The coronavirus pandemic is presenting businesses of all kinds with an array of challenges. Based on some of their most frequently asked questions, solicitors from legal firm Wright, Johnston & Mackenzie LLP share their advice on three key areas to help keep businesses on track.
EMPLOYMENT LAW
Martin Stephen, Head of Employment, said: “The situation relating to the Covid-19 pandemic and the steps being taken by UK Government in response are constantly evolving. HMRC has issued what is now the seventh version of the Employer Guide on claiming wages through the Job Retention Scheme, so it’s important to stay up to date as things change.
“According to latest updates, employers can only claim for furloughed employees who were employed on March 19, 2020, and who were on the PAYE payroll
on or before that date. In terms of new recruits, it still seems to be the case that not all employees who started work in late February or early March will be eligible to be furloughed, as they must have been added to the PAYE payroll by the March deadline.
“An employee whose fixed-term contract ends during furlough can be re-employed, furloughed and claimed for, but only under certain conditions, which are available online on the Government Guidance website. Employers should bear in mind that non-renewal of a fixed-term contract will amount to a dismissal for unfair dismissal purposes. If the employee has two years or more continuous service, they should ensure they have a fair reason for not renewing the contract.”
CONTRACT LAW
Stephen Cotton, Partner, said: “We’re getting a lot of questions, particularly from consumer facing SMEs, about the impact of Covid-19 on their contracts. While there is legislation in the orbit of such contracts, the best starting point is what does the contract actually say and, if it is silent on something, how is that gap to be filled?
“Contracts reflect an intention by parties to be legally bound. If you break a contract, a court will either make you perform or expect you to pay for your non-performance.
"Separately, with consumers, there is a raft of legislation dealing with cancellation rights, refunds and, in a broad sense, the fairness and transparency of your contract. However, government agencies and politicians making sweeping populist statements should be treated as opinions, not law.
“As only one example, if your business lets out residential holiday accommodation, the so-called Cancellation Regulations from 2013 are inapplicable (though the fairness of your contracts and common law concepts like frustration still need to be considered). The simple point though is, however overwhelming Covid-19 seems for your business, staying calm and firstly checking the legislative and contractual small print always makes sense.
“Once you have had some detailed advice, it’s often worth having a frank and honest conversation with the other party to determine the best way forward. While it may not always be appropriate, it’s amazing how much opening the dialogue can help.”
CYBER SECURITY
Angus MacLeod, head of the firm’s Inverness office, said: “Following the recent move to home-working for a majority of the workforce, it’s important to consider cyber security risks to ensure your business stays on the right side of the law.
“If you’re a business owner, not only can cyber criminals pose a risk to your company’s hardware and finances, there can also be serious legal repercussions for businesses who fall foul of hackers if this results in confidential information being leaked. You may face a fine or legal action from individuals who have been affected by a data breach.
“First, I’d advise business owners to cultivate a communicative culture. Staff may be more likely to click a link or open an email they’d usually think twice about if they can’t ask a colleague what they think. It’s important staff feel they can still ask questions and consult regularly with their colleagues, even while working remotely.
“It’s also important to stick to ‘safe’ means of communication. Some may choose to work on their own laptop rather than using IT equipment provided by their employer, but this increases the risk of information falling into the wrong hands.
“Finally, make sure you’re providing adequate training for staff. There’s a multitude of training courses available online that will allow your team to brush up on the dos and don’ts of home-working.”
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