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In response to the COVID-19 outbreak in Sydney, the New South Wales Government placed a pause on work at construction sites from 19 July 2021 through to 11.59 pm on 30 July 2021. The pause applies to construction sites where works are being carried out to erect, demolish, extend or alter a building or structure and includes civil and excavation works. However, with some exceptions, construction on non-occupied sites in Greater Sydney is set to resume from Saturday 31 July. This article provides an overview of the new and existing restrictions, along with some practical advice if your business has been affected by the construction pause. 

What Are the New Restrictions?

From Saturday 31 July, construction on non-occupied construction sites in Greater Sydney (including the Central Coast, Blue Mountains, Wollongong and Shellharbour) can resume, subject to strict COVID-19 safety measures.  

However, construction sites will remain closed in local government areas (LGA) of: 

  • Blacktown; 
  • Canterbury-Bankstown; 
  • Campbeltown; 
  • Cumberland; 
  • Fairfield; 
  • Liverpool; 
  • Parramatta; and 
  • Georges River (affected LGAs). 

Workers from affected LGAs are not permitted to leave unless they are ‘authorised workers’. Note that construction workers are not authorised workers. 

Safety Measures 

COVID-19 Safety Plans are mandatory for any construction site in Greater Sydney that is not an occupied residence. Plans must be completed before works resume. Additionally, a printed plan must be available for inspection at the site.

The NSW Government has information on preparing your COVID-19 Safety Plan.

Preparatory Works

In order for construction to resume safely, certain preparatory work may commence from 29 July 2021, including:

  • checking or maintaining installations or equipment;
  • cleaning, waste removal or waste management;
  • stocktaking or restocking;
  • delivery of materials or equipment;
  • servicing or installation of amenities;
  • relocation on the construction site of plant or equipment;
  • issuing permits or certificates;
  • establishing arrangements or procedures to help protect persons from COVID-19;
  • erecting fencing or hoarding;
  • inspections including for technical reasons, safety (including work health and safety), valuations or other financial reasons;
  • removing water;
  • connecting power, fuel or services;
  • safety work, including work related to fire safety or electrical safety;
  • surveying or marking out; and
  • training required to be carried out on the construction site.

Works in Occupied Premises Including Residential Homes 

From Saturday 31 July, tradespeople, including cleaners, are able to resume work, provided that: 

  • the workers have zero contact with the occupiers of the residence; and
  • there are no more than two workers for indoor work and no more than five workers for outdoor work.

Therefore, if it is not possible for residents to vacate, the works must not be carried out. 

The Current Restrictions Remain in Place Until 11.59 pm on July 30

Remember, work on construction sites across Greater Sydney remains banned until 11.59 pm on 30 July, unless work is preparatory work or is urgently required to: 

  • ensure the safety or security of the construction site;
  • handle environmental risks;
  • ensure the integrity of critical plant, equipment or assets, that would otherwise deteriorate;
  • receive supplies which would otherwise deteriorate;
  • maintain public utilities;
  • ensure the safe operation of existing transport infrastructure;
  • enable NSW Health to respond to the COVID-19 pandemic; or
  • be carried out because of an emergency.

The ban on a person visiting a residential dwelling to carry out repairs, maintenance, additions, alterations, cleaning or other trades, also remains in place until 11.59 pm on 30 July. This is unless work is an urgent requirement to ensure the health, safety or security of the dwelling.

It is a criminal offence under the Public Health Act 2010 for breaching the ban, and significant penalties may apply.

Has the Pause Affected Your Business? 

Contractors, Subcontractors and Consultants

If you are a contractor, subcontractor or consultant, chances are the pause may have, or is affecting your ability to complete the works on time. Consider whether your construction contract includes:

  • a right to an extension of time;  
  • specific COVID-19 relief provisions; 
  • force majeure or change of law provisions; and 
  • suspension and demobilisation costs. 

Extension of Time and Delay Costs

Most contracts include a right to claim an extension of time. In most instances, you need to notify the principal of the event giving rise to the delay. In some instances, you may be required to notify within one or two business days of the delay occurring. Therefore, you should make sure you are aware of any time bars and other notification requirements in your contract to ensure that you make your claims within the timeframe specified in your contract. If your claim for an extension of time is time-barred, you may be exposed to liquidated damages for failing to complete the works on time. 

