Covid-19 : Worksite stop or pursuit ?

24/04/20
Covid-19 : Worksite stop or pursuit ?
By cause of the health crisis and the extensive lockdown resulting from Covid-19 pandemic, most public and private worksites have been slowed down or even stopped.   According to the state of health emergency, it is recalled that transportation has been strictly prohibited by the government, with the exception, however, of "travel between home and the workplace, when it is essential for professional activities that cannot be organized in the form of home-working or business trips that cannot be postponed ".   As a result, the legal provisions do not in themselves prevent worksites from being maintained, but provide a framework for their activity in terms of compliance with the measures of hygiene and social distancing, known as "barriers", defined at the national level, which must be respected in all places and under all circumstances.   After two weeks of discussions, OPPBTP’s (i.e. “Organisme Professionnel de Prévention du Bâtiment et des Travaux Publics”) “guideline on health and safety recommendations for the continuity of construction activities in times of Covid-19 pandemic " has been validated by the competent ministries and released on April 2, 2020 . It has been recently modified to integrate a new opinion expressed by the French National Agency for Medicines and Health Products Safety (ANSM) of April 8,2020 concerning the use of alternative fabric masks.   This guideline identifies the "urgent and specific measures to be implemented to ensure the essential sanitary conditions required by construction and public works employees called upon to work in offices, workshops, warehouses or construction sites and other places, in addition to any sanitary measures enacted by the public authorities". Without a strict compliance with these recommendations, the guideline specify that companies must "stop their activity on the relevant sites”.   The latter highlights, over and above the essential sanitary recommendations, the joint analysis to be carried out by the project owner, the project manager and the Health and Safety coordinator (where applicable) together with the various companies involved, so that the sanitary measures are respected for each project, whatever its size. According to this analysis, the project owner will decide whether or not to postpone the worksite.   In fact, it is up to each company involved on the site to decide whether or not to continue any of the activities under the works contract and to assume the implications and/or anticipate/negotiate the impact on the ongoing contract with the project owner (impact on the work schedule, compensation for additional costs, etc.).     Therefore, two options should be considered:  

1- The company decides, in collaboration with the project owner, the project manager and the Health and Safety coordinator (if applicable), to continue the worksite.

In this case, the company shall reorganize/adjust its practices and put in place appropriate measures to ensure the safety and health protection of its employees in strict compliance with the guide published on April 2 (which will be revised/updated according to evolution of the pandemic). To date, the recommendations mainly consist of ensuring:
  • A safety distance of at least 1 meter between the different workers;
  • Availability of respiratory protection masks and formal request to wear them on site (in specific situations);
  • Access to a water point with soap and single-use hand towels;
  • Limitation to coactivity by reorganizing the operations;
  • Individual allocation of site tools (except in the case of systematic wearing of work gloves);
  • Remote maintenance of the execution studies;
  • Remote meetings and site monitoring by video/audioconference; etc.; etc.
  In any event, pursuit of works is subject to the following conditions:
  • Mobilization and implication/right of withdrawal of each of the company's employees. It is difficult, in this particularly anxious period, to constrain/anticipate the number of employees willing to mobilize to take over/continue work on the site.
  • Reduction or disruption of supplies from the various service providers, subcontractors and suppliers.
As things stand, it is clear that works execution schedules will be significantly impacted by these events.  

2- On the other hand, a company may decide to suspend its worksite, since it may not be able to comply with the sanitary measures prescribed by the government nor meet its legal obligation to ensure safety.

In such a case, the company's delay may have a significant impact on the execution/non-execution of the works contract which may engage its contractual liability   The Government has already taken measures to extend the expired deadlines during the health emergency period (Order No. 2020-306 of March 25, 2020 amended by Order No. 2020-427 of April 15, 2020) as follows:   “The periodic penalty payments, the penal clauses, the termination clauses as well as the clauses providing for a forfeiture, when their purpose is to sanction the non-performance of an obligation within a specified period, are deemed not to have taken effect or to have effect, if this period has expired during the period defined in I of Article 1(I).”   If the debtor has not fulfilled his obligation, the date on which those penalty payments arise and those clauses take effect shall be postponed for a term, calculated after the end of that period, equal to the time elapsing between the later of 12 March 2020 or the date on which the obligation arose and the date on which it should have been fulfilled. The date on which such periodic penalty payments and clauses take effect, when they are intended to sanction the non-performance of an obligation, other than the payment of sums of money, within a specified period expiring after the period defined in I of Article 1, shall be postponed for a period equal to the time elapsed between March 12, 2020 or, if later, the date on which the obligation arose and the end of that period". (Article 4 of the aforementioned Order).” It is specified that the so-called "legally protected" period runs from March 12, 2020 until the expiry of a period of one month after the end of the state of public health emergency. To date, the end date of the state of public health emergency has been provisionally set at 00.00 hours on May 24,2020. The "legally protected period" would consequently end one month later, on June 23, at midnight.  

By way of illustration:

  During the "legally protected period":
  • If a deadline was expected on March 20, 2020, i.e. eight days after the beginning of the legally protected period, the penalty clause sanctioning non-compliance with this deadline will only take effect, if the obligation is still not fulfilled, eight days after the end of the legally protected period.
  • If a termination clause, resulting from an obligation arising on April 1st should take effect, in the event of non-performance, on April 15, this 15-day period will be postponed to the end of the legally protected period so that the debtor can still validly fulfil his obligation before the termination clause takes effect".
  At a date later than the end of the "legally protected period":
  • “If a works contract signed prior to March 12, 2020 provides for the delivery of a building on a date that expires after the end of the legally protected period, the penalty clause sanctioning the possible non-performance of this obligation will only take effect on a deferred date equal to the duration of the legally protected period". (Report to the President of the Republic of the aforementioned Order on April 16, 2020)
  The suspension of late payment penalties /termination clause for a given period does not, as far as the legal provisions are concerned, prevent the company's obligation to deliver a work on an agreed date. Whether during or after the end of the health emergency period plus the "legally protected period" delays, many companies will find it impossible to meet the delivery deadlines under the works contracts because of containment difficulties.   The project owner could consequently invoke the company's liability (on the basis of ordinary law) if the latter has not completed its works within the agreed timeframe. The company, however, would be attempting to negotiate the terms of its contract by trying to take advantage of the legitimate causes for suspending work and/or extending deadlines stipulated in its works contract. The exceptional and unprecedented circumstances of Covid-19 should not, however, fall within the scope of the legitimate causes for suspension of work that could have been anticipated on the day the contract was signed.   The effects of this pandemic and the health measures implemented could potentially be qualified as an event of force majeure under the terms of Article 1218 of the French Civil Code or as an unforeseen event for which compensation may be sought (if no waiver is provided for in the works contract). These qualifications will nevertheless have to be assessed on a case-by-case basis.   In any event, and in an obvious sanitary and economic logic, a better communication/collaboration between all the actors of the construction (the project owner, the project manager, the Health and Safety coordinator, companies, suppliers, etc.) is to be encouraged during and after the lockdown period to limit the impact on the execution of ongoing contracts and/or prevent any litigation.   [interne id="44840"] [interne id="44791"]
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