#covidandconstruction

#covidandconstruction

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Morrissey Law
#covidandconstruction
Info Feed…
Updated for the
July 2021 Sydney
Construction Shutdown

As we’re all aware, the July 2021 outbreak of the Delta Variant has resulted in Government Orders to shutdown most construction sites & operations in the Greater Sydney region.

The following resources have been pulled together by the team at Morrissey Law + Advisory to help the Construction Sector navigate through this testing period as smoothly as possible.

Webinar Series

We’re hosting a series of webinars, twice daily, from Monday July 19 – Friday July 23 running through considerations, recommendations, and updates to the restrictions as they affect the Construction Sector.

Details below…

Construction Shutdown FAQs

In addition to these webinars, you’ll find a series of FAQs below with questions we’re being asked by clients and common issues that we’re seeing or anticipating across the sector.

FAQs listed below…

July 2021 Construction Shutdown Webinar Series

The Sydney Construction Shutdown will see many projects grind to a halt and give rise to delays, costs, and many other issues.

All this week we’re bringing you quick webinars morning and afternoon discussing various issues and recommendations to help see you through the next couple of weeks.

We understand it is a very busy time for all so all who register will receive recordings, slideshows, and any other resources from the webinars. They will also be uploaded below to view at your convenience.


Monday 19 July:

10am – Construction Shutdown: What you need to know!
Webinar Recording  |  Slideshow  |  Event Page


Tuesday 20 July:

10am – Preparing Claims for the Shutdown
Webinar Recording  |  Slideshow  |  Event Page

2pm – Employment Law: Considerations for the Construction Sector & the Shutdown
Webinar Recording  |  Slideshow  |  Event Page


Wednesday 21 July:

10am – Security of Payment: Essential Tool to Getting Paid During Shutdown
Webinar Recording  |  Slideshow  |  Event Page  |  NSW Gov Construction Guidelines (released Tues 20 July)

2pm – Insurance: Do I Have a Claim for Lockdown
Webinar Recording  |  Slideshow Event Page


Thursday 22 July:

10am – Director Duties: Managing Obligations During Shutdown
Webinar Recording  |  Slideshow Event Page

2pm – Managing Business Risk through the Shutdown
Webinar Recording  |  Slideshow  |  Event Page


Friday 23 July:
10am – General Q&A, What We’ve Seen, and What We Expect Next Week
Webinar Recording  |  Event Page


Thursday 29 July:
11:30am – Pressing Play after the Construction Pause
Webinar Recording  |  Slideshow  |  Event Page  |  NSW Gov: Authorised WorkersConstruction Covid Safety Plans


July 2021 Construction Shutdown FAQs

Please note: The information on this page is not intended as legal advice.

The responses listed below are intended as commentary, and we recommend seeking specific legal advice for any situation you are unsure about.

We’ll try to keep this information as up-to-date as possible given the constant updates and alterations being made to the rules and restrictions in place.

General Questions:

At 12:01am on 19 July 2021, Greater Sydney, which includes Shellharbour, Wollongong, Central Coast, and Blue Mountains local government regions became subject to a “construction pause”.

Last updated: Monday 19 July

On Saturday 17 July the NSW Government temporarily paused all construction work across Greater Sydney from until Friday 30 July 2021 (inclusive). The two week construction pause was put in place to attempt to reduce the spread of the Delta variant of COVID-19 across Greater Sydney and to allow for the construction industry to make plans for ongoing operations that minimise risk of infection.

Last updated: Thursday 29 July

The only works permitted to be carried out during the construction pause in Greater Sydney are urgent works, including:

  • to ensure the safety or security of the construction site;
  • to deal with environmental risks;
  • to maintain and ensure the integrity of critical plant, equipment or assets, including partially completed works, that would otherwise deteriorate;
  • to receive deliveries of supplies that would otherwise deteriorate;
  • to maintain public utilities;
  • to ensure the safe operation of existing transport infrastructure;
  • by or on behalf of NSW Health in response to the COVID-19 pandemic, or
  • Because of an emergency.

Last updated: Thursday 29 July

Travel during lockdown:

Yes. Under the orders, you are allowed to leave Greater Sydney if you have a reasonable excuse. A reasonable excuse includes work, if you are unable to work from home. Obviously if you are required to construct something on site, that is unable to be done at home.

