NEC ECC: Can you be paid for working outside of the Working Areas?

While working on an NEC3 Option E Contract, the Contractor has recently suffered numerous delays getting to site as a result of Official Strike action by another Contractor which involved picketing the gates. The Strike Action related to a dispute over pay between the Employer and the other Contractor.

Each occasion resulted in 2 to 3 hour delays in getting to the site due to congestion on the roads.

The Employer is rejecting any compensation events (notified in accordance with 60.1(19) ) on the grounds that notice was given by the Employer and therefore alternative travel arrangements could have been made.
In reality, alternative travel arrangements were unpractical. The Contractor did however request to work alternative shift patterns to avoid the congestion at in-muster times however this proposal was rejected by the Employer.

The Employer has now gone one step further and Disallowed any costs for people sat in traffic for 2 hours waiting to get on to the site on the basis that they were not Providing the Works and were not working within the Working Areas.

Is the intent of the SOCC, specifically items 11 and 14, that any people costs incurred while outside of the Working Areas should be disallowed?

If so, what is the purpose of the first 2 bullets against item 1 which appear to differentiate between people who’s normal place of working is within the Working Areas and people who’s normal place of working is outside of the Working Areas but they are working in the Working Areas?

Previously, my interpretation of these 2 bullets were that costs associated with someone working outside the Working Areas could still be Defined Cost so long as their normal place of working was within the Working Areas.

I am now concerned that my initial interpretation may be incorrect.

If so, this poses a significant risk to the Contractor that any time/cost for QSs, Project Managers etc. spent working from home could be disallowed unless the home addresses of employees are added to the Working Areas in accordance with clause 15.1.

Similarly, a day spent auditing a subcontractor at their premises could be disallowed without first using clause 15.1.

The principle of the SCC under NEC3 is that certain components of cost are required to be in the Working Areas for these to constitute Defined Cost, which includes People.

In reality much of the cost in relation to People is incurred whilst they are physically outside the Working Areas, which is why their total cost is divided by the number of hours they are planned to be in the Working Areas, to ensure a ‘full recovery’.

My understanding is that the bullet points under item 11 provide clarity, that is a person doesn’t need to be working full time on a project for their cost to be treated as Defined Cost, for example a Health & Safety Manager, Quantity Surveyor or Planner who divide their time between more than one project.

In your case it seems that you have been frustrated by circumstances outside your control. Ultimately, however, the allocation of that risk is determined under the contract, whether it is considered fair or otherwise.

Although it may seem unfair and you might even indirectly attribute the cause of the problem with the Employer, the risk of getting people to the place of work is generally with the Contractor. What if the strike action occurred elsewhere on a major arterial route to the Site and was not connected with the Employer? What if high winds caused major disruption on the train network, especially as this is not one of the standard weather measurements?

If as a consequence of the strike action you were not able to access the Site then that may well constitute a CE under 60.1 (2). For a prevention event at 60.1 (19) it would need to prevent you from completing the works by the date shown on the Accepted Programme. The test is quite strict, however, which you would need to demonstrate. It also seems like the Employer has given an early warning by notifying of the event, which is what they are obliged to do.

I think this issue highlights the need to thoroughly understand how the contract works in practice.