NEC3 ECC option A: PMI instructing us to continue working against statutory body instruction to stop

NEC3 and NEC4 Contracts
1

A little background.

As part of our tender, the licenses required for the works to proceed were the client’s responsibility. We were sent the licenses on the day we were due to start on site.

Fast forward 5 weeks and we get a visit from an inspector of the statutory body who informs us that the license we have been given is invalid and not on their system. We are told to stop our works until such time as we have a valid license in place. I promptly call the project manager and inform him of this and follow it up with an NCE as the license is not our responsibility.

The project manager’s response to the NCE was to instruct us to continue working as in his eyes the problem lies with the statutory body and not with them. We subsequently refuse to accept the instruction as it is in direct violation of the instruction by the statutory body and unlawful in our eyes.

Firstly, is the project manager in his power to instruct us to continue working?
Secondly, is the project manager in his power to instruct us to continue with an unlawful operation?
Thirdly, the project manager has not accepted or rejected the NCE. All he has done is give us an instruction to continue.

2

This is an interesting question and one I have looked at in a slightly different context in the past (eg can the PM exclude someone from site in breach of anti-discrimination laws). I think the answer is pretty simple but not directly or easily found in the contract and the same here as in my previous example.

Clause 27.3 provides that a Contractor obeys and instruction given in accordance with the contract. While that is not quite enough I think it is clear that the contract would prohibit the PM from issuing illegal or impossible instructions. The contract would make no sense if that weren’t the case and, for illegal instructions, there is obviously a wider public policy point.

As the requirement for a license from a Stat is usually a requirement of some form of legislation (worth checking though) no license means no work. The Stat is really the sole arbiter of the license position and that is a problem, in your example, for the Employer/Client to fix.

So, the answer is no to both your questions.

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