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Commercial Services

Coronavirus - potential effects and planning

The Coronavirus (COVID-19) outbreak is developing into a global challenge. What as a business can you be doing to minimise the risk and disruption?

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Anyone who has been within earshot of a TV or radio or looked at a newspaper recently will recognise that the Coronavirus (COVID-19) outbreak is developing into a global challenge. Individuals are impacted by human consequences, and businesses and economies are beginning to see the knock-on effect.

What as a business can you be doing to minimise the risk and disruption?

As a first step it would be sensible to familiarise yourself with Government guidance for employers and ensure you are reviewing updates on a regular basis.

Implementing processes and communicating effectively with a view to protecting employees, visitors and close associations.

Simple steps include;

• making sure there are clean places to wash hands with hot water and soap, and encourage everyone to wash their hands regularly
• providing hand sanitiser and tissues for staff, and encourage them to use them
• keeping everyone updated on actions being taken to reduce risks of exposure in the workplace
• making sure everyone's contact numbers and emergency contact details are up to date
• making sure managers know how to spot symptoms of coronavirus and are clear on any relevant processes, for example sickness reporting and sick pay, and procedures in case someone in the workplace develops the virus
• considering if any business travel planned to affected areas is essential

Planning in advance for potential scenarios could help your business navigate substantial challenges should (as now seems very likely) this current outbreak become a more widespread problem.

Maintaining business operations – the people considerations

Keep your people safe

The nature of a business’ operations will likely determine the risk factors facing its employees. Completing a risk assessment can help in identifying any particular sources of risk , including staff who may be at greater risk. It is important to then consider what can be done to mitigate any risks identified.

Many businesses are already distributing factual advice regarding the virus, as well as sharing practical advice in relation to good hygiene – supplying appropriate equipment/facilities where possible.

Planning how to handle the quarantine of employees and the effect of increased absences is a sensible step in pro-actively managing potential impacts on your business.

FAQs

1. Should we restrict all work-related travel?

At the moment it is probably not necessary to ban all work-related travel but it would be sensible to keep this under review and also to avoid travel where this is not strictly necessary (e.g. if a meeting can be held by Skype rather than in person). Particular care should be considered if an employee is travelling to an area where the virus is prevalent. If you have more than one operating location, it may be sensible to discourage staff from travelling between them unless unavoidable.

2. Can we stop employees travelling for personal reasons to affected areas?

You can discourage employees from doing so but enforcing a ban is likely to be impossible in practice and attempts to do so may do more harm than good to staff relations. A better approach may be to encourage employees to be open with you about their travel plans and to check current government guidance on their return, to see if self-isolation is advised.

3. Can we stop employees attending mass gatherings e.g sporting events, networking, parties etc?

Whilst you can have an element of control over work-related events such as networking, it will be much harder in the case of events employees choose to attend in their own time. A blanket rule would be almost impossible to enforce. The best advice here may be to ensure employees are provided with and keep up with evolving advice and are encouraged to reflect on the risks of travelling to and attending such events to themselves and their colleagues.

Flexible Working

Staff who are told to self-isolate may still be well enough to work but are unlikely to be able to do so (or do so productively) unless arrangements are made in advice. These range from setting up the IT arrangements (are you set up for home working?) through to practical implementation points (do key employees have laptops and do they take them home every day?). If an office is forced to close at short notice, are you confident you have an effective backup plan to ensure work is covered as far as possible and does everyone know what that plan is?

FAQs

1. Should we encourage staff not to use public transport?

This is not the current government advice, but a situation may arise when it becomes sensible to do so. It may be worth encouraging staff to think of other ways of working (whether this is working from home or car-sharing).

2. Do we have to allow employees to work from home (or take holiday) if they want to avoid the office?

No. Unless they have been advised by their GP or 111 (or other medical professional) to self-isolate, employees can be required to attend work as normal. Whilst you should treat any request sympathetically, consider what impact any individual arrangement may have on the business if others then demand it. Having said that, a compromise may be available such as allowing an employee to take holiday or unpaid leave.

3. Do we have to enforce home working or close the workplace?

Not at present on the basis of Government advice.

 

Maintaining business operations – the financial considerations

Keeping healthy staff productive

Many businesses are already distributing factual advice regarding the virus, as well as sharing practical advice in relation to good hygiene – supplying appropriate equipment/facilities where possible with the aim of keeping its workforce healthy

Whilst many employees may remain healthy and free from the symptoms of the virus, their productivity may still be affected. Supply chain issues could result in a lack of core materials, demand for certain products may wain whilst other areas may remain robust and potentially grow.

Healthy colleagues may also be impacted by family members requiring care, or future advice in relation to travelling.

Understanding how your business is likely to be affected and planning accordingly is key.


