NEC3 - Option B. Works have been suspended under cl34.1. Quotation requested.
We are preparing quotation for suspension, we cannot re-allocate the labour and staff, we have off-hired all plant.
Is it reasonable to include all suspended labour and staff in CE quotation (for the full duration of suspension) or can the PM instruct us to furlough the workforce to mitigate his costs?
I dont think that the PM can force you to furlough but I think that it would be unreasonable to expect the Client to pay full salaries as you would have an obligation to mitigate costs.
The PM has no right to be able to instruct you to furlough workers as that instruction would be either illegal or impossible to comply with. As an employer you don’t have the right to tell your staff that they will be furloughed, you have to ask them and they have to agree, they may choose redundancy as an alternative.
This said it is vital in these times that the Contractor and PM are communicating with each other about this. Whilst the PM can’t instruct they can advise in the context of a risk reduction meeting. Also the Contractor should inform the PM about what measures it is putting in place to minimise costs / losses as clause 63.7 states that any Defined Cost and time due to the compensation event are reasonably incurred.
If the Employer / Client is publicly funded then that may change the approach entirely, PPN 02/20 advises public bodies to seek to maintain cashflow to suppliers which may mean paying in advance or looking at ordering Plant and Materials earlier than planned etc.
See my comment below re: PPN 02/20: if the Employer / Client is publicly funded then it can pay the Contractor the full cost of people working on the contract provided that the Contractor can prove that they are indeed paying / going to pay them in full.
Neil, thank you for your two responses.
The Client is a local authority and i have read PPN 02/20 and understand it for maintaining cashflow but cant pinpoint the item which states the client will pay the contractor the full cost of people working on the contract.