Building & Construction

Relief for Construction Firms Facing Higher Foreign Manpower Costs Due to COVID-19

The COVID-19 pandemic has brought about a whole host of challenges for construction firms. Among them, the cost of foreign manpower necessary for the construction works has increased due to travel restrictions and limited supply. To provide relief for affected firms, the COVID-19 (Temporary Measures) (Amendment No. 3) Bill ("Bill") was introduced in Parliament on 10 May 2021.

The Bill introduces a new Part 10A to the COVID-19 (Temporary Measures) Act, which provides a framework for parties to construction contracts to apply for relief from their contractual counterparties if they are affected by an increase in remuneration for work permit holders as a result of a COVID-19 event. Such increase may be caused by border control quotas set by the Government limiting the inflow of workers from particular countries facing a spike in COVID-19 cases, or by travel restrictions imposed by other countries on their citizens.

Having been tabled on a Certificate of Urgency, the Bill has since been passed on 11 May 2021. In this Update, we highlight the key provisions of the Bill and the framework for relief applications set out therein.