To help you navigate the new restrictions, including what work can and cannot continue, we outline the following:
- the public health directions relevant to the construction industry from Tuesday, 20 July 2021;
- an explanation of what building work is restricted;
- a clarification of what the exemptions are, and a summary of the projects that have now been identified as 'essential infrastructure', which will recommence works from Monday, 26 July 2021;
- a summary of the key requirements that must be met for building work that can continue;
- the key considerations under building contracts; and
- the considerations for standing down workers.
1. Public Health Directions
From Tuesday, 20 July 2021 at 6.00pm, a Level 5 'stay at home' direction was declared that included pausing work at all construction sites.
This initial direction has since been replaced with further directions. The current public health directions that are relevant to the construction industry are:
2. What are the new restrictions?
From Tuesday, 20 July 2021 at 6.00pm, work is not to be carried out on a construction site in South Australia, except if it is urgently required for a number of limited reasons.
The Directions do not define a 'construction site'. However, the Directions provide that all 'unrestricted activities', including activities at a construction site that are necessary for the normal operation of those premises, are not permitted for the period of time that the Direction is in place.
The restrictions apply to all construction sites in the 'declared area', being the whole of South Australia. However, it was announced on Thursday, 22 July 2021 that there will be a staged return to construction works from Monday, 26 July 2021. The works will be able to recommence on a small number of hospital, emergency services, school, and transport infrastructure projects, in both the government and non-government sectors. This is in order to ensure the health, safety and welfare of the community. We have outlined the projects below.
3. What work can be carried out on a construction site?
From Tuesday, 20 July 2021 at 6.00pm, a person who performs work that is essential for the continued operation of the work specified below is an 'authorised worker'. This means that they may leave home while the restrictions are in force:
- essential infrastructure (within the meaning of the Planning, Development and Infrastructure Act 2016), essential services (within the meaning of the Essential Services Act 1981), and other services required to maintain and protect human health, safety and wellbeing, including:
- electricity, gas, water, sewerage, drainage and liquid fuels, and refinery operations; and
- waste and recycling services (including collection, treatment and disposal services, and transfer stations), but only those services that are provided to commercial contractors; and
- construction, maintenance and repair of schools, roads and other essential infrastructure; and
- critical repairs or works to any facility, site or premises where required for emergency or safety, or to maintain and ensure the integrity of critical plant, equipment or assets (including partially completed works) that would otherwise deteriorate (including any associated matter, such as any necessary assessment for insurance purposes, engineering, or other expert assessment or inspection).
The following projects have now been identified as 'essential infrastructure' and will recommence works from Monday, 26 July 2021:
- Adelaide High School
- Aldinga Payinthi College
- Glenunga International High School
- Glossop High School
- Goolwa Secondary College
- Heathfield High School
- Mark Oliphant College
- Norwood Morialta High School
- Playford International College
- Port Augusta Secondary School
- Riverbanks College R-12
- Roma Mitchell Secondary College
- Seaton High School
- Unley High School
- Whyalla Secondary College
- Woodville High School
- St Francis of Assisi College, Renmark
- St Paul’s College, Gillies Plains
- Compass Catholic Community
- St Joseph’s School, Murray Bridge
- Cardijn College, Noarlunga
- The Queen Elizabeth Hospital Electrical Infrastructure Upgrade
- The Flinders Medical Centre Emergency Department Expansion
- Emergency Services Sector Headquarters, Keswick
The identified transport infrastructure are sections of the Barrier Highway, Stuart Highway, Horrocks Highway, Ngarkat Highway, Riddoch Highway, and the Upper Yorke Road, where road stabilisation and completion of sealing is essential for the safety and integrity of the regional arterial network.
Further, partially completed re-surfacing projects at the following locations will also be completed, as the current condition is hazardous:
- Port Road (East Avenue to Grand Junction Road)
- Greenhill Road (Glen Osmond Road to Glynburn Road
- Kensington Road (Britannia Roundabout to Portrush Road)
- Montague Road (Main North Road to Bridge Road)
- McIntyre Road (North East Road to Golden Way)
4. What restrictions apply to construction sites that can remain open?
For work that can be carried out, existing restrictions will remain in place. Under the current restrictions, face masks are required at all public places. If work is being performed by an authorised worker in a public place, a mask will be required unless it is not possible to properly carry out those functions with a mask on.
The targeted construction projects identified above also have COVID-safe plans in place.
5. Key considerations under building contracts
Do I need to give timely notice of the effect of these Directions under my contract?
Depending on the terms of your contract, the current Directions may trigger rights for claiming relief under your construction contract. Contractors will ordinarily have an obligation to give timely written notice of any event that may give rise to an entitlement to make a claim for an extension of time, or additional costs. You should ensure that you give any notice on time, as a failure to do so will likely bar your entitlement to claim. Developers should consider the operation of suspension clauses under their construction contracts.
What happens if you can no longer deliver or perform under a contract?
You should consider whether the contract includes a force majeure clause. Force majeure clauses differ between contracts, and a clause may not be drafted in a way which provides relief in the current circumstances. You should also consider the doctrine of frustration to discharge your obligations under a contract. We discuss these issues in detail in our previous article: COVID-19: Force majeure and frustration of your contracts.
6. Standing down of workers
If you are required to cease operations because of the Directions, you may want to consider standing down employees without pay. You may do so under one of the following:
- Enterprise agreements: You should check if they provide for stand down, and whether the right is triggered in these circumstances;
- Employment contracts: Prior to COVID-19, most employment contracts did not deal with stand down. However, some employers have since updated their employment contracts to provide for stand down; and
- Section 524 of the Fair Work Act.
This is a complex area and the particular circumstances of your business will need to be carefully considered.
Enterprise agreement
If you have a stand down provision in an enterprise agreement that is triggered in the current situation, you will need to follow the requirements of that clause. The consultation provision in the agreement may be triggered, but practically, consultation in this situation will be relatively short.
If an enterprise agreement does not cover the field on the issue of stand down, then the Fair Work Act provision may be relevant.
Employment contract
If you have a stand down provision in an employment contract that is triggered in the current situation, you will need to follow the requirements of that clause.
If an employment contract does not cover the field on the issue of stand down, then the Fair Work Act provision may be relevant.
Fair Work Act
Under section 524 of the Fair Work Act, you would need to meet the following requirements to be able to stand an employee down:
- the employee cannot be usefully employed in their normal duties, or performing alternative duties that would have a net benefit to the employer;
- there is a stoppage of work, which might not necessarily include a reduction of work;
- the stoppage is for a cause for which the employer cannot be held reasonably responsible – in the current circumstance, the SA Government directions not to operate your business;
- the employee cannot be usefully employed, because of the stoppage of work referred to above. This is an important issue of causation.
Developers and builders should closely examine their obligations under the public health directions and consider the impacts on construction sites. You may need to give notices in a timely manner if you wish to make claims under building contracts, ensure certain requirements are met if you can continue building work, and consider implications for standing down workers.
Please reach out to a member of our National Building Regulation and Compliance team for advice in relation to your particular contract, or for assistance in preparing any relevant notices.
