
⚫ This is the case when the relationship of master and servant exists.
⚫ The basic rule is that a master is liable for any tort which the servant commits in the
course of his employment.
⚫ The reason for this rule of the common law is that as the master has the benefit of his
servant’s services, he should also accept his liabilities.
⚫ The importance of vicarious liability is that it ensures that the injured person can sue
the employer instead of employee. The two main criteria for the operation of the rule
are :
⚫ The person who commits the tort must be an employee.
⚫ The employee must commit the tort in the course of employment.

The Course of employment

⚫There is no single test to determine when an employee is in the course of
employment.
⚫ The decisions of the courts tend to humour the individual facts of the case.
Certain situations certainly seem to be covered:
⚫ Torts committed while the employee is doing what he is employed to do.
⚫ Torts committed while the employee is doing what he is employed to do
but doing it in a manner forbidden by his employers.
⚫ Torts committed while the employee is doing what he is employed to do
but doing it in a criminal manner.
⚫ Tort committed while the employee is doing acts which are reasonably
incidental to his work.
⚫ Torts committed while the employee is acting in an emergency for the
protection of his employer’s person or property when his actions would
have normally be outside the scope of his employment.
⚫ Generally, an employer is not vicariously liable for the torts of an
independent contractor.
⚫ However, in some cases either the liability imposed is strict, or duties owed
by a person are so onerous that there can be no delegation to someone
else. Then the employer is liable in addition to the contractor.
⚫ Although the following are often spoken of as examples of vicarious
liability, it is more appropriate to regard them as examples of an
employer continuing to be personally liable. This can arise in the
following situations:
⚫ When an employer is negligent in choosing the contractor, he remains
personally liable.
⚫ When the liability of the employer is strict e.g. in the tort of Rylands V
Fletcher and can occur even if he has taken reasonable care, the
employer is liable whether he commits the tort personally or through an
independent contractor.
⚫ When the employer undertakes a
particularly hazardous activity especially when it is on or near the
highway, he is liable for torts committed personally or by his
independent contractor.
⚫ When the employer authorises or instructs the contractor to do something
involving the commission of a tort, he remains liable.
⚫ Even in the above cases where both the employer and contractor are liable
the former will not be held responsible for the contractor’s collateral
acts of negligence.
⚫ In other words, an employer will only be liable if the risk of harm arises
from the work itself rather than the negligent performance of the work.
 SPECIFIC TORTS
1. Trespass

⚫Trespass is commonly thought to be a tort relating to land but the law also recognises
trespass to the person and to goods.

Trespass to the person

⚫ It occurs if force is directly and intentionally inflicted on another person.
For this purpose force means any physical contact.
⚫ It is a special feature of trespass that an action can be brought even if no
damage has been suffered. This tort is said to be actionable per se, of itself
without proof of damage.
⚫ Where there is a trespass to the person, the same behaviour could also be a
crime. E.g. a punch on the nose could also be result in a prosecution for
assault.
⚫ Trespass to the person embraces assault, battery, and false imprisonment
⚫ Assault is an act of the defendant which causes the plaintiff reasonable
apprehension of the infliction of violence on his person by the defendant.
⚫ Battery is inflicting of violence.
⚫ False imprisonment is constituted when a person’s physical freedom is
unlawfully restricted.
⚫ Defences to assault and battery are lawful arrest and volenti non fit injuria.

Trespass to goods
⚫ Trespass to goods is an intentional and direct act of interference by a
defendant with goods in the plaintiff’s possession.
⚫ The emphasis here is to protect possession.
⚫ The common form this tort will be causing damage to goods or destroying
them.
⚫ Proof of damage is not necessary.
⚫ Frequently, the person in possession will be the owner of the goods in
question.
⚫ The defendant’s act must be direct and intentional, so tearing a page from
someone’s book or throwing a stone at their car are examples of trespass to
goods.

Conversion
⚫ Conversion consists of an unauthorised dealing with the goods or chattels of
another which amounts to a denial of the owner’s title or is inconsistent
with the owner’s right to immediate possession of them.
⚫ Trespass and conversion usually coincide but not always so e.g. if X by
mistake takes the hat of Y and on Y pointing this out, X returns the hat, this
constitutes trespass but not conversion.
⚫ Conversely if on the same facts X denies Y’s title to his hat, X will have
committed conversion in addition to trespass.

Detinue
⚫ Detinue consists of the unlawful retention of the goods of another.
⚫ The plaintiff must prove that he is entitled to immediate possession of the
chattel and secondly that the defendant refused to restore it upon reasonable
demand being made.
⚫ Detinue usually amounts to conversion but the action of detinue is primarily
one for recovery of goods rather than damages.
⚫ If the plaintiff succeeds he can recover either goods or their value.
Trespass to Land
⚫ This tort consists of an unjustified interference with the possession of land.
⚫ The interference may consist of walking over another’s land, or throwing
things onto the land, or placing a ladder against the surrounding wall or
even swinging a crane jib over the land.
⚫ For the purpose of this tort, land means the surface of the earth itself,
anything which is a fixture on it, the airspace above it to the extent
necessary for the use and enjoyment of the land, and the sub soil below the
land.
⚫ This tort is actionable without proof of damage.
⚫ It is obvious that construction work involve constant danger of trespass.
⚫ A contractor would be wise to seek permission for acts which would
otherwise cause a breach of these rules.
 NUISANCE
For the purposes of the law, nuisance falls into
three categories:
1. Public nuisance,
2. Private nuisance
3. Statutory nuisance.

Public nuisance
⚫ A public nuisance is an unlawful act or omission to discharge a legal duty
which causes inconvenience or annoyance to the public, or interfering with
the exercise of employment of a right common to all.
⚫ Public nuisance is primarily a crime, but if a member of the public can
prove that he has suffered some special damage over and above that
suffered by the general public, he will succeed in a civil action.
Statutory nuisance
⚫ Constitute certain maters which are declared by statute to be a nuisance.
⚫ Certain statutory nuisances have been created by Parliament e.g. Public
Health Act (cap 242) section 118 contains a long list of Statutory nuisances
e.g. “premises in such a state as to be injurious or dangerous to health; any
stream, pool…cesspit in such a state as to be injurious to health”
⚫ The Environmental Protection Act also contains a list of statutory nuisances
e.g. accumulation or deposits or animals which are ‘prejudicial to health or
a nuisance’.
⚫ A statutory nuisance cannot exist where there is merely an interference with
the personal comfort of the occupiers.

Private Nuisance
⚫ Private nuisance is committed where one person unlawfully interferes with
another’s use or enjoyment of land.
⚫ Some form of unjustifiable interference must take place e.g. noise, smells,
smoke, fumes, pollution of the air or water etc.
⚫ Essentially, the law of private nuisance attempts to reconcile conflicting
interests.
⚫ The duration of the nuisance is relevant, not only in establishing the
existence of a nuisance but also in determining which remedy is most
appropriate – an injunction or damages or both.
⚫ To hold a party at times of universal gaiety is reasonable, but to hold
frequent parties going into the early hours of the morning causing excessive
and continuous noise would amount to a private nuisance.
⚫ The person who will be liable in an action for nuisance will be he person
who creates the nuisance, or permits it to continue on his land unabated.
⚫ It is no defence in nuisance for the defendant to show that the plaintiff came
to the nuisance or that the conditions giving rise to nuisance are even
beneficial to the community e.g. providing employment.
⚫ Act of God is a defence and statutory authority.
⚫ It has been seen that malice is not a tort in itself (Bradford v Pickles) but
malice could be relevant in nuisance, depending upon the surrounding
circumstances.
⚫ In Hollywood silver Fox farm Ltd V Emmett (1963) All ER 825,
⚫ It was held that the plaintiffs were entitled to damages and an injunction to
restrain the defendant from firing guns or making other noises in the
vicinity of the plaintiff’s fox farm during the breeding season.

Remedies
⚫ Damages,
⚫ Injunction, or
⚫ Abating of the nuisance e.g. the occupier of land can always lop off the
branches of his neighbour’s tree which protrude over his land.
⚫ However this form of remedy should not be taken lightly.
⚫ The sort of problem a plaintiff could face is shown in one case where
branches from the defendants’ apple trees encroached over the plaintiff’s
land.
⚫ The plaintiff cut off the branches stripped off the apples and then sold them.
Although he was within his rights to lop off the branches, he had no right to
keep them, or the fruit.
⚫ He was successfully sued by his neighbour for having misappropriated the
fruit.
The rule in Rylands v Fletcher
⚫ The type of liability created by this tort is Strict Liability.
 ⚫ This means that if a set of given facts fit the requirements of the rule, then
the defendant will be liable, whether he took care or not.
⚫ This tort is always known by the name of the case which gave rise to
particularly form of liability.
⚫ The basics of liability were stated as follows:
⚫ “Where a person, for his own purposes, brings on to his land, and collects
and keeps there anything likely to do mischief if it escapes, he must keep it
at his peril and if he does not do so, he is liable for all the damage which is
a natural consequence of the escape.”
⚫ Decisions on this have extended the scope of the rule apart from water to
fire, gas explosions, electricity, oil, and fumes even to a flag pole.
⚫ But even if it has been established that there has been a non-natural user of
land, it must be proved that there has been “escape” from the defendant’s
land to the plaintiff’s land and consequential damage.

The rule involves a number of points:

1. The dangerous ‘thing’ must be brought by the defendant on to his land. It follows
that no liability can arise from an escape of something which is naturally on the
land.
E.g. weeds or rocks

2. The ‘thing’ must be likely to cause harm if it escapes

3. There must be an escape i.e. the person injured must show that he was not on the
defendant’s land at the time when the harm occurred.

4. The escape must cause damage; may be injury to the person or damage to property.

5. The defendant must bring the ‘thing’ on to his land for his own purpose and in
doing so must be making a non-natural use of his land. In case of Rylands v
Fletcher, the non-natural use was bulk storage of water in a reservoir.
 There are several well established defences to an action under the rule:

• Where the damage caused has been due to the natural user of the land e.g. where
water escapes from land owing to natural gravitation, wrongful act, he cannot
recover.

• Fault of the plaintiff- if the damage is caused by the plaintiff’s own wrongful act,
he cannot recover.

• Consent of the plaintiff-presumably tenants on different floors of a building

impliedly consent to the presence of a water supply running through the
building. If flooding occurs on an upper floor causing damage to a lower floor,
there will be liability.

• Where the escape is caused by the wrongful act of a stranger.

• Act of God

• Statutory authority

• A tangent of the rule is liability for fire. Someone will no be held liable if a fire
begins in their estate/house accidentally and spreads.
⚫ Another tangent is liability for animals. Liability for animals may arise in
both nuisance and negligence but there are two sets of rules governing this
form of liability.
⚫ An occupier of land is liable without proof of negligence for damage done
by his cattle if they trespass on to the land of his neighbour and thereby
cause damage. This is known as cattle trespass.
⚫ “Cattle” includes bulls, cows, horse, sheep, goats, pigs and even poultry but
not cats and dogs. It is in the nature of cats and dogs to trespass.
⚫ Liability can also arise under what is known as the scienter rule, which
stems from the rule in Rylands v Fletcher.
⚫ For the purpose of the scienter rule, animals are divided into two main
categories:
i) Animals mensuatae naturae
ii) Animals ferae naturae
⚫ Animals mensuatae naturae are those which are harmless by their nature
e.g. rabbits, pigeons, domestic pets, e.g. dogs, cats etc.
⚫ The owner of such an animal will only be liable if the animal commits an act
which is contrary to the nature of its species but which the owner knows that
has a propensity to commit.
⚫ Animals ferae naturae are those which by their nature are dangerous e.g. lions,
elephants, snake etc.
⚫ A man who keeps such an animal does so at his peril for if it causes injury he
will be strictly liable, even in the absence of negligence.

NEGLIGENCE
⚫ Negligence is the “omission to do something which a reasonable man,
guided upon those considerations which ordinarily regulate the conduct
of human affairs, would do, or doing something which a prudent and
reasonable man would not do”.

⚫ To succeed in an action for negligence, the plaintiff must prove:

1. That the defendant owes the plaintiff a legal duty of care.
2. That the defendant was in breach of that duty.
3. That as a result of the breach of that duty the plaintiff suffered damage.
4. The damage must not be too remote (i.e. must be foreseeable)
5. The defendant must not be able to raise any defence to the plaintiff’s claim.
⚫ The question as to whether the defendant owed the plaintiff a legal duty of
care is for the courts to decide.
⚫ The case of Donoghue v
Stevenson is a good example.
⚫ Duty, remoteness and causation, are all devices by which the courts
limit the range of liability for negligence…
 ⚫ It is not every consequence of a wrongful act which is the subject of
compensation.
⚫ The law has to draw a line somewhere.
⚫ Sometimes it is by limiting the range of persons to whom a duty is owed.
⚫ Sometimes it is done by saying that there is a break in the chain of
causation.
⚫ At other times it is done by saying that the consequence is too remote to be
a head of damage.

The duty of care

⚫ The role of the duty of care concept is a simple one: that of marking out
problem areas and laying down the rules limiting liability in each.

⚫ Liability in negligence can only arise if a duty to take care is owed.

⚫ Whether a legal duty of care exists depends upon whether what took place
was reasonably foreseeable.

⚫ It is clear that a motorist owes a legal duty of care towards fellow motorists
and pedestrians, the surgeon and dentist towards their patient, the
manufacturer towards the consumer.

⚫ Before a duty of care can exist, it must be shown that there is foresight of
harm, that there is proximate relationship between the parties and that it is
just and reasonable to impose the duty.

⚫ There are certain well-recognised situations where the courts have faced
particular problems in establishing whether a duty should exist because of
policy considerations. These include:
Cases involving pure economic loss

⚫ As a general rule, no duty of care is owed where plaintiff suffers only pure
economic loss.

⚫ An example can be found in the case where a research institute negligently

allowed a virus to escape which caused foot and mouth disease, and as a
result cattle needed to be slaughtered over a wide area. Markets were
closed to stop the spread of the infection.
 ⚫ The plaintiff was a cattle auctioneer who lost profits as a result i.e. his only
loss was pure economic loss.

Cases involving negligent mis-statements

⚫ If the negligent statement results in physical damage, the normal rules of

negligence operate.

⚫ So, in one case where an architect negligently stated that a wall was safe to be left
standing, he was successfully sued in negligence by a workman who was injured
when the wall collapsed (Clay V Crump).

⚫ In negligent statements, there has to be dishonesty, mere carelessness is not

enough.
Judicial Immunity situations
⚫ The courts have recognised that there are times when there will be liability
in tort for negligent misstatements.
⚫ Nevertheless, no liability attaches of the statement made by a judge, lawyer
or arbitrator in the course of legal proceedings.
Nervous shock situations
⚫ Nervous shock in this context means illness like psychiatric disorder or depression.
⚫ Nervous shock as a consequence of negligent behaviour causes no problems where
the victim has also sustained physical injuries.
⚫ The cases which cause problems are those where the only harm is the nervous
shock especially if a person was never in any danger himself of suffering physical
harm.
Negligent exercise of statutory powers
⚫ Where a Local Authority acts under statutory powers e.g. in the building inspection
processes, there may be liability for negligence if, once having decided to inspect,
the inspector fails to carry out the inspection properly.
⚫ However there would be no liability in negligence. So long as the Local Authority
had given proper consideration to the question of whether or not to inspect.
Omission to act
As a broad general rule there can be no liability in negligence for pure omission
to act.

