Coronavirus (COVID-19)
Call our coronavirus contracts advice helpline on 0113 283 4011 for support from our commercial and disputes experts.
Read our Coronavirus Q&A guide which summarises some of the most common queries from our clients with our brief guidance. Download the guide here.
The guide is also available on our Walker Morris on The Go App.
Visit our ‘Dealing with the Next Normal hub‘ for latest guidance on returning to the workplace.
The outbreak of coronavirus continues to affect the contractual and legal obligations of businesses regionally, domestically and internationally. The challenges with which businesses are now being faced are largely unprecedented considering the speed and severity of the outbreak. Companies need to respond quickly and efficiently to this disruption and mitigate the risks caused to their businesses.
The Covid-19 outbreak is affecting us all. Like all responsible businesses, we’re monitoring the situation closely. In line with government guidelines, we are taking measures to protect both our staff and you, our clients.
Read about Walker Morris’ own planning for Coronavirus COVID-19. Changes may need to be made as this situation progresses, and we will keep you informed. Please get in touch with any of your Walker Morris contacts if you want to discuss in more detail.
For insight into the evolving impact of coronavirus on your business, please contact one of our specialists below.

Dealing with Migrant Workers in the COVID-19 Pandemic
Visit our Business Immigration hub to watch a series of short videos on current topics. […]
Visit our Business Immigration hub to watch a series of short videos on current topics.
Employers up and down the country have been grappling with the COVID-19 pandemic and the impact that the resulting Government imposed lock-down has had on their workforce for a number of weeks now. Furloughing, laying-off and requiring staff to work from home have already become widespread, and many employers have now been upskilled in the correct employment law processes to follow before implementing such changes. As the economic downturn caused by the current crisis continues to tighten its grip across the UK, many employers are now being forced to consider more permanent workforce reduction measures to reflect the potential continuation of decreased business demand, including redundancies.
However, where employees are sponsored migrant workers working in the UK under Tier 2 or Tier 5 visas, there is an additional layer of legal compliance in the form of immigration considerations which employers may be less aware of. In this article, we consider the specific immigration considerations which need to be borne in mind when dealing with sponsored migrant workers in the current COVID-19 crisis, including:
- the obligations associated with them;
- the rules around furloughing and laying off;
- considerations around salary reductions;
- working from home;
- considerations when undergoing a redundancy process; and
- visa extensions;
We will also consider temporary changes to right to work checks which have been introduced during the COVID-19 crisis, and the new points based immigration system.
Sponsored Migrants
Where an employer sponsors a migrant worker to work in the UK, that sponsorship carries with it onerous monitoring and record keeping obligations in relation to the migrant worker, as well as obligations to notify the Home Office in the event of certain circumstances changing. Under normal circumstances, any failure to comply with these obligations can carry significant consequences, including the possible revocation of the sponsor licence pursuant to which migrant workers are sponsored.
For the migrant worker, their right to live and work in the UK is generally contingent upon their continued employment on the terms under which they were first sponsored. Therefore any changes to the migrant worker’s role during the current COVID-19 pandemic have the potential to impact on the continued sponsorship of the individual.
Furloughing and Lay-Offs
Employers with an existing contractual right to lay-off have been making use of these provisions as a means of managing costs during these difficult times, and those without such a right have been seeking the agreement of their workforce to temporary lay-offs both under the Government’s Coronavirus Job Retention Scheme (“CJRS”) and otherwise. Under the CJRS, employees can agree in writing to be “furloughed” (i.e. not required to work but remain employed) in return for 80% of their salary, up to a maximum of £2,500 per month, which the Government will repay to their employer. The employer has the option to top-up the salary to full pay, but is not required to do so, and any top up will not be recoverable under the CJRS.
The Government’s guidance on the CJRS makes it clear that individuals who are working in the UK under visas are eligible to be furloughed and employers are entitled to have their salary reimbursed under the scheme (subject to compliance with the terms of the scheme). However, employers should be cognisant of the fact that the CJRS only applies to employees who are covered under the employer’s PAYE system. Therefore the salary of any migrant workers working under a Tier 2 (Intra-Company Transfer) visa whose salaries are paid overseas will not be recoverable by the employer under the CJRS. Further, any decision to furlough individuals on the grounds of their immigration status is likely to be discriminatory.
Salary Reductions
Under normal circumstances, any changes to the salary of sponsored migrants which takes the salary level below £30,000 for a Tier 2 (General) visa or £41,500 for a Tier 2 (Intra-Company Transfer) visa, or the threshold in the relevant SOC Code applicable to the role, whichever is higher, would jeopardise the continued sponsorship of the individual. However, the Home Office has issued guidance which states that sponsors can temporarily reduce the pay of sponsored workers to 80% of their salary or £2,500 per month, whichever is lower, if the reduction is due to the COVID-19 outbreak. The reduction must be part of a company-wide policy to avoid redundancies and must be temporary. The employer should make a written record of the reason for the reduction in case evidence subsequently needs to be presented to the Home Office, and the sponsored worker’s pay must return to its previous level when the company-wide arrangements end.
