President’s Column: April 2020
The world is facing unprecedented times. The effect of the coronavirus (COVID-19) pandemic on the health and wellbeing of the nation is still uncertain. Each day the number of people infected, and the number of deaths increases. We are also getting more stringent information on social distancing; pubs restaurants, clubs etc have been closed as have some parks and public spaces. We can only go outside for food, health reasons or work – but only if we cannot work from home. Further restrictive measures including ‘curfews and prohibitions’ on movement may yet be imposed.
The government and the Chancellor have introduced unprecedented peacetime measures to ensure companies and employees make it through the pandemic and are able to continue their business and social lives once the pandemic is over.
But what are steelwork contractors doing? Like most companies they are trying to follow government guidance, but this is changing rapidly, and the measures put in place today may be different from those needed tomorrow. These are very challenging and stressful times.
Most companies are doing their best to operate a business as usual approach by putting in place lots of measures to help prevent the spread of the virus including special cleaning in the office and workshop. Members of staff with existing conditions and those with children whose jobs permit it have been set up with systems allowing then to work from home. Companies report that all staff are being very supportive and realise that it is not just the Company’s responsibility to deal with the current circumstances, but they too have a responsibility.
However, the business as usual approach is becoming more difficult as site shutdowns become widespread. Nevertheless, it is important to ensure that the business remains viable during these difficult times and this includes reviewing active contracts and any contracts that the company is about to enter. It is important to review what the contract says about the following issues:
- Use of alternative materials
- Force majeure (if defined, sometimes epidemics or pandemics are included)
- Relevant events/matters enabling claims for extensions of time and additional money
- Delay and liquidated damages
- Rights to suspend/terminate the contract
- Notices – early warnings and notification of relevant events/compensation events in particular
Other issues that are being reviewed include what to do if employees do contract coronavirus, and if you do shut down the works how do you do so quickly and safely? How quickly and safely can companies react to receiving a notice to shut down your works on site from a main contractor? These are questions that some companies are having to deal with now. Another issue to consider is insurance and whether companies have insurance policies that could held recoup losses and, if you have this type of insurance, do you need to contact your insurers under the terms of the insurance policy?
The effect of the pandemic is likely to result in a recession although there is also talk of a depression. Strategic planning is therefore needed to ensure companies can weather the results of this economic shock.
These are very difficult times for the country, its people and the construction industry. The impact that this will have on the construction industry is unknown, but I feel that by pulling together the industry will come through this.