Let's set the scene; it’s January, the weather is iffy, the roof isn’t on and industrial action has brought your project to a standstill. Aside from a lot of emails, phone calls and *animated* conversations with the team, what do you do? Remember the document agonised over months before you started on site - the contract? Construction contracts usually have a standard clause relating to events like this.
As the Client you will be wanting to know how quickly the show can be back on the road, without you paying for the inconvenience, and as Contractor you will be keen to see that you will not be paying a penalty for something you could not prevent.
The standard contracts like FIDIC, JCT, NEC, IChemE and MF/1 vary in the way they cater for the possibility of industrial action. Some are quite specific and will state the process and the timescales involved relating to a strike or lockout. Others you would need to rely on their catch-all or force majeure clauses to help in these situations.
But after the feeling of comfort in reading your contract with a clause that seems to fit, an unease can creep in as the facts reveal themselves and parties’ solicitors pick the bones of each word in that clause, and you might find that the industrial action you are dealing with is not sufficiently covered.
For example, a strike would be covered in the JCT contract but not a work-to-rule. Amendments to the contracts would be needed to expand the eventualities covered.
Amendments that are usually made normally go in the other direction, limiting the scope of the clause to a strike that is beyond the workers within the contractors’ control and not also limited to the site in question. This would seem reasonable and acceptable to most parties. When reviewing in a climate of potential industrial action it is worthwhile amending to increase the possible types of action, even if you continue to limit the scope in this regard.
But when accepting amendments there is a need to ensure that you do not have a special circumstance where this may put you at a disadvantage, for example, if workers coming to work on the site from abroad, or suppliers of materials in other countries and shipping are impacted, where does the “action” have to take place?
It’s important not to be too hasty in declaring a force majeure event under any clause without advice, as many contracts have a thread tethering the termination options to those clauses and you need to be sure where you might end up.
So, if you find yourself in the midst of industrial action, you can reach for the contract and see where you stand, and then take advice as to whether it sufficiently covers the situation, and what remedies are available.