Although the Home Office’s concession on salary reductions appears to be intended to cover sponsored workers who are furloughed under the CJRS, the guidance does not refer to furloughing specifically, therefore it could also cover sponsored workers who are still working and who agree to reduce their working hours and salary by up to 20%, or those who agree to a pay cut without reducing their hours, in response to business needs.
Further, although the Home Office has not issued specific guidance on whether any salary reduction applicable to a migrant worker who was granted leave under the Tier 2 (General) route as a “high earner” (i.e. with an annual salary of £159,600 or more) which takes them below the “high earner” threshold will require a new application for leave as would be the case under normal circumstances, it is expected that similar concessions will be made.
Where employers are laying-off workers without pay (in order to avoid redundancies), the general position is that an employer must stop sponsoring a migrant who is absent from work without pay for 4 weeks or more in total in any calendar year (unless the leave is for one of a specified number of reasons). The Home Office has, however, issued specific guidance which confirms that sponsors are not required to withdraw sponsorship where migrants are absent without pay for 4 weeks or more if the absence is related to the COVID-19 crisis. Further, absences related to COVID-19 do not need to be reported to the Home Office in the normal manner. In each case, the employer should keep a written record confirming that the time away from work has arisen as a result of COVID-19.
Changes to salary or working hours should still be notified to the Home Office via the on-line sponsor management system within 10 working days of the change, as per normal notification requirements.
Working from Home
Although under normal circumstances a change to the migrant worker’s place of work would be a reportable change of circumstances, the Home Office has issued guidance to confirm that employers do not need to report a change to a migrant worker’s workplace to their home address for the purposes of complying with Government guidance on social distancing. Clearly if a migrant worker continues to work from home after the COVID-19 crisis is over (for example as part of an employer’s increased use of agile working), then a report would be required. Further, employers may need to take extra steps to monitor attendance at work for migrant workers who are working from home in the event that a reportable situation does arise (e.g. an absence from work which is not related to COVID-19).
Redundancy
When conducting redundancy exercises, employers should be aware that there may be specific considerations and limitations around their treatment of migrant workers. For example, if the fact that an individual is a migrant worker influences any decision to make them redundant, this could give rise to an unfair dismissal and race/nationality discrimination claim. When making offers of alternative employment as part of the redundancy process, the alternative role would need to be within the same SOC Code as the role for which the migrant was initially sponsored, and at the requisite salary level, otherwise the individual will require a new visa and the employer may be required to undertake a new resident labour market test before offering the role, if applicable. However, even where an employer is confident that an alternative role requiring a new visa would not meet the requirements of fresh sponsorship, they would be well advised to tread very carefully before deciding not to offer the role to the migrant to mitigate against the risk of an unfair dismissal or discrimination claim, and bespoke legal advice should be taken before any decisions are made.
Sponsors of migrant workers will no doubt be aware that if they terminate the employment of a migrant worker earlier than the end date shown on the certificate of sponsorship, they are under a duty to report this to the Home Office within 10 working days via the on-line sponsor management system. This includes where a migrant worker is made redundant as a result of a down-turn in work caused by the COVID-19 outbreak.
For the individual, the redundancy would result in their leave to remain in the UK being curtailed to 60 days. If they have not found alternative employment with another sponsor (or found another lawful basis for remaining in the UK) by the end of this period, they will be required to leave the UK.
Visa Extensions
Where a sponsored worker’s visa is due to expire, an employer will normally work with the migrant to secure an extension of the visa, or look to terminate their employment if their services are no longer required. However, in light of the current COVD-19 crisis, the Home Office has granted visa holders whose visa expires between 24 January 2020 and 31 May 2020 (and who were not otherwise intending to apply to extend their leave) an extension to their visa until 31 May 2020 if they cannot leave the UK because of travel restrictions or self-isolation requirements. Although there have not been any formal announcements at the time of writing, it is likely that this concession will be extended beyond 31 May if the current situation continues. In order to benefit from this extension, affected individuals are required to contact the COVID-19 Immigration Team and complete a COVID-19 UK Visas & Immigration form to provide certain information, including their name, date of birth, visa reference number and the reason why they intend to remain in the UK.
However, those migrant workers who do require a continued presence in the UK when their current visa expires will still need to make a visa extension application (or other application to remain lawfully in the UK beyond the date of their current visa), and should make this application on-line before their current visa expires in the normal manner. Those whose visa expires between 24 January and 31 May who are looking to switch into a different long-term visa category and who would otherwise need to make the application from outside the UK are currently permitted to make in-county applications. However, it is not currently possible to progress applications to the next stage, which requires an appointment to submit biometric information and upload supporting documents, as all UK Visa and Citizenship Application Centres are temporarily closed due to the COVID-19 outbreak. In addition, the Government’s proposals to introduce a 14 day quarantine period for those coming into the UK will impact on the ability of migrant workers arriving from overseas to start work (although there is currently no date for when this proposal will come into effect). Those wishing to use priority or super priority services for a faster decision on their application should be aware that these services are also temporarily suspended. If their visa is due to expire imminently, they should submit their application and seek to add a priority or super priority service at a later date once the services are back up and running.