Breach of Duty of Care

The plaintiff must prove that there was a breach of that duty.
⚫ This is a question of fact.
⚫ The standard of care required will be that of a reasonable man and will vary
according to the facts of the case.
⚫ So a surgeon must operate with the care that a reasonable surgeon would
take, a builder must build with the care that a reasonable builder would take
and so on.
⚫ In formulating a standard of reasonable care, everyone is assumed to have
knowledge about common facts. e.g. fire burns, knives cut, water can
drown etc.
⚫ In assessing how much risk is involved in the defendant’s activities, one
judge has said that ‘people must guard against reasonable possibilities not
fantastic possibilities’.
⚫ As a general rule, the plaintiff has to prove that the legal duty of care owed
him was broken.
⚫ A plaintiff seeking to prove negligence may also rely on the maxim “res
ipsa loquitur”, the facts speak for themselves.
⚫ In the absence of any explanation on the part of the defendant, the plaintiff
will have discharged the burden of proof.
⚫ The respondents can avoid liability if they can show either that there was no
negligence on their part which contributed to the accident; or that there was
a probable cause of the accident which does not connote negligence on
their part or that the accident was due to circumstances not within their
control.
Damage resulting of the type which is not too remote
⚫ Once the breach of the legal duty of care has been established , the plaintiff
must prove that the injury suffered was caused by the breach.
⚫ A break in the line of causation may make the damage too remote.
⚫ Causation is concerned with the problem of whether the defendants conduct
caused the plaintiff’s damage.
⚫ Remoteness is concerned with the cut-off point at which the law regards, the
defendant as no longer liable to compensate the plaintiff.
⚫ Causation- a defendant may behave
negligently towards a plaintiff and yet still not be the cause of his injuries
e.g. (doctor & patient).
 ⚫ Remoteness- the plaintiff must show the harm he suffers was not too remote
a consequence of the negligent act.
⚫ The test used by the court is that a defendant is only liable for such
consequences of his negligent act as could reasonably be foreseen.

Contributory negligence
⚫ The court has power to reduce the damages awarded to the plaintiff if he is
found guilty of contributory negligence. This means that the plaintiff has
shown lack of reasonable care for his own safety.
⚫ It is important to note that if someone possessed of a special skill
undertakes, quite irrespective of contract, to apply that skill for the
assistance of another person who relies upon such a skill, a duty of care
will arise.

Duties of an employer
Closely related to the study of common law negligence are the common law duties owed
by an employer to his employees. They are as follows:
1. To provide a competent staff.

2. To provide adequate plant and material.

3. To provide a safe system of work.

Occupier’s liability
⚫ Occupier’s Liability Act ( Cap 34) provides that the occupier of premises owes “
the common duty of care” to all his visitors.
⚫ Visitors are all persons who are lawfully on the occupier’s premises.
⚫ The common duty is also defined as “a duty to take such care as in all
circumstances of the case as is reasonable to see that the visitor will be reasonably
safe using the premises for the purposes for which he is invited or permitted by the
occupier to be there”.

⚫ The duty concerns “dangers due to the state of the premises or to the things done or
omitted to be done on them”
⚫ In Lougher V Kenya Safari Lodges & Hotels the plaintiff was a guest at the
defendant’s hotel. He slipped on the floor outside a changing room in the hotel
swimming pool area and broke an ankle. A claim for damages for breach of
common duty of care by the plaintiff succeeded; proper precautions had not been
taken against the probable wetness of the floor due to barefooted swimmers
walking on it.
Some conditions are imposed to decide if there’s been breach:
⚫ An occupier must be prepared for children to be less careful than adults.
⚫ An occupier may expect that a person in the exercise of his calling, will appreciate
and guard against any special risks ordinarily incident to it, so far as the occupier
leaves him free to do so.
⚫ If the occupier has given a warning of a danger
⚫ The occupier is not liable for the negligence of an independent contractor.
⚫ The occupier is not liable if the visitor has willingly accepted a risk.
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PRINCIPLES OF LAND
LAW LAND LAW
Introduction
The Unit is designed to introduce the fundamental
principles of land law. It builds upon the study of concepts
related to land since pre-colonial to the current system.

ABA 2508: BUILDING LAW AND Definition of terms

CONTRACT ADMINISTRATION Land law is the form of law that deals with the
rights to use, alienate, or exclude others from land.
In many jurisdictions, these kinds of property are
referred to as real estate or real property, as distinct
from personal property.

 The conveyancing dimension of land law

 Each of the legal interests in land assumes
that there is a relationship between two Conveyancing is a document that transfers the ownership of
an interest in land from one person to another: it looks at the
or more people (such as a landlord and a formalities to be followed when creating or transferring an
interest in land.
tenant) and it looks at the rights and
duties of each party to that relationship. Importance
 to ensure that there is certainty as to who has some kind of
proprietary (or ownership) interest in a given piece of land
 promotes certainty by defining the procedure to be followed
when creating, transferring or extinguishing an interest in
land or contracting to do so (the law on formalities)
 promote certainty by requiring owners to register their
interests in a public register.
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Legal concept of land ◦ Physical characteristics of land

 Jackson (1987) defines land as land  Land is immobile - land cannot be moved
covered with water, all matter growing on although sand soil gravel may move by
it together with buildings and any other action of nature the land retains its
things permanently affixed to it. geographical location.
 Jacobus (2003) asserts that land is the
 It's indestructible – this means land is
surface of the earth, the sky above it and
everything below to the centre of the durable and this makes land a worthwhile
earth. investment
NB: The above definitions have the three  Non-homogeneous - no two parcels of
rights of ownership in land i.e sub-surface, land can be the same and cannot occupy
surface and air rights. the same position on the globe.

◦ Economical characteristics of land RIGHTS AND INTERESTS IN


 Scarce - there is shortage of land and thus has a
great demand .This also means that excess supply
LAND
of land in one area cannot meet the requirements  Interests recognized under law are;
of another area. The market is restricted thus 1. Estates,
making supply inelastic
 Modification - Can be modified or improved 2. Servitudes and
 Fixity - Fixed in terms of payment or return on 3. Encumbrances
investment.The land cannot be moved from its
present location of a lesser value to a location of
a higher value for instance land in Kamulu being
moved to Runda.
 Situs - Sites or location generally hinders the
preferences of land in different locations differs.
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1. Estates in land a) Free Hold

 These are interests in land capable of being  This is the greatest interest in land a person
created for a defined period of time. They can have. It gives absolute ownership of the
are quantifiable in terms of time scale i.e. land.
interests for a given duration of time and are  A freehold title generally has no restriction
enjoyed in one’s own land. as to the use or occupation but in practice
 Whereas estate is the legal interest in land, there are conditional freeholds which
tenure of land on the other hand means a restrict the use say agriculture or ranching
set of conditions upon which an estate or purposes only.
interest in land may be owned.  They are subdivided into;
 Types of interests in common law are; i. Freeholds of inheritance i.e. Fee-Simple estate
a) Freehold, and Fee-Tail estate
b) Leasehold and ii. Freeholds not of inheritance i.e. Life estate and
Estate Per autre vie
c) Customary estate

 Fee simple - This is the largest quantum or  Life interest - This estate only lasts for
bundle that land owners can have. A fee simple
represents absolute ownership of land, and the life time of the guarantee or interest
therefore the owner may do whatever he or she holder.
chooses with the land. If an owner of a fee simple
estate dies intestate, the land will descend to the
heirs.
 Estates per autre vie - In this form of
 Fee tail - This is an estate in land subject to a estate the ownership lasts for the life
restriction regarding inheritance. A fee tail is an time of another. Example if a property is
interest in real property that is ordinarily created
with words such as "to A and the heirs of his given to A for the life of B, when B dies
body." It may be limited in various ways, such as before A the property then reverts to the
to male or female heirs only, or to children
produced by a particular spouse settler and eventually B inherits nothing
from the settler.
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b) Lease Holds  They include:-

 These are interests in land that are
limited in duration i.e. there are specific a) Fixed term estate
periods for which they are meant to last b) Periodic tenancy
and where such duration is not expressly
c) Tenancies at will
stated or explained such durations should
d) Tenancies at sufferance
be capable of being ascertained, currently
limited to 99 years. It may be granted by a
freeholder usually subject to a fee
payment or rent and subject to certain
conditions to be observed. They include:-

 Fixed term estate

c) Customary estate
This is normally a lease held by an owner for a fixed period of
time i.e. 99 years. It is guided by certain conditions which may  This applies in those areas not covered by
or may not be done in the continuing relationship of the
parties. registration where the applicable law is
 Periodic tenancy customary law. Hence, it is presumed that
This may be defined as tenancy from year to year or half year this estate exists as a result of the state
to half year. This tenancy is characterized by the element of
continuity .It does not end abruptly but there are steps to be failure in not having all the land brought
taken for this tenancy to end i.e. giving a notice.
 Tenancies at will
under the registration system. Thus if a
This tenancy is created by an express agreement. If there is no land based matter pertaining to certain
time fixation in the agreement then the tenant may be evicted people’s rights was to arise in an area not
by the owner at any time, and this also applies to the tenant
terminating the agreement at will. registered the applicable law would be
 Tenancy at sufferance
governed by the customary estate of the
This is said to be the smallest estate known to law. It exists
when one owns or possesses land by lawful title but then keeps particular community.
ownership without the title at all.
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2. Servitudes  The owner of property burdened by servitude

cannot unilaterally terminate the servitude or
transfer the property free from the servitude
 Can be defined as a device that ties rights without the consent of all the beneficiaries.Thus,
whether or not they expressly agree to its terms,
and obligations to ownership or possession subsequent owners and occupiers are bound to
of land so that they run with the land to follow the servitude.
successive owners and occupiers.  Servitudes arise out of agreements between
 Servitudes allow people to create stable owners and users but may also be created by
prescription (i.e., by open use of someone else’s
long-term arrangements for a wide variety property for a specified period of time) or by
of purposes, including shared land uses; eminent domain (i.e., government appropriation
maintaining the character of a residential of private property for public use).
neighborhood, commercial development, or  Agreements to create servitudes are subject to a
historic property; and financing statutory requirement which requires that they
be created by a written instrument.
infrastructure and common facilities.

 Servitudes usually, but not always, involve two or  The three basic types of servitudes
more parcels of land, one of which is burdened
and the other benefited by the servitude. The include:
burdened parcel is called the “servient estate” a) Easements,
and the benefited parcel the “dominant estate.”
Benefits and burdens that run with the land are b) Covenants, and
“appurtenant” (i.e., they must be used for specific
property) and cannot generally be detached from c) Profits.
the land with which they are associated.
 -use arrangements implemented by servitudes
range from simple driveway easements and
covenants prohibiting non-residential use of
subdivision lots to complex declarations that
provide for the physical and governmental
infrastructure, planned developments, or private
towns.
 7/25/2018

a) Easements b) Restrictive covenants

 These allow the right to enter and use, for a  These are often referred to as negative easements to
the extent that they restrain the activities of the
specified purpose, land that is owned by registered proprietor as to what he can possibly do
another (e.g., the right to install and maintain within his land.
an electric power line over someone else’s  In the event the place curves on the free exercise of
land). the proprietor’s powers and freedoms in relation to
 Easements are commonly used to provide his land, they in effect introduce an element of
curtailment of enjoyment of one’s rights in relation to
for driveways, private roadways, parking, his own property and that restraint is intended to
utility lines, irrigation ditches, and pipelines. benefit all persons other than the proprietor himself.
Historically, easements have been used to  Examples of covenants are agreements between
create rights-of-way for rail, roads, streets, owners of a parcel of land that they will pay
and highways, but more often full ownership assessments to a homeowner’s association and
interests are acquired for those kinds of agreements with an owner of a business on a parcel
facilities of land that another parcel of land in the area will not
be used by a competing business.

c) Profits  There are 3 ways in which a profit can be brought

about:
 profits as a right to go on right of another, i. Unity of seisin which involves acquisition of
to take a particular substance from that ownership or the servient tenement by the owner of
the profit at which point the question of enjoying the
land whether it is the soil or products of profits ceases. Easements and other rights of servient
the soil. tenement for the benefit of a dominant tenement are
extinguished if both tenements come into the same
 A profit entails the taking of something ownership).Where profit is pertinent to land it
terminates through unity of both tenements
from another’s land, something capable of ii. Release that is duly executed and evidenced in
ownership that is taken from the servient writing;
tenement. iii. Alteration of the dominant tenement in such a way
that it cannot support the exercise of such a right so
 They give someone the right to enter and the alteration must be such that it alters the nature
remove natural resources (e.g., sand and the dominant tenement and is completely overhauled
and there is a presumption that any right that existed
gravel) from the land of another. must be distinguished.
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c) encumbrances  Mortgages
 The transfer of an interest in specific
immovable property for the purposes of
These includes Mortgages and Charges and securing of the payment of money
it forms Land as Security for a Loan. They advanced or to be advanced by way of
are borrowing transactions. loan, an existing or future debt, or the
performance of an agreement which may
give rise to financial liability
 In this interest there is a temporary
transfer of interest to the financial
institution

Classification and Creation of a) In a simple mortgage, the borrower

binds himself to repay the loan with a
Mortgages provision that the lender can cause the
security to be sold on default.
b) A mortgage by conditional sale is the
Under section 58, I.T.P.A. four classes of kind of arrangement where the borrower
legal mortgages may be created. These are : ostensibly sells the property to the lender
 (i) Simple mortgages; subject to the following conditions:
(a) that on default of payment the sale shall
 (ii) Usufructuary mortgages; become absolute; or
 (iii) (iii) Mortgages by conditional sale; (b) that on payment of the mortgage debt, the
sale becomes void;
 (iv) (iv) English Mortgages.
(c) that on payment of the debt, the property
will be retransferred to the borrower.
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c) In the case of a usufructuary  Remedy of Mortgages

mortgage, the lender takes possession of  (i) Foreclosure
the mortgaged property and repays himself, This is a court order which absolutely debars
either wholly or partially, from the rents, the mortgagor or charger from his right to
rates and proceeds from the land. redeem the property. A successful foreclosure
operates to extinguish all subsequent
d) An English mortgage is one in which
mortgages.
the borrower binds himself to repay the
 (ii) Judicial Sale
mortgage money on a certain date and
transfers the mortgaged property absolutely This is an alternative remedy to that of
foreclosure. It is preferable to foreclosure
to the lender, but subject to a provision that where property mortgaged is worth more
he will retransfer it to the borrower upon than the mortgage money
repayment of the mortgage money.

 (iii) Statutory Power of Sale Charges

 (iv) Right to take possession  Section 3 of the Act defined a charge as
 (v) Suit on personal covenant “an interest in land securing the payment
A lender may sue on the borrower's of money’s worth on the fulfillment of any
personal covenant to repay the principal condition and includes sub charge
and interest. This is a right which may be instruments creating a charge.” Unlike
exercised even though the property has mortgage it does not transfer interests in
been sold. land from borrower to the lender but
 (vi) Right to appoint a receiver
operates only as a security.
 (vii) Right to Consolidate
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Priority of Mortgages/Charges Termination of Mortgages/Charges

 Under all registration statutes, priority is  A mortgage/charge may be terminated by a
given by registration and not by the date of lender exercising his statutory power of sale,
the document. For this purpose, the date of or by foreclosure, or judicial sale, or by
registration is the date that a document is
presented to the registry for registration, redemption and subsequent discharge.
notwithstanding that the actual entry in the  On termination of a mortgage by
register may be delayed. redemption, the property is retransferred to
 The proviso to section 42(1) of the R.L.A. the borrower by execution of a
states that where an instrument is prepared reconveyance, or a re-assignment and under
in the registry, it shall be deemed to have the R.L.A., on redemption the charge is in
been presented on the date on which the practice discharged by the execution of a
application for its preparation was made to discharge of charge, duly attested and
the Registrar.
registered.115

◦ POWERS OF USE AND DISPOSITION  There are three types of waste namely;
a) Viz ameliorating – this involves a change of
 The fee simple is said to be unlimited in
system of husbandry which has the effect of
scope and that the holder has unlimited enhancing the value of the land. Thus this waste
powers of use, abuse and disposition. generally destroys the owner’s evidence of title.
Restrictions on these rights come about b) Permissive waste – this is an omission whereby a
building or buildings are allowed to fall in a state
through a number of statutory of decay.
qualifications. These restrictions basically c) Voluntary waste – this is a wrong of commission
relate to the landowner’s activities on of a positive act of injury to the property. It may
his/her land. The restrictions also are involve pulling down or altering houses charging
the course of husbandly, opening pits or mines
applied equally to leaseholds. Jackson cutting down timber etc.
(1987) defines abuse as waste.
 7/25/2018

◦ Qualification to freedom of use  The land planning Act (cap 303) deals with the
 Section 115 of the Health Act (cap 242) provides ‘No person shall control of development of urban land.
cause a nuisance or shall suffer to exist on any land or premises
owned or occupied by Him or of which he is in charge any
 Section 10 prohibits any development of the
nuisance or other condition liable to be injurious or dangerous to land without consent from the central
health’. authority. Section 3 defines development as
 The objective of the act is to prevent injury to health. Section 118 erection of buildings, the making of any
states that nuisance includes any animals or things so kept on the material changes in the use of any buildings
land as to be dangerous or injurious to health. Prevention of or land sub-divisions or advertisement of
accumulation of direct filth or refuse on and that can cause or be
hazardous to health.
land. If this is done unauthorized then
Section 119 – empowers medical officer to serve the owner and
through a notice the planning authority can

engage him in the removal of the nuisance. take steps to stop it; alter it or even
 Section 120 and 121 of the owner does not adhere to the removal
demolish.
of the nuisance then he is liable to pay a fine.  A fine or imprisonment also can be served
to the owner.

