NECA Group

News & Views

5th May 2020

Managing COVID-19 in the workplace

As most of our members would be aware, there is a current global outbreak of coronavirus (COVID-19). The outbreak has been declared a Public Health Emergency of International Concern by the World Health Organisation. 

COVID-19 is spread from someone with COVID-19 coming into close contact with another person through contaminated droplets spread by coughing or sneezing, or by contact with contaminated hands, surfaces or objects. COVID-19 has influenza like symptoms, such as fever, cough, runny nose, shortness of breath etc. It may also result in pneumonia with severe acute respiratory distress.

As a starting point, the following simple methods of preventing the spread of COVID-19 should be put into place in your workplace:

  1. Ensure that workplaces are clean and hygienic, including surfaces and objects being disinfected regularly;
  2. Promote regular and thorough hand washing by employees, contractors and customers, including:
    • placing hand sanitiser throughout the workplace;
    • displaying posters that promote hand-washing;
    • communicating with staff; and
    • ensuring that all employees, contractors and customers have access to places where they can wash their hands with soap and water.
  3. Advise employees to cover their nose and mouth when coughing and sneezing with a tissue or a flexed elbow.

 

In addition to the above, anyone returning from China, Iran or South Korea, should self-isolate for 14 days from the day they departed either China, Iran or South Korea. Further, any persons that have recently travelled from Cambodia, Hong Kong, Indonesia, Italy, Japan, Thailand, or Singapore should self-monitor symptoms and practice social distancing.

Please note that the above list of countries is current as at 9 March 2020. Members should constantly check to see if this has been further updated.

Please click here to access the NSW Government Health alert on COVID-19.

Please click here to access the Australian Government Health updates on COVID-19.

Please click here to access the World Health Organisation updates on COVID-19.

 

How do I pay an employee that requires isolation?

In NECA’s view, if an employee has recently returned from China, Iran or South Korea, they are required to isolate themselves for 14 days after leaving the relevant country. On that basis, it is arguable that the relevant employee may not be able to prove that they are fit for work and therefore they may be entitled to take paid personal leave.

Section 97 of the Fair Work Act 2009 (Cth) provides that an employee may take paid personal/carer’s leave if the leave is taken because the employee is not fit for work because of a personal illness, or personal injury, affecting the employee.

In light of the above, the relevant employee could take personal leave during this isolation period. In addition, if an employee is suffering from an illness that is apparent, such as a cold or influenza, an employer is well within their right to request that the employee go on personal leave.

 

Checklist for Managing Work Health and Safety Aspects of COVID-19

NECA NSW’s Work Health and Safety team has developed an online checklist to assist NECA members in ensuring that their workplace is ready for COVID-19. See the following link to access a copy of the online checklist:

https://necawhs.typeform.com/to/IYFDDF

Should you have any questions about this, please contact NECA’s WHS Manager, Owen Leslie, at owen.leslie@neca.asn.au.

 

Managing Contracts with respect COVID-19

In relation to your current or future building and/or construction projects, it is important to consider whether any of your projects are at risk of being impacted by COVID-19.

The impact may be as a result of:

  1. supply chains suffering or being delayed due to the Chinese/Italian/South Korean etc manufacturers; and
  2. quarantine taking place at ports used for the transportation of materials ordered for the project; and
  3. in the worst case scenario, your company’s workforce or part thereof or other personnel on Site may contract the virus.

 

Delays in relation to construction/electro technology industry projects may result in your company incurring increased costs such as:

  1. substantial damages claims including claims for liquidated damages for delay, acceleration costs incurred for making up for lost time;
  2. increased prices for materials where more expensive materials are to be sourced elsewhere; and
  3. major damages for breach of contract for termination of contract for non-performance of the contract.  

 

Force Majeure Clauses

Many contracts (when amended) have Force Majeure clauses which include events such as “biological contamination” or “epidemic or embargo” in the definitions, which may result in your company being able to release itself from the performance of its obligations under the contract.  If your contract does not have a Force Majeure clause you may not be entitled to the benefits of Force Majeure as it is a Roman Law (vis major) concept and not part of our common law.

For any future contracts it would be wise to include a Force Majeure clause, especially one that includes “biological contamination” or “epidemic or embargo” in its definition. For current contracts, if possible, have these amended to include these definitions as well.

Should your contract have a Force Majeure clause ensure that you strictly comply with the notification requirements under the contract in order to seek relief under the contract by way of delay damages, EOT’s or at worse, termination.

This may save your company from significant claims for Liquidated Damages or breach of Contract claims for delay or disruption to the contract.

 

Frustration

If your company is unable to perform its obligations under a contract as a result of the impact of the outbreak of the COVID-19, due to circumstances beyond your company’s control then the doctrine of “Frustration” may be invoked to terminate the contract. Termination on the grounds of Frustration is a difficult remedy to invoke. The reason for this is that in the modern commercial world, a shortage of materials or delays can be overcome by sourcing (at great cost to your company) materials elsewhere and your company shall be responsible for these additional costs. If your company can source materials elsewhere, no matter the additional costs, the Courts are unlikely to consider this as a sufficient ground to be an event that can frustrate the contract.

In summary, frustration of the contract may not be the best approach moving forward if your company is directly affected by COVID-19.

 

Extension of Time (EOT)

Generally, Extension of Time clauses in contracts only permit a contractor to apply to an EOT in circumstances where the Principal/Head Contractor, or one of their subcontractors, is at fault and has caused the delay. COVID-19, unless specifically included in a contract as a ground for an EOT (i.e. by way of a Force Majeure Event being a qualifying cause of delay), will not be a ground that would generally entitle a contractor to an EOT.

 

Risk Mitigation Steps

Ensure that your contract incorporates clauses dealing with:

  1. Force Majeure;
  2. Extension of Time; 
  3. suspension of works which specifically raise the issues set out above,

 

Should your current contracts not have such clauses, you should endeavour to negotiate an addendum to your current contracts to include such clauses.

This will assist with ensuring a limitation of your company’s exposure with respect to COVID-19.

Please note that this industry release is not legal advice and should not be taken to be legal advice. Legal advice should be sought if COVID-19 directly or indirectly affects your workplace.