Building firms can seek relief for higher costs of contracted foreign labour under Covid-19 Bill

SINGAPORE – Construction firms here will soon be able to seek relief for higher foreign manpower costs from their contract partners if their workers’ salaries have been affected as a result of Covid-19-related measures.

This will be done through an amendment to the Covid-19 (Temporary Measures) Act Bill that was introduced in Parliament on Monday (May 10).

The draft law comes as construction firms here grapple with increased manpower costs due to entry restrictions set by the Government on workers from countries such as India and Bangladesh due to surging Covid-19 cases there, which has constricted the pool of foreign workers here.

Manpower costs may also come under pressure should source countries impose travel restrictions on their citizens and residents due to the pandemic, which prevents them from travelling to Singapore to work.

The Covid-19 (Temporary Measures) (Amendment No. 3) Bill was tabled on a Certificate of Urgency, which allows the proposed law to be fast-tracked through all three readings in one parliamentary sitting.

Under the amended law, affected contractors, including sub-contractors, may apply to the authorities for an assessor to adjust the contract sum to take into account an increase in foreign manpower salary incurred between Oct 1 last year and Sept 30 this year due to reasons relating to Covid-19.

Contractors must first show that they have made a reasonable attempt to negotiate with the other party to adjust the contract sum. They must also serve a copy of the application to involved parties, including their contract partner and any guarantor or surety.

To be able to tap on this relief, both parties must have entered into a contract before Oct 1 last year, with construction works not yet completed as at May 10. This includes contracts for public sector projects.

The amendment, however, does not apply to construction contracts for works at or on any residential property that do not require the approval of the Commissioner of Building Control under the Building Control Act.

When appointed, the assessor will determine whether there has been an increase in foreign manpower salary costs. He will also determine whether it is “just and equitable” to adjust the contract sum to take into account the additional costs.

If so, the assessor will then determine the adjusted amount, which will be enforced in the same manner as a judgment or court order. No appeal will be allowed.

The registrar may also reject an application if information provided by the contractor is deemed to be false or misleading.

This is the third amendment to the Covid-19 (Temporary Measures) Act, which seeks to provide relief to businesses and individuals whose contracts have been impacted by the pandemic.

In the second amendment to the law that was passed last month, construction firms were given an additional six months’ reprieve from legal and enforcement action for their building and supply contracts, until Sept 30.