Legal Implications of Managing Your Business Under COVID-19 Restrictions

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The Government has advised businesses to encourage staff to work from home wherever possible. While some businesses may be well versed in how to manage staff who work from home, for others this is likely to be new territory.

You’ll want to ensure that despite having less regular contact with your staff, business is still able to carry on as normally as possible, so we asked Francesca Mundy, Senior Legal Editor at Sparqa Legal to highlight key issues for employers to consider.

The outbreak of COVID-19 has been declared a pandemic by the World Health Organisation. With thousands of confirmed cases in the UK, businesses must take into consideration how to best equip themselves to succeed in these uncertain times, as well as maintaining the health and wellbeing of their staff and broader society.

To help you tackle the issue, we’ve pulled together some of the key considerations businesses may need to address.

Draft a business contingency plan and keep it updated

As coronavirus continues to spread, more and more businesses are putting together contingency plans to safeguard and protect both their business and their staff. These plans should outline what steps your business plans to take in response to the outbreak to manage the threat and ensure business continuity.

Make sure to update your plans regularly to take account of any new developments, including new Government guidance. This will help to keep your staff well informed and your business running as smoothly as possible.

The legal implications of  working from home

The Government has introduced measures requiring people to work from home wherever possible.

As an employer, you still have health and safety responsibilities towards your staff whether  they are in the workplace or not. This means that you must conduct risk assessments on the suitability of your staff member’s home working space.

You must also check that your employer’s liability insurance covers home workers. Employees still have a right to claim against you and your business if they have been injured or have fallen ill during the course of their work for you.

Protecting your confidential information when staff work from home

The security of confidential information and personal data can be difficult to supervise when your staff are working from home, but your data protection standards must be maintained.

Staff should be reminded of their confidentiality and data protection obligations and, if appropriate, you should consider providing additional training on keeping information secure.

Putting in place a company-wide working from home policy will help. This can set out your expectations for your staff and your respective responsibilities, including in relation to remote working procedures and technologies. This will give your staff members clarity and make the transition to remote working smoother.

Managing your staff at home

Whilst some businesses may be well versed in how to manage staff who work from home, others may be in new territory. Now more than ever it’s important to have open communication and create clear expectations for staff who are working from home.

Set guidelines for checking in and establish clear deadlines to keep everyone accountable when they are out of the workplace. Make sure you keep regular contact with your staff and check in to see how they are coping. This can prevent your staff from feeling disconnected or isolated.

You should also remind staff members about the importance of taking breaks, exercising and ensuring they do not work excessively long hours.

The impact on commercial contracts 

The spread of coronavirus is causing great strain on some business’s supply chains and impacting  the demand for goods and services. This could mean that you and your suppliers find it difficult to carry out your contractual obligations.

However, coronavirus may not be a valid reason to change or delay your obligations; it’s important to check your contract for clarity.

First, check whether there is anything specific in your contract that allows a change if certain things happen; for example, a price adjustment clause allowing you to increase your prices in certain circumstances. If not, you may also be able to cancel or delay your obligations under a contract in two ways:

1. Force majeure

You could establish that a force majeure clause applies. Force majeure clauses are designed to protect the parties when something happens that is outside their control, and results in a party being unable to perform their obligations.

A force majeure clause may allow the affected party to suspend their contractual obligations for a certain time or even cancel a contract altogether. Whether coronavirus is a force majeure event will depend on the wording of the contract itself and the extent to which the virus has impacted your business.

If you intend to rely on a force majeure clause, make sure you read it carefully. There may be specific notification requirements or steps you must take to mitigate any losses. If not, you could be asked to pay damages to the other party.

2. Frustration

If a contract becomes impossible to carry out, or a party can show that their obligations have become radically different to what was intended when the contract was agreed, it may be frustrated.

For example, the recent travel restrictions in some countries may make it impossible for people to provide services by an agreed date, which may mean the contract is frustrated.

You do not need a specific clause in your contract to rely on frustration, but it is wise to speak to a lawyer to ensure such a claim is made properly.

Interaction with clients

To reduce the spread of COVID-19, the Government has produced measures requiring people to stay at home wherever possible and to only leave for very limited purposes. This means that ‘face-to-face’ meetings with clients should be rearranged to virtual meetings (eg online meetings or video calls). It is therefore essential to make sure your staff are provided with the appropriate technology to facilitate this.

Communicate with your clients  to let them know what steps your business is taking to prevent the spread of coronavirus, and whether any processes or channels of communication will be changing.

Focus on what is important to your clients by reassuring them that you are doing everything you can to maintain your smooth working relationship with them, which will enable you to meet their needs on an ongoing basis.

Consider using social media as another platform to communicate how your business is responding to the outbreak. This may help to reassure clients that you are on top of the latest developments and have a full contingency plan in place.

Responding and communicating effectively as a business during the outbreak will build the trust and confidence of both your clients and your staff, helping to pave the way for long-lasting and successful future relationships.

The content in this article is up-to-date at the date of publishing. The information provided is for information purposes only, and is not for the purpose of providing legal advice.

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