The Home Office has also introduced free automatic one year visa extensions for frontline health and social care workers working for the NHS and in the independent sector. The provisions cover workers and their family members whose visas expire between 31 March 2020 and 30 September 2020. In addition, the Home Office has confirmed that the family members of frontline workers who die from COVID-19 will be offered immediate indefinite leave to remain.
Right to Work Checks
Another challenge employers are currently facing is in relation to carrying out right to work checks for new recruits or those requiring follow-up checks while their workforce works from home, given that the normal process involves obtaining physical identity documents and verifying these during a meeting with individuals in person. Without such checks being carried out in a legally compliant manner, employers have no statutory excuse in the event that they are found to be employing illegal workers. The Home Office has confirmed that from 30 March 2020, right to work checks can temporarily be carried out over video calls (e.g. Zoom, Skype or Facetime) with the individual submitting scanned copies or photos of their original documents. The written record of such a check should state that it is an adjusted check due to COVID-19. If an individual has a biometric residence permit, biometric residence card or status under the EU Settlement Scheme, then the employer can use the Home Office’s online right to work checking service provided that the individual has given permission for their details to be viewed. For individuals who are unable to provide the required documents, the Home Office’s employer checking service is still operational and a “positive verification notice” will provide a statutory excuse against liability for a civil penalty or criminal sanctions for employing a worker illegally for 6 months.
The Home Office have confirmed that once the temporary COVID-19 measures end, employers will have eight weeks to carry out retrospective right to work checks in the usual way on employees who commenced employment or required a follow-up check while these measures were in place. The Home Office will give notice in due course of when the measures will end. On the copy of any documents reviewed as part of the retrospective check, the employer should note: “The individual’s contract commenced on [insert date]. The prescribed right to work check was undertaken on [insert date] due to COVID-19”. Copies of both checks should then be held on file.
New Points Based System
In addition to factoring in the above when dealing with migrant workers during the current crisis, employers should not forget the Government’s proposed introduction of a new points based immigration system from 1 January 2021 which will apply to EU and non-EU nationals alike. At the time of writing, there have been no indications that the proposals to extend the requirement for sponsorship to EU nationals (who currently have the right to work without being sponsored) from 1 January 2021 will be postponed as a result of the global pandemic. The Immigration Bill which sets out the legal framework for these changes passed its second reading in the House of Commons on 18 May 2020, and looks set to be on course to become law. Therefore employers who do not currently have a sponsor licence because they have only needed to recruit from within the UK and EU in the past are being urged to make applications for a licence as soon as possible, to ensure they are in a position to sponsor individuals from the EU from 1 January if required. Further, the requirement for EU nationals to register under the EU settlement scheme in order to gain longer-term rights to remain living and working in the UK remain in place.
We will shortly be issuing more detailed guidance on the new points based system and the impending changes to the recruitment of nationals from the EU from 1 January 2021.
Next Steps
At Walker Morris, we have a dedicated Business Immigration team which can assist with any of the issues raised above. Please do not hesitate to get in touch with your usual contact or one of the individuals below for further advice.

The age of agile working
Click here to watch our video nugget on agile working. There has been a national […]
Click here to watch our video nugget on agile working.
There has been a national “home-working experiment” as a result of the Coronavirus pandemic. Prior to this, many businesses had few or no staff working remotely. Of course, for some, it might not have been possible, but for many it was due to a pre-conceived negative view of working from home or a reluctance to tackle the challenges and technology.
As a result of the enforced experiment into different ways of working, many businesses have demonstrated that they are perfectly capable of operating with all (or the majority of) their staff working remotely. However, some publications and surveys have suggested that almost half of those who are currently working from home (but did not normally work from home prior to the pandemic) felt their employers would reverse widespread remote working once the pandemic is over and, instead, revert to their previous policies. As time has gone on and it has become clear that there is no quick way of going back to “business as usual”, attitudes are most likely to have changed.
We are therefore exploring what businesses can learn from the home-working experiment. Walker Morris is working in on a research project with the University of Leeds to seek to identify how employees manage the boundaries between work and home, how they interact with colleagues in a virtual environment and the influence this has on their work satisfaction, productivity and general wellbeing. Below, we take an initial look at both the benefits and implications of this new age of agile working.
- Changing attitudes to agile working and effective management – Some managers may have viewed an employee’s desire to work from home as a way to avoid certain responsibilities and/or a have a perception that employees are not productive on days spent working from home. However, many individuals, particularly those classed as “millennials” and “generation Z”, value flexibility and agile working ahead of pay – and this experiment may well have shown an increase in productivity as well as employee satisfaction (although that will be for each individual business to gauge in terms of what has worked for them). The new world of work looks set to have agile working at its forefront, with the home-working experiment speeding up the culture-shift. The focus of putting in “face-time” in the office may now change, and lead to an increase in trust between managers and staff. Employers should therefore consider how to effectively manage and analyse the performance of those working from home (for example, by offering their directors and managers training on leadership in a virtual world, introducing comprehensive home-working policies, and implementing new technology and systems to monitor work output), to ensure that agile working is working for their business.
