Not just the economy, stupid: New legislation

Construction Contracts Bill – now the Local Democracy Economic Development and Construction Bill

This was due to be published on 5 December 2008. It should reveal to what extent the criticisms – that the proposed payment mechanism is too complicated and the adjudication cost changes unnecessary – have been taken on board. Either way, these provisions will require amendment of standard form contracts. As the Scheme for Construction Contracts also has to be amended, it may not apply to contracts entered into until 2010.

The Arbitration (Scotland) Bill

This bill should at last become law introducing a similar regime for arbitration to that contained within the Arbitration Act 1996. The current draft seeks to do this through a set of, mandatory and default, rules similar to the Scheme for Construction Contracts in adjudication.

The Remedies Directive and Public Sector Procurement

A year ago a new directive which deals with remedies for breach of public sector procurement rules was published (2007/66/EC). It is required to be implemented as law by all member states by 20 December 2009. It introduces:

• A new EU-wide requirement for a “standstill” period following the communication of the contract award to unsuccessful bidders (similar to the UK’s own ALCATEL provision).
• An automatic “suspension period” during which the contracting body will not conclude a contract while an unsuccessful bidder considers the reply to its formal complaint.
• A requirement that the contract is not concluded while a contract award decision is being reviewed
• A requirement that the courts be given power to declare the contract ineffective or impose penalties, not only financial, to include shortening the contested contract’s duration.

This will be a significant piece of legislation, where this year alone we have seen a number of legal challenges to public sector awards (see McLaughlin & Harvey vs Department of Finance & Personnel).

It is expected that the public sector will have to report on pay and other equality measures

The Equality Bill

Although the Equality Bill has not yet been published, we already have a clear idea of the main issues. Its remit is to amalgamate and simplify all the different strands of existing anti-discrimination law in the UK. Part of the bill will include an inquiry by the Equalities and Human Rights Commission into race in construction. The commission notes that: “Only 2.5% of workers in the construction industry are from ethnic minorities, compared to 8% of the workforce as a whole. The inquiry will focus on race discrimination but issues such as procurement practices and the treatment of migrant workers may form part of the recommendations. The inquiry may also cover other areas such as gender discrimination.”

On a broader level, one of the key themes is to promote transparency in pay systems with a view to reducing the gender pay gap. Although the government rejected mandatory pay audits for the private sector, it is expected that the public sector will have to report on pay and other equality measures. It also intends to use the commercial lever of public procurement as a way of ensuring that private companies that contract with the public sector demonstrate a commitment to equality.

The Employment Act 2008

This act comes into force on 6 April 2009 and will abolish the universally disliked statutory dispute procedures which have governed disciplinary, dismissal and grievance procedures since 2004. The Acas Code of Practice on Discipline and Grievances will take their place, giving employers more flexibility on workplace disputes, and will hopefully lead to less litigation over procedural issues. Unreasonable failure to follow the code can lead to a rise in compensation by 25%.

Health and Safety (Offences) Act 2008

Due to come into force in January, this act increases the fines that can be imposed from £5,000 to £20,000, and broadens the range of offences for which individuals can face up to two years imprisonment. Such offences include breaches of the employers’ duties to employees in providing and maintaining safe plant and machinery and a safe working environment.