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Coronavirus: The Legal Issues

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Coronavirus: The Legal Issues

Coronavirus: The Legal Issues

We've been advising businesses across multiple sectors about the legal risks presented by the Covid-19 outbreak in the UK, so we thought it would be useful if we collated the frequently asked legal questions that our experts are facing to help your business respond to this fast-moving problem...

"We have staff returning to work from overseas who have been near places where Covid-19 has been detected, e.g. Northern Italy. Should we insist that they do not attend work in the office?"

If they have symptoms of Covid-19, yes. If they have no symptoms, it’s up to you depending on where they have actually been. The UK Government’s current advice is that individuals returning from specific areas (full details can be found here) should stay indoors and avoid contact with other people even if they do not have symptoms. The decision to require employees to work from home is easier to make if they can work remotely. However, if they need to be on site (such as a nurse or teacher) then it is likely they will need to be asked to work from home to the extent possible, although their ability to perform their role is much reduced. If they are not ill, it is likely you will still need to pay them full pay. If they are ill or become ill whilst at home, they move to the usual process you have for sick pay.

If they are receiving SSP, don’t forget that on 4 March 2020 the UK Government said that it would introduce measures so that SSP would kick in from day 1 of absence if their illness is Covid-19, rather than day 4 as with other illnesses.

We have produced a more detailed employer’s guide on the legal issues that Covid-19 creates which you can find here.

Answered by Millie Kempley

"Is an outbreak of Covid-19 a force majeure event?"

Quite possibly! If the contract contains a force majeure clause then you need to check carefully the wording of that clause. It's very common for force majeure definitions to generally cover “any event beyond the reasonable control of the parties.” In our view, the Covid-19 outbreak is very likely to meet this definition. The next thing you need to do is see what the contract requires where a force majeure event occurs. Does it permit termination? Or just suspension until the event has passed? And does it require prior notification before the clause kicks in? These issues need to be addressed before you can rely on Covid-19 as a force majeure event.

If you don’t have a force majeure clause in your contract, you may still be able to rely on the common law doctrine of frustration to get out of your contract, but that can be quite hard to do: frustration is a complex legal doctrine.

Answered by Hans Schumann

"We are concerned that Covid-19 could cause a drop in sales and we have seen FlyBe go under because of this. What do we do if this outbreak starts to push the business into financial trouble?"

Clearly we hope no more businesses go into administration due to the impact of Covid-19 on business, but it is quite possible. Your creditors might be persuaded to agree deferred short-term payment holidays if we can show the issues are directly related to Covid-19, especially as the current forecast from Government and the Bank of England is that this is likely to be an acute but short-lived phenomena.

A legally binding payment plan agreed with creditors such as a Company Voluntary Arrangement is an option for companies who need more time to repay their debts. 

Answered by Nicola Holton

"If we cancel an event or service due to Covid-19, do we have to refund payment to them? Our customers are consumers, not businesses."

To some extent, the answer depends on what the service or event is. If the service is in a regulated sector (such as air travel) then there are mandatory provisions regarding refunds, cancellations or delays. If your business is not in a regulated sector, whether you have to refund payments will basically hinge on 2 things: what the contract terms say and statutory rights set out in the Consumer Rights Act 2015 (“CRA”).

If the contract says you can withhold refunds where the service or event is cancelled due to events beyond your reasonable control (remember, consumer contracts shouldn’t use terms like force majeure) then you may be able to retain payment. However, the CRA may still step in to rescue the consumer. If the clause that allows you to withhold payment is unfair to the consumer then you cannot rely on it. There is a specific legal test for this which is fairly complex. You can find more information on unfair terms here.

As a general rule, the law tends to favour consumers, so the probability of consumers getting a refund is quite high.

Answered by Amelia Collins

"If we have concerns that pupils have Covid-19, should we notify the parents and other pupils? And at what point should we consider closing the school?"

Firstly, PHE has produced a lot of comprehensive guidance for schools available here, and their is now equivalent guidance for private schools from the Independent Schools Council, here.

The current guidance is to contact NHS 111 (or 999 in an emergency) if a pupil becomes ill on return from travel abroad. There is no need to shut the school while tests are undertaken, but it would be prudent to communicate with parents (and, if appropriate, pupils) that tests are being undertaken. You should communicate with PHE and take all preventative steps that they recommended.

If your school receives positive Covid-19 test results for staff or pupils, PHE will work with you to conduct a risk assessment. PHE’s current advice is that completely closing a school is unlikely to be needed. 

Answered by Laura Thompson

"Is the fact that an employee has Covid-19 special category data? And if yes, how can we tell other staff about this without breaching GDPR?"

Yes, it is special category data (i.e. sensitive personal data). Generally speaking, special category data can only be processed in very limited circumstances, typically where you have consent or it is necessary in the field of employment law. However, given the current state of affairs and PHE’s advice to prevent the spread of Covid-19, you may be able to justify processing this data using other grounds.

There are a number of avenues here, and it is quite complex, but one thing you should remember is that you can always process special category data where that processing is necessary to protect the vital interests of a staff member with Covid-19 or the vital interests of his/her immediate colleagues.

Any processing must be limited to what is strictly necessary, i.e. notifying the colleagues which staff member has contracted Covid-19 in case they have had close contact as well, but requesting that the information is not broadcast more widely or circulated outside of the company in order to maintain the individual’s expectation of privacy.

Answered by Matthew Holman

GET IN TOUCH

If your business needs legal support with any issues arising from Covid-19, please get in touch by emailing below, or calling us on 0345 070 6000.

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All information in this document is accurate at the time of writing. It is meant for general information only and is not legal advice.