- Ability to recruit from a wider labour pool (including internationally) and positive impact on the environment – Individuals may no longer restrict their job searches to businesses within a certain radius of their homes and employers may widen their recruitment searches to find the best talent. This is likely to be a real positive for both employers and employees:
- Less time spent commuting may result in a better utilisation of employees’ time and greater job-satisfaction.
- An international and diverse workforce should no longer be reserved for tech giants such as Google – and this move may assist businesses in expanding and reaching more clients and customers across the world.
- The environment will benefit from less work-related travel, which will assist businesses in meeting their sustainability goals – which should also be high up on the agenda.
- Flexible working and diversity – As stated above, agile and flexible working may assist in creating a more diverse workforce. In addition to changes to work location, employees with childcare and other caring responsibilities will have been working flexibly in the sense of their hours of work (with many parents taking certain “shifts” when juggling home-schooling and childcare with work). Overall, it seems that the eventual death of the “nine-to-five” is inevitable – and it could well be beneficial having certain employees “online” and available at different times of day. One obvious implication of this is the question of how employers will deal with flexible working requests and potential discrimination issues. It seems increasingly unlikely that employers will be able to objectively justify a policy or requirement for staff in many job roles to be present in the office and/or to work within the confinement of set hours – meaning that real consideration will need to be given to the business’ policies on agile and flexible working and its approach to flexible working requests.
- Gig economy and employment status – Greater flexibility should not necessarily lead to a diminishing of employment rights. Many “gig economy” workers want to be engaged in less traditional ways due to the flexibility it offers – however, unfortunately, some of those individuals may have fallen through the gaps in terms of the government’s assistance under the Coronavirus Job Retention Scheme (the Scheme). The Chancellor’s comments when announcing the Scheme will have also laid the foundations for a wider review of the gig economy/employment status debate – quite possibly in the direction of even greater tax collection. Businesses should therefore be careful before basing their economic recovery around a self-employed or zero-hours workforce and, as stated above, in a 24/7 world of work, it can actually be beneficial for “traditional” employees to be working flexible hours, with the “nine-to-five” model no longer being fit for purpose.
- Mental well-being and health and safety considerations – Remote-working has, for some, blurred the boundaries between work and home life – which can of course take its toll on people’s mental health and well-being, read our previous article on this. This will of course have an impact on how leaders can manage staff in a digital world and communicate effectively. Employers will need to consider how they will ensure employees are taking adequate rest-breaks and not exceeding weekly working limits to avoid falling foul of legal requirements – this will likely be done by investing in adequate technology and monitoring systems and putting new guidelines, policies and practices in place. In addition, employers should remain mindful of their health and safety duties in respect of home-workers. While risk assessments are likely to take a different (virtual) form, it should still be ensured that employees are comfortable that they can do their job safely, they have the right equipment, and they have access to the relevant information and policies relating to home-working.
- The interplay between living and working spaces and access to equipment – Employees may start to request their employers to reimburse them for more expenses when home-working – for items such as display-screen equipment, desks and stationery and for costs associated with use of broadband, heating and electricity, which is an additional cost for businesses to factor in. However, employers can also benefit by saving the over-heads associated with large office spaces. This leads us to consider how property and offices will be utilised in different ways – and developers were already working on projects involving shared “co-living and co-working” spaces. In addition, while investing in technology, automating processes and digitalisation may have already been on the agenda, businesses who engage employees in roles which are not currently capable of being carried out remotely should consider investing in the development of new technology. Enabling more sectors of the workforce to operate remotely should, in turn, assist in the development and growth of the business and give employers a sound basis on which to plan for unforeseen events such as pandemics!
It’s clear that the topic of agile working will remain at the forefront for businesses. We will publish further insights following our research project with the University of Leeds, but the message is that embracing agile working as the new normal has the potential to aid in the recruitment of talented individuals, assist businesses in growing and increase employees’ job-satisfaction.
Click here to read our article Future World of Work which considers the key issues for employers to think about when planning their exit strategy is in a post-furlough world.
Visit our Future World of Work hub here.

Webinar Recording: The Future World of Work: Life[...]
Claire Burrows (Regulatory) and Charlotte Smith (Employment) presented a live webinar on ‘The Future World of Work: […]
Claire Burrows (Regulatory) and Charlotte Smith (Employment) presented a live webinar on ‘The Future World of Work: Life After Lockdown’.
The webinar covered practical advice for businesses as the lock-down eases, including:
- Coronavirus risk assessments
- social distancing in the workplace
- dealing with employee concerns
- post-furlough workforce planning
- what we can learn from the home-working experiment.
They also looked at the key health and safety and employment considerations for employers, answering attendee questions in a Q&A session.
You can also download our “Road Out of Lockdown Checklists” for help to get your company COVID-19 secure here.
Visit our Future World of Work hub here.

Repairing the balance sheet – what are the[...]
Many public companies are raising capital on an urgent and discounted basis to cope with […]
Many public companies are raising capital on an urgent and discounted basis to cope with the financial impact of the Covid-19 pandemic. This article explores the options that are available to companies seeking to raise emergency equity capital taking into account the measures recently announced by the Financial Conduct Authority (FCA) to help listed companies to raise new funding.