◦ Abuse and disposition

 The Agriculture Act (cap 318) – this gives
 Under the land control Act (cap 302) consent to
the Cabinet Secretary of Agriculture wide transactions must be obtained from appropriate
powers in connection with land. Section land control board.
48 gives him/her powers to make rules on
The following can prevent an owner from disposing
preservation of land. In summary he/she off land.
can;  Caution – any person claiming a contractual or
other right over land amounting to a defined
 Make preservation orders interest capable of creation by a registrable
 Land development orders instrument i.e. a lease holder may lodge a caution
with the registrar against any dealings that is
 Land management orders inconsistent with the interest. And in caution if
one lodges a caution without reasonable cause is
liable to pay remedy in damages.
 7/25/2018

◦ Abuse and disposition continues..  Requirements relating to disposition

 Capacity to dispose of or acquire an interest in
 Inhibition – it is a court order preventing land. Any person of sound mind can hold and
for a time or until the occurrence of an dispose an interest in land. In the case of an infant,
event to be named in such order or until the can hold an interest in land but has no power in
making of a further order, the registration of disposition the registrar in this case can put a
restriction. A committee or guide would be used
any dealing with the land. to deal with the property. For mentally
 Restriction – is imposed by the registrar, handicapped person the high court takes the
either on his own motion or on the mandate.
application of any interested person.  Must be in writing – through its memorandum
Normally imposed for the prevention of any and its contents. This adopts the doctrine of past
fraud or improper dealings in land or for any performance under section 3(3) of the law of
other sufficient use. contract Act (cap 23). Every contract for the
disposition an interest in land must be a general
NB: Under the R.T.A and R.L.A it is used to rule be evidenced in writing.
protect the government interest in land.

Requirements relating to disposition ESTOPPELS

continues…  An estoppel is legal principle that bars a
party from denying or alleging a certain
fact owing to that party's previous
 Execution of the documents and conduct, allegation, or denial.
attestation of signatures, verification  Estoppel includes being barred by false
execution, powers of Attorney. representation or concealment (equitable
 Registration - Recording interests in land estoppel), failure to take legal action until
for ease of conveyancing. the other party is prejudiced by the delay
(estoppel by laches), and a court ruling
against the party on the same matter in a
different case (collateral estoppel).
 7/25/2018

 An estoppel is, when a man is concluded a) Equitable Estoppel

by his own act or acceptance, to say the  Equitable Estoppel, sometimes known as
truth. estoppel in pais, protects one party from
 There are two general types of estoppel: being harmed by another party's
a) Equitable and voluntary conduct.
b) Legal.  Voluntary conduct may be an action,
silence, acquiescence, or concealment of
material facts.
 One example of equitable estoppel due
to a party's acquiescence is found in the
case law: Lambertini v. Lambertini

 There are several specific types of i. Promissory estoppel is a contract law

doctrine. It occurs when a party reasonably
equitable estoppels: relies on the promise of another party, and
because of the reliance is injured or damaged.
For example, suppose a restaurant agrees to
 Promissory estoppel
pay a bakery to make 50 pies. The bakery has
 An estoppel certificate only two employees. It takes them two days to
make the pies, and they are unable to bake or
sell anything else during that time. Then, the
restaurant decides not to buy the pies, leaving
the bakery with many more pies than it can sell
and a loss of profit from the time spent baking
them. A court will likely apply the promissory
Estoppel doctrine and require the restaurant to
fulfil its promise and pay for the pies.
 7/25/2018

ii. An estoppel certificate is a written  Estoppel by laches - precludes a party

declaration signed by a party who attests,
for the benefit of another party, to the from bringing an action when the party
accuracy of certain facts described in the knowingly failed to claim or enforce a
declaration. The estoppel certificate legal right at the proper time
prevents the party who signs it from later
challenging the validity of those facts. This
type of document is perhaps most
common in the context of mortgages, or
home loans. If one bank seeks to purchase
mortgages owned by another bank, the
purchasing bank may request the
borrowers, or homeowners, to sign an
estoppel certificate establishing:

 Legal Estoppel GOVERNMENT RIGHTS IN LAND

 Legal estoppel consists of estoppel by  This was adopted from the European way
deed and estoppel by record. Under where the feudal system and allodial use
the doctrine of estoppel by deed, a party of land which was providing services and
to a property deed is precluded from general land administration.
asserting, as against another party to the  Though land could be owned by an
deed, any right or title in derogation of individual, it was necessary for the
the deed, or from denying the truth of any government to retain certain rights on
material fact asserted in the deed. the land.
 7/25/2018

 These four rights are:  B. Eminent Domain - This means that the
government is able to take up land individually
owned for public use and improvement. Acquiring
this land is done through legal process called
 A) Property taxes - this basically means Condemnation where the owner is paid a fair
that proceeds from the land were market price for the land that is taken up.
Severance damages are paid upon when there is
apportioned to the king or the only a portion of land being taken while still the
government. These taxes helped to owner gets compensation for the land taken. At
times an owner might force certain authorities to
support the government and also increase buy their land. Example land close to Airports
the government revenue. may be sold back to the authorities and this is
referred to as Inverse Condemnation. When there
is condemnation of land next to an owner B and
there is resultant improvement on the land that
reduces the value of owner B's land then
consequential damages are paid.

 C. Police Power – These are basically

government enacted laws to ensure there
is order, safety health and general welfare
of the citizens. This includes zoning laws,
planning laws, building laws health and
safety.
 D. Escheat -This basically means land
reverting back to ownership by the
government when a person dies and
there are no heirs to the property. This
also applies when the property has been
abandoned for a long time.
14.3.05T MORTGAGES AND CHARGE

14.3.05T11 MORTGAGE AND CHARGE

Definition of Mortgage: is the transfer of an interest in specific securing the payment of
money advanced or to be advanced by way of loan, an existing or future debt, or the
performance of an engagement, which may give rise to peculiarity liability.

The transferor is called a mortgager and the transferee a mortgagee. The principal
money and interest on this money for which payment is secured is called the mortgage
money. The instrument (document) by which the transfer is effected, is called a
mortgage deed.
Definition of charge: is an interest in land, securing the money payment of money or
money‟s worth or the fulfillment on any condition, and includes sub charge and the
instrument creating a charge.

14.3.05.T13 TYPES OF MORTGAGES

Are two main types:
a Legal Mortgages, and
b Equitable Mortgages

a LEGAL MORTGAGES
In Kenya the Legal Mortgage may be created under Section 58 of the Indian Transfer of
Property Act 1882. According to this Act, the following four classes of Legal Mortgages
may be created:
i) Simple Mortgages
ii) Usufructuary Mortgages
iii) Mortgages by Conditional Sale
iv) English Mortgages.
i) In a simple mortgage, the borrower binds himself to repay the loan and in the case of
default, the lender can sell the security to recover his money.
ii) In the case of a Usufructuary mortgage, the lender takes possession of the
mortgaged property and repays himself, either wholly or partially, from the rents,
rates and proceeds from the land.
iii) A Mortgage by conditional sale, is that type of arrangement where the borrower
sells the property to the lender subject to the following conditions:
1. That on the default of payment the sale shall become absolute; or
2. That on payment of the mortgage debt, the sale becomes void;
3. That on payment of the debt, the property will be transferred to the
borrower
iv) An English mortgage: is that type of mortgage when the mortgager binds himself to
repay the mortgage money on a certain date and the transfers the mortgages property
absolutely to the lender, subject to this provision that he will retransfer it to the
borrower upon repayment of the mortgage money. The English mortgagers are more
valuable as compared to other types of legal mortgages.
 b EQUITABLE MORTGAGES
These mortgages are created in accordance with the provisions of the Equitable
Mortgages Act (Cap. 291) together with the relevant sections of the Government Lands
Act and the Land Titles Act. In the case of an equitable mortgage, the mortgager
(borrower) deposits with the lender (mortgagee) the title deed of the property as security
for the loan. When the loan has been repaid, the Lender (Mortgagee) returns the title deed
to the borrower (mortgager).

Rights of Mortgagers (Lenders)

Section 100 (A) (1) of the Indian Transfer of Property Act provides that the remedies of a
legal Mortgage are available as contained in the Act. The same remedies are also
extended to equitable mortgages under section 100 (A) (2) of this Act. It means that legal
and equitable mortgages have similar rights. The rights of the mortgages are described as
under:
a Foreclosure:
Under this right the mortgagee (lender) may obtain a court order extinguishing the
mortgager‟s equitable right to redeem the property. This order can be obtained if the
mortgager (borrower) fails to pay the sum due for an unreasonable time. This order is
made in two stages:
i) The borrower is given time within which to repay the debt so as to redeem his
property.
ii) If the borrower is unable to repay the mortgage money as ordered then
absolute order of foreclosure is made. In this case, the full estate is vested in
the name of the mortgagee. After this order, the land can be offered by the
mortgagee for sale.
b Sale:
This is an alternative remedy to that of foreclosure. In this case, a mortgagee may sell the
mortgaged property upon an order of court. A sale of the property may also be affected
without an order of court, but only where the mortgagee to sell without applying to court.
The sale must take place in public auction.
The proceeds of the sale must be applied in the following orders:
i) In payment if all expenses property incurred or incidental to the sale.
ii) In payment of all sums due to the mortgagee and to pay any other encumbrances.
iii) In payment in the order of priority of any encumbrances subsequent to the
mortgagee; and
iv) The residue if any, in payment to the mortgager

c Suit on Personal Covenant:

In every mortgage, the mortgager covenants, among other things, to repay the principal
sum plus interest on a definite date. This is a personal covenant, which he enters into with
the mortgagee. Once the date of repayment has passed, the mortgage may sue on this
personal covenant.
Under the Limitation of Actions Act (Cap 22), a suite to recover the principal sum will be
barred if instituted after twelve years from the date of the accrual of the right to receive it.
Only six years interest is reasonable under the Act.
d Appointment of a Receiver:
This is one of the ways in which the mortgagee may realize his security. Such
appointment may be made by the mortgage, in which case it must be done in writing, or it
may be made by the court upon an application by the mortgagee. A receiver is appointed
by the lender in writing, but he is deemed to be the agent of the borrower. The receiver is
responsible for collecting rents, profile, and income relating to the property. The money
received must be applied in the following order:
i) In discharge of any prior encumbrances free from which the property was sold.
ii) In paying the receiver‟s own commission insurance premiums and the cost of
repairs (if any);
iii) In payment of interests accruing sue in respect of the principal due under the
mortgage;
iv) In discharge of the mortgage debt if so directed by the lender.

e Right to take possession:

A mortgagee may also realize his security by entering into possession of the security
property. Where the mortgagee chooses to realize his security by taking possession of the
mortgaged property, he becomes a mortgagee in possession. He is then accountable to the
mortgager for any income received by him from the time of entering into possession. In
this case the mortgagee is responsible for:
i) Any failure to be diligent in realizing any sum due to him from the mortgaged
property.
ii) An occupation rent if he occupies all or part of the mortgaged land, at the fair
market value.
iii) An unreasonable injury or neglect of the mortgaged land caused by his willful or
negligent act or omission.
iv) Repairs and improvements to protect the value of mortgaged land. In this case he
is allowed to charge reasonable cost of repairs and improvements made.

Rights of the Mortgager (borrower)

The main right of the mortgager is his right to redeem the mortgaged property on
payment of the principal sum borrowed, plus interest. In Common Law, if a borrower
didn‟t repay the mortgage debt on due date (i.e. Legal date of redemption), hid right to
redeem the mortgaged property was extinguished. But the equity of redemption was
allowed to the mortgager. The term “equitable right of redemption” was based on the
following two equitable principals.
i) Once a mortgage, always a mortgage;
ii) Equity looks at the intent rather than the form.
According to the principal of “Equitable Right of Redemption”, the mortgager has the
right to repay the debt plus interest, even after the date for redemption. Equity treats the
right of redemption with special care. Any term in a mortgage deed, which greatly
benefits the mortgagee at the expense of the mortgager, should be viewed carefully. The
right of redemption exists as long as an order of foreclosure has not been issued by a
court.
 In addition to the Equitable Right of Redemption, the mortgager has the following
rights:
i) The appointment of a receiver
ii) The statutory power of sale of land
iii) The action on the personal covenant to repay the money lent
iv) The improvements to the mortgaged property
v) The payment of public charges in respect of the mortgaged property.

Revision Questions
a) Briefly explain the following:
i) Mortgage
ii) Charge (6mks)
b) Describe equitable mortgages.
(3mks)
c) i) Briefly explain the term „mortgage‟
ii) Outline the types of mortgages.
iii) Outline the use of land as security in mortgage transactions. (12mks)
PERSONNEL
RECRUITMENT
Recruitment is the first part of the process of filling a vacancy; it includes the
examination of the vacancy, the consideration of sources of suitable candidates, making
contact with those candidates and attracting applications from them. It is aimed at
ensuring that the organization‟s demand for employees (recruits) in a cost-effective and
timely manner.
A vacancy can be:
a) Additional to the present workforce i.e., it has occurred because of some new or
increased activity, and hence the need for the new employee and a job
specification.
b) A replacement for people who have left the organisation, transferred or
promoted

SOURCES OF LABOUR
Sources of labour can be:
1. Internal
2. External
Internal Sources: Advantages over external sources include:
a) Better motivation of employees
b) Better utilization of employees in higher positions through promotion
c) The employee is better known than non-employee and hence more reliable
d) The employee is more likely to stay on with the company than an external
candidate
e) Internal recruitment is quicker and cheaper.

External Sources: External recruitment is time-consuming, expensive and uncertain.

External sources may be divided into two:
a) Those that are comparatively inexpensive but offer limited choices:
i) Recommendations by present employees – employee referrals.
ii) Casual or unsolicited applicants – candidates apply or visit the work
place under own initiative
iii) Direct links with learning institutions – colleges, universities etc
iv) Trade unions
v) Job centres or careers office. These may be public or private e.g., Job
link, Manpower Services Commission, Public Service Commission etc
vi) Professional organisations appointments service

b) Those that are comparatively expensive but give the employer access to a wider
range of candidates e.g.,
i) Private agencies, management consultants, etc. On this list will be
Delloitte & Touché, PriceWaterCoopers, Manpower Services Ltd, Ernst
& Young, KPMG Peat Marwick etc.
ii) Advertising in print and/or electronic media e.g. newspapers, radio &
television, the Internet etc.
SELECTION
This is the process of assessing by various means those candidates coming forward,
identifying the individual(s) most likely to fulfill the requirements of the organisation
followed by an offer of employment.

Job Description
This is a broad statement for the purpose, scope, duties and responsibilities of a
particular job. It must contain most or all of the following about the job concerned:
i) Title of job;
ii) Grade/Salary level;
iii) Title of immediate superior;
iv) Number of subordinates;
v) Overall purpose of the job
vi) Principal responsibilities of the job
vii) Limits of Authority; and
viii) Location of job.

Skills can best be developed only by actually doing; therefore participative methods are
best such as field studies (management laboratories), demonstrations, case method,
decision simulation exercises and role-playing. This leads to ability to perceive
significant differences and use knowledge.

