Legal

Legal and practical considerations during coronavirus

22 Apr 2020 By Francesca Mundy

Francesca Mundy outlines important points businesses may need to address, including contingency planning, home working and data protection

Draft a business contingency plan

As coronavirus continues to spread, make sure you have business contingency plans in place to protect both your company and your staff. These plans should outline what steps your organisation plans to take in response to the outbreak to manage the threat and ensure business continuity. Update your plans regularly in line with any new developments, including new government guidance. 

The legal implications of working from home

As an employer, you still have health and safety responsibilities towards your employees, whether they are in the workplace or not. Make sure you risk assess the suitability of their home working spaces and check that your employer’s liability insurance covers remote workers.

Protecting confidential information

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

Managing your staff at home

While some businesses may be used to managing staff who work from home, others may be in new territory. Put in place a working from home policy to set guidelines for keeping in touch and establish clear deadlines to keep everyone accountable. Make sure you keep in regular contact with your employees and check in to see how they are coping. This can prevent them from feeling disconnected or isolated.

The impact on commercial contracts

The coronavirus outbreak is causing significant strain on some businesses’ supply chains and impacting on the demand for goods and services. This could mean that you and your suppliers struggle to carry out your contractual obligations.

However, coronavirus may not be a valid reason to change or delay your obligations. It’s essential 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:

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 affected 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.

Frustration

If a contract becomes impossible to carry out, or a party can show 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

The government’s requirement for people to stay at home wherever possible and to only leave for very limited purposes means face-to-face meetings with clients should be changed to virtual meetings (eg online meetings or video calls). Make sure your staff are provided with the appropriate technology to enable this.

Communicate with your clients to let them know what steps your company is taking to limit 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 ensure you continue to meet their needs on an ongoing basis.

Responding and communicating effectively as a business during the pandemic 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.

Francesca Mundy is a lawyer at Sparqa Legal

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