Having weathered the initial disruption caused by the first few months of the pandemic, many companies are now looking at how they can repair their balance sheets and avoid covenant breaches by raising fresh equity capital, possibly alongside new debt. Companies seeking to raise capital quickly have a number of options available to them, namely rights issues, open offers, placings, cash box placings or a combination of these. We will look at each of these in turn and highlight any issues pertinent to the current landscape of which directors should be aware.
Rights issues
A rights issue is an offer of shares to existing shareholders in proportion to their existing shareholdings. As such it is known as a ‘pre-emptive offer’. New shares are issued for cash and shareholders have the option either to take up their rights and buy the new shares, or to sell or trade those rights. There is no limit on the size of a rights issue, so it is a popular structure when a company is looking to raise a large amount of capital, and the financial crisis in 2008/2009 saw a number of companies opting to use rights issues.
The downside of a rights issue is that shareholder approval is usually required as is an FCA approved prospectus. Because of this, additional time will need to be factored into the timetable as well as additional expense. If funding is needed urgently, a rights issue is probably not the best course of action. However, if companies decide to opt for a rights issue, a further option is to go down the “Gazette route” which may enable companies to avoid calling a shareholder meeting (depending on the size of the issue) which, in the age of social distancing, is problematic in itself.
Open offers
An open offer is another pre-emptive share offer in that shares are offered to existing shareholders in proportion to their existing shareholdings. However, unlike rights issues, shareholders cannot trade their entitlements to the shares. Consequently it is seen as a more aggressive option as those shareholders that don’t take up their entitlement will be diluted.
The advantage of an open offer is that it can usually be carried out more quickly than a rights issue, although it is still not a fast process as a prospectus is likely to be required as well as shareholder approval.
Placings
A placing is an issue of shares for cash to selected investors, which can be both existing and new, on a non pre-emptive basis. The size of a placing often depends on the company’s annual disapplication of pre-emption rights, which is normally around 5% to 10% of the issued share capital. However as a result of coronavirus pandemic, on 1 April 2020, the Pre-Emption Group announced a temporary easing of the guidelines applicable to the size of non pre-emptive offers, raising the amount of disapplication authority to as much as 20% for general corporate purposes and an additional 5% for specified acquisitions or investments (although the company will still need to follow the requirements of the Companies Act). Therefore, in the current climate and if existing shareholder authorities allow, companies could use a placing to issue new shares up to 20% of its issued share capital without a shareholder meeting or a prospectus and without first giving existing shareholders a right of refusal.
The change has been controversial because in a number of cases it means institutional investors have been invited to take part in the placings whilst smaller retail shareholders have been sidelined. Companies considering taking advantage of the relaxation in the disapplication of pre-emption rights should take heed of the backlash experienced by Foxtons Plc and The Restaurant Group Plc following their placings last month. Investor advisory group Institutional Shareholder Services (ISS) has argued that, since Foxtons was not running out of cash, it should have waited for investor approval to any new share issues. ISS and Glass Lewis urged shareholders to rebel at the recent AGMs for both companies and to vote against any future share issues. The anticipated shareholder rebellion did not materialise.
Cash box placings
Since statutory pre-emption rights do not apply on an issue of shares for consideration that is not cash, a number of placings in the current climate are being structured to ensure that the company receives non-cash consideration for the new shares by incorporating an offshore special purpose vehicle (SPV), typically a Jersey company. This is known as a cash box placing. The equity raising company issues shares as consideration for the shares in the Jersey SPV, which in turn holds the cash paid by investors, rather than issuing the shares directly for cash.
No shareholder approvals are required, other than the authority to allot shares (which would normally be taken at each AGM over one third of the share capital). As a result, the timetable for a cash box placing is short. However since there are limits on the number of shares that can be issued (both as a result of the constraints of the authority to allot and also any prospectus requirements (for Main Market companies)). It is in the context of a cash box structure that the Pre-Emption Group’s easing of the guidelines is particularly useful.
Although cash box placings have been unpopular in the past, of the recent capital raising deals announced in March and April 2020, more than two thirds were cash box placings.
Current considerations and issues
If companies intend to carry out a capital raising they will need to canvass their shareholders to determine if there is investor demand for more shares and to see if support will be forthcoming for any resolutions which will need to be passed and, particularly in the case of a cash box placing, the structure of the fundraising.
Companies and their advisers may need to be innovative in achieving their aims whilst keeping their existing investors on side. An example of this is the recent fundraising by Compass Group Plc which successfully raised £2 billion through a retail offer which ran alongside a non pre-emptive placing of shares to institutional investors. The fundraising was achieved using an FCA-regulated platform known as PrimaryBid which connects retail investors with listed companies.
Finally, on 8 April 2020, the FCA announced a series of measures to help listed companies to raise new funding in the current crisis including the ability to apply to the FCA for waivers to ensure that shareholder approval can be sought for certain related party transactions without the need to hold a general meeting. The FCA is also encouraging companies to make use of the simplified prospectus introduced by the new Prospectus Regulation.