Q. a) State FIVE functions of training staff in a construction company.

b) Briefly outline the following training methods:
i) On-the-fob training
ii) Off-the-job training

STAFF APPRAISAL
Appraisal is the evaluation of the effectiveness of individuals in their job performance.
It helps in evaluating how a worker succeeds in his present job and this is important for
estimating how well he or she will perform in the future.
The appraisal process starts with the completion of appropriate appraisal forms,
followed by interview, in which the supervisor/ manager discusses progress with the
worker. The result is some of agreed action either by the staff member alone, or jointly
with the supervisor/manager. The action generally materializes in the shape of a job
improvement plan, promotion to another job or to a salary increase.
There are two categories of appraisal:
a) Informal
b) Formal
Informal appraisal is the continuing assessment of an individual‟s performance by
his manager in the normal course of work and hence a by-product of the day-to-day
relationship between supervisor/manager and subordinate.
Formal appraisal is altogether more rational and orderly than informal appraisal.
Purpose of Staff Appraisal
Appraisal has the following functions:
1. To assess an individual‟s current level of job performance
2. To identify employee strengths and weakness so that remedial measures can be
taken to improve productivity
3. To provide a basis for promotion, transfers or dismissals in relation to their
contribution to organisation goals
4. To motivate and increase job satisfaction of workers
5. To identify training and development needs of workers as individuals or as
groups
6. To identify potential performance
7. To provide information for succession planning, which involves identifying
who is currently in post and who is available and qualified to take in the event
or retirement, voluntary leaving, dismissal or sickness, for example.

Appraisal Methods
The following are the main performance appraisal methods:
1. Written essays: an immediate supervisor of a worker is asked to describe the
worker‟s strengths and weaknesses. This method depends heavily on the
objectivity of the supervisor.
2. Critical Incidents: a supervisor describes, in writing, a good or bad thing that a
worker did at a particular time. In this case only specific behaviours are cited.
From this kind of listing a worker can be shown his or her strengths and
weaknesses.
3. Graphic rating scales: this is one of the oldest and most popular appraisal
methods. The rating scale is a list, which consists of a number of performance
factors, like quality and quantity of work, knowledge and skill levels,
interpersonal relations.

Revision Questions
1. State SIX strategies that a construction firm can adopt in the case of excess
manpower
2. Using a flow diagram outline the interview and selection procedure from the
time applications are secured to the time when the post is filled.
3. Briefly describe the procedure followed in the recruitment of skilled labour for a
given site. (7mks)
4. Outline the interview and selection procedure in an organisation in the form of a
flow chart. (8mks)

TRAINING TECHNIQUES
Training is process of providing junior employees with specific knowledge and skills
in order to enable them to perform specific work tasks.
Training of workers serves the following important functions:
 i) Is an important investment in human resources since it increases employees‟
productivity. Acquisition of newer skills and knowledge helps employees to
increase both quantity and quality of output in work.
ii) Enhances job motivation and satisfaction. Dissatisfaction, which leads to
tardiness, absenteeism, turnover and job restriction, can be greatly reduced
when employees are enabled. Through training to experience direct job
satisfaction associated with a sense of achievement and knowledge that they are
developing their inherent capabilities at work.
iii) Reduces the problems, which are associated with the supervision of employees.
A well-designed training programme enhances employees‟ abilities to learn new
work methods and equipment and also helps them to adjust to changes in the
content and context of their jobs.
iv) Increases a worker‟s value to an organisation, and this prepares him or her for
promotion
v) Increases the stability of an organisation since it creates a reservoir of qualified
employees who easily replace those who either transfer, retire or exit from the
organisation for various reasons.
vi) Reduces work-related accidents. This is because proper training in job skills and
safety techniques enhances employee abilities to handle work-related equipment
carefully.

Training Methods
1. Lecture method is a talk given without much, if any, participation in the form of
questions or discussion on the part of the trainees.
Suitable for factual information especially for large audiences where participation
of the trainees is not possible because of numbers. The information to be put over can
be exactly out beforehand – even to the precise word.
The lack of participation on the part of the audience means that, unless the whole
of it, from beginning to end, is fully understood and assimilated, the sense will be
lost.
2. Discussion method – knowledge, ideas, opinions and solutions on a particular
subject are freely generated and exchanged among the trainees and the instructor.
Suitable where the application of information is a matter of opinion. Also when
attitudes need to be induced or changed. Trainees are more likely to change attitudes
after discussion that they would if they were told during a talk that their attitude
should be changed.
Also suitable as a means of obtaining feedback to the instructor about the way in
which trainees may apply the knowledge learned.
The trainees may stray from the subject matter or fail to discuss it usefully. The
whole session may be blurred and woolly. Trainees may become extrenched about
their attitudes rather than be prepared to change them. Requires adequate leadership.
3. Text reading – To broaden and update the fund of knowledge of facts, functions,
techniques etc. Factual and substantive knowledge can be transferred by traditional
methods such as reading assignments, tutorials, exercises and programmed learning.
4. Fieldworks – To develop managerial skills such as ability to observe, diagnose
problems, formulate solutions, make decisions, or communicate
Ways of controlling and interview in a firm, but diplomatic way
i) Proper preparation especially questions to the candidate, physical conditions of the
room
ii) Returning the questions felt not to have been adequately answered by the candidate,
i.e., not being fobbed off by a plausible non-answer.
iii) Politely, but firmly, cutting short a response, which has gone on too long or is a
repetition of things already mentioned.
iv) Supplying the candidate with information and hence forcing him or her to listen.
v) Using the application form as a map of the interview, on which progress can be
plotted.
vi) Resisting the temptation to get involved in an interesting but time-consuming issue
raised by the candidate.
vii) Allocating the time available for the interview between the key phases to be
covered.

Interviews are usually not used to assess technical ability or value of past life and
hence psychological tests are used to supplement the information gained during
interviews.

PSYCHOLOGICAL TESTS
These are standardized tests designed to provide a relatively objective measure of certain
human characteristics by sampling human behaviour. Standardized in the sense that the
same set of tasks has been of typical results have been developed to provide standards
against which subsequent results can usefully be compared. They are in four categories:
1. Intelligence tests
2. Aptitude tests
3. Attainment tests
4. Personality tests

Intelligence tests are designed to measure thinking abilities. General intelligence can be
demonstrated by verbal ability, spatial ability or numerical ability or a combination of
them.
Aptitude tests are basically tests of innate skills such as mechanical ability, clerical and
numerical ability and manual dexterity.
Attainment tests measure test measure the depth of knowledge or grasp of skills (e.g.
typing abilities, spelling abilities and mental arithmetic), which have been learnt in the
past.
Personality tests aim to identify an individuals principal personality traits or dimensions
e.g. introverted or extroverted, sociable or isolate etc.

Summary of procedure for recruitment and selection of staff

Staff requisition form should be completed by the head of department where the
vacancy arises, noting full details of the vacancy.
Advertisement placed: Word the advertisement correctly so that unsuitable candidates
do not apply. Media used for advertising should be checked periodically to ensure it is
effective.
Shortlist drawn up to select from the total number of applicants those who appear worthy
of an interview. Arrange interviews.
References can be taken up before the interviews and used to determine the final
selection at the interviews
Interviews may be structured using standard procedures and techniques e.g. five- or
seven-point plan.
Tests for specific skills are usually left to the time of the interview. Professional
qualifications claimed should be checked.
Medical examination may be essential and appointments are often made conditional
upon passing.
Unsuccessful candidates are informed of the decision
Successful candidates are informed and company records updated

Job Specification
This is a detailed statement of the physical and mental activities involved in the job
and, when relevant, of social and physical environmental matters. The specification is
usually expressed in terms of behaviour, i.e. what the worker does; what knowledge he
uses to do it; the judgments he makes and the factors he takes into account when making
it.
For several personnel functions a detailed account of the job is necessary. The most
important of these are:
i) Selection
ii) Promotion
iii) Appraisal
iv) Setting performance standards
v) Job evaluation
vi) Training

Candidate Specification
This is a summary of the knowledge, skills and personal characteristics required of
the jobholder for successful and acceptable job performance standard.
There are two well-known classifications for personal requirements: the Seven-point
plan developed by Professor A. Rodger, and the five-point plan by J. Munro Fraser.

Seven-point plan Five-point plan

a) Physical make-up a) Impact on others
b) Attainments b) Acquired qualifications
c) General intelligence c) Innate abilities
d) Specialized aptitudes d) Motivation
e) Interests e) Adjustment
f) Disposition
g) Circumstances

The above two form general profiles of candidates for selection. The seven-point plan is
generally more popular.
THE SELECTION INTERVIEW
By far the most common technique is selection. The measure of reliability of an
interview is the extent to which conclusions about candidates are shared by different
interviewers while the measure of validity an interview is the extent to which it does
measure what it is supposed to measure, i.e., the suitability of a particular candidate for
the job.
Causes of poor interviews
Lack of training in interviewing techniques
Lack of adequate preparations for an interview

Interviewing Procedure
1. Be prepared: Obtain available information e.g. job details, candidate
specification and application form. Arrange interview room, ensure no
interruptions and plan the interview.
2. Welcome the candidate: After initial courtesies, thank candidate for coming.
Explain briefly what procedure you propose to adopt for the interview.
Commence by asking relatively easy and non-threatening questions
3. Encourage the candidate to talk: Ask open-ended questions. Prompt where
necessary. Indicate that you are listening. Briefly develop points of interest
raised by candidate.
4. Control the interview: Direct your questions along the lines that will achieve
your objectives. Tactfully, but firmly, clamp down on the over-talkative
candidate. Don‟t get too involved in particular issues just because of your own
interests. Observe time.
5. Supply necessary information: Briefly add to information already made
available to the candidate. Answer candidate questions. Inform candidate of the
next steps in the selection procedure.
6. Close Interview: Thank candidate for his/her response to your questions.
Exchange final courtesies.
7. Final steps: Write up your notes about the candidate. Grade or rank hi/her for
suitability. Operate administrative procedures regarding notifications etc.

Of a worker then rates the worker in each factor on a five-point scale.

4. Behaviourally anchored rating scales (BARS): several important dimensions of a

job, or just two extreme statements of anticipated behaviour, are identified and
defined. These dimensions include planning, communication or meeting deadlines.
The identified dimensions are then described along a continuum scale from effective
to ineffective behaviour. The worker is then rated accordingly on this scale against
each dimension.
 Dealing with customer relations, a scale could demonstrate a range of possible
behaviour from the best, e.g. „Deals politely and efficiently with customers at all times‟,
to the worst „is barely civil to customers, is inefficient‟.

Q. Briefly explain the following methods of staff appraisal:

i) Appraisal by immediate superior
ii) Appraisal by supervisor‟s superior
iii) Appraisal by a member of the personnel department
(9mks)

STAFF WELFARE, HEALTH AND SAFETY

An employer has a common law duty to provide a safe place of work for his employees,
and is liable at common law for accidents caused by his employees in the course of their
employment. Statutory duties include specific duties towards members of the public
affected by the employer‟s activities and employees of other employers working on his
premises, as well as towards his own employees. Every employer is obliged by law to
take out employers‟ liability insurance to cover accidents and injury to his employees.
The general principles to be followed by employers in matters of health and safety at
work are contained in the Health and Safety at Work Act, 1974, whose purposes can be
summarized as:
1. To secure the health, safety and welfare of persons at work
2. To protect persons other than employees against risks to health and
safety arising from work activities
3. To control the keeping and use of explosives or highly flammable or
otherwise dangerous substances
4. To control the emission into the atmosphere of noxious or offensive
substances from prescribed premises (e.g. factories)

Role of Health and Safety Supervisors

1. Enter any premises with a good reason to investigate conditions. Take samples and
measurements
2. Take statements from relevant persons in the course of their investigations
3. Serve notices on employers (and other persons) requiring them to remedy breaches
of the relevant statutory provisions
4. Serve prohibition notices where there is a serious risk of personal injury at work.
5. Conduct summary prosecutions in a magistrate‟s court for failure to discharge
health and safety duties.

DISCIPLINARY ACTION AND TERMINATION PROCEDURE

Discipline is the action by management to enforce organizational standards. Without
a high cultivation of discipline, a slack anti-cooperative situation will arise, resulting in
lower production, poor teamwork and a general loss of control.

Stages of disciplinary action

Various stages of disciplinary action are available. In order of increasing severity they are
 1. Helpful suggestions
2. Constructive criticism
3. Severe reprimands
4. Discharge
Which form of action to take depends upon the case in point, but relating the right
action in a given situation is a major aspect in the handling of people.

Disciplinary Procedure
The Code of Practice prepared by the Advisory, Conciliation and Arbitration Services
(ACAS) contains a model disciplinary procedure, which may be summarized as follows:
a) A written disciplinary procedure, which is fair, full and quick, should be agreed
between management and employee representatives.
b) Each employee should know what the procedure constitutes, forms of disciplinary
action, which may be taken (dismissal, suspension or warning), nature of their
alleged misconduct, and reasons for any penalty they receive.
c) Ensure that every case is properly investigated before any disciplinary action is
taken.
d) Specify the appropriate levels of authority for the exercise of disciplinary actions,
provide that senior management is consulted, give the employee an opportunity to
state his case and be accompanied by a fellow employee or union representative,
provide for a right of appeal, and specify the appeals procedure
e) State that no employee will be dismissed for a first offence, except in cases of
gross misconduct; before dismissal occurs, two written warnings should have
been issued, setting out details of the alleged offence and the consequences of
continued errant behaviour.

A model disciplinary procedure should aim to correct unsatisfactory behaviour,

rather than to punish it. For appeals, it should aim to ensure that these are dealt with
quickly, so that the employee involved can be informed of the final decision without
undue delay.
Because of the serious implications of disciplinary action, only senior managers are
normally permitted to carry out suspensions, demotions or dismissals. Other managers
and supervisors are normally restricted to giving warnings.

Dismissal is the termination of employment by

a) The employer, with or without notice
b) The employee‟s resignation, with or without notice, when the employer behaves
in a manner that demonstrates refusal to be bound by the contract of employment
(this is termed constructive dismissal. Meaning that the employer is behaving so
unreasonably that the worker has no alternative but to quit).
c) The failure of the employer to renew a fixed-term contract

Termination Procedure
Dismissal Without notice: is termed as “summary dismissal”. The employer should
normally give a notice to the employee as stated in the Contract of Employment Act, but
in rare cases. The conduct of the employee is such that the employer is legally entitled to
dismiss the employee without notice. Examples of misconduct justifying instant dismissal
are:
a) Refusal to obey a reasonable instruction, providing the refusal is serious enough
to indicate that the employee is repudiating the contract. A refusal in a fit of
temper would not justify instant dismissal unless it was maintained afterwards.
b) Serious neglect of duties
c) Absence from work without permission or good cause
d) Activities in private life, which might adversely affect the employer‟s business
e.g. running a similar business, or discreditable behaviour, which might drive
customers or clients away from the company.
e) Dishonesty towards the employer
f) Violence towards the employer other employees

Dismissal With notice: The Employment Protection (Consolidation) Act of 1978

requires that employees with at least 6 month‟s service are legally entitled to a written
statement of the reasons for their dismissal. The dismissal must only be for a good reason
and must be fair, because unjust capricious dismissals will result into:
 Adverse effect on employee‟s motivation
 Lowering the reputation of the company
 Creation of an industrial relations problem
 Exposing the employer to legal action

Unfair dismissal: “Wrongful dismissal” occurs when insufficient notice is given.

“Unfair dismissal”, in contrast, is defined under the Employment Protection
(Consolidation) Act of 1978 as dismissal, which has occurred for reasons other than (a)
genuine redundancy (b) gross misconduct (c) inadequate performance

Reasons for fair dismissal include:

a) Disruption of staff relations
b) Organizational inefficiency
c) Temporary job coming to an end provided the employee was notified at start of
employment
d) If the continuation of that person‟s employment would cause the company to break a
law e.g. if a driver lost his driving license

Q. 1. Write down the FOUR stages of disciplinary action

2. Outline FOUR principles to be observed when disciplining a worker
3. State FIVE factors that may cause termination of service of an employee.

REMUNERATION
It‟s the amount paid or to be cash to the employee by the employer. Clear of any
deductions in respect of any matter whatsoever except any deductions lawfully made.
Wage Structures
A wage is all the money received by a manual worker for being at the disposal of his
employer whether it is earned or not. Wages are usually paid weekly, and more difficult
to calculate, especially in the building industry. This is because of:
i) Frequent movements from one job to another per week in cases of repair
jobs
ii) Loss of earnings due to bad weather
iii) Traveling time may have to paid or lodging allowances and many more
items hence complicating the wage payment.
It is therefore vital that careful records are kept on workman‟s time to assess correctly
their earnings is his basic time wage, which is at times fixed by job evaluation but is
subject in most industries to minimum rates agreed in national collective bargaining or
laid down by wages councils.
Other payments given to manual workers in addition to the basic rate are:
i) Overtime pay for work done beyond normal hours
ii) Shift pay for employees who work unusual or changing hours, to compensate
them for inconvenience and hardship
iii) Special additions e.g. danger money, dirty money or wet money paid to the
employee during abnormal working conditions
iv) Merit or length of service additions either on the results of appraisal or on
completion of a certain period of service
v) Cost of living allowances in response to a rise in the general price level or to
employees who work in high cost areas
vi) Policy allowances cover miscellaneous extra payments. Like the addition to the
job evaluated rate for temporarily scarce employees
vii) Payments by results bonus, i.e. an extra payment based on the output of the
worker or of the group to, which he belongs.

