The Week That Was - 25 October 2024

Welcome to the week that was, a round-up of key events in the construction sector over the last seven days.

New duty to prevent sexual harassment of employees

From 26 October 2024, the Worker Protection (Amendment of Equality Act) Act 2023 will come into force. This will create a new preventative obligation for employers in respect of sexual harassment.

Currently, employers are liable for sexual harassment carried out by their employees unless they can show they took 'all reasonable steps' to prevent that harassment from occurring. The new Act converts this into an obligation to take all reasonable steps to prevent the harassment from arising in the first place. If the duty is found to have been breached, tribunals can apply a 25% compensation uplift in associated actions, and the Equality and Human Rights Commission ('EHRC') can take enforcement action.

The EHRC has responded by producing detailed technical guidance on the legal nature of harassment and victimisation, and the new duties created under the Act.

You can read more here. The EHRC's technical guidance can be found here.

Three building control firms sanctioned 

Building Consents Ltd and Integral Building Control Solutions Ltd were each given a "minor" sanction for failings that included, respectively, failing to provide a service which was to a competent standard and compliant with relevant regulations, and not acting honestly. These sanctions were given by the Health and Safety Executive. 

Harwood Building Control Ltd ('Harwood') was given a "moderate" sanction by the Construction Industry Council Approved Inspectors Register for 8 separate failures to comply with the Code of Conduct. Harwood has been warned that it will face a higher-level sanction if it does not address these failures.

None of the three have been banned from carrying out approved inspector services, in contrast to PWC Building Control Services, which entered liquidation after having its Approval Notice withdrawn in August 2024. 

See more here. Sanctions appear on the Government website here.

Notice of termination for repeated breach does not require prior right to terminate under JCT contract

In December 2022, Hexagon Housing Association Ltd ('Hexagon'), as employer under a JCT Design and Build (2016 edition) ('DB 2016'), failed to make timely payment to Providence Building Services Ltd ('Providence'), the contractor. Providence duly served a Notice of Specified Default under clause 8.9.1. This would have permitted Providence to terminate under clause 8.9.3 unless Hexagon paid within 28 days. Hexagon paid, and the contract continued.
 
Hexagon missed another date for payment in May 2023. Providence gave Notice of Termination for repeated breach under clause 8.9.4. Hexagon argued that the clause, which gave a right to terminate upon further breach after 'the Contractor for any reason does not give [Notice of Termination under] clause 8.9.3' meant that Providence needed to have had a right to give that notice previously. The Technology and Construction Court agreed, saying that this wording envisaged an 'active step' being taken (or not) by the contractor, and therefore the right to terminate must have arisen.
 
The Court of Appeal disagreed. First, standard form contracts warranted an 'intense focus' on the words used. The words 'for any reason' were of particular significance. 'For any reason' was broader than the employer's termination provisions under clause 8.4.3, which contemplated termination for repeated breach even in the event of timely remedy of the first. Second, the parties could not be taken to have impliedly rejected the wording of previous versions of the contract in choosing to adopt DB 2016. Third, the resulting allocation of risk was 'commercially acceptable', and thus need not be interfered with.

You can read the judgment here.

Government's industrial strategy omits construction as key growth sector; industry reacts

The Labour Government's new 'modern industrial strategy' Invest 2035, published on 14 October, notably failed to designate construction as one of eight key 'growth-driving' sectors for which support would be prioritised. Industry bosses expressed dismay at this, with Patricia Moore, managing director at Turner & Townsend, questioning the reasoning behind excluding "the engine which will deliver and sustain the physical investment that [the included] industries need to thrive".

This development comes against a backdrop of expected overhauls to the planning system and expansion of mandatory homebuilding targets for local authorities aimed at 'getting Britain building again'; along with the proposed 10-year infrastructure strategy coming in Spring.

The strategy is currently the subject of a public consultation run by the Department of Business & Trade, open until 24 November.

You can read more here, and access the consultation here.

Government creates new 'British Infrastructure Taskforce'

The Chancellor of the Exchequer, Rachel Reeves, recently held the first meeting of the new British Infrastructure Taskforce, designed to create a dialogue between the Government and the private sector to assist in the development of policy which will stimulate private infrastructure investment. The meeting was attended by leaders of various domestic and international banks and institutional investors, many of whom indicated intentions to make further investments after the meeting.

Charlie Nunn, chief executive of Lloyds Banking Group, welcomed "the British Infrastructure Taskforce’s focus on increasing investment in UK infrastructure and addressing some of the fundamental barriers that have existed to date".

The plan is for the Taskforce to have regular meetings over the coming years.

You can read more here.

With thanks to:  Fiona Engledow, Abbie Dyas and Joe Towse

Disclaimer: The information in this publication is for guidance purposes only and does not constitute legal advice.  We attempt to ensure that the content is current as at the date of publication, but we do not guarantee that it remains up to date.  You should seek legal or other professional advice before acting or relying on any of the content.