WM Comment
In the current environment there is likely to be fierce competition for new capital. If a particular sector is struggling, such as hospitality or retail, multiple fund raisings in the same sector becomes a distinct possibility. Being quick to go to the market with a capital raising, and thereby being ‘on the front foot’ can help to ensure that willing investors can be found.

WM video nuggets: The Future World of Work:[...]
We recently held a live webinar ‘The Future World of Work: Life After Lockdown’ covering […]
We recently held a live webinar ‘The Future World of Work: Life After Lockdown’ covering the key health and safety and employment considerations for employers as the lock-down eases.
Below are a range of bitesize videos taken from the Q&A section of the webinar covering some very important questions.
- Will employers be expected to pickup some of the cost of furloughed employees after August?
- Is anxiety about using public transport a valid reason not to return to the workplace?
- Can employees be forced to take holidays?
- Can I tell employees if a co-worker has tested positive for Covid19?
- People who find it difficult to work at home all of the time but they’re coming into work some of the time, can they argue that this is consistent with the guidance?
- Do we need evidence of health issues?
- Should we consider obtaining consent from employees on their return to work?
- Does the Health and Safety Representative have to be nominated by the employees?
- If over 70’s return to the workplace, of their own choice does the business face a great liability if they get covid19, even if they’ve done everything possible, including providing PPE?
- What happens when employees raise concerns about safety in their workplace and they’re not satisfied with the outcome?
- Can we require employees to have their temperature checked each day before entering the workplace?
Click here to watch our full webinar recording.
Will employers be expected to pickup some of the cost of furloughed employees after August?
Is anxiety about using public transport a valid reason not to return to the workplace?
Can employees be forced to take holidays?
Can I tell employees if a co-worker has tested positive for Covid19?
People who find it difficult to work at home all of the time but they’re coming into work some of the time, can they argue that this is consistent with the guidance?
Do we need evidence of health issues?
Should we consider obtaining consent from employees on their return to work?
Does the Health and Safety Representative have to be nominated by the employees?
If over 70’s return to the workplace, of their own choice does the business face a great liability if they get covid19, even if they’ve done everything possible, including providing PPE?
What happens when employees raise concerns about safety in their workplace and they’re not satisfied with the outcome?
Can we require employees to have their temperature checked each day before entering the workplace?
Learn more on our Future World of Work hub here.

Stadium Lockdown: a look at some of the[...]
Watch our video nugget on this topic here. To the delight of football fans across […]
Watch our video nugget on this topic here.
To the delight of football fans across Europe, live football returned to television screens over the weekend as the German Bundesliga season resumed. However all of these matches were played with empty stadiums, as fans were not permitted to attend the matches in line with social distancing guidelines.
As the period of lockdown continues in the UK, there is an increasing likelihood that, as we have seen in Germany, we will see a certain number of Premier League football matches played “behind closed doors”.
With a potential return of Premier League football across the country edging closer, there are many practical and commercial issues which all Clubs will need to consider in relation to hosting matches without fans being in physical attendance. Some of the keys issues include:
Ticketing
In addition to the loss of revenue from general ticket sales, Clubs will need to consider their general approach in respect of season tickets and hospitality packages. In particular, Clubs will need to carry out a review of their terms and conditions relating to the sale of season tickets and hospitality packages in order to establish the rights held by both the Club and each ticketholder in relation to the cancellation of matches (including any rights regarding refunds and/or any alternative remedies which may be available to ticketholders).
Given the current uncertainty about when it will be possible to stage large events and host sporting events with fans in the UK, Clubs should also consider their approach to the 2020/21 season. At this stage, there is a real possibility that the unusual circumstances of matches being played behind closed doors may need to be extended into next season. In particular, this will be relevant to those Clubs which operate an auto-renewal scheme in respect of their season tickets and those Clubs which “factor” the revenue generated by season ticket sales. Clubs will need a clear policy on ticketing for the 2020/21 season which covers circumstances in which games may be played behind closed doors and this will need to be communicated to fans swiftly to allow the fans sufficient time to make an informed decision in respect of their season ticket/hospitality package.
Sponsors
Playing matches behind closed doors may also have an impact on Clubs’ sponsorship and partnership arrangements. Sponsorship or partnership deals usually involve obligations on the Club to promote the brand of the sponsor/partner. Therefore it will be important for Clubs to consider their contracts with sponsors and partners in order to identify which rights and obligations under the contract will be affected if matches are to be played behind closed doors.
In reviewing the rights granted to under existing sponsorship and partnership contracts, Clubs will need to identify both:
- any rights which the Club will still be able to provide under the agreement even if games are played closed doors (e.g. social media, digital advertising and LED advertisements during matches); and
- any rights which the Club will not be able to provide if games are played behind closed doors (e.g. any match tickets and/or hospitality tickets that would normally be provided to the sponsor/partner under the contract).
