16 March 2020
The impact of coronavirus is wide ranging within the building industry, from effects felt within the supply chain, through to the inevitable questions about its impact on employment conditions and safety.
Impact on the building supply chain
The impact of the coronavirus on the building supply chain in Queensland is already starting to be felt. While the true impact won’t be known for weeks or possibly even months, we anticipate it will most likely be felt in the second half of 2020. The impact will be felt in both commercial and residential sectors; neither is immune.
The Queensland building industry uses building products imported from China (particularly taps, valves, glass, nails, screws, nuts, bolts, iron and steel) and with the industry already facing a downturn, there is real concern about the impact this will have and the risk the industry will be exposed to.However, while China is a source of building material imports to Australia, it’s not a dominant source, and many are produced here in Australia.
There is also some anecdotal evidence emerging that suggests products such as imported tiles, high-end appliances and elevator cars from Italy are also experiencing issues and delays.
Panic buying isn’t necessarily restricted to consumers. We’ve had reports from some builders who are experiencing issues sourcing products like ovens, with stock levels plummeting overnight for products that were in stock just the day before.
The rush on purchasing of disposable masks, which are used within the industry as a control measure for silica dust, has also had an impact on the building industry.
For builders experiencing delays, our advice is to:
- Understand that you are responsible for the suppliers selected for the project and are not necessarily entitled to any additional costs you incur because of a supply issue.
- Look at alternative sources for products – although, there will be no escaping a global supply issue.
- Investigate alternative products that are available in Australia or elsewhere. You will need to have your client’s approval to use an alternative product so ensure you follow the process set out in the contract for variations before you order an alternative product.
- Check with suppliers before placing orders and be clear on when to expect deliveries. Ensure you read your supplier agreements to understand what your rights are if goods are not received by the date that you have requested and agreed with the supplier.
- Ensure you manage delays caused by non-supply of products contractually and in writing. The key is to notify your client as soon as you become aware that a delay is likely to occur to the project and ensure that your notice of delay complies with the requirements of the contract. Submit updated notices of delay to keep your client abreast of a continuing delay and what steps you are taking to mitigate the delay.
- Ensure you submit a claim for an Extension of Time to the Date for Practical Completion within the timeframes noted in your contract. For domestic building work, this must be done within 10 business days of the delay occurring. For commercial/subcontract work, this is likely to be set out in the contract.
- For new contracts, factor in delays wherever possible and be aware that it is unlikely that you will be automatically entitled to an extension of time to the Date for Practical Completion if the delay could have been reasonably expected at the time you entered into the contract or submitted your tender. We recommend that you raise the issue of supply delays with your client prior to submitting your tender and/or entering into the contract. Similarly, ensure that any quotes that you provide also address these potential issues.
- Review your contract for a force majeure clause which may apply where it is not possible to source supplies for the project at all.
- First step when considering mask shortages – look at all other respiratory options, for example, re-usable masks.
Employment conditions & safety – common questions
If you’re an employer within the industry, you need to be across the questions you may be asked regarding coming to work and workplace risk management, according to Australian workplace laws.
Workers and their employers must follow the government guidelines regarding self-quarantine periods, with workers required to notify their employer should self-quarantine be required.
Employers are also responsible for identifying and managing work health and safety risks, which includes exposure to the virus. Businesses and their workers should be familiar with how to prevent the spread of infection.
Employers should consider measures such as providing hand washing facilities or alcohol-based hand sanitiser, tissues and cleaning supplies and generally promoting good hygiene practices.
Our common workplace relations FAQs provides answers to common questions.
Read more about workplace risk management from WHSQ or the coronavirus and workplace laws from the FairWork Ombudsman or contact us if you need assistance.