If option X7 forms part of the contract, can an employer/contractor levy delay damages at the end of a project/contract without prior notification/warning of their intention to do so?
Yes. In the absence of verbal communications stating their intention not to, you should assume that they will do if planned Completion is forecast to be after the Completion Date.
However, the Completion Date may move backwards due to compensation events which are in the process of being assessed but have not been implemented. You may wish to call a meeting to ideally expedite the process of assessment and implementation or, failing that, agree an alternative way to avoid damages being deducted - and thus affecting the contractor’s cashflow - only to be repaid at a later date once the Completion Date is moved.