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Coronavirus - what should businesses be thinking about?13th March 2020 Corporate
Coronavirus - what should businesses be thinking about?
As the confirmed cases of coronavirus (Covid-19) in the UK continue to rise it has unsurprisingly had an effect on many businesses ranging from supply chain issues to workforce issues. Following our recent blog, in which we discussed coronavirus and force majeure in contracts, in this blog we will talk you through a few of the practical steps your business can take to reduce the detrimental impact of coronavirus. As businesses will be aware Boris Johnson held the first of what is intended to be daily ministerial press conferences on coronavirus on Monday 16 March 2020 where important information and guidance will be broadcast.
The guidance for businesses, employers and employees will no doubt change on a daily basis and we will all have to remain flexible in our efforts of mitigating health risks to individuals and commercial risks to businesses. It is important that we all tune in to the daily conferences to keep abreast of the latest guidance.
Remote Working and Sick Pay
As of 16 March 2020 the new government measures confirm that everyone should work from home if they can. Even for those businesses where it is not possible for home working, it is likely that the majority of these businesses will also be affected in some way by workers being forced to stay away from their place of work following the government’s guidance either as a precaution or by employees contracting the virus and commencing sick leave. The new government guidance confirms that if one person in any household has a persistent cough or fever, everyone living there must stay at home for 14 days is set to increase the amount of self-isolation cases.
The first question this raises is whether employees have the capability and infrastructure to allow those employees who are able to, to work from home with as little disruption to the business as possible. In preparation for home working businesses should ensure that employees have the equipment to work from home and it would also be helpful to test home-working technology in advance of this being required. Businesses may also want to consider either creating or reviewing policies relating to remote working which they can direct employees to should the need arise.
As you might expect many employees have already started to find out what their company’s sick pay policy is if they are either forced to self-isolate or they start to feel unwell, with many employees concerned that following the government guidance and not attending work could cost them financially. The Government has confirmed that Statutory Sick Pay (SSP) will now be available for eligible individuals diagnosed with coronavirus or those who are unable to work because they are self-isolating in line with Government advice. Helpfully for smaller businesses (those with under 250 employees), the Chancellor of the Exchequer, Rishi Sunak, has also announced that the government will reimburse any statutory sick pay they pay to employees, for the first 14 days of sickness which may ease the burden on employers.
Temporary Lay-offs and Pay Cuts
Following government guidance many companies may be forced to consider temporary lay-offs and pay cuts due to the coronavirus outbreak. Such measures have already been reported in the aviation industry as the government have advised to avoid “non-essential” travel and contact with others to curb coronavirus. Employers asking their employees to be temporarily laid off can only do so with the employees consent or where their contract of employment expressly permits unpaid or reduced pay lay-offs.
Should you wish to discuss employment related issues, our employment team can be contacted using this link.
Remote Signing, Power of Attorney and Delegated Authority
Unsurprisingly many businesses are concerned about how they can execute documents if they are forced to self-isolate as a result of coronavirus.
E-signatures can be used and are explored further in our previous blog.
One further resolution (particularly where a specific transaction is underway or anticipated) could be to use a power of attorney which is a form of agency by which one party gives another person the power to act on their behalf and in their name. A power of attorney can be used for the purpose of amongst other things:
- Finalising and signing the transaction documents;
- Attending any shareholder meetings; or
- Signing any written resolutions on the seller's behalf.
Further consideration should be made in relation to whether certain key individuals should be given delegated authority for signing certain documents or entering into certain transactions on a temporary basis and whether bank mandates and spending authorities need reviewing to ensure business continuity in the event of unexpected absences.
Meetings and Visitors
As social distancing becomes more prevalent, consider your duty of care not only to your staff but in relation to any visitors to your premises. Are meetings necessary? Can they be postponed? Can they be held remotely by telephone conference or a video link?
If people are attending your premises, have you put in place measures to try and reduce the risk of the spread of bacteria/virus? Many clients have we’ve spoken to have invested in additional hand-wash and anti-bacterial products, signage to promote awareness and in some more extreme cases, screening visitors and asking them to complete a health/travel questionnaire before attending.
The government’s Chief medical adviser Prof Chris Whitty said the group of people who should take "particular care to minimise their social contact" were: People over the age of 70, other adults who would normally be advised to have the flu vaccine (such as those with chronic diseases) and pregnant women showing that extra precautions should be taken when meeting anyone who is particularly at risk.
It does raise an interesting question as to what an employer’s duty of care is in these circumstances!
Understanding the scope of your insurance cover will be essential when considering business decisions, particularly as to whether losses arising from coronavirus are recoverable, this may depend on the specific wording on a businesses’ policy. Unhelpfully, there is no consistency as to the coverage which insurers provide relating to a pandemic. Some insurers exclude liability on this basis whilst others may provide coverage. Businesses should check directly with their insurance company or broker to understand their coverage.
Due to the uncertainty caused by coronavirus, many businesses have already faced financial difficulties. In response, UK banks are providing emergency loans to businesses that are struggling with cash flow amid the outbreak of the virus. For those businesses that are facing such difficulties, advice may be needed as to the most suitable funding arrangements for your business during this difficult time. The Government is also set to unveil new financial measures to support the economy as the new Chancellor Rishi Sunak is also expected to appear at the now daily Downing Street news conferences.
Cash Balances and Investments
Again, the uncertainty within the macro economy and global markets causes a further threat, businesses with excess cash balances or corporate investments should review where their money/investments are held to ensure that any potential risk is mitigated.
If you want to discuss your business plans, please contact your usual JMW contact on 0345 872 6666 or complete the contact form found on this page.
This article is for general guidance only and should not be used for any other purpose. It does not constitute and should not be relied upon as legal advice and reflects the position as at the time of writing (17th March 2020). We recommend that you review the daily updates and guidance issued by the government.