Clubs will then need to consider how to approach any obligations under the contract which it feels it is unable to provide and identify whether the relevant contract provides the Club with any relief from liability in respect of those obligations (e.g. force majeure, material adverse change clauses or specific liability carve-outs). Clubs may also wish to consider whether there is a commercial deal that could be done with the sponsor or partner, in order to provide alternative, or deferred, rights to the relevant sponsor or partner without the Club incurring any liability. For example, the principles of social distancing may affect a Club’s ability to perform its obligations in relation to any player and staff appearances that have been agreed under the relevant contract, but could these obligations be:
- deferred, so as to be provided to the sponsor at a later date; or
- replaced by alternative rights (e.g. digital appearances)?
Existing Supply Chain
A substantial part of Premier League Clubs’ supply chains are often focussed upon the provision of goods and services related to match days and enabling Clubs to effectively host fans at the stadium on match days. Examples of agreements that may need to be considered and/or amended to reflect matches being played behind closed doors include agreements for the supply of:
- food and drink within the stadium;
- travel services for players;
- travel and hotel packages for fans;
- policing and other emergency services;
- retail services and/or Club merchandise; and
- payment processing services within the Stadium.
If matches are played behind closed doors for a significant period, it is likely that a substantial portion of these goods and services may no longer be required by Clubs during this period. Therefore Clubs will again need to consider the rights and obligations under each contract with its suppliers in order to identify any obligations that the Club cannot comply with if matches are played behind closed doors. Clubs should also identify any provisions under the contract which may provide relief from liability that may be incurred by the Club as a result.
One example of an important issue to consider is any minimum order volumes that may be granted to suppliers by the Club under the relevant contracts. Minimum order volumes are relatively common provisions in respect of pouring rights deals and other contracts for the supply of food and drink or merchandise for sale by the Club on match days. Clubs will need to consider the impact of hosting multiple home matches behind closed doors on its ability to sell products and meet any minimum order volumes for the relevant season, quarter or year (as applicable).
Fan Engagement and New Suppliers
In addition to any issues relating to existing supplier contracts, Clubs should also consider whether new suppliers may need to be engaged to deliver alternative goods and services. For example, if fans are not going to be engaging with the Club through attending the Stadium on match days, Clubs will need to consider how else they can engage with their fans and grow their influence. With social distancing measures likely to be in place for a significant period of time, digital engagement with fans is sure to be crucial and Clubs may need to evaluate their current offerings and procure additional resources and platforms by engaging additional suppliers where necessary.
With no opportunity for fans to experience the “magic” of stadium atmospheres on a match day, Clubs will need to invest in new ways to engage existing fans and “win” new fans. Again, this is likely to require Clubs creating significant levels of digital content and seeking out innovative ways to engage with its fans on a more personal level.
Already we are seeing an increase in social media activity and use of online platforms, with Premier League players replacing their in-person appearances with Zoom calls and clips of team online meetings being put out on Club channels for fan viewing. However there are many more opportunities which are likely to be explored over the next few months. Any new concepts and initiatives may require new digital platforms, software solutions and relationships with third party suppliers in order for Clubs to continue to improve its meaningful engagement with fans on a regular basis. As with any new commercial relationship, it will be important to ensure that any such new third party supply arrangements are governed by robust, but suitably flexible, contractual documentation to achieve the best commercial and legal position for the Club despite the current challenging circumstances.
Moving Forward
Overall, we appreciate that Clubs will be in the process of making numerous important commercial decisions over the next few weeks, as the details surrounding the return of Premier League football, and whether matches will be played behind closed doors, become clearer. These decisions will potentially have a significant impact on the Club’s brand, revenue and future strategy and therefore it will be important to ensure that decisions are taken based on an informed view of the rights and obligations under the various commercial agreements affected whilst preserving key commercial relationships going forward.
In addition to the significant impact on match day operations and revenues, Covid-19 is affecting Clubs’ commercial operations in numerous other areas. With this in mind, Clubs should also carry out a review of their other key commercial agreements (e.g. kit supply agreements, venue hire agreements and agreements relating to pre-season tours), and seek advice where necessary, in order to ensure that the Club is adequately protected from potential liability under those agreements and further ensure that it will continue to receive key goods or services that may still be required.

Mental health awareness week – How can businesses[...]
With Mental Health Awareness week starting today, what better time to turn up the volume […]
With Mental Health Awareness week starting today, what better time to turn up the volume and get talking about mental health at work. Kindness is this year’s theme and Walker Morris will be sharing resources and ideas daily in our lockdown communication to staff with a focus on mental well-being. What will you be doing for your employees?
The COVID-19 pandemic has placed the spotlight on mental health. In the home-working environment there may be a lack of distinction between work and home-life, while some may be struggling to feel motivated. For those who are unable to work remotely, particularly in roles where social distancing is not possible, anxiety and stress may well be high. In addition, it’s important to include staff who are temporarily not working, having been placed on furlough leave, and consider the negative impact this might have on their perception of their value.