If the area you are travelling to is within 50 kilometres of the Greater Sydney area, then you do not need to get a covid test. If it is outside the 50 kilometre ring, you must have a covid test within 7 days of leaving the Greater Sydney area.

It is unclear what you are to do in circumstances where you are leaving the Greater Sydney area for work for longer than 7 days.

Further, clause 22AA of the Orders says that a person who is at least 18 years of age who is leaving Greater Sydney must—(a) carry evidence showing the address of the person’s place of residence or temporary accommodation, and (b) produce the evidence for inspection if requested to do so by a police officer.

Last updated: Monday 19 July

Yes. See answer above for requirements in travelling from Sydney for work.

Last updated: Monday 19 July

Here the public health orders and the NSW Health website diverge (as at 19 July 2021). The public health orders state you can attend Greater Sydney for work, although not a construction site (which is closed), however, the NSW Health website says otherwise, noting the only reasons are:

  • returning to your home if you live in Greater Sydney.
  • travelling to Greater Sydney including the Blue Mountains, Central Coast, Wollongong and Shellharbour from another place in NSW if you meet the requirements to receive the COVID-19 vaccination.
  • attending a funeral or memorial service that complies with the rules for funerals and memorial services.

Last updated: Monday 19 July

Restarting Construction Work:

While the caseload of Covid-19 has not decreased, the NSW Government has continued with their intention to reopen the construction centre in Greater Sydney.

Construction is allowed to resume from Saturday 31 July, subject to sites having completed the mandatory COVID-19 Safety Plan for Construction Sites in Greater Sydney, which can be found here https://www.nsw.gov.au/covid-19/covid-safe/construction-and-tradespeople .

Last updated: Thursday 29 July

From Thursday 29 July some preparatory work will be permitted on construction site. Worksites will be able to operate on Sundays and public holidays up until Christmas to make up for any lost time.

Last updated: Thursday 29 July

Yes, all workers are allowed back on site from 31 July with the exception of unauthorised workers from the identified LGA’s (listed below). However, all construction sites across Greater Sydney must comply with the mandatory COVID-19 Safety Plan which will require social distancing measures to be put in place including minimising contact between workers. For smaller sites, this may mean less workers can attend the site.

Note: For workers whose hours and income have been significantly reduced by the lockdown may be eligible for the COVID-19 Disaster Payment from the NSW Government (see details below).

Last updated: Thursday 29 July

There is no limit to the amount of workers on larger, unoccupied construction sites in Greater Sydney, subject to them complying with the covid safety plan.

On residential construction sites there is a limit of two workers for any works inside the property and a maximum of five workers for any outdoor construction works. In circumstances where the owner of the property is going to remain on site the parties must ensure that there is segregation between the construction workers and the resident, however it is preferred that residents leave the property whilst the works are being undertaken.

Contractors should be aware of their obligations to ensure that the maximum amount of people on site at any one time is 7 and ensure that they have their covid safety plan available for inspection should that be required.

Last updated: Thursday 29 July

Construction sites located in the Local Government Areas (LGA’s) listed below will remain closed:

  • Blacktown,
  • Canterbury-Bankstown,
  • Campbelltown,
  • Cumberland,
  • Fairfield,
  • Liverpool,
  • Parramatta, and
  • Georges River.

(Restricted LGAs)

Residents from the identified LGAs cannot leave their local area to attend work, unless they are an authorised worker. General construction workers are not authorised workers.

Last updated: Thursday 29 July

Workers from Greater Sydney who work 50km or more outside of Greater Sydney must have a COVID-19 test in the 7 days before entering that workplace. Site managers can ask for proof of testing and residence.

Last updated: Thursday 29 July

No.

People living in the Restricted LGAs are unable to leave the area unless they are an authorised person.

Workers who work in manufacturing businesses located in the identified LGAs that are critical to the construction supply chain are considered to be authorised workers and are permitted to operate within these LGAs. Employees of those manufacturing businesses are also considered to be authorised workers and are permitted to leave their LGA for work, subject to meeting any relevant NSW Health testing requirements. This includes workers engaged in manufacturing of construction materials, plant and components. These exceptions are in place to ensure the construction supply chain can continue to operate given that many of the relevant businesses are located in the identified LGAs.

Last updated: Thursday 29 July

Notices & claims under contracts:

Yes. In most contracts, the ability to claim an EOT arises as a result of a change in legislation or an event that is outside the control of the contractor.

