28 / 02 / 2020

Coronavirus – considerations for business

The number of reported cases of COVID-19, more commonly known as the ‘coronavirus’ continues to increase. A recent newspaper report stated that in a document prepared by the National Security Communications Team, it was anticipated that in the worst case scenario, up to 80% of the UK could be contaminated with Coronavirus, meaning more than 50 million cases. Obviously, the chances of this level of infection are extremely remote. However, it is hard to ignore the impact that Coronavirus has had on people and businesses globally since it first hit the headlines.

In China, people have been forced to self-isolate and businesses have been closed. Japan has announced that all schools will be shut until the end of March 2020, impacting 13 million students. The governor of the Bank of England has warned that the UK economy could be impacted with signs of reduced supply chain, decreased economic activity and lower tourism already showing. So, what practical steps can businesses take now to minimise impact?

Short term

  • Action plan
    • Travel – put tighter controls on international travel especially to impacted regions. Workers should be required to inform their manager if they have or intend to travel to any impacted regions.
    • Meetings – ask visitors to business premises to confirm that they have not travelled to affected regions in the last 14 days. If they have, ask workers to meet them offsite or via alternative means such as Skype. For the service sector, it will be impossible to impose such checks or bans.
    • Education and Office hygiene – place notices in public areas reminding workers and visitors of how they can limit the spread of Coronavirus and how to spot symptoms. Increase cleaning levels, add antibacterial soap dispensers and if necessary, implement a deep clean.
    • Contact details – ensure details are up to date so that workers can be contacted in the event of an emergency.
    • Remote working – we have seen several UK businesses temporarily close business premises due to Coronavirus scares. Such action has been taken very swiftly. To the extent that workers are set up for remote working, they should be told to take home laptops on a daily basis. IT systems should be stress tested to ensure that they can cope with the entire workforce logging on at the same time.
  • Self-isolation
    •  The government has published helpful guidance on what you should do if you have travelled to an impacted region and/or are displaying symptoms. Guidance states you should stay at home, do not go to work and avoid public transport.
    • Please click here to read the guidance.
  • Pay
    •  Business decision to close – as the worker is ready and willing to work, ordinarily, staff would be entitled to receive normal pay.
    •  Self-isolating – the Health Secretary stated this week “self-isolation on medical advice is considered sickness for employment purposes. That is a very important message for employers and those who can go home and self-isolate as if they were sick, because it is for medical reasons.”
    • Workers decision not to attend work – some workers may simply feel uncomfortable travelling to or attending work. Ordinarily, such actions could constitute disciplinary action. However, if the concerns were legitimate, such action would be hard to justify. In this scenario, if remote working is not possible, consider unpaid leave / holiday.
    • School closures – it is likely that we will see sporadic school closures as cases are identified. Under English  law, there is a right to take unpaid emergency dependant’s leave to deal with an immediate crisis. However, this does not mean that workers are entitled to remain away from work for the entire duration of the closure.

Medium / Long term

  • Mitigating losses
    • Temporary lay-off and Short-time working – certain contracts permit businesses to reduce work or ask workers to remain away from work for a limited period. This may be a useful tool for businesses in the service and manufacturing sector.
    •  Reduced working days – we have already seen businesses in Asia reducing the working week by one or two days to save costs. Again, much will depend on what the contract states, failing which worker consent will need to be obtained.
    •  Unpaid Leave /  Holiday – business could ask workers to take various forms of leave if there was no work to do or serve notice to take holiday on workers.
  • Reshaping business
    • Redundancy / change to terms – China has suggested that Coronavirus will not be contained in it’s country until the end of April 2020. If UK businesses were paralysed for three months, this would have a significant impact on finances. Options could include variations to pay, and in the worst case scenario, redundancies. This would be a last resort due to the costs and time of running such a process. It may also be difficult for businesses to recruit after the scare has passed, especially in light of the proposed new immigration rules.
  • Commercial costs
    • Businesses may also look to reduce supplier costs be that via a reduction in cleaning or security services or reducing goods ordered. It would be prudent to review commercial agreements to see what rights you have, especially if they are subject to long notice provisions.

If you need any assistance in preparing an action plan or with any aspects of this note, please get in contact.