If a Contractor pays any discretionary top up to a furlough amount paid by the Government, is this recoverable as Defined Cost e.g. as a component of wages and salaries paid to People?
Under NEC, the Contractor has a duty to react competently and promptly to a compensation event, taking reasonable steps to mitigate its impact (time and cost). Any Defined Cost and time due to the event should be reasonably incurred.
Clause 52 confirms that Contractors take cognisance of all discounts, rebates and taxes which can be recovered e.g. furlough recovery from Government would reduce Defined Cost.
Furlough cannot be imposed on a Contractor’s employees i.e. it is achieved with their agreement. The Contractor offering a top up may have been the influencing factor to an individual(s) and to their agreement i.e. ability of the Contractor to mitigate cost via furlough may not have been possible without the top up offering.