As the spread of coronavirus gains pace in the UK and globally, the volume of information (and in some instances, misinformation) online can make it hard to understand the impact.
To assist, we have put together tips, advice and practical steps for a small business to consider when planning and preparing for a possible pandemic.
COVID-19 is a new strain of coronavirus – the latter being a common type of virus across the world. UK health officials are now moving towards the second phase of their response to the outbreak of COVID-19; a “Delay” phase to slow the spread of the virus.
As you will be aware, the outbreak and responses are moving at a fast pace. You should keep abreast of the most recent government guidance. Below are some key points that you, as business owners and employers, should be aware of.
Business continuity planning
The government’s Business Continuity Management Toolkit
advises that you should consider the following:
· What are your organisation’s key products and services?
· What are the critical activities and resources required to deliver these?
· What are the risks to these critical activities?
· How will you maintain these critical activities in the event of an incident (loss of access to premises, loss of utilities etc)?
We cover some of the integral parts of this assessment below: people, suppliers and partners. However, if you are concerned about the impact on certain areas of your business and what you should do, we are here to help.
Employee risk in the event of a pandemic
An employer’s obligations
As an employer, you have a duty to protect the health and safety of employees. You should have a system in place to not only keep informed about health-related risks, but also to share this information with your employees.
Your business must also take steps to ensure that there is good hygiene in the workplace, specific to the nature of coronavirus. Precautions could include:
· Educating staff about the symptoms of coronavirus and preventing its spread, for example covering their mouth and nose with a tissue or their sleeve when coughing or sneezing and putting used tissues in the bin straight away. You may want to consider putting up etiquette posters.
· Encouraging staff to regularly wash their hands with soap, to carry and use tissues and sanitising hand gel. To boost compliance, it would be best to communicate why these practices are required.
· Increasing the cleaning of hard surfaces in the workplace, particularly phones and door handles.
Much of the current guidance on hygiene and risk control is based on common guidance for preventing the spread of common colds and flu. There is therefore a wealth of publicly available resources to assist you.
Your duty to protect employees also involves carrying out a risk assessment to identify any higher risk groups (for example, those in close contact) and individuals (for example, those with weakened immune systems, underlying conditions, older employees and pregnant employees). If you identify any higher risk employees, you should consider enabling employees to work from home or, if this is not possible, to remain at home anyway. Alternatively, you may consider flexibility to commute outside of rush hour.
You should also be aware that employers have special duties in relation to pregnant employees and disabled employees. Failure to consider requests for flexible working arrangements could be discriminatory and give rise to claims of discrimination.
Your duty to protect your employees is ongoing. This requires you to give proactive, as opposed to reactive, guidance and direction to employees. You shouldn’t wait until an employee falls ill. You should advise your employees on how to protect their own and other employees’ health. This may include providing guidance or even direction on their activities outside the workplace to protect them and the rest of your team. For the latest information and advice, keep an eye on the government’s up-to-date guidance daily.
Employees also have important responsibilities, including: to take reasonable care of their own health and safety; to take reasonable care not to put others (including fellow employees and customers) at risk by what they do or don’t do; and to cooperate with their employer. You may consider taking disciplinary action against employees who refuse to do so.
Travel to high-risk areas
Foreign & Commonwealth Office (FCO) is currently advising against all travel to Hubei Province and parts of South Korea, and advising against all but essential travel to the rest of mainland China and parts of northern Italy. Other high-risk areas include Iran, Malaysia, Singapore, Cambodia and Japan.
You should monitor employee travel and where employees travel to high-risk areas, you must check whether:
· Your travel insurance will still provide cover for medical repatriation.
· Local care is available or suitable.
· Specialist travel protection from a third party is required or desirable.
Unless guidance states otherwise, employees that are not sick (and do not claim to be) nor higher risk should still generally be required to attend work.
During a pandemic, employers will face a conflict between the need to keep genuinely sick employees away from the workplace and the need to prevent unauthorised absence. However, in these circumstances, concerns about whether someone is a malingerer should give way to the very real need to prevent the spread of the disease and ensure adherence to public health guidance. Employee safety must be the priority.
Quarantine, suspension, self-isolation and pay
As with all aspects of its response, an employer needs to keep a close eye on government guidance on the prevention of spread of disease during a pandemic. Where the workplace and the nature of the role allow for remote working, this will avoid some of the difficult issues that can arise in terms of precautionary suspension, quarantine, self-isolation and pay.