While each contract is different, the following questions address some standard examples.

Last updated: Monday 19 July

Yes.

Industrial Conditions would likely allow a claim of an EOT for the impact of the Covid shutdown. However, most AS4000 contracts that are used these days, include numerous variations, particularly in the clauses concerned with variations, EOTs and delays, so it is critical to review your contract and understand your obligations.

If you do have the ability to claim an EOT, it is critical you put the principal and superintendent on notice, with the contract stating that any party (although let’s say the contractor) “shall promptly give the Superintendent and the other party written notice of that cause and the estimated delay.”

Last updated: Monday 19 July

The builder would be entitled to an EOT under clause 11, as it states “Should the progress of the works be delayed by any of the following matters, conditions or consequences resulting from them: ix) civil commotion or industrial dispute affecting any of the trades employed upon the works or the manufacture or supply of materials for the works”.

This is a broad definition that allows not only the delay for the shutdown to be claimed as an EOT, but also any delay that is suffered as a result of the shutdown. For example, if you had programmed the roof to be installed and couldn’t, you would be entitled to claim for an EOT until such time as you could reengage those trades to install the roof.

Last updated: Monday 19 July

Yes. Subject to the builder using the MBA BC4 contract, the delay is a compensable cause.

The builder would be required to advise the owner in writing, and subject to that not being rejected by the owner, a builder would be able to claim delay costs under the contract.

Those delay costs being the costs determined in the schedule, or if those costs are not applicable, nil.

Last updated: Monday 19 July

The builder would be entitled to an EOT under clause 6, as it states “Should the progress of the works be delayed by any of the following matters, conditions or consequences resulting from them: ix) civil commotion or industrial dispute affecting any of the trades employed upon the works or the manufacture or supply of materials for the works”.

This is a broad definition that allows not only the delay for the shutdown to be claimed as an EOT, but also any delay that is suffered as a result of the shutdown. For example, if you had programmed the roof to be installed and couldn’t, you would be entitled to claim for an EOT until such time as you could reengage those trades to install the roof.

Last updated: Monday 19 July

Yes. Subject to the builder using the MBA BC3 contract, the delay is a compensable cause.

The builder would be required to advise the owner in writing, and subject to that not being rejected by the owner, a builder would be able to claim delay costs under the contract.

Those delay costs being the costs determined in the schedule, or if those costs are not applicable, nil.

Last updated: Monday 19 July

Financial Assistance Packages:

Transport for NSW (Transport) has created the COVID-19 Liquidity Support Program (Program) to provide immediate support to limit the impact of the construction pause across Greater Sydney. The Program facilitates cash flow to ensure the supply chain of employees, equipment and other resources are supported and ready to recommence work by 31 July 2021. This support is available now to Transport’s contractors and we strongly encourage your participation to facilitate cash flow across industry.

Eligible participants of the Program will receive support in the form of accelerated payment of certified June work and accelerated advance payments of actual and anticipated July works and on site activities impacted by the Construction Pause.

  1. Payment for work to end of June 2021 (June Claim):
    Irrespective of whether you opt into the Program payment, certified progress claims will be made on an urgent basis.
  2. Payment for work to 30 July 2021 (July Claim):
    Contractors may immediately submit a progress payment claim for July 2021 providing details of:

    • Activities and works completed up to the time of the pause on construction (12:01am on Monday 19 July 2021); and
    • A cost estimate of the activities and works that would have been undertaken during the construction pause (19 July 2021 to 30 July 2021, inclusive) which is consistent with the July forecast and which may include the cost of dealing with the construction pause.

It is paramount that contractual relief flow through the entire supply chain, from head contractors right down to subcontractors and suppliers. Evidence that subcontractors have been paid must be submitted in the usual way.  Following reconciliation if payments have not passed through to subcontractors, as appropriate, Transport reserves the right to recover them.

Last updated: Thursday 29 July

The NSW Government has provided additional support to small-medium size businesses and individuals affected by the construction pause across Greater Sydney. This support is summarised below:

INDIVIDUALS SMALL-MEDIUM BUSINESSES
COVID-19 Disaster Payment JobSaver
Mental Health Long Service Leave
Additional Leave Support Payroll Tax Deferrals
Payroll Tax Concessions

More information on these support packages can be found here.

Last updated: Thursday 29 July

Director Duties:

Highly unlikely. D&O insurance policies will have a carve-out for particular situations, for example, negligence, fraud, dishonesty, criminal acts, intentional breaches of the law etc.

