Acting on behalf of the Client, I have recently come across the Contractor applying for costs for staff (who are usually Proving the Works within the Working Area) who are self isolating and as a result, not currently Providing the Works. The Contractor argues this is the same as an absence due to sickness and holidays, or is covered under working in special circumstances.
My view is it is not a sickness or holiday, nor is it working in special circumstances (the person isolating is not working).
The SCC states an amount is included only if it is incurred to Provide the Works.
Any advice or viewpoints on the above would be appreciated.
If the person is self-isolating and not Providing the Works i.e. they aren’t carrying out their duties from home then they should not be included in Defined Cost.
If the Contractor wants to claim that their absence is due to sickness and holidays you should ask them to provide evidence to back this up from their HR system. If the Contractor can prove that the person was sick or on holiday for the period claimed then the Client is liable to pay for the person in line with either the person’s contract of employment with the Contractor or the law when it comes to statutory sick pay.
If they are actually ill, then they would be sick, but self-isolating whilst having no symptoms is not the same thing.
BUT that is a bit of a misdirection: as you say, something is only a Defined Cost “if it is incurred in order to Provide the Works” ( 2nd bullet of pre-amble to the Schedule of Cost Components), so you don’t pay for when they are not doing this.
The Contractor’s daily or hourly rate for that person should include “12 (e) absence due to sickness” i.e. it is in the rate that it is charged when the individual is working.
So even if the does become sick, the Contractor’s rate allows for it.
Far more constructively, if they are staff why doesn’t the Contractor get them working from home as this is an allowed cost if their “normal place of working is within the Working Areas”?
Context is often critical to these types of questions. However, if the isolation is following medical advice/government guidance of safe working then my view is that it does very closely align with sick leave. Sick leave starts and finishes when an employee is capable of undertaking their role. A period of convalescence or isolation is part of the period where that person cannot work due to an illness.
As I say, context is important so it is worth trying to find out the basis on which the contractor is dealing with that staff member. Are they furloughed, being treated as if on sick leave by their own HR team, using holiday, being paid in full etc. If you can get to the facts then you can probably find a sensible way of sharing the impact.