CONFIRMATION – Building and Construction is included in the 5-day lockdown.  These restrictions impose stronger limits our sector than the 5 August 2020, Stage 4 restrictions. This reflects that the Government’s Circuit Breaker Action is intended to be a shorter, sharper lockdown with fewer exceptions.

What does the lockdown mean for Building and Construction?

• After industry meetings with Government this afternoon, it has been confirmed that the Building and Construction industry will be shut down for five days from 11:59 pm tonight, 12 February 2021.  
• Government have advised that, under the published summary of restrictions, essential construction services work will be permitted to continue for critical infrastructure work, including road construction services. We understand that essential work can continue on:
• projects that have already been listed as ‘State critical infrastructure projects’ or ‘Critical and essential infrastructure projects’ (lists at https://www.dhhs.vic.gov.au/victorias-restriction-levels-covid-19).
• Construction and maintenance for the purposes of national security and defence, and
• critical infrastructure, including road construction services.
• Any further permitted activity would only be considered in highly exceptional circumstances where urgently required for the purposes of sustaining human health, safety and wellbeing
• Government have also advised that work required in order to make your sites safe and secure for the lockdown is allowed. For information on closing down sites click here
• Display homes, display suites and offices must also remain closed, with real estate auctions taking place online only

We understand this lockdown may pose a number of questions for your business, and our team will continue to update you through these bulletins and social media as any new information becomes available.
 
The Master Builders Victoria Team will continue to engage with the State Government throughout the evening and weekend to represent our members and the Building and Construction Industry.
 
Legal Implications

Contractual implications of the new lockdown
If the new lockdown period in Victoria will cause delays in your project, you should consider whether you are able to claim an extension of time under the relevant provisions of your contract. Below is a summary of relevant provisions in Master Builders Victoria’s suite of contracts:
 

• MBV HC7 New Homes Contract & MBV HIC6 Home Improvement Contracts (Domestic Contracts) - Under Clause 15, the builder is entitled to an extension of time if the progress of the Works is delayed by, amongst other things: the general unavailability of any Materials necessary to carry out the Works; or any other cause beyond the reasonable control of the builder.
• MBV MW2 Minor Works Contract & MBV PS1 Pool 7 Spa Contract (Domestic Contracts) – Under Clause 14, the builder is entitled to an extension of time if the progress of the Works is delayed by any cause beyond the reasonable control of the builder.
• MBC DCP2 Domestic Cost Plus Contract – Under Clause 17, if, through no fault of the builder, the progress of the Works is delayed by: the general unavailability of any materials necessary to carry out the Works; or any other cause beyond the reasonable control of the builder.
• MBV GCC6 General Conditions of Contract & MBV CP1 Commercial Cost Plus Building Contract (Commercial Contracts) – Under Clause 19, the Contractor shall constantly use best endeavours to avoid delay in the completion of the Works by the due date; but shall be entitled to an extension to the Contract period and a corresponding adjustment to the Date for Practical Completion with respect to any delay caused by, arising from or attributable to any event or events beyond its immediate control.

 
It is the legal team’s opinion that the effects of a COVID-19 government-mandated lockdown are beyond the reasonable control or the immediate control of the Builder/Contractor, and may entitle them to claim an extension of time. However, if doing so, the Builder/Contractor must notify the other party as soon as possible of any delay in accordance with the contract.
 
We note that the above clauses contain terms that are defined in the relevant contracts.
 
Contractual implication on future projects
 
If you are about to sign a contract, we remind you to ensure that you:

• provide an appropriate allowance for your construction period; and
• have specific special conditions dealing with the pandemic, such as special conditions to allow you to claim an extension of time due to delay caused by the pandemic and delay caused by shortages in materials. 

If you require further assistance, please contact the Master Builders Legal team by calling the mainline on (03) 9411 4555.
 
Employment Implications

What happens to employee entitlements if an employer is required to close a building site or project because of the Victorian Government imposing a lockdown?

The Government’s strict restrictions that work on a particular project or site must stop, or operations must cease, or the employer or workers lose access to the site or premises, are likely to amount to a stand down.

A stand-down can be lawfully implemented in the circumstances where the employee cannot be usefully employed due to a stoppage of work for which the employer cannot be reasonable held responsible. A period of stand-down is without pay.
Before standing employees down without pay, employers should consider whether the following circumstances exist:

• There is a stoppage of work;
• The stoppage means that the employer cannot usefully employ the employee; and
• The employer cannot reasonably be held responsible for the stoppage.

Members should also consider whether their Enterprise Agreement (EBA) or contract of employment prescribe any additional stand down requirements before standing down employees.
As an alternative to a stand-down of workers, the employers may consider:

• whether workers can be reasonably redeployed elsewhere;
• whether any of the workers can work from home;
• whether any other arrangements can be made so that the work can continue;
• discussing the ability to take paid leave, including annual leave or accrued RDOs.

Eligible employees may be able to access an Incolink hardship payment.
For more information about payments, accruals and other entitlements during stand down, please refer to our FAQs sheet.

General Lockdown Information

The Victorian Government has announced Victoria will go into lockdown for five days, as of 11:59pm tonight Friday 12 February 2021 under Stage 4 Restrictions. There will be a review after the five days. This is being termed by the Victorian Government as a “short, sharp circuit breaker”, similar to recent short lockdowns in Brisbane and Perth.

What does this lockdown consist of?

• Residents of Victoria will only be permitted to leave the house for 4 reasons during the five-day period from 11:59pm 12 February 2021:
  
  1. Shopping for things you need
  2. Care and caregiving
  3. Essential work or education that cannot be done at home.
  4. Two hours of exercise each day

• When leaving the house for the four above reasons, it must be within 5kms
• Masks must be worn everywhere
• It applies to all of Victoria

Full information on restrictions can be read here
The Victorian Government statement can be read here

Border updates:

As of 1am Saturday 13 February, the Queensland border will close to Greater Melbourne for 14 days

Next steps:
Master Builders Victoria will be involved in further meetings with the Government later tonight to determine more information.
We will keep members informed via Member Bulletins, website and social media platforms as we receive more detail.    

Master Builders Victoria media comment:
“The Building and Construction industry has proven itself to be safe throughout the last 12 months.
We understand the reasons for the five-day lockdown, but of course we are incredibly disappointed that our industry will need to stop completely for the first time.

The best everyone can do right now is to follow the Chief Health Officer’s directions, so that our sector is best placed to be ready to go back to worksites after this five-day lockdown.

In the meantime, Master Builders Victoria will be assisting members over the coming days to work through any issues that this lockdown may cause.”