Salary Structures
A salary is a fixed periodically payment to a non-manual employee. It‟s usually
expressed in annual terms; implying a relatively permanent relationship, though normally
paid at monthly intervals.
Characteristics of salaries
1. Usually all-inclusive, i.e., no additional payments of danger money or
productivity bonus etc
2. Is progressive, in most cases increasing annually as opposed to a wage earner who
reaches the standard rate quite early and doesn‟t receive annual increases
3. Often personal unlike a wage which id a sum given to all workers at a particular
job
4. Often confidential, but there is secret about a wage
5. (In the private sector) are less likely to be the subject of trade union negotiations
then wages.

Human Relations
The term “human relations” refers to all interactions, good and bad, among
individuals, between individuals, between superiors and subordinates and in formal and
non-formal groups of people in the industry, business, construction projects and society.
Good relations give rise to a pleasant atmosphere and make life joyful and happy, while
bad relations cause tension and bitterness. Human behaviour in the work environment
covers more than just the activities involved with the actual work itself. Thus it is
important that every body should have a sound knowledge of human relations.

LEADERSHIP STYLES
Leadership can be described as a dynamic process in a group whereby one individual
influences the others to contribute voluntarily to the achievement of group tasks in a
given situation.

Functions of a Leader
In organizational dynamics a leader fills many of the voids left by a conventional
organizational designs. His functions include:
(1) Allows for greater organizational flexibility and responsiveness to environmental
changes provides
(2) Provides a way to coordinate the efforts of diverse groups within the organisation.
(3) Facilitates organizational membership and personal needs satisfaction.

Qualities of a leader
The following are some of the qualities one could expect to find in a leader:
Self-confidence: Without it the men under him will soon lack confidence in his orders,
for the leader will be continually changing his mind because he is not sure of his own
knowledge. A leader must be positive in his thinking.
Temperament: a quick or erratic temper will soon lose the respect of the men. Temper
should be even and controlled; a cheerful enthusiasm for work with consideration and fair
play for others will contribute a great deal towards success.
Respect: a leader needs the respect of all those with whom he is working, not only
subordinates but also superiors, and this popularity can often be achieved through
consideration for others. Bad manners and language will do nothing to enhance respect.
Tact: many problems in labour relations present themselves to a leader and so if
unpleasantness is to be avoided and good feeling maintained, situations and unpleasant
tasks must be handled diplomatically.
Energy: example is the keyword here, for it is generally agreed that enthusiasm is
infectious; spurts of energy are no good, it must be sustained, will often show itself in the
organisation of a site.
Technical skill: Comparisons are often made on this subject relating to skill gained
through years in an industry and that gained through education and books. The best
solution would be comprehension of both so that the leader knows the methods suggested
in theory and can relate these through his acquired knowledge of practical application.
Some „book learning‟ should always be sought by the leader for it must be realized that
points picked up in practice may not always be the right ones.

Other attributes in a leader are tidiness, punctuality, intelligence and integrity. To find
all of these attributes in one human being is rare, but some can be cultivated if the basic
qualities are there, and, possibly above all else, the person chosen must want to be a
leader, whether in the capacity of craft foreman or managing director.

Leadership Styles
A leadership style refers to a particular behaviour applied by a leader to motivate his
or her subordinates to achieve organizational objectives. Leadership styles are usually
identified as points on a continuum. The pioneering work on leadership conducted at the
University of Iowa in 1938 investigated the impact of three leadership styles on the
behaviour of group members.

AUTHORITARIAN STYLE
Also known as autocratic or authoritative or benevolent leadership
Nature: 1. Leader retains all authority and responsibility. He assumes a paternalistic role,
which forces subordinates to rely on the leader for their satisfaction
2. Leader assigns to people clearly defined tasks
3. Primarily a downward flow of communication
Primary Strength: stresses prompt, orderly and predictable performance
Primary Weakness: Approach tends to stifle individual initiative and leadership
qualities. Work disintegrates when leader is absent.

DEMOCRATIC STYLE
Also known as participate or consultative leadership.
Nature: 1. Leader delegates (decentralizes) a great deal of power and authority while
retaining ultimate responsibility.
2. Work is divided and assigned on the basis of participatory decision-making
3. Active two-way flow of upward and downward communication.
Primary Strength: enhances personal commitment through participation. Subordinated
tend to venture on their own initiative and communicate freely with fellow subordinates,
resulting in cooperative spirit and development of managerial abilities.
Satisfaction is gained through feeling of group accomplishment.
Primary Weakness: Democratic process is time-consuming.

LAISSEZ-FAIRE STYLE
Nature: 1. Leader avoids responsibility and abdicates authority and power to group
2. Leader depends largely on the group to establish goals and means for
achieving progress and success
3. Primarily horizontal communication among peers.
Primary Strength: permits self-starters to do things as they see fit without leader
interference
Primary Weakness: group may drift aimlessly in the absence of direction from leader.

Revision Questions
1. Describe THREE leadership styles that can be found in a construction firm stating
ONE merit for each. (12mks)
2. i) Define leadership
ii) Briefly explain the Laisssez-faire or free-rein leadership giving THREE
advantages and THREE disadvantages. (8mks)
 iii) Outline FIVE qualities of a good leader. (7½mks)

INDUSTRIAL RELATIONS

This is the aspect of all those activities, which contribute both formally and
informally to the organisation of the relationships between employers and employees. In
some instances these relationships are predominantly formalized as a result of collective
bargaining between employers and trade unions as to the role, status and working
conditions of employees.

Dispute and Dispute Procedure

A trade dispute is a dispute between workers and their employer, which relates
wholly or mainly to one or more of the following:
a) Terms and conditions of employment
b) Engagement or non-engagement, or termination or suspension of employment
… of one or more workers;
c) Allocation of work or the duties of employment as between workers or groups
of workers
d) Matters of discipline
e) A worker‟s membership or non-membership of a trade union
f) Facilities for officials‟ trade unions
g) Machinery for negotiation or consultation, and other procedures relating to any
of the above matters; including the recognition by employers … of the right of a
trade union to represent workers‟.

A key element in most procedure agreements is the disputes procedure, which in a

few cases, such as in engineering, may be a separate agreement. The aim of a disputes
procedure is to settle disputes speedily, as near to the original source as possible. The
following factors may cause disputes:
Failure to agree during the course of negotiations
A differing interpretation of an existing agreement
An issue, which has risen as the result of the implementation of an agreement (e.g.
concerning redundancies or dismissals)

When disputes arise, they should be tackled at once, since everybody would like them
to be short-lived. Most organisations have two or three stages of an internal procedure,
involving progressively more senior managers and union officers. If the dispute can‟t be
solved internally, then, but only then, can external sources be called in, which could be
conciliation officer, a mediator or an arbitrator.

Q. State any SIX sources of disputes in the construction industry. (6mks)

Grievance and Grievance Procedure

Causes of Grievances
1. Discrimination – pay, leave, welfare facilities, working hours
2. Undue favouritism – promotion, distribution of work to workers
 3. Inhuman behaviour – exploitation or bad treatment of workers by superiors
4. Lack of incentives – e.g. non-implementation of bonus schemes
5. Strict rules – too rigid rules and regulations
6. Victimization e.g. trade union officers – transferring them
7. Miscellaneous e.g. bad machinery and tools

In grievance handling, all managers and supervisors are involved unlike in discipline.
This is because one of the key features of every effective grievance procedure is that it
should aim to settle the grievance as near as possible to the point of origin.
In a work team where the manager or supervisor is in close touch with the members,
issues that might lead to a grievance tend to be dealt with in the course of day-to-day
problem solving. Where, however, an issue is still not satisfactorily resolved from the
employee‟s point of view, then a formal application may be made to raise the issue under
the appropriate procedure which may follow the following stages:
Stage 1
The employee should first raise the matter with his or her immediate supervisor or
manager and may be accompanied by a fellow employee. The manager or supervisor will
endeavour to resolve the grievances without delay.

Stage 2
If the employee is not satisfied with the response of his or her immediate manager or
supervisor, the matter may be referred to the department manager or other appropriate
senior manager, who will hear the grievance within 5 working days of it being referred to
him. During this meeting the employee may be accompanied by a fellow employee and
the company personnel Manager will be present.

Appeal
If the employee is still dissatisfied after the second stage, he or she may appeal to a
director, who will arrange to hear the appeal within 5 working days. The employee, an
accompanying employee, and the Company Personnel Manager will be in attendance for
the appeal. The results of the appeal will be recorded in writing and distributed to all
parties concerned.

Managers are trained in the tactics of grievance interviewing. The fundamental point
is that no hasty judgments or solutions should be made until all the facts of the case are
clear, and all third parties have been consulted and, where appropriate, have agreed to the
proposed solution.
The key points to note can be summarized thus:
Objectives: 1. Obtain the facts
2. Arrive at an acceptable solution
Strategy: Aim for a win/win conclusion
Tactics: a. Listen carefully to the employee‟s side of the story
b. Ask probing questions to elicit relevant facts and feelings
c Summarize from time to time to ensure mutual understanding
d Attempt to unravel cause(s) of grievance
e Check facts obtained and meet any other parties involved
 f Consider actions that could be taken and assess their consequences
g Reply to the aggrieved employee and record actions taken.

The employee concerned should go away feeling reassured that either he or she has
no problem, or if they have, it is being tackled constructively by the immediate
supervisor. The manager or supervisor concerned should feel that the grievance has been
handled correctly and both parties have “won”. As with discipline cases, the idea is that
the outcome of a grievance includes appropriate learning by all those concerned.

Q. Outline THREE issues, which may give rise to informal grievances in a given firm.
(3mks)
Q. Briefly explain how grievances could be minimized on a building site. (5½mks)
 14.3.01T LABOUR RELATIONS
14.3.01T ROLE IF TRADE UNIONS IN CONSTRUCTION INDUSTRY
A trade union is an organisation of workers, which aims to protect and promote their
interests in the work place, mainly by means of collective bargaining and consultation
with employers.
The principal legislation on trade unions is contained in the Trade Union and labour
Relations (Consolidation) Act, 1992, which gives a legal definition of ‘trade union’ as
follows:
‘… an organisation (whether permanent or temporary) which either:
a) Consists wholly or mainly of workers of one or more descriptions and is an
organisation whose principal purposes include the regulation of relations between
workers … and employers or employers’ associations; or
b) Consists wholly of mainly of:
i) Constituent of affiliated organisations which fulfill the conditions
specified in (a) above, or
ii) Representatives of such constituent of affiliated organisations;

And in either case is an organisation whose principal purposes include the regulation of
relationships between workers’ associations,’

FUNCTIONS OF TRADE UNIONS

Trade unions serve the following two functions:
1. Social function
2. Industrial function
Social function: trade unions enable workers to:
1. Seek better working conditions and wages, greater job security and improved
welfare benefits
2. Gain some control over working environment
Industrial function: effects of trade unions on management include:
1. Decisions and policies are subject to challenge and negotiation
2. Limited management powers, more cautions use of powers
3. Centralized decision-making so that a unified company industrial relations policy
can be formulated and practiced
4. The management may be required to give certain information about the company
to union representatives.

The Trade Union and Labour Relations (Consolidation) Act, 1992, defines an
independent trade union as follows:
‘… a trade union which –
a) is not under the domination or control of an employer or a group of employers or
one or more employers’ associations; and
b) is not liable to interference by an employer …’

in assessing whether a trade union is independent, the Certification Officer applies a

number of guiding principles, summarized in the form of a number of key questions, as
follows:
 1. Is the union financially independent?
2. What assistance does it receive from the employer (premises, offices, extra time
off etc)?
3. How much employer intervention is present?
4. What is the union’s history (e.g. always independent or started out as a staff
association established by the employer)?
5. What rules are established to run the union?
6. Is this a single-company union (and therefore more liable to employer
interference)?
7. How much union organized and financed?
8. What is the union’s attitude towards negotiations, and what is its record?

Types of Trade Unions

1. Manual Workers’ Unions – Are principally the large general workers’ unions.
2. White collar Unions – are mostly general unions for clerical, administrative and
technical workers, and some specific to occupational groups, especially in the
public sector e.g. Kenya Building Construction & Allied Workers’ Union
3. Managerial/Professional Unions – Tend to recruit from those employed in
middle management and professional occupations e.g. University Academic Staff
Union.
4. Staff Associations – Are unions representing the employees of a single employer,
usually in the white-collar sector e.g. in banks, insurance etc.

Central Organisation of Trade Unions (C.O.T.U.)

It’s a confederation of all trade unions in Kenya. The role of C.O.T.U. is primarily to
represent the interests of employed people in debates and policy discussions on
employment and social security matters (e.g. pensions policy) at national and
international levels. The organization’s policies are derived from the annual congress of
COTU whilst the day-to-day operations are administered by a General Secretary and staff
directed by a General Council composed of a cross-section of independent trade union
leaders.

Functions of COTU
1. To agree and express a policy for the trade union movement
2. To promote legislation to protect and benefit its members
3. To be consulted by the government
4. To deal with inter-union disputes

Employers’ Associations
The approximate employers’ equivalent to C.O.T.U. is the federation of Kenya
Employers (F.K.E.). Its aims include:
1. Acting as a national reference point for those seeking industry’s views (e.g.
governments, foreign investors etc) on a range of economic, social and
commercial matters
2. Operating a number of important information, advisory and training services for
its members.
 3. Handling of employee relations’ issues, including, where applicable, collective
bargaining on behalf of a group of employers. In this role their main objectives
are as follows:
a) Represent employers in collective bargaining
b) Develop industry-wide procedures for the avoidance of disputes
c) Provide information and advice to members on employee relations’ matters
d) Represent workers on national employee relations’ issues

Employers’ associations must be distinguished from trade associations, which are

only concerned with furthering their members’ interests in commercial matters.

Workplace Representatives (Shop Steward)

Whilst some collective issues are still handled by national bodies e.g. unions and
employers’ associations, majority of collective matters are dealt with in the workplace. In
organisations where one or more trade unions are recognized for the purposes of
bargaining and./or consulting on behalf of the employers, it is usual for shop stewards to
be appointed by the union members. Such representatives are employees of the
organisation who fulfill unpaid work on behalf of their trade union colleagues within a
framework of rules agreed between the two parties – employers and union members.
The responsibilities of a shop steward include:
1. Negotiating local conditions, where appropriate agreements exist for enabling
them to do so.
2. Dealing with members’ problems in respect of pay, hours and other relevant
conditions of employment
3. Representing members in the course of a grievance
4. Monitoring the implementation of agreements with employers
5. Acting as a communication channel between members and the employer on
relevant matters
6. Contributing to joint discussions on workplace safety, efficiency etc
7. Acting as a link between the trade union and its members

Industrial Disputes
‘Industrial Dispute’ means any dispute or difference between employers and
employers or between employers and workmen or between workmen and workmen,
which is connected with the employment or their terms of employment or with the
conditions of labour of any person.
In addition to the causes of trade disputes, an industrial dispute relates to one or more
of the following:
1. Dispute regarding contract labour
2. Demand for modification of standing orders
3. A question of re-instatement of a workman
4. Alteration of condition of service of employees of a cooperative society
5. Claim of an employee who has ceased to be a workman

Revision Questions
1. a) Define a trade union (2mks)
 b) State FOUR functions of trade unions in construction industry. (4mks)
c) Outline THREE disadvantages of trade unions. (3mks)

2. a) State any SIX sources of disputes in construction industry. (6mks)

b) State any SIX factors that cause poor labour relations in an organisation.
(3mks)
c) State any TEN benefits of good labour relations in construction industry.
(5mks)
d) Briefly describe the procedural steps in handling grievances in an organisation
(6mks)
14.3.01T12 INDUSTRIAL TRAINING

The need for training concerns all, from management to operatives, and with the
industry becoming more and more technical, competitive and complex, the need for
training becomes more necessary. Combining theory with practice still holds good, and
the only variance is the time span, for it will take much longer to learn and apply
management techniques than to learn a practical skill.
The Directorate of Industrial Training (D.I.T.) was established under the Industrial
Training Act, 1964, its purpose is to ensure that there is an adequate supply of properly
trained men and women at all levels of industry, at the same time improving the quality
and efficiency of industrial training. It is to liaise with other providers of industrial
training (training institutes, national polytechniques, universities etc) in designing
training programmes that are relevant and responsive to social and economic
development needs of Kenya.
The construction industry is broadly divided into three groups:
1. Manual workers (tradesmen and labourers)
2. Technicians (the assistants to the professionals)
3. Management

Manual Workers: The system of training the apprentice by setting him to work
alongside a skilled craftsman is still carried on, but many organisations now provide
their own training schemes designed to meet the more modern methods of today’s
industrial needs. This may include attending technical college at the end of which an
examination is sat a certificate can be awarded to show proficiency of the apprentice.
Technicians: These are the link between craft and top management. Generally come
under the direct orders of a professional such as a quantity, engineer, architect,
estimator, planner etc. they require not only a high standard of knowledge of his own
duties, but also a wide understanding of the industry as a whole so that they can
converse and evaluate problems.
Management: All persons who have supervisory duties are referred to as management,
whether it be a director, top management, contracts manager, quantity surveyor,
middle management or site agent, general foreman, craft foreman, site management.
All have the same role to play, that of ensuring that the tasks they control are
completed to the satisfaction and benefit of the company.
Generally, training for management is a long term exercise. In the building
industry most management staff come from one the professions, e.g. surveying,
 engineering, estimating, planning etc. and though in-house training and education
courses learn to understand and adopt principles of management after having acquired
a professional qualification.

