Coronavirus: Impact on construction in Scotland
COVID-19 guidance recently issued by the Scottish Government has had significant consequences for the construction industry; with many major sites ceasing “non-essential” works with immediate effect. However, the legal force and effect of this guidance must be considered - has the Government imposed a lawful prohibition on such works? This raises an interesting question - when is the law the law?
It is trite to say that we are living in unprecedented times. COVID-19 has wreaked change to almost all aspects of daily life; with significant impact on health, social freedoms and employment. With such uncertainty, there is a need for clarity of the law and how it will operate - people must understand their obligations, and know how the law will affect and respond to their actions. In Scotland, the Government has responded to the developing situation through emergency legislation, supplemented by directions, guidance and advice. Whilst this action is welcomed, a lack of clarity regarding the legal intent and effect of certain communications has fuelled further uncertainty. One notable example is the guidance issued recently to the construction sector. Rather than providing clarity, uncertainty has arisen as to whether the Government has, in fact, imposed a ban on non-essential construction works. It is necessary to look behind the guidance to understand whether it is has lawful force or is advisory in nature, and what is required to comply.
Guidance issued to construction sector
Under the Health Protection (Coronavirus) (Restrictions) (Scotland) Regulations 2020, the Scottish Ministers issued a schedule of prescribed non-essential businesses which were to be subject to closure or restrictions in their operation until further notice. One notable exception to this list was construction sites. With an estimated 2.7 million people employed in the construction industry in the UK, there was a need for clarity as to whether sites could continue to operate.
On 6 April 2020, the Scottish Government published online guidance:- “Coronavirus (COVID-19): construction sector guidance”. This guidance has been widely reported on; with the general consensus amongst contractors, industry bodies and trade unions being that the guidance as mandatory.
The guidance begins by noting that the advice of the Chief Medical Officer is that:- “… all non-essential business premises, sites and attractions should close unless and until we can all be clear how operations can be undertaken safely and in a way that is fully compliant with social distancing”. The guidance then goes on to state:- “As such we would advise all business premises, sites and attractions to close now unless” the works are essential to the health and welfare of the country, or support essential services, or are required to continue for a period for wider public health reasons. Even then, the guidance states that premises and sites should close unless works are capable of being carried out in a way that is “fully consistent with established social distancing advice”. Further detail is provided within the guidance regarding the circumstances in which “essential” works can continue. The guidance applies until further notice, but may be revised by the Scottish Government on 20 April 2020.
The accompanying news release issued by the Scottish Government stated on clear terms:- “Work on construction sites, unless it is for essential projects, should stop immediately, as confirmed in new guidance for the construction industry. The guidance makes clear that work on construction projects should cease unless it is supporting crucial work during the coronavirus (COVID-19) pandemic.”
From this guidance, it can reasonably be understood that the Scottish Government is seeking to stop all non-essential construction works with immediate effect. Indeed, this is the message that has been received (and acted upon) by a number of contractors and trade unions within the industry; with works on significant projects having ceased in the days following release of the guidance. For example, last week it was reported that work on the GBP250 million Sighthill project in Glasgow had stopped in light of the guidance from the Scottish Government.
The guidance goes further than the position adopted by the UK Government, which has not sought to prohibit non-essential construction works from continuing. Instead, guidance provides that all works can continue in England provided that workers adhere to social distancing requirements.
In issuing the guidance, Secretary for Economy, Fair Work and Culture Fiona Hyslop said:- “This guidance offers clear and comprehensive advice on how the industry should respond in these unprecedented and difficult times.” Whilst the terms of the guidance may be clear, the legal status of the communication is far from clear. There is a difference between the law and advice from the Government. Is the guidance mandatory? Has an enforceable ban been imposed?
In raising this issue, we do not advise or suggest that the Government guidance should not be followed. However, there is a need for clarity as to the legal status of the guidance – not least because of the potential consequences arising under construction contracts. For example, whether there has been a Relevant Event entitling a contractor to an extension of time.
