This is a case study of the use of subcontracting within BT plc the UK's largest telecommunications firm. The 1990s have witnessed significant quantitative and qualitative changes in the utilisation and management of subcontracting within BT. The deregulation, or rather the shift in regulation, of the employment relationship represented by movement from bureaucratic hierarchical forms of organisation to subcontracting introduces several sources of uncertainty into the process of ensuring an adequate supply of labour and inducing the desired contribution within production. This study examines whether the regulation of labour in terms of supply and performance can be reconciled through subcontracting mechanisms. In this case the experience of deregulation of the capital-labour relationship threw up unforeseen outcomes. The problems that arose from the reliance upon a labour source that was ostensibly beyond the control of the firm inspired initiatives that essentially represented the partial reregulation of the capital-labour relationship.