Thinking | 2 September 2020

Stage 4 and beyond: the five worker cap at large-scale construction sites in Victoria

By John O’Kane, Ed Paton and Ben McIver

When Stage 4 restrictions were first announced at the beginning of August, the Victorian Government stated that it would place the construction industry on 'pilot light mode' for six weeks until midnight on 13 September 2020.

These changes were formalised in the Workplace (Additional Industry Obligations) Directions. The most recent version of these directions, No. 4, commenced on 16 August 2020.

Among the changes introduced to the construction industry was a cap on the number of workers that an employer is permitted to have on a construction site.

Depending on the nature of the construction site, an employer was to be subject to one of three possible caps. 'Large-scale construction sites' (defined below) are subject to a cap of 'no more than 25% of the large-scale construction baseline daily workforce or 5 workers, whichever is higher'.

Although these directions have been in force for several weeks, it is clear that many employers at large-scale construction sites are uncertain about how this cap operates in practice. For example, is the cap a maximum on the number of workers allowed on a site per day, or is it a 'point in time' metric?

What is a large-scale construction site?

Broadly speaking, a construction site will be a 'large-scale construction site' if it is:

  • permitted to be (at completion) more than three storeys high (excluding basement); or
  • larger than 1500m2 floor size (inclusive of all floors); or
  • the construction of a premises that is predominately for:
    • office, internal fit out or retail use, or
    • industrial or large format retail use; or
  • the construction of a building, warehouse, physical structure or a large-scale residential development (for example, a retirement village) on land that was an early stage land development site[1].

Five workers ‘at any one time’ or ‘per day’?

The worker cap for employers at large-scale construction sites is expressed as a daily maximum on the number of unique workers the employer is permitted to have on-site.

This means that an employer cannot run multiple, non-overlapping shifts that use more than 25% of their baseline workers or five workers, whichever is higher.

If a site manager at a large construction site wished to manage the site using two non-overlapping shifts, they would need to ensure that each shift was limited to 12.5% of their baseline daily workforce.

In contrast, employers at small scale construction sites or early stage land development sites are only limited by the number of workers on site at any one point in time. This will provide such employers with the flexibility to swap out the workers, provided they do not have more than the maximum number on site at any one point in time.

For large construction sites, if 25% of the baseline daily workforce is equal to or less than five workers, then the site manager would need to ensure that they do not have more than the same five workers on the construction site over the course of that day.

This rule also applies where the site manager seeks to manage the site using two, non-overlapping shifts. For example, the first shift could have three unique workers, and the second shift could have two unique workers, plus any three of the original workers.

The meaning of ‘workers’ includes employees (self-employed or otherwise), labour hire, subcontractors (and their employees), volunteers and any other person engaged or permitted by an employer to perform work.

Apprentices will be counted towards the worker cap, as will supervisors for all construction sites except small scale construction sites.

Conversely, suppliers and deliveries who are only present on site for a short period of time (such as concrete testers) and workers that are specifically dedicated to oversight of COVIDSafe functions in the workplace will not be counted towards the worker cap.

Further guidance

The worker cap poses a significant temporary challenge to employers faced with competing demands and challenging timelines.

Ambiguity in the wording of the direction – coupled with the lack of an example to illustrate its practical effect – has made this challenge more difficult.

Employers at large construction sites should ensure they have calculated their baseline workforce to determine whether they are permitted to have more than five workers on site over the course of a day.

The baseline workforce is calculated as follows:

Baseline workforce is the average daily number of workers on site across the project lifecycle, as derived from the project’s resourcing plan as at 31 July 2020. 

The project lifecycle commences from the date of on-site mobilisation and ends at handover.

Further guidance on the current Stage 4 restrictions for the construction industry is available on the Business Victoria website.

Looking ahead

With the 13 September expiry date for the current Stage 4 restrictions fast approaching, the State Government is expected to announce further measures this Sunday about how more Victorians can return to work safely.

One proposal that the State Government has put to business leaders is a four-level ‘traffic light system’ that will be tailored to each industry sector. It has been reported that the traffic light attributed to a sector will depend on the estimated level of risk of coronavirus in that industry, recent compliance levels, and the economic return of reopening each industry.

Are we going to see a new system where worker numbers on site are tied to a traffic light system that is tied to average daily COVID cases in Victoria on a rolling two-week basis? Whatever the announcements on Sunday, let’s hope they are workable for employees, employers and the viability of Victorian construction projects.

The construction industry has shown it can operate in a responsible and COVID safe manner, with no construction sites listed among the known case locations and outbreaks on the DHHS website at the time of writing[2], and is relying on a positive and workable announcement on Sunday.

 

[1] An early stage land development site comprises all civil works undertaken on open air, large greenfield sites that are associated with and preparatory to construction of multiple individual residential dwellings or industrial or commercial development on that site (including site remediation and site preparation works, construction of utilities and construction of roads, bridges, stormwater/flood management works and trunk infrastructure).

[2] Department of Health and Human Services, ‘Case locations and outbreaks’ (last accessed 2 September 2020 at 5.35 pm).

 

Contact

You might be also interested in...

Property & Projects | 24 Sep 2020

NSW Government extends COVID-19 commercial tenancy regulation to end of 2020

The NSW Government will extend the Retail and Other Commercial Leases (COVID-19) Regulation until 31 December 2020. It was originally due to expire on 25 October 2020.

Property & Projects | 10 Sep 2020

Deconstructing the reopening roadmap: guidance for employers at large-scale construction sites in metropolitan Melbourne

The Victorian Government has published a specific roadmap and guidance for the construction industry in addition to their four-step plan. This guidance includes information relating to small and large scale construction sites and early stage development sites.