All of this raises an interesting question – when is the law the law?
The law
As noted above, non-essential construction sites were not included within the schedule of businesses subject to closure or restricted operations issued by the Scottish Government under the Health Protection (Coronavirus) (Restrictions) (Scotland) Regulations 2020. To date, the Scottish Ministers have not sought to amend this list to include such sites.
Ministers have also not sought to utilise their general powers under Schedule 19 of the Coronavirus Act 2020 (the “Act”) to impose closures through a regulation specifically directed at the construction industry. In practical terms, a regulation requiring closure or imposing a restriction would have legal effect and could be enforced by the Police. However, the Scottish Ministers have not sought invoke this power and pass a regulation concerning construction sites.
The Scottish Ministers also have a general power to order closure of premises by issuing “directions” under the Act. Once issued, the direction can be enforced, and persons in breach are liable to a fine or prosecution.
Under Schedule 22 of the Act, Scottish Ministers were granted the power to close (and restrict access to) premises for the purposes of preventing, protecting against, delaying or otherwise controlling the spread of coronavirus. To do so, Scottish Ministers must issue directions, which impose prohibitions, requirements or restrictions in relation to the entry into, departure from, or location of persons within premises in Scotland.
In terms of the Act, there is very limited criterion to be satisfied before a direction can be issued. The Scottish Ministers are simply required to “have regard to any relevant advice” of the Chief Medical Officer – this is a term open to interpretation. Thereafter, a direction can be issued provided it is in writing, and published in such a manner as the Scottish Ministers consider appropriate to bring it to the attention of persons who may be affected by it. This is the relevant legal framework.
However, as will be considered further below, the Scottish Ministers do not appear to have issued a direction under the 2020 Act requiring the closure of non-essential construction sites.
Has a ban been imposed?
Looking at the guidance issued by the Scottish Government, two critical points must be noted.
Firstly, it is plain from the terms of the publication that the Scottish Ministers issued “guidance”, not a direction as required under the Act. The publication is entitled “Coronavirus (COVID-19): construction sector guidance”. If intended to be a direction (with the legal implications of such, including criminal sanctions for failure to comply) a publication must be held out, in clear terms, as being a direction. Instead, the publication is entitled “guidance”, and is classified as “guidance / advice” on the Scottish Government’s website. The Scottish Government do not state that the publication is a direction. Indeed, the word “direction” is not used anywhere within the guidance. By contrast, there are examples of directions being issued by the Scottish Government pursuant to the Act – which are classified as “regulations / directives / orders” and expressly state that they are a “direction” made pursuant to the Act. For example, the Review of medical certificates of cause of death and cremations: Scotland. Such directions meet the requirements of the Act, and demonstrate adherence by the Government to the legislative requirements on certain matters.
Secondly, the language used by the Scottish Ministers in the guidance is advisory rather than prescriptive. The Scottish Ministers simply “advise” that all non-essential business premises and sites were to close. By their own words, the Scottish Ministers stop considerably short of prohibiting action and imposing a ban. Further, throughout the guidance, there is a liberal use of the word “should” to describe what is required of parties. There is no prescriptive order to stop activity.
Therefore, when the terms are considered in more detail, the legal force and effect of the guidance is thrown into doubt. As a matter of fact, the Scottish Ministers were furnished with the power to close construction sites (either by regulations or directions), but they have failed to utilise this power. Whilst there have been “directions” issued by the Scottish Government pursuant to the powers conferred under the Act, the Scottish Government stopped short of issuing a direction to the construction sector. When looked at the form and content of the guidance, it may be questioned whether the Scottish Ministers intended to exercise their powers of closure at all.
The whys and wherefores of the Government’s actions are not known (and are not relevant). What appears clear, as a matter of law, is that the prescribed criterion for issuing a direction to prohibit non-essential construction works have not been met.
What is the status of the guidance?
