Hello All, interesting question regarding the additional bank holiday that has been declared for the 19th September 2022, or, in fact any ‘additional’ bank holiday to a calendar year.
A contractor on an NEC3 ECC option C has notified a compensation event for time due to works shut down for the additional bank holiday.
Law states that it is optional for employees and/or business to honour the bank holiday but this particular one is part of the uk’s period of national mourning.
As the contractor has chosen to stop works on the bank holiday are they entitled to a CE for this additional’ BH?
This could be one of those scenarios where the PM acts in a spirit of mutual trust and cooperation and agrees with the Contractor to shared cost of the loss of the days activities, particularly if the Client is not closing down for the bank holiday.
As you say bank holidays are not covered by statute so the additional day is not introduced by a change in law.
If the people working for the Contractor decide to take the holiday then it is an event which neither Party could prevent; an experienced contractor would have judged to have such a small chance of occurring that it would have been unreasonable to have allowed for it; and it is not one of the other compensation events; if it prevents the Contractor from completing the works by the date shown on the Accepted Programme, it is compensation event 60.1(19).
I could be wrong, but banks holidays are dictated by statutory law, therefore an additional bank holiday should constitute a change in law. As for the contractor/employer honouring the bank holiday, this should be subject to the individual contractual agreements with their workforce. If operatives do not typically work on bank holidays, I cannot imagine they are obliged to do so during HM’s state funeral.
Has Option X2 been used in your Contract? If so, I think the Contractor should be entitled to additional Time, but not necessarily cost.
If a matter is a CE under X2 then the Contractor is entitled to time and cost incurred, as set out in Clause 63.
With respect to all the opinions stated, my thoughts are as follows.
In Option Y(UK)2, clause Y2.1(2) states that time is calculated in accordance with Section 116 of the HGCRA 1996 as amended, i.e. excluding bank holidays as set out in the Banking and Financial Dealings Act 1971 (“the Act”); that is clear.
Schedule 1 to the Act specifies the days that are bank holidays in England and Wales, Scotland and Northern Ireland respectively; subsection (3) of the Act states that Her Late Majesty might, by proclamation, appoint a special day to be a bank holiday in any place or locality in the UK. Although not the case here, even if it was (such as the Royal Wedding bank holiday in 2011) it would not constitute a change in the law, as such addition is already provided within it. Therefore, I believe we should rule out the application of X2.
With regards to clause 60.1 (19), I think there is a valid point but it would turn on the specifics of each case.
I agree with the general interpretation here, which is that there is no change in the law to accommodate this bank holiday. It was made by royal proclamation, which requires no change in the law; the monarch exercised a power under existing law. I therefore don’t believe X2 applies.
I think that only leaves you with prevention, as suggested by @stevebrownassociates. I think I agree that of the 3 ‘hurdles’ for that CE, this would clear the small chance test and the unreasonableness test. The ‘if it stops the Contractor from completing…’ test is a big one, though. Note that is ‘stops’. That’s pretty adjacent to ‘makes impossible’ - an onerous test.
Having said that, there are clients out there who are willing to be sensible, particularly when faced with a supplier who recognises that it was unexpected for everyone. While the Contractor didn’t allow for it, neither did the Client. It might be that your best starting position is to just talk about it.