FAQs

1. Can we change an employee’s duties/hours to cover the duties of other sick employees?

This will depend on the terms of the employee’s contract and job description. In the absence of a contractual term allowing you to do this (and most contracts / job descriptions have some inbuilt flexibility), you should seek to agree material changes with employees. There are legal processes for enforcing a change but these are cumbersome and time-consuming and may involve dismissing an employee on notice after following a fair process and offering re-engagement on new terms, so these should be considered very much a last resort.

2. Do we have to allow employees to work from home if a dependant needs care?

If an employee needs time off work to look after someone who depends on them (e.g. if their child’s school closes or a dependant is sick or needs to go into isolation), they will be entitled by law to reasonable (unpaid) time off. Whilst there is no fixed limit on the amount of time that can be taken, the right is usually interpreted as covering no more than a couple of days or so. If longer is needed, you should consider agreeing that the employee takes holiday or unpaid leave. Whilst employees might work from home as an alternative to simply taking time-off, you should consider how productive they are likely to be and the effect working at home in unusual circumstances may have.

Cash flow implications
A drop in productivity, and/or reduced demand could cause cash flow issues for many SMEs. Projections have always been a key tool in business and with the uncertainty being faced potentially never more so.

Planning and forecasting potential issues enables a pro-active discussion with funders, and media coverage in the past few days suggests the door is open for dialogue. Many High Street banks are proposing specialist funds or approaches including repayment holidays, waiving of fees on overdrafts and invoice finance facilities as well as some automatic extensions to facilities.

Central Government and the Bank of England are taking steps too. An emergency interest rate cut has been announced and measures announced in the budget including access to ‘business interruption loans’, refunds for up to 2 weeks’ statutory sick pay for firms with fewer than 250 staff and the abolition of business rates in certain sectors are all aimed at bolstering business support. You can find a Government fact sheet supplying further information here.

FAQs

3. Do we have to pay employees who are off sick with diagnosed Coronavirus?

Yes. Usual contractual sick pay arrangements will apply. Employees without contractual sick pay may be entitled to statutory sick pay (SSP). The government has recently announced that SSP will be payable from day 1 of a period of absence (rather than, as currently, from day 4); this is expected to come into force imminently.

4. Do we have to pay employees who are off sick with Coronavirus symptoms, but who have not been diagnosed?

If the employee is sick, usual sick pay arrangements will apply whether it is coronavirus or some other illness.

5. Do we have to pay employees due back at work who are stuck abroad?

Not unless they are sick or self-isolating in line with UK medical advice.

6. Do we have to pay employees if we decide to close the workplace?

Potentially, yes. The general rule is that employees who are able and willing to work are entitled to full pay. Some employers may have the contractual right to lay employees off for short periods, but this is unusual in an office environment. However, if the workplace is closed by order of medical authorities, employees may also be told to self-isolate. In this case, the entitlement would be to sick pay, rather than full pay. Employers should (where practicable) consider ways of allowing employees to work from home if closing a workplace becomes likely.

7. Do we have to pay employees who just refuse to come into work because they're scared?

No. Potentially this is a disciplinary issue but it may be more sensible to deal with this in a less confrontational way, such as agreeing holiday or unpaid leave where feasible.

8. Do we have to let employees have (paid) time off to care for a dependant who is sick? Or if a school has closed?

Not unless you have a policy or contract term in place that provides for this. If an employee needs time off work to look after someone who depends on them (e.g. if their child’s school closes or a dependant is sick or needs to go into isolation), they will be entitled by law to reasonable time off but this is unpaid. Whilst there is no fixed limit on the amount of time that can be taken, the right is usually interpreted as covering no more than a couple of days or so. If longer is needed, the employer should consider agreeing that the employee takes holiday or unpaid leave.

9. What if we need to reduce staff due to loss of business?

There are a number of options to consider. Employers may have the contractual right to lay employees off (send them home) for a limited period, or to reduce or withdraw hours or to withdraw overtime. Freezing recruitment is an option and some employers are exercising a contractual right to require employees to take holiday now. If the downturn is more prolonged, other options including asking for volunteers to take unpaid leave (which may become more attractive if schools are closed or dependants become sick) or asking employees to temporarily reduce their hours by agreement. Ultimately employers can make staff redundant, though care should be taken to follow the correct legal process.

 

Contractual Obligations

It is worth reviewing your contractual obligations not just with employees but also with clients / customers and your bank. Whilst there may be a limit to the changes you can make to staff contracts (which must generally be agreed), it may be possible to work greater flexibility into any new contracts you issue.

Consider carefully your terms with clients / customers; if you are unable to meet your usual standards then you may be protected by a cancellation right or “force majeure” (unexpected events) clause in your terms and conditions. If you don’t have such a clause in your standard terms, you may wish to consider introducing one.

If you do not have provisions which deal with situations such as these, what are your options if you cannot perform your contractual obligations. As with staff, early engagement is key. Be honest with your customers or suppliers about your position (they will likely be suffering similar issues) and try and negotiate an agreement that suits both parties going forward and avoids the need for more formal action later.

 

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