Employees who have returned from a high-risk area in the last 14 days should avoid attending work, self-isolate and call NHS 111 for advice. The government have announced that self-isolating employees will be entitled to statutory sick pay (SSP) from the first day off work, as opposed to the usual fourth day rule.
If you request for an employee to remain at home (in effect suspending them), they should receive company pay.
If an employee is actually sick, then any entitlement to company pay will be governed by the incapacity provisions in their contract of employment. You might need to be flexible in respect of doctor’s certification as evidence for long term absences, as self-isolating employees will generally be told to stay away from doctors’ surgeries and hospitals.
Employees are entitled to time off work to help someone who depends on them in an unexpected event or emergency, for example due to school closures. However, there is no statutory right to pay for this time off. You should check any policies in place to this effect and in any event, you of course have discretion to offer this.
Supply chain and commercial risk
Businesses with operations in affected areas have been forced to suspend operations or find alternative means of working. The resulting impact on supply chains has affected many UK businesses. We set out below the position under English law.
Contracts that require ongoing performance are, in principle, absolute; that is, a party affected by the coronavirus outbreak is required to perform its obligations and will be potentially liable to its counterparty for a failure to do so. There are two key exceptions to the rule:
· The operation of any force majeure clause in a contract. In the absence of specific reference to coronaviruses, the key will be whether it is the type of event that would fall under general force majeure wording, or whether there has been a government decision or administrative
action preventing performance. Even if it is covered, other requirements may still need to be satisfied to constitute force majeure and allow parties to be excused from obligations.
· The common law concept of frustration. In the absence of a force majeure clause the doctrine provides that a party is discharged from its contractual obligations if a change in circumstances makes it physically or commercially impossible to perform the contract, or would render performance radically different.
This is not a straightforward area. If you are concerned about your contractual obligations and/or rights, we are well placed to review contracts on your behalf and advise on what this may mean in practice and your options going forward.
When drafting a force majeure clause for a new contract, you should consider adding pandemics, epidemics and other crisis situations to the list of force majeure events. Businesses should also consider amending their standard terms of business to make sure that their force majeure clauses cover pandemic situations and crises.
You may have some insurance to cover losses arising from certain types of business interruption (BI insurance) or the death or incapacity of key personnel (keyman insurance). Many BI insurance policies however will not cover disruption caused by pandemic interruption or crisis so you should check the terms of the policy as part of the business continuity discussions and preparations.
Businesses should be able to claim tax relief for the expenditure incurred as a result of a pandemic or crisis such as increased hygiene facilities, cleaning costs or hiring temporary staff to cover absences.
If the absence of key personnel means that a business misses deadlines for submitting tax returns or paying tax, the business may be liable to pay a penalty. Penalties do not apply where there is a reasonable excuse for failure to submit a return or pay tax on time. The circumstances, including the size of the business, will be considered. You should contact your accountant or a tax specialist if you are unsure on any taxation and filing issues.
Continuity planning and the Delay phase
In the Delay phase of the government’s response, population distancing strategies including widespread school closures and encouraging greater home working will be considered. To minimise the impact on your business, you should assess how well you are prepared for both actions in advance. This review should include: how many employees will be affected by school closures and discuss the extent to which shared childcare can be utilised; employees’ remote access capabilities to work from home; the business’s ability to sell online and/or via telephone, access critical information and communicate with customers and suppliers.
After an initial review, action should include active testing your disaster recovery plans. For example, assessing not just whether the necessary approvals are in place for employees’ remote access, but also whether the facilities actually work in practice for every employee.
Summary of key actions
· Undertake a risk assessment for your business.
· Review the impact on employees (collectively and individually).
· Talk to IT service providers about remote working access.
· Discuss shared childcare possibilities with employees.
· Keep employees informed of developments.
· Discuss working arrangements with any higher risk employees.
· Ensure that there is good hygiene in the workplace.
· Check employment contracts and policies.
· Monitor and review employees’ travel.
· Check contracts for force majeure clauses.
· Review your insurance policies.
· Talk to accountants about additional expenditure.
· Be proactive and keep an eye on the government’s guidance on a daily basis to better advise your employees on what they should or should not be doing to protect themselves and their colleagues.