Last updated: Thursday 22 July

These people may be held responsible for a breach of directors duties if they are a director (including if they are held to be a de facto director or shadow director). If not, they will still have responsibilities for example, under their employment agreement, and under other pieces of legislation that apply to the particular business.

Last updated: Thursday 22 July

Employment Matters:

In the event that your business can demonstrate that it is restricted from doing any work during the current restrictions, employers would have options in respect of how to deal with their employees during this time. The below options are based on the assumption that all avenues to have the employee work from home, or undertake different duties have been canvassed and there is no further work available.

In those circumstances, the options include:

  1. Negotiate reduced hours during the lockdown;
  2. Negotiate a period of paid or unpaid leave with the employee;
  3. Stand down the employee; and finally
  4. Make an employee redundant.

Our view is that both the third and fourth options should be approached with significant caution. It was only weeks ago (if not less in many instances), where employers were struggling to find employees and trades, and, if history is any indication, what the NSW Government has shown is that they intend on bouncing back from this lockdown through construction stimulus.

In the event that any changes are made to employees work hours or work, ensure that the employee is consulted and that you document the changes in writing.

Last updated: Monday 19 July

Your employees who live in the Fairfield, Liverpool and Canterbury – Bankstown LGAs can only attend their workplace if your business is allowed to be open and they are an authorised worker.

A list on the industries allowed to open as well as what constitutes as an authorised worker is available in this link – https://www.nsw.gov.au/covid-19/rules/authorised-workers

Last updated: Wednesday 21 July

This will depend on whether they have provisions under the employment contract or the enterprise agreement which deals with this situation. However, under section 524 of the Fair Work Act 2009 (Cth), you will be entitled to stand the employee if:

  1. The employee cannot be usefully employed;
  2. There has been a stoppage of work for any cause; and
  3. For which the employer cannot be held responsible.

If the three elements above are satisfied and subject to any applicable provision in their employment contract or enterprise agreement, you will be entitled to stand – down the employees.

Last updated: Wednesday 21 July

Yes, their entitlements continue to accrue.

Last updated: Wednesday 21 July

No, if your employee is stood down, they would not be able to use their paid sick leave, carer’s leave or compassionate leave. They can however use their annual leave, long service leave or any other paid leave entitlements.

Last updated: Wednesday 21 July

There is no minimum notice period, however, you should give as much notice as possible.

Last updated: Wednesday 21 July

A redundancy is genuine if:

  • the job is no longer required to be performed by any person;
  • the employer has complied with consultation obligations (whether under the applicable modern award, employment contract or enterprise agreement); and
  • the employee cannot be reasonably redeployed within the business.

Last updated: Wednesday 21 July

You could consider allowing your employees to have access to their accrued annual or long service leave where the workforce is being stood down, varied the employment contract by agreement (eg. Reducing hours and remuneration) or leave without pay.

Last updated: Wednesday 21 July

The decline in turnover is calculated on what is experienced by your business over a minimum 2-week period from 26 June 2021 to 17 July 2021 compared to the same period in 2019.

Last updated: Wednesday 21 July

You will only be able to operate your retail business if you are providing essential products and services. Retail business which are allowed to be open are:

  • supermarkets;
  • grocery stores (including butchers, bakeries, fruit and vegetables, seafood and other food retailers);
  • kiosks and other small food and drink premises;
  • petrol stations,
  • liquor stores;
  • chemists providing health, medical, maternity and baby supplies;
  • banks and financial institutions,
  • hardware, building supplies, landscaping material supplies,
  • agricultural and rural supplies,
  • pet supplies;
  • post offices and newsagents;
  • office supplies;
  • garden centres and plant nurseries;
  • vehicle hire premises; and
  • shops that predominantly carry out repairs of mobile phones.

Last updated: Wednesday 21 July

Previous Covid-19 Articles

Here you will find our previous Morrissey Law articles concerning the COVID-19 pandemic, the implications for the construction industry, and important information that you need to know.

Please Note: While we make every effort to keep this information up-to-date, unfortunately given the dynamic nature of the COVID-19 situation, there may be instances where the information provided becomes no longer current. If you have any questions or concerns regarding the information provided, please get in touch here.
All information provided is intended as commentary or general information for reference purposes – it does not constitute legal advice.

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