REGULATIONS GOVERNING
14.3.01T13 EMPLOYMENT IN
CONSTRUCTION INDUSTRY
The Employment Contract
A person employed by an organisation is either employed under a contract of service
and is therefore an employee or under a contract for services and is then an independent
contractor. It is only the former, which is referred to as the contract of employment. The
distinction is important because legal rights granted to individuals, e.g. the right not to be
unfairly dismissed, are only applicable to employees, and not to independent contractors.
Tests applied to determine a contract of employment exists in a given situation.
1. The organisation test – This asks whether the individual is integrated into the
organisation; if he is an employee; if not, he is an independent contractor
2. The control test – This asks where the control lies in the situation; if the
individual is told what to do and how to do it, he is an employee; if not then he is
an independent contractor.
3. The Multiple test – This takes several circumstantial factors into account as well
as both the control and organisation factors; this is the most comprehensive test to
date; where the individual appears, in all the circumstances, to be carrying out the
role of an employee, then he is an employee; where there is sufficient doubt about
the role being performed it is more likely that he is an independent contractor.

Advantages of being an employee over an independent contractor

1. The employer is liable vicariously for any civil wrongs committed by employee
in the course of his employment
2. Only employees are granted certain rights on protection in legislation e.g. rights
to minimum periods of notice, and rights employment, and rights to protection
such as the right not to be unfairly dismissed, and the right to pursue trade union
activities without being penalized; and lastly rights in matters relating to
benefits e.g. only employees are allowed to claim unemployment benefit and
industrial injuries benefit.

Redundancy
Under the Redundancy Payments Acts 1965, employers must make a weekly
contribution to a central fund administered by the Department of Employment to help
meet the cost of the Redundancy Payments Scheme which concerns all employees over
18 years. A payment is made to any employee who has worked continuously in the
service of the employer for not less than 104 weeks since the age of 18, normally
working 21 hours a week.
To enable a claim to be made, an employee’s main reason for dismissal must be that
the employer no longer needs anyone for particular work or that the work has ceased. The
reason why the employer needs less employees makes no difference, whether it be firm
closure, trade recession or new production methods. The lump sum payment received by
the employee will be calculated from completed years of service, up to a maximum of 20
years as follows:
1. For each year of employment between 18 and 21 inclusive, half a week’s pay
2. For each year of employment between 22 and 40 inclusive, one week’s pay
3. For each year of employment between 41 and under 65 (60 for women)
inclusive, 1½ week’s pay

Duties of an Employee
The employee has an obligation to:
1. Render a personal service, and be willing and able to do so
2. Take reasonable care in the performance of his duties
3. Obey reasonable and lawful instructions from his employer
4. Act in good faith towards the employer, e.g. not to work for two competing
employers at one and the same time
5. Not to impede his employer’s business

Duties of an Employer
The employer has an obligation to:
1. Pay wages
2. Provide work (but only for those who are paid by results e.g. salesmen on
commission)
3. Take reasonable care of the employee
4. Indemnify the employee where he necessarily incurs expenses and liabilities in
the performance of his duties
5. Treat the employee with courtesy.

14.3.01.T14 FACTORIES ACT AND BUILDING CODE REGULATIONS

Building, due to its very nature of serving the public, is controlled by considerable
legislation. The Factories Act, 1961, the Health and Safety at Work Act, 1974 and the
Building Code regulations have been passed with the aim of ensuring that industrial
workers are safeguarded in respect to their working conditions.
The employer’s statutory duties under the Factories Act, 1961, can be summarized as
follows:
1. To keep the factory clean and prevent overcrowding
2. Maintain a reasonable temperature, and adequate ventilation and lighting
3. To securely fence (i.e. guard) machinery
4. Maintain floors, passages and stairs
5. Provide safe means of access to and from work.

Powers of the Factories Inspector

The Factories Inspector administered the Factories Act and related regulations and the
special powers conferred on him, enable him to:
1. Examine any site, day or night
 2. Inspect any register, certificate, etc, which the Act and Regulations require to be
kept and to take copies if necessary
3. To seek out information from persons on site regarding occupier of the site
4. If obstruction to the carrying out of his duties is anticipated the factory inspector
may take with him a police officer
5. If any substance may prove harmful to employees, samples may be taken
6. Persons being employed for over 2 months on site can be questioned in private
and asked to sign a statement – but any employee is not obliged to say anything
if it incriminates him.

Notification of Accidents and Industrial diseases

To assist the factory inspector to carry out his duties, he will require various
notifications from the builder, as follows:
1. Notice of building operations expected to last six weeks or more (Form 10)
2. Notice of Accident of Dangerous Occurrence (Form 43B). This requirement is
for an accident resulting in death or absence from normal work for more than
three days and other occurrences noted in instructions on the back of this form
3. The Chief Inspectors of Explosives must be notified in the event of fire or
explosion due to petroleum spirit or explosives (Back of Form 43B)
4. Notification required under the Lead Paint Act 1962 (now embodied in the
Factory Acts) when persons are employed in painting buildings – no official
form
5. When certain diseases (e.g. silicosis, asbestosis) occur on site, notification to be
made on Form 41 to factory inspector and appointed factory doctor
6. Appointed factory doctor required to be notified within seven days of taking on
young persons (i.e. under 18) into employment – special form

NB Particulars of accidents should be given to the insurance company-covering firm for

employer’s liability. An accident resulting in absence for more than 3days must be
recorded in the General Register (Form 36) and all accidents should be recorded in the
accident book as provided for in the National Insurance (industrial Injuries) Act, 1946.

Causes of Accidents
There are many causes and reasons why accidents happen and it is the duty of the site
supervisory staff to know and to try to eliminate these to the best of their ability:
a) Weather – rain, frost and snow produce dangerous walkways, slippery
conditions, changes in ground conditions, often affecting excavations, hidden
traps, or materials covered in snow. Wind can cause considerable damage, for it
can easily blow over weak structures of loose sheet material.
b) Poor communication in the giving of orders relating to safety measures
c) Removing safety and protective guards. Workers are generally averse to the use
of masks, earmuffs, tight-fitting clothes, gloves, gumboots, goggles etc
d) Monotony in work – often forsaking safety precautions
e) Trying to work with too much haste – often caused through badly worked out
incentive scheme.
 f) Defective plant and equipment. Proper guarding and fencing of machinery is
sometimes rare, let alone its timely oiling and lubrication.
g) Unsafe ladders
h) Poor stacking of materials
and many more reasons. All can be eliminated, and will be if everyone plays their part in
accident prevention.

Revision Questions
1. a) State any FIVE reasons why the site personnel should be trained in the first aid
techniques. (5mks)
b) Identify FIVE common types of safety attire used by operatives on a building site.
(5mks)
2. a) list any FIVE factors which may influence the level of accidents on construction
sites (2½mks)
b) With respect to the ‘factories act’ explain the precautions that must be observed to
ensure that the health of employees is safeguarded against the following:
i) Dermatitis
ii) Silicosis
iii) Asbestosis
(4½mks)
 FINANCIAL ACCOUNTING

SOURCE DOCUMENTS AND BOOKS OF ORIGINAL ENTRY

These are documents containing the information that makes basis of making entries in the books of
accounts. They act as evidence that the transaction actually took place. They includes
 Cash sale receipt: - a document that shows that cash as been received or paid out of the business
either in form of cash or cheque. It is a source document that is mainly used in making records
in the cash journals cash book, cash accounts or bank accounts. If the receipt is received, it means
payments has been made and therefore will be credited in the above accounts, or taken to cash
disbursement/payment journals, while when issued, it means cash/cheque has been received and
therefore will be debited in the above accounts or taken to cash receipt journals

 Invoice: - a document issued when the transaction was done on credit to demand for their
payment. If the invoice is an incoming invoice/invoice received, then it implies that the
purchases were made on credit, and if it is an outgoing/invoice issued then it implies that sales
were made on credit.
The incoming invoice will be used to record the information in the purchases journals/diary,
while an outgoing invoice will be used to record information in sales journals/diaries

 Credit note: - a document issued when goods are returned to the business by the customer or
the business return goods to the supplier and to correct any overcharge that may have taken
place. If it is received, then it means part of the purchases has been returned and therefore the
information will be used to record information in the purchases return journals, while if issued
then it means the part of sales has been returned by the customers and therefore used to record
the information in the sales return journals/diaries

 Debit note: - a document used to correct an undercharge that may have taken place to inform
the debtor to pay more. It therefore acts as an additional invoice

 Payment voucher: - a document used where it is not possible to get a receipt for the cash/cheque
that has been received or issued. The person being paid must sign on it to make it authentic. It is
therefore used to record information just as receipts

Books of original entries/Journals/Diaries/day’s books/Subsidiary books

These are books where the transactions are listed when they first occur, with their entries being made
on a daily basis before they are posted to their respective ledger accounts. The information in the source
documents are used to make entries in these books. The books of original entries include:
 Sales journals
 Sales return journals/Return inwards journals
 Purchases journals/creditors journals/bought journals
 Purchases return journals/return outwards journal
 Cash receipt journals

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  Cash payment/cash disbursement journals
 Three column cash book
 The petty cash book
 Analysis cash book
 General journals/journal proper

a) Sales journals
This is used to record credit sales of goods before they can be recorded in their various ledgers. The
information obtained in the outgoing invoice/invoice issued is used to record the information in this
journal as the source document
The overall total in the sales journal is therefore posted in the sales account in the general ledger on
credit side and debtors account in the sales ledger as a debit entry
Sales journal
Date Particulars/details Invoice no Ledger folio amount

Example:
The following information relates to Tirop traders for the month of June 2010
June 1: Sold goods to wafula on credit of ksh 200, invoice no 0114
2: Sold to the following debtors on credit; Wanjiru ksh 400, Musyoka ksh 300, Wafula
ksh 300
5: sold goods on credit to Wanjiru of ksh 300
10: Sold goods to the following on credit Kanini ksh 100, Wafula ksh 500, Wanjiru ksh
600
12: Sold goods on credit to musyoka of ksh 350
Required:
Prepare the relevant day book for the above transactions; hence post the various amounts
to their respective individual accounts
Sales journal
Date Particulars/details Invoice no Ledger folio amount
June 2010:
1 Wafula 0114 SL 200
2 Wanjiru SL 400
2 Musyoka SL 300

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 2 Wafula SL 300
5 Wanjiru SL 300
10 Wanjiru SL 600
10 Wafula SL 500
10 Kanini SL 100
12 Musyoka SL 350
15 Totals posted to the sales
account (Cr) GL 3050

(Post the rest to their individual debtors account)

b) Sales Return Journals/Return inwards journals

This is for recording the goods that the customers/debtors have returned to the business. It uses the
information in the credit note issued as a source document to prepare it. The information is therefore
recorded to the return inwards account in the general ledger, while the individual’s entries are reflected
(credited) also in their respective debtors account for double entry to be completed. It takes the following
format
Sales return journal
Date Particulars/details Credit note no Ledger folio amount

For example;
Record the following transaction for the 2007 in their relevant diaries, hence post them to their respective
ledger accounts;
May 1: goods that had been sold to M Okondo of shs 2600 on credit was returned to the business
“ 2: G. Otuya returned good worth shs 1320 that was sold to him on credit to the business
“ 8: the following returned goods that had been sent to them on credit to the business H
Wati shs 3500, Muya shs 4700 M Okondo shs 2900
“ 12: G Otuya returned goods worth shs 5400 that were sold on credit to the business
“ 30: Goods worth sh 8900 that had been sold on credit to G Otuya were returned to the
business
Sales Return journal
Date Particulars/details Credit note Ledger folio amount
no
May 2007:
1 M Okondo S.L S.L 2600
2 G Otuya S.L S.L 1320
8 H Wati S.L S.L 3500
8 Muya S.L 4700
8 M Okondo 2900
12 G Otuya 5400
30 G Otuya 8900

Page 3
 Totals posted to Return
Inwards a/c (Dr) GL 29320
(Post the entries to the individual ledger a/c’s (Cr))

c) Purchases Journal
This is used to record the credit purchase of goods. The totals are then debited in the purchases account
in the general ledger, while the individual’s creditors accounts are credited. It used the invoices
received/incoming invoices as it source document. It takes the following format; Purchases journal
Date Particulars/details Invoice no Ledger folio amount

For example
The following information relates to Mikwa Traders for the month of April 2011. Record them in their
relevant day’s book, hence post the entries to their relevant ledger accounts. April 2011;
“ 2. Bought goods worth shs 25 000 on credit from Juma, Invoice no 3502
3. Bought goods worth shs 16 500 from kamau on credit, invoice no 2607
6. Bought goods worth shs 12 700 from Juma on credit, invoice no 3509
8. Purchased goods of shs 25 200 from juma, invoice no 3605; shs 17 500 from Kamau, invoice
no 3700; shs 45 000 from Wamae wholesalers, invoice no 3750
15. Purchased goods of shs 9 200 from Wamae wholesalers on credit, invoice no 3762
18. Bought goods of shs 17 000 from Kamau on credit, invoice no 3802
24. Purchased goods of shs 36 000 from Juma suppliers on credit, Invoice no 3812

Purchases Day book

Date Particulars/details Invoice no Ledger folio amount
April 2011:
2 Juma 3502 PL 25 000
3 Kamau 2607 PL 16 500
6 Juma 3509 PL 12 700
8 Juma 3605 PL 25 200
8 Kamau 3700 PL 17 500
8 Wamae 3750 PL 45 000 9
15 Wamae 3762 PL 200
18 Kamau 3802 PL 17 000
24 Juma 3812 PL 36 000
Totals posted to the
Purchase account (Dr) GL 204100

(Post the individual entries to their relevant accounts in the ledger (crediting))

d) Purchases Return Journals/Return outwards Journals

Page 4
This is used to record goods that have been returned to the creditors by the business, reducing the value
of the goods that had been purchased. It uses the credit note received as the source documents, with the
totals being in the purchases return account while the individual creditor’s accounts are debited in their
respective ledger accounts. It takes the following format Purchases return journal
Date Particulars/details Credit note no Ledger folio amount