There is a difference between the law and Government advice, and urgent clarification is required from the Scottish Government as to the status of the guidance. Parties need clarity as to their obligations – both legal and contractual - and how their actions will be judged. In the absence of clarification from the Government, it may be necessary to seek an answer from the Courts.
It may be remembered that a similar issue arose in 2018 concerning the apparent ban on fracking in Scotland. Following a number of ministerial statements advising that the process was banned in Scotland, a judicial review was raised which challenged the legality of the actions of the Scottish Ministers. What emerged during the hearing was extraordinary. Firstly, to the surprise of (almost) the whole country, the Court held that a ban on fracking had not been imposed in Scotland. More fundamentally, the Court accepted the position adopted by the Scottish Ministers whereby, to understand the legal effect of a ministerial statement, it was necessary to look behind the statement and assess what legal steps have been taken to implement a policy. As the legal process had not been completed, the Court was satisfied that a ban on fracking had not been implemented. Whilst this reasoning may be accepted as a matter of law, it is clearly unsatisfactory for parties living and conducting business in Scotland. There should not be any uncertainty as to the law.
It may be anticipated that there will be a number of challenges to the various regulations, directions and guidance issued by the Government in response to the coronavirus crisis; with subsequent amendments introduced. In England, such a challenge has already been raised (in pre-action correspondence) in respect of the “stay at home” guidance, which has now been amended.
In the absence of clarification from the Scottish Ministers, it may be anticipated that a challenge will be raised in respect of the construction industry guidance in Scotland.
A ban by another name?
Whilst we question whether the guidance issued by the Scottish Government has the legal effect of a prohibition on non-essential construction works continuing, it must be considered whether a de facto ban has been introduced by other means. Can such works continue?
As an employer, each contractor owes health and safety duties and obligations to its staff and sub-contractors. A contractor must manage health and safety risks on a site. It may be questioned whether these duties can be fulfilled, and a safe working environment provided, during the coronavirus outbreak. The Health and Safety Executive (HSE) has advised that such obligations continue in force, stating:- “Despite the demanding circumstances, compliance with occupational health and safety legal requirements remains with duty holders and HSE will continue its regulatory oversight of how duty holders are meeting their responsibilities in the context of the current public health risk and based on our available regulatory capacity.” Further, if an employee contracts coronavirus whilst at work, the HSE have confirmed that this triggers a RIDDOR reporting obligation. It must also be questioned whether construction works can continue whilst observing social distancing (albeit that requirement is contained in Government guidance rather than a regulation or direction).
Consequently, a number of contractors may consider that they are unable to continue supplying workers to non-essential construction sites; resulting in a de facto prohibition on such projects continuing.
Indeed, prior to the guidance being issued, we encountered instances of sub-contractors failing to perform services and provide workers under contract because they felt unable to complete the relevant risk assessments for the work due to the risks presented by COVID-19. On a practical level, there may also be issues in obtaining necessary materials if suppliers have ceased trading at this time.
Comment
There is a difference between the law and Government advice. Whilst at first glance it may appear that the guidance issued by the Scottish Government prohibits all non-essential construction works with immediate effect, when the terms are considered in more detail the legal force and effect of the guidance is thrown into considerable doubt.
Whilst it appears that the Scottish Government has not utilised its powers to impose a legal ban on non-essential construction works continuing, there may be an indirect de facto prohibition on such works continuing through the ongoing operation of health and safety obligations. However, the position is far from clear. The construction industry is a significant employer in Scotland, and there must be clarity as to the legal status of continuing with non-essential works at this time.
In practical terms, the status of the guidance is also important, not least because of the implications on construction contracts. The reason for cessation of works must be clarified, as this can affect parties’ liabilities under construction contracts. Parties are advised to check their contracts to understand the consequences of failure to perform.
There is an urgent need for clarity from the Scottish Government and a firmer legislative footing. If anything is clear at present, it is that there is considerable uncertainty.
