Construction Law/how to charge for non-productive laybour
Hi their, I am trying to find out what to charge or add to our terms and conditions regarding charging for non-productive labour. We some times run into situations on our projects. Wear in the middle of the project the client changes their minds. This in-turn creates at least one or two days non-productive labour, that can not be put on to other jobs as they are specified to that particular contract and time frame. Some of the team are employees and sub contractors. The work we d is highly specialised. Can you advise?
Good Day Gillian,
I am not aware of the Contract to which you are referring. However, your concern regarding Disruption caused by the Client, is a very important concern. The effects of disruption to the contract works usually result in:
(i)delay to the entire project (thus jeopardizes the completion date)
(ii) working out of sequence (alters the contractor's work schedule)
(iii) underutilization of plant and equipment(causes the contractor to obtain reduced output from his assigned resources)
Most standard form of contracts in construction have allowances for delays and disruption caused by either parties to the contract, and the specific remedies to be applied accordingly to these circumstances.
I would advise that along with the site log of the resources on site,proper and accurate documentation regarding the records of regular worktime and downtime of labour and equipment on site must be kept at all times on all projects. These records should also be signed by the Client's representative on site as witness to the daily events on site.
The reason for this is that, it is the responsibility of the Contractor to "prove" that because of the disruption caused by the Client's representative on site, there was a delay which may result in prolongation cost, additional cost for working out of sequence and additional cost for having his resources underutilized.
You can with the help of legal advice include in the particular conditions of the contract, the adjustment of the clauses of the contract which deals with delays and disruption to include additional compensation(not penalty) for disruptions.
If you are not using a standard form of contract, and your present form of contract does not have such allowance in the terms and conditions to address this situation, with the help of legal advice i suggest that you include such clauses similar to that of any other acceptable standard form of contract (including compensation for disruption)into your bespoke contract which will be suitable for your situation.
However, i repeat that whatever your claim may be regarding disruption caused by the client, it remains your responsibility to prove that you were affected. Hence the reason why the documentation of your claim is important and will be the major help to you in receiving the desired compensation. In the event that a dispute arises and litigation or arbitration is recommended to resolve the dispute, your documentation is your only defence in supporting your claim.
I Hope this answers your question.