For example;
Record the following transaction in the purchases return day book for Njiru’s traders for the month of
June 2010, hence post the information into their relevant ledger accounts.
June 2010;
“ 3. Returned goods worth shs 400 that had been bought from Nairobi stores, credit note no 56
“ 8. Return goods of shs 1 200 to Matayos store, Credit no 148
“19. Had some of their purchases returned to the following; Njoka enterprises shs 700, credit
note no 205, Nairobi Stores shs 600, credit note no 58, Matayos store shs 1 000 credit note
no 191
“26. Returned goods worth shs 1 800 to Njoka enterprise credit note no 210
“30. Return goods worth shs 1 020 to Matayos store, credit note no 200

e) Cash receipt Diaries

This is used to record all the cash and cheques that have been received in the business. They may be
many that posting directly in the cash book may be tedious and are therefore first recorded here. It totals
are posted to the cash and bank accounts in the general ledger (Dr), while the individual accounts are
credited in their respective accounts in the ledger. It uses the cash receipt issued and bank slips received
as the source documents. It takes the following format; Cash receipt journal
Date Particulars/details Receipt no Ledger folio Disc allowed cash bank

f) Cash payment Journals

This is used to record cash and cheques that have been issued to the creditors/out of the business. Its
totals are credited (Cr) in the cash and bank account and the individual accounts are debited (Dr) in their
respective accounts It uses the cash receipt received and bank slips issued as the source documents. It
takes the following format;
Cash Payment journal
Date Particulars/details Receipt no Ledger folio Disc received cash bank

For example:
Record the following transactions into their relevant day books of Onyango traders, hence post the
entries to their respective ledger accounts and balance them off; May 2011:
“1. Cash sales amounting to ksh 3 000, receipt no 0112

Page 5
 “2. Paid the following creditors by cheque after having deducted a cash discount of 10% in each
case; H. Mwangi ksh 1 500, J. Mwaniki ksh 1 600, N. Mugo ksh 1 200
“3. Receive the following Chaques from debtors in settlement of their debts after having
deducted 5% cash discount in each case; Lucy kshs 22 800 cheque no 0115, Otieno kshs 8
550 cheque no 0011, Martha ksh 1 330 cheque no 0016
“5. Paid for repairs in cash kshs 16 000, receipt no 0251
“10. Paid Juma in cash kshs 9 500, receipt no 0295
“14. Cash sales kshs 17 000, receipt no 02714
“15. Banked kshs 6 000 from the cash till
“15. Received cash from Mary of kshs 13 500, receipt no 0258
“16. Cash sales of kshs 26 400 was directly banked, bank slip no 40152
“20. Cash purchases of kshs 8 920, receipt no 117
“22. Cash purchases of kshs 15 200 was paid for by a cheque, cheque no 512

Cash receipt journal

Date Particulars/details Document no Ledger Disc cash bank
folio allowed
May 2011
1 Sales 0112 GL 3 000
3 Lucy 0115 SL 1200 22 800
3 Otieno 0011 SL 450 8 550
3 Martha 0016 SL 700 1 330
14 Sales 02714 GL 17 000
15 Cash “c” 6 000
15 Mary 0258 SL 13 500
16 Sales 40152 GL 26 400

Totals to be posted to
the cash and bank a/c
(Dr) 2 350 33 500 65 080

(Post the totals and the entries to their respective accounts)

Cash Payment journal

Date Particulars/details Document no Ledger Disc cash bank
folio Received
May 2011
2 H. Mwangi J. PL 166.70 1 500
2 Mwaniki PL 177.70 1 600

Page 6
 PL 133.30 1 200
2 N. Mugo GL 16 000
5 Repairs 0251 PL 9 500
10 Juma 0295 “c” 6 000
15 Bank GL 8 920
20 Purchases 117 GL 15 200
22 Purchases 512

Totals to be posted to the cash and

bank a/c 477.30 40 420 19 500
(Cr)

(Post the totals and the entries to their respective accounts)

g) The petty Cash book

This is used to record money that has been set aside to make payments that does not require large
amounts, such as cleaning, staff tea, posting letters, etc. it is always kept by the petty cashier, under the
supervision of the main cashier. The amount received by the petty cashier is always debited, while the
payments made from the same is credited. The credit side also contains the analytical columns for
various items of expenditure. The amount credited is also extended to the analysis column for the
specific item. At the end of the stated period, the petty cash book is balanced, and the totals are posted
to their individual accounts. The individual’s accounts are debited with the totals of the analytical
columns, while the cash account is credited by the main cashier for the total that was spent in the petty
cash book.
Petty cash book can also be operated on an imprest system, where the petty cashier receives a given
amount of money at an intervals (imprest) to spend, and report back to the main cashier at the end of the
period on how the money has been spent and the balance still remaining for re-stocking (reimbursed),
and only the amount spent can be reimbursed so that at the beginning of the period the petty cashier will
always have the full amount (cash float).

For example:
A petty cashier of sina chuki traders operate a petty cash book on an imprest of kshs 2 500 on a monthly
basis. On 1st February 2010, she had cash in hand of shs 150 and was reimbursed the difference by the
main cashier to restore her cash float. The following payments were made during the month of February
2010
Feb; 1. Travelling expenses kshs110
2. Correcting fluid kshs 200
3. Sugar for staff tea ksh 180
4. Stamps kshs 255
10. Telephone kshs 255
15. Entertainment kshs 130
18. Postage stamps kshs 100
20. Bread for staff tea kshs 148
25. Fare kshs 200

Page 7
 26. Duplicating ink kshs 250
27. Entertainment kshs 400
28. Telephone kshs 100
28. Atieno a creditor was paid ksh 150
Required;
Prepare a petty cash book from the above information and post the totals to the relevant ledger
accounts.
Sina Chuki Traders
Petty Cash Book

The totals in the analytical columns are Debited in the individual accounts, with the petty cash
book totals being credited in the cash account.

Page 8
 h) The general Journal/Journal proper
This one is used to record purchases or sales of fixed assets of the business on credit. These assets do
not form part of the stock since the business does not deal in them, however the business may decide to
buy or sell them for one reason or the other.
In this journal, the account to be debited begins at the margin, while the account to be credited is indented
from the margin, with a narration below them put in brackets. The narration simply explains the nature
of the transaction that has taken place. The individual entries are then posted to their respective accounts
by either debiting or crediting depending on the transactions. It takes the following format;

General journal
Date Particulars/details Ledger folio Dr shs Cr shs

For example;
Journalise then following transactions which took place in the business of J Opuche during the month
of March 2005
March 5; Purchased office furniture on credit for shs 25 000 from miugiza Furniture Limited
10; Sold old duplicating machine for shs 15 000 to samba academy on credit
15; Bought a new motor vehicle for shs 800 000 from explo motors Ltd, paying shs 300 000 in
cash and balance was to be settled at a later date
18; Sold old vehicle to Mara Secondary school for shs 500 000 on credit
25;The owner converted personal electronic calculator valued at shs 9 000 into business asset
27; Sold old computers valued at shs 20 000 for shs 15 000 on credit to Mara secondary school
30; Sold old dining chairs worth shs 10 000 to Maendeleo for shs 15 000 on credit

General journal
Date Particulars/details Ledger Dr shs Cr shs
folio
March
2005
5 Office Furniture a/c 25 000
Miugiza a/c 25 000
(Being a credit purchase of office
furniture from Miugiza)
10 Samba Accademy a/c 15 000
Duplicating Machine a/c (Being 15 000
credit sales of duplicating machine
to Samba academy)

Page 9
 Motor vehicle a/c
15 Cash a/c 800 000
Explo Motors a/c 300 000
(Being purchase of motor vehicle from 500 000
explo. motors, paying part in cash and
part on credit) Mara Sec sch a/c
18 Motor vehicle a/c 500 000
(being the credit sale of old motor 500 000
vehicle to mara sec sch)
Calculators a/c
25 Capital a/c 9 000
(being conversion of private calculator 9 000
to business asset)
Mara Sec. Sch. a/c
27 Loss on disposal a/c 15 000
Computer a/c 5 000
(being credit sale of old computers to 20 000
Mara school at a loss of 5 000)
Maendeleo a/c
30 Furniture a/c 15 000
Gain on disposal a/c 10 000
(being the credit sale of dining chairs 5 000
to maendeleo at a gain of 5 000)

1 384 000 1 384 000

The entries are then transferred to their respective accounts in the ledger, with the ones debited in the
journals being debited and the ones credited being credited.
The Journal proper can also be used to show the opening entries and the closing entries. That is; 
Opening entries
The opening entries are the entries of the assets and liabilities at the beginning of the trading periods to
facilitate the opening of different accounts for them. They are the balance b/d for the assets and liabilities
of the business.
The assets to be debited are recorded first, followed by the liabilities and capital to be credited. Incase
the capital is not given, it can be calculated using the book keeping equation, that is A = C + L. the
narration then follows the entries. The opening entries are necessary when;
 A business that did not keep complete accounting records would like to start keeping
 Opening up new sets of accounting books, after closing the old ones
 Starting accounting records for a business which has been bought, though was in full operation
For example;

Page 10
 The following balances were extracted from Martine’s store that did not keep complete records,
and would like to start keeping on 1st January 2011. Prepare for them their relevant subsidiary
book to show the balances.
Shs
Motor vehicles 230 000
Machinery 40 000
Creditors 10 000
Debtors 5 000
Cash in hand 20 000
Stock 10 000
Insurance prepaid 5 000
Bank 25 000
Premises 335 000
Capital 660 000
Martine’s Store
General journal
On 1st January 2011
Date Particulars/details Ledger folio Dr shs Cr shs
2011 Premises 335 000
January 1 Motor vehicle 230 000
Machinery 40 000
Debtors 5 000
Cash 20 000
Insurance prepaid 5 000
Bank 25 000
Stock 10 000
Capital 660 000
Creditors 10 000
(being the records of assets,
liability and capital at the
beginning of new period)

670 000 670 000

 Closing entries
At the end of the trading period the business asses how it carried out its trade and the amount of
profit it made by preparing the Trading profit and loss account and the balance sheet to show its
financial position. These are prepared by the information obtained from the ledgers. That is, all the
nominal accounts (sale, purchase, expenses and revenue accounts), both opening and closing stocks

Page 11
 are transferred to the trading profit and loss account through the trial balance and general journals,
while the rest are taken to the balance sheet.

Uses of general journal;

 To record purchases of fixed assets on credit
 To record sales of fixed assets on credit
 To correct errors by checking the balances
 To record the opening and closing entries
 To write off bad debts
 To record the inter ledger transfers
 To issues shares and debentures in companies
 To make end of the year adjustments for the final accounts

In the table below, indicate the books of original entry that the information obtained from the given
source documents are used to prepare
Source Document Books of Original entry
Sales Invoice/invoice issued/Invoice retained/invoice copy Sales journals
Purchases Invoice/Invoice received/Original invoice Purchases journals
Credit note issued/Credit note retained/Credit note copy Return inwards/Sales return journals
Credit note received/credit note original Return outwards/purchases return
journals
Original receipt/Receipt received Cash payment/Analysis cash book/ Cash
book
Receipt copy/Retained receipt Cash receipt journal/Analysis
cash book/cash book
Petty cash voucher Petty cash book

Uses of Journals
 To relive ledger of many details
 To record more details about the transaction that are not found in the ledger
 To facilitate tracing of errors
 To facilitate the preparation of control accounts
 To curb frauds and promote efficiency, since they are prepared by different people from the ones
handling ledgers

Assignment:
(Exercise 1B pages 50 and 51, Nos16 and 18 in Inventor book 4, KLB Students book)

Page 12
 FINANCIAL STATEMENTS
These are prepared at the end of a given trading period to determine the profit and losses of the business,
and also to show the financial position of the business at a given time.
They includes; trading account, profit and loss account, trading profit and loss account and the balance
sheet.
They are also referred to as the final statements.
The trading period is the duration through which the trading activities are carried out in the business
before it decides to determines it performances in terms of profit or loss. It may be one week, month,
six months or even a year depending on what the owner wants.
Most of the business use one year as their trading period. It is also referred to as the accounting period.
At the end of the accounting period, the following takes place;
All the accounts are balanced off
A trial balance is extracted
Profit or loss is determined
The balance sheet is prepared

Determining the profit or loss of a business

When a business sells its stock above the buying price/cost of acquiring the stock, it makes a profit,
while if it sells below it makes a loss. The profit realized when the business sell it stock beyond the cost
is what is referred to as the gross profit, while if it is a loss then it is referred to as a gross loss. It is
referred to as the gross profit /loss because it has not been used to cater for the expenses that may have
been incurred in selling that stock, such as the salary of the salesman, rent for the premises, water bills,
etc. it therefore implies that the businessman cannot take the whole gross profit for its personal use but
must first deduct the total cost of all other expenses that may have been incurred.
The profit realized after the cost of all the expenses incurred has been deducted is what becomes the real
profit for the owner of the business, and is referred to as Net profit. The net profit can be determined
through calculation or preparation of profit and loss account.
In calculating the gross profit, the following adjustments are put in place o Return inwards/Sales return:
- these are goods that had been sold to the customers, but they have returned them to the business
for one reason or the other. It therefore reduces the value of sales, and is therefore subtracted from
sales to obtain the net sales
Therefore Net sales = Sales – Return inwards

o Return outwards/purchases return: - these are goods that had been bought from the suppliers to
the business and have been returned to them for one reason or the other. It reduces the purchases
and is therefore subtracted from the purchases to obtain the net purchases.
o Drawings: - this refers to goods that the owner of the business has taken from the business for
his own use. It reduces the value of purchases, and is therefore subtracted from purchases when
determining the net purchases. It is different from the other drawing in that it is purely goods
and not money
o Carriage inwards/Carriage on purchases: - this is the cost incurred by the suppliers in
transporting the goods from his premises to the customers business. It is treated as part of the

Page 13
 purchases, and therefore increases the value of purchases. It is added to purchases to determine
the actual value of purchases/Net purchases.

Therefore Net Purchases = Purchases + Carriage inwards – Return Outwards - Drawings

o Carriage outwards/Carriage on sales: - this is the cost that the business has incurred in
transporting goods from its premises to the customers premises. The cost reduces the business
profit that would have been realized as a result of the sale, and is therefore treated as an expense
and is subtracted from the gross profit, before determining the net profit.
o Opening stock is the stock of goods at the beginning of the trading period, while the closing
stock is the stock of the goods at the end of the trading period
Gross profit is therefore calculated as follows;
Gross Profit = Sales – Return inwards – (Opening stock + Purchases + carriage
inwards –
Return outwards – Closing stock)
Or
Gross profit = Net sales – Cost of Goods Sold (COGS)

COGS = Opening Stock + Net Purchases – Closing stock

Net Profit = Gross profit – Total expenses

Trading Account
This is prepared by the business to determine the gross profit/loss during that trading period It
takes the following format;
Name of the business
Trading Account
Dr For the period (date) Cr
Shs Shs Shs Shs
Opening stock xxxxxx Sales xxxxxx
add Purchases xxxxx Less Return inwards xxx
add Carriage inwards xxx Net sales xxxxxx less Return Outwards
xxx less Drawings xx xxxxx Goods available for sale
xxxxxx
Less Closing Stock xxx
Cost Of Goods Sold (COGS) xxxxxx
Gross profit c/d xxxx
xxxxxx xxxxxx
Gross profit b/d xxxx

The trading account is completed by the time the gross profit b/d is determined
For example
The following balances were obtained from the books of Ramera Traders for the year ending may 31 st

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2010
Sales 670 000
Purchases 380 000
Return inwards 40 000
Carriage outwards 18 000
Return outwards 20 000
Carriage inwards 10 000
Additional information;
 During the year the owner took goods worth sh 5 000 for his family use
 The stock as at 1 June 2009 was shs 60 000, while the stock as at 31st May 2011 was shs 70
st

000
Required; Prepare Ramera Traders trading account for the period ending 31 st May 2010
Ramera Traders
Trading Account
Dr For the period ending 31/5/2010 Cr
Shs Shs Shs Shs
Opening stock 60 000 Sales 670 000
add Purchases 380 000 Less Return inwards 40 000
add Carriage inwards 10 000 Net sales 630 000
less Return Outwards 20 000
less Drawings 5 000 365 000
Goods available for sale 425 000
Less Closing Stock 70 000
Cost Of Goods Sold (COGS) 355 000
Gross profit c/d 275 000
630 000 630 000
Gross profit b/d 275 000
Carriage outwards is not an item of Trading account, but profit and loss account as an expense.
Importance of Trading account
i. It is used to determine the gross profit/loss for a given trading period for appropriate decision
making by the management.
ii. It is used in determining the cost of goods that was sold during that particular accounting period.
iii. It is used to reveal the volume of turnover i.e net sales
iv. May be used to compare the performance of the business in the current accounting period and
the previous periods. It can also compare its performance with other similar businesses
v. It facilitates the preparation of profit and loss account, since the gross profit is carried forward
to the profit and loss account.