Depending on your specific contract, you may or may not be entitled to delay costs. However, your contract may include alternative ways of claiming costs, for example, through a change of law regime. 

COVID-19 Relief and Force Majeure Clauses

More recently drafted contracts may include a specific COVID-19 or pandemic relief clause providing specific entitlements for shutdowns due to COVID-19. You should also check whether your contract includes a force majeure clause. A force majeure clause may allow the parties to suspend their obligations due to certain events outside the control of either party. Whether COVID-19 amounts to a force majeure event will depend on the relevant contract. 

Receiving and Responding to Claims

Additionally, you should be prepared to receive and respond to claims and notices from your subcontractors and suppliers on the same basis.

What to Expect if You Are a Principal or Developer

Be prepared to receive claims and notices from your contractors, subcontractors and consultants, particularly for delays. Additionally, from a contract administration perspective, ensure you are across the:

  • notification requirements; and 
  • time frames in which your contractors have to make claims. 

Note: not all claims will be for time or delay damages. You should be aware of the various ways in which your contractors may make claims.

Also, consider your upstream contracts. You may have entitlements to claim or obligations to notify.    

Impact on Employees

If your sites are in an affected LGA and you, therefore, cannot operate, there are two key considerations in relation to managing your employees during this period: 

  1. You will need to ensure you are still complying with your work health safety obligations. Even if your employees are not performing work, make sure your employees (and contractors) are still safe during this difficult time. 
  2. Determine whether you continue to pay your workers while they cannot work. As a starting point, you can agree to some options with your employees, like having them take annual leave, long service leave or even unpaid leave. Beyond that, you may consider standing them down. Employers may have a right to stand down their workers under the Fair Work Act, an enterprise agreement or an applicable modern award. 

It is critical that you review your rights as an employer against the correct industrial instrument. Under the Fair Work Act, an employer generally has the right to stand down an employee during a period where the employee cannot usefully be employed because of a stoppage of work for any cause for which you cannot be held responsible for. For example, where a site is shut down because of a government direction, it is likely this would amount to a stoppage of work for which the employer is not responsible. However, you will need to consider whether there is any other work the employees can do, including whether you have other sites that are in operation in a permitted LGA and your employees can attend those sites.

Concerned About Your Business’ Solvency?

If you are a director and have concerns about your business’s solvency, you will need to consider what options are available to you. If your company is ultimately wound up as a result of insolvency, you may be personally liable for debts incurred while your company was trading insolvent. 

Under the Safe Harbour Regime, as prescribed by the Corporations Act 2001 (Cth), there are very limited circumstances in which a director can defend an insolvent trading claim. Therefore, if you are worried that you cannot pay creditors, you should seek urgent legal advice. Your lawyer can also help you to negotiate a suitable resolution with your creditors. 

Key Takeaways 

Construction work on non-occupied sites in Greater Sydney is set to resume from Saturday 31 July, with certain preparatory works allowed from Thursday 29 July. However, construction sites in affected LGAs remain shut down. 

The existing restrictions banning work on construction sites remain in place until 11.59 pm on 30 July. If your business has been affected by the pause, you should consider the following. If:

  • you are a contractor, subcontractor or consultant, consider your obligations and entitlements under your construction contract;
  • you are a director and have concerns about your business’s solvency, you will need to consider what options are available to you; and
  • your employees are from an affected LGA and cannot attend work, you should ensure your employees are safe and consider whether you need to keep paying employees if they cannot attend work.

The response to COVID-19 is constantly evolving. Therefore, a lawyer can assist you with understanding your contractual position, making or responding to claims, understanding the impact on your employees, and addressing any solvency concerns you may have. If you have any questions or concerns arising from the ban on works at construction sites, contact LegalVision’s building and construction lawyers on 1300 544 755 or complete the form on this page.

Frequently Asked Questions

What are the restrictions on construction?

From Saturday 31 July, construction on non-occupied construction sites in Greater Sydney (including the Central Coast, Blue Mountains, Wollongong and Shellharbour) can resume subject to strict COVID-19 safety measures. However, construction sites remain closed in affected LGAs. Workers from affected LGAs are not permitted to leave unless they are ‘authorised workers’. Construction workers are not authorised workers.

Are there any exceptions to the restrictions?

There are very limited exceptions to the ban. Work on construction sites across Greater Sydney remains banned until 11.59 pm on 30 July, unless work is preparatory work or the works are an urgent requirement.
 

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