Insights, Legal alerts / 1.04.2020

Construction: to work you mustn’t rest

By the Russian President’s Order No. 206 “On declaring non-working days in the Russian Federation” dated 25 March 2020, this current week has been declared a week off work. The Order does not apply to some categories of companies, namely: organizations that operate continuously, and companies engaged in repair work and in loading and unloading operations that cannot be postponed.

The Russian Government’s Instruction dated 26 March 2020 has approved “Recommendations to employers regarding the application (extension) of the non-working days regime to their employees over the period from 30 March until 3 April 2020”. These recommendations clarify that organizations that operate continuously include, among others, construction companies whose suspension of operations will pose a threat to the safety, health and life of people, and organizations engaged in the construction and operation of roads, bridges and tunnels. The same logic can be found in the Ministry of Labour’s Letter No. 14-4/10/P-2696 dated 26 March 2020.

A legitimate question arises: should all construction companies continue their operations? Which repair operations cannot be postponed?

It is a general rule, in accordance with article 52(4) of the Russian Town-Planning Code, that if construction, reconstruction or overhaul repairs of capital construction facilities need to be terminated or suspended for more than 6 months, the corresponding facility must be mothballed.

One of the primary goals of mothballing is to bring a facility into a state that secures the safety of the facility and of the construction site for the public and for the environment (clause 3 of the Russian Government’s Order No. 802 dated 30 September 2011). As a suspension of construction without mothballing creates a potential threat to the safety of people, it can be argued that companies engaged in the construction of major construction projects may continue their operations.

The case law interprets work that cannot be postponed as work in the absence of which a facility can no longer exist or cannot be used for its intended purpose. Such work that cannot be postponed should not be aimed solely at improving a facility, and nor should it pursue an increase of the profit to be made. Work that cannot be postponed also includes work of which the suspension may result in decay of or damage to the construction facility. Courts point out that work aimed at preventing an accident should also be treated as work that cannot be postponed. Consequently, repair work that has the above features can continue during the week off work.

Sub-clause (c) of clause 2 of the President’s Order permits companies who supply ‘essential needs’ products to the community not to stop their operations. The list of ‘essential needs’ products included in the Russian Ministry of Industry and Trade’s Letter No. TsS-21568/15 dated 27 March contains, among other things, “construction and finishing materials and tools”. Please note that the above item is not included in the list approved by Russian Government’s Resolution No. 762-r dated 27 March. Consequently, from a formal viewpoint, companies engaged in the construction/ distribution/ sale of construction products should suspend their operations in accordance with the President’s Order regarding the week off work.

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