NEC ECC: How is clause 52.1 to be applied to Covid 19 Government subsidy

Further to the initial question; The situation in NZ is that under government imposed lockdown restrictions, building works were unable to proceed for a period of 4 weeks. The Government then provided a wage subsidy scheme for a period of 12 weeks, to support employers who had experienced a drop in revenue of at least 30%, and ensure staff were paid and retained during lockdown.

As a result, full salary and wage costs were incurred during the lockdown period for directly employed staff (including carpenters) for which the rates are included in the contract data. However vast the majority are not recoverable under the contract as they are deemed to be not being used to Provide the works under 11.2(26). In addition, in line with your original answer, the full value of the government subsidy support package needs to be credited against any actual costs claimed for the remaining 8 weeks. On this basis, the Contractor is significantly worse off, and the client significantly better off than the status quo pre lockdown. Is that your understanding of the intention of the contract?

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Shaun, no that is not how I think anyone intended it to work, though that doesn’t necessarily mean it doesn’t work that way.

I am aware of some nuances around the NZ approach to C-19. Could I recommend to you this excellent article written by a couple of people I know, Raine Selles and Steven Evans.