Profit and Loss account

In preparation of this account, the gross profit is brought down on the credit sides, with all other
revenues/income of the business being credited and the expenses together with the net profit being
debited. Net profit = Total Revenues (including Gross Profit) – Total expenses
Name of the business

Page 15
 Profit and Loss Account
Dr For the period (date) Cr
Shs Shs
Expenses Gross profit b/d xxxxxx
Insurance xxx Discount received xxx
Electricity xxx Rent income xxx
Water bills xxx Commission received xxx
Carriage Outwards xxx Any other income received xxx
General expenses xxx
Provision for Depreciation xxxx
Discount allowed xxx
Commission allowed xxxx
Rent paid xxxx
Any other expense xxxx Net
profit c/d xxxx
xxxxxx xxxxxx
Net profit b/d xxxx
The profit and loss account is complete when net profit b/d is obtained. In the trial balance, the
revenues/incomes are always credited, while the expenses are debited, and the same treatment is found
in the profit and loss account. (Any item that is taken to the profit and loss account with a balance
appearing in the Debit (Dr) side of a trial balance is treated as an expenses, while those appearing in the
credit side is revenue e.g. discount balance appearing in the Dr side is Discount allowed, while the one
on Cr side is Discount received) For example
The following information relates to Akinyi’s Traders for the period ending March 28 th 2010. Use it to
prepare profit and loss account.
Gross profit 100 000
Salaries and wages 20 000
Opening stock 150 000
Rent income 10 000
Discount received 12 000
Commission allowed 15 000
Repairs 10 000
Discount allowed 8 000
Commission received 16 000
Carriage outwards 4 000
Provision for depreciation 6 000
Power and lighting 10 000

Akinyi Traders
Profit and Loss Account
Dr For the period ending 28th March 2010 Cr
Shs Shs
Expenses Gross profit b/d 100 000

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Power and lighting 10 000 Discount received 12 000
Carriage Outwards 4 000 Rent income 10 000
Salaries and wages 20 000 Commission received 16 000
Provision for Depreciation 6 000
Discount allowed 8 000
Commission allowed 15 000
Repairs 10 000
Net profit c/d 65 000
138 000 138 000
Net profit b/d 65 000
Incase the expenses are more than the income, then the business shall have made a net loss, and the loss
will be credited.

Net profit/loss can also be found through calculation as follows;

Net profit/loss = Gross profit + Total other revenues – Total expenses

For the above example;

Total other revenues = 12 000 + 10 000 + 16 000
= 38 000
Total expenses = 10 000 + 4 000 + 20 000 + 6 000 + 8 000 + 15 000 + 10 000
= 73 000
Therefore; Net profit = Gross profit + Total other revenues – Total expenses
= 100 000 + 38 000 – 73 000
= 65 000

Importance of profit and loss account

 It shows the revenue earned, and all the expenses incurred during the accounting period
 It used to determine the net profit/net loss of a given trading period
 It is a requirement by the government for the purpose of taxation
 May be used by the employees to gauge the strength of the business, in terms of its ability to pay
them well
 It is vital for the prospective investor in the business, in terms of determining the viability of the
business
 The creditors or loaners may use it to asses the business ability to pay back their debts  It is
used by the management to make a decision on the future of their business.

Trading, Profit and Loss Account

This is the combination of trading account and trading profit and loss account to form a single
document. It ends when the net profit/loss brought down has been determined. That is; Name
of the business
Trading, Profit and Loss Account
Dr For the period (date) Cr

Page 17
 Shs Shs Sales xxxxxx
Opening stock xxxxxx Less Return inwards xxx
add Purchases xxxxx add Carriage Net sales xxxxxx
inwards xxx less Return Outwards xxx
less Drawings xx xxxxx
Goods available for sale xxxxxx
Less Closing Stock xxx
Cost Of Goods Sold (COGS) xxxxxx xxxxxx
Gross profit c/d xxxx Gross profit b/d xxxx
xxxxxx Expenses Discount received xxx
Insurance xxx Rent income xxx
Electricity xxx Commission received xxx
Water bills xxx Any other income received xxx
Carriage Outwards xxx
General expenses xxx
Provision for Depreciation xxxx
Discount allowed xxx
Commission allowed xxxx
Rent paid xxxx xxxxxx
Any other expense xxxx Net profit b/d xxxx
Net profit c/d xxxx
xxxxxx Shs
Shs
End Year Adjustments
The following items may require to be adjusted at the end of the trading period
 Revenues/Income
 Expenses
 Fixed assets

Adjustment on revenues
The revenue may have been paid in advance in part or whole (prepaid revenue) or may be paid later
after the trading period (accrued revenue).
Prepaid revenue is subtracted from the revenue/income to be received and the difference is what is
treated in the profit and loss account or trading profit and loss account as an income, while the accrued
revenue is added to the revenue/income to be received and the sum is what is treated in the above
accounts as the actual revenue.
Only the prepaid amount and the accrued amounts are what are then taken to the balance sheet

Adjustment on the expenses

The expenses may have been paid for in advance in part or whole (prepaid expenses) or may be paid for
later after the trading period (accrued expenses).

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 Prepaid expenses is subtracted from the expenses to be paid for and the difference is what is treated in
the profit and loss account or trading profit and loss account as an expense, while the accrued expenses
is added to the expenses to be paid for and the sum is what is treated in the above accounts as the actual
expenses.
Only the prepaid amount and the accrued amounts are what are then taken to the balance sheet

Adjustment on fixed assets

The fixed assets may decrease in value, due to tear and wear. This makes the value to go down over
time, what is referred to as depreciation. The amount of depreciation is always estimated as a percentage
of cost.
The amount that shall have depreciated is treated in the profit and loss account or T,P&L as an expense,
while the value of the asset is recorded in the balance sheet, less depreciation.

For example;
1. 1997 The following Trial balance was prepared from the books of Paka Traders as at 31 st December
1995. Trial balance December 31st 1995
Dr. (shs) Cr. (shs)

Sales 980,000
Purchases 600,000
Returns 80,000 20 000
Carriage in 40,000
Carriage out 3,000
Stock (Jan 1st 1999) 120,000
Rent 60,000 45 000
Discount 15,000 25 000
Motor vehicle 150 000
Machinery 250 000
Debtors 120,000
Salaries 18,000
Commission 7,000 12 000
Capital 178,000
Insurance 15 000
Creditors 240,000
Cash 122 000
1 540 000 1 540 000

Additional information
i. Stock as at 31st December was 100,000
ii. the provision for depreciation was 10% on the cost of Motor vehicle, and 5% on the
cost of Machinery Required:
Prepare trading profit and loss account for the period ending 31st December 1999

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 Adjustments:
Provision for depreciation;
Machinery =
= 7 500
(New balance of machinery = 250 000 – 7 500 = 242 500. The 242 500 is taken to the balance as
Machinery (fixed asset), while 7 500 is taken to the trading profit and loss account as expenses)
Motor vehicle =
= 15 000
(New balance of Motor Vehicle = 150 000 – 15 000 = 135 000. The 135 000 is taken to the balance as
Motor Vehicle (fixed asset), while 15 000 is taken to the trading profit and loss account as expenses)

Paka Traders
Trading, Profit and Loss Account
Dr For the period 31/12/1995 Cr
Shs Shs Sales 980 000
Opening stock 120 000 Less Return inwards 80 000
add Purchases 600 000 add Carriage Net sales 900 000
inwards 40 000 less Return Outwards 20
000 620 000 Goods available for sale
740 000
Less Closing Stock 100 000
Cost Of Goods Sold (COGS) 640 000
Gross profit c/d 260 000 900 000
900 000 Gross profit b/d 260 000
Expenses Discount received 25 000
Insurance 15 000 Rent income 45 000
Carriage Outwards 30 000 Commission received 12 000
Salaries 18 000
Provision for Depreciation
Motor vehicle 15 000
Machinery 7 500 22 500
Discount allowed 15 000
Commission allowed 7 000
Rent paid 60 000
Net profit c/d 174 500
Shs Shs
342 000 342 000
Net profit b/d 174 500

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The net profit/loss may be taken to the balance sheet.
The items that have been adjusted will be recorded in the balance sheet less the adjustment.

The Balance Sheet

The balance sheet will show the business financial position in relation to assets, capital and liabilities.
The adjustment that can be made will be on Fixed assets and capital only. That is;
Fixed assets are recorded less their depreciation value (should there be provision for depreciation) as
the actual value.
Actual value of assets = Old value – depreciation.
Capital is adjusted with the following; Net capital, Drawings and additional investment. i.e.
Closing Capital/Net capital (C.C) = Opening/initial capital (O.C) + Additional Investment (I) +
Net profit (N.P) or (less Net Loss) – Drawings
CC = OC + I + NP – D Where:
Opening Capital: - the capital at the beginning of the trading period
Closing capital: - the capital as at the end of the trading period
Additional Investment: - any amount or asset that the owner adds to the business during the trading
period
Net profit: - the profit obtained from the trading activities during the period. Incase of a
loss, it is subtracted

Types of Capital The

capital in the business can be classified as follows
 Capital Owned/Owner’s Equity/Capital invested; - this is the capital that the owner of the
business has contributed to the business. It is the Net capital/Closing capital of the business (C
= A – L)
 Borrowed capital: - the resources brought into the business from the outside sources. They are
the long term liabilities of the business.
 Working capital: - these are resources in the business that can be used to meet the immediate
obligation of the business. It is the difference between the total current assets and total current
liabilities
Working Capital = Total Current Assets – Total Current Liabilities
 Capital employed: - these are the resources that has been put in the business for a long term. i.e.
Capital Employed = Total Fixed assets + Working
Capital Or
Capital employed = Capital Invested + Long term liabilities
Name of the business
Balance Sheet
As at (date)
Shs shs Buildings xxxxx
Fixed Assets Motor Vahicle xxxxx
Land xxxxx

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 Any other fixed assets xxxxx xxxxxx Add Net profit xxxx
Add additional investt xxx
Current Assets Less drawings xxx
Stock xxxx Net Capital xxxxx
Debtors xxxx
Bank xxxx Long term liabilities
Cash xxxx Long term loan xxxx
Prepaid Expenses xxxx Any other xxxx xxxx
Accrued revenues xxxx
Any other current assets xxxx xxxxxx

Current liabilities
Creditors xxxx
xxxxxx
Short term loan xxxx
Accrued expenses xxxx
For example 00A
Prepaid revenues xxxx
Shs shs
Any other xxxx xxxxx
xxxxxx
Capital xxxxx
The following information were extracted from the trial balance of Mwema traders on 31 st December
2010
Sales 750 000
Purchases 540 000
Sales return 24 000
Return outwards 30 000
General expenses 72 000
Commission received 24 000
Rent expenses 2 500
Electricity expenses 16 000
Furniture 288 000
Motor vehicle 720 000
Capital 842 500
Bank Loan 250 000
Creditors 216 000
Cash 156 000
Debtors 244 000
Additional Information
a) Stock as at 31/12/2010 was ksh 72 000
b) Electricity prepaid was shs 4 000
c) Rent expenses accrued shs 3500
d) Depreciation was provided for as follows
i. Motor Vehicle 15% p.a. on cost ii.
Furniture 6% p.a. on cost

Page 22
 Required
(i) Prepare Trading, profit and loss account for the year
(ii) Prepare a balance sheet as at 31st December 2012 (iii)
Determine the following:
a. Owner’s equity
b. Borrowed capital
c. Working capital
d. Capital employed

Adjustments:
Motor Vehicle =
= 108 000
Therefore Motor vehicle = 612 000
Furniture =
= 17 280
Therefore furniture = 270 720

Mwema Traders
Trading, Profit and Loss Account
Dr For the period 31/12/2010 Cr
Shs Shs Net profit c/d 96 720
Purchases 540 000 less Return Shs Shs
Outwards 30 000 510 000 Goods Sales 750 000
available for sale 510 000 Less Return inwards 24 000
Less Closing Stock 72 000 Net sales 726 000
Cost Of Goods Sold (COGS) 438 000
Gross profit c/d 288 000
726 000
Expenses 726 000
General expenses 72 000 Gross profit b/d 288 000
Electricity expenses 16 000 commission received 24 000
Less Electricity prepaid 4 000 12 000

Rent expenses 2 500

Accrued rent exp 3 500 6 000

Provision for Depreciation

Motor vehicle 108 000
Furniture 17 280 125 280

312 000 312 000

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 Net profit b/d 96 720

Mwema Traders
Balance Sheet
As at 31/12/2010
Shs shs Shs shs
Fixed Assets
Motor Vehicle 612 000 Capital 842 500
Furniture 270 720 882 720 Add Net profit 96 720

Net Capital 939 220

Current Assets
Stock 72 000 Long term liabilities
Debtors 244 000 Bank Loan 250 000
Electricity prepaid 4 000
Bank 50 000 Current liabilities
Cash 156 000 526 000 Creditors 216 000
Accrued rent 3 500 219 500
1 408 720 1 408 720
Basic Financial Ratios
A ratio is an expression of one item in relation to the other. It is used to compare the groups of related
items in the business, for the purpose of assessing the performance of the business. They include: a)
Mark-up
This is the comparison of gross profit as a percentage of cost of goods sold. i.e.

Mark-

For example: in (example OOA) above, determine the mark-up of the business.
Mark-
Gross profit = 288 000
COGS = 438 000

Mark-
= 65.75%
(This implies that the Gross profit of the business is 65.75% of its cost of goods sold)

b) Margin
This is the expression of the gross profit as a percentage of net sales. That is:
Margin

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 For example: in (example OOA) above, determine the margin of the business
Margin =
Gross profit = 288 000
Net sales = 726 000

= 39.67%
(This implies that the gross profit of the business is 39.67% of the net sales)

Relationship between margin and mark-up

Since margin and mark-up are all the expression of Gross profit, it is possible to change one to the other.
• Changing mark-up to margin
Mark-up can be changed to margin as follows:
i) Convert the mark-up percentage as a fraction in its simplest form
ii) Add the value of the numerator of the fraction to the denominator to come up with the new
fraction (margin fraction) that is
If the mark-up fraction =

Margin fraction = iii) Convert the margin fraction as a

percentage to obtain margin

For example: in the above example,

Mark –up = 65.75%

Margin fraction =
x 100
= 39.67%
• Changing margin to mark-up
i) Convert the margin percentage as a fraction in its simplest form
ii) Subtract the value of the numerator of the fraction from the denominator to come up with
the new fraction (mark-up fraction) that is If the margin fraction =
Mark-up fraction =
(iii)Convert the mark-up fraction as a percentage to obtain mark-up
For example: in the above example,
Margin = 39.67%

Mark-up fraction =

Page 25
 x 100
= 65.75%

c) Current ratio/working capital ratio

This is the ratio of the current assets to current liabilities. It can also be expressed as a percentage. That is:
Current ratio =
= current assets : current liabilities
Or
Current ratio = x 100
For examples: in (example OOA) above, determine the current ratio;

Current assets = 526 000

Current liabilities = 219 500
Current ratio =

= 1052 : 439 Or

x 100
239.64%

d) Rate of stock turnover

This is the rate at which the stock is bought or sold within a given period of time. It is obtained by;
Rate of stock turnover (ROST) =

Average stock =
In (example OOA) above, determine the rate of stock turnover;
The cost of goods sold = 438 000
The closing stock = 72 000
The opening stock = 0
Therefore
The average stock =

Rate of stock turnover (ROST) =

= 12.17 Times
e) Return on capital
This is the expression of net profit as a percentage of the capital invested. That is;

Page 26
 Return on capital = x 100
It can be given as a ratio or a percentage.
For example: in (example OOA) above, determine the return on capital of the business
Net Profit = 96 720
Capital invested/owner’s equity = 939 220
Return on capital = x 100
x 100

= 10.33%
f) Acid test ratio/quick ratio
This shows how fast the business can convert its current assets excluding stock to settle its current
liabilities. That is;
Quick ratio =
It is given in ratio form.
For example: in above (example OOA), determine the quick ratio;
Current assets = 526 000
Stock = 72 000
Current liabilities = 219 500
Quick ratio =

= 2.07 (or 207 : 100)

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