With this in mind, we have outlined some top-tips and recommendations for businesses, across six key themes:
- Time management – With the new “WFH” lifestyle, many of us will be blurring the lines between work and home life – there’s a temptation to work non-stop. Managers need to engage with staff and ensure they are taking regular rest breaks and holidays. The focus needs to change – managers should be setting an example between balancing home and work life and this can be achieved by encouraging colleagues to be more open, more personal – sharing hobbies, weekend plans – encouraging life beyond the screen/the workplace. There’s no social escape in the same way as before – we can’t switch off by heading out for a drink with colleagues and friends after work and we no longer have our commute to allow us to mentally rev up or put on the breaks at the start and the end of the day. Managers therefore face a new challenge, to help motivate and encourage staff in their new working environments – this could be done by setting up team challenges, encouraging effective use of internal platforms (see social engagement below) and holding regular catch-ups.
- Communication – Communication with colleagues has changed – not only for those in home-working environments, but also in workplaces, where social distancing and new rules such as one-way systems and staggered shift-patterns are set to become the norm. This brings further challenges: it is far easier to pick up on employees’ moods from their body language than it is by email or even on a call, and new processes in the workplace may feel awkward and un-natural. Every employee is different and needs/wants different levels of interaction – it’s up to management to gauge that – and deal with people as individuals. Mental health first aiders can be trained to spot the first signs of mental health issues, and know how to reduce and manage the stress levels of the workers in their team – why not allocate this role to one (or a few) colleague(s) per team? Such individuals should check-in with all employees across the business, including those who are on furlough leave.
- Social engagement – Another way employers can turn to nurturing employees’ mental health whilst many employees remain working at their kitchen tables, is to create a virtual “safe space” for staff to enjoy a shared break and catch up. TED, an American media organisation, has set up a virtual space where staff can work alongside each other — separately, but not alone — in an effort to replicate working in a coffee shop or a shared office space (the usual chats by the coffee machine). Employers should encourage employees to talk and share positive experiences as well as their hardships. Similarly, many businesses are encouraging employees to tap into their inner-creativity: Lucozade Ribena Suntory has launched a Creative Juice page, which inspires individuals to use art, nature, cooking and creative film to get their creative juices flowing. [1]
- Recognition and praise – Let’s not forget about the vital work of those still making their daily commute – key workers (such as medical and social care professionals, teachers, delivery workers, transport and utilities workers, and workers involved in the manufacture and distribution of food and other essential goods), and others performing roles that cannot be carried out remotely. The public support for these workers has been enormous over the lockdown period, and long may the general attitude towards their hard work and dedication continue. However, the pressure and long hours can lead to mental and physical exhaustion. Checking in with employees is essential to their mental health and it is important to encourage employees to identify how they are feeling mentally and physically in order to take steps to alleviate the pressure from work and switch off. Many organisations have been sharing positive stories, including: The Food and Drink Federation’s recognition of the #hiddenheros in the food manufacturing industry, working across the supply chain to keep the nation fed; and businesses such as Burberry, who have re-purposed manufacturing lines to make PPE for the NHS. It’s great to share positive stories to recognise the value and achievements of employees – both across social media and also internally in your business.
- Effective monitoring, using technology – Servelec, a leading provider of digital care software, together with its mobile workforce solution provider Totalmobile, has launched an Employee Wellbeing App to help NHS trusts and local authorities support their dedicated staff during (and post) the current crisis [2]. This App captures employee’s feelings with a simple mood recording and wellbeing form. By allowing staff to record their mental and physical health, the App offers suggestions to help alleviate low mood and tracks when these have been used, providing access to guidance documents. Managers can then use the information captured to see the live working status of their team and report on wellbeing data. This is an excellent idea that could be adopted across the board, for both workers at home and in the workplace. It’s likely that we will continue to see the increased use of technology to assist employers to effectively monitor employees in the new world of work.
- Training and resilience sessions – There’s also the potential long-term impact on mental health to consider as lockdown eases and workers adjust to the ‘new normal’. Businesses should be putting in place vital support such as a comprehensive employee assistance programmes (or “wellness action plans” [3]), maybe an App (similar to that mentioned above) and training courses. Resilience training courses are an ideal way of encouraging employees to focus on their “inner game” – their decision making, self-awareness, emotional intelligence and their beliefs and assumptions. By identifying limiting beliefs and behaviours and learning how to gain a new perspective, individuals are able to achieve a more positive mind set (both in the workplace and in their personal lives) which leads to greater motivation, more fulfilment and an increase in job satisfaction. Leeds Law Society recently ran a 3-hour taster webinar session on resilience, with one-to-one follow-up sessions available upon request. If businesses were to invest in such courses, the impact on the workforce could be huge – greater productivity and an increase in profits – a win-win. It should be recognised that people are coping with work in different ways during the Coronavirus pandemic – according to Forbes Magazine [4], the pandemic has exposed the missing pieces in employee engagement and productivity: resilience and mind set. Employees who are thriving during the coronavirus crisis are the ones with the highest levels of resilience, optimism and perseverance. Focus therefore needs to turn to these three areas, now and in the long-term.
With the theme of kindness at the forefront this week, businesses should be taking those vital steps both in the immediate future and when implementing longer-term business strategy planning: encourage conversation; share positive stories; get to know your workforce; appreciate their individuality; and offer support to the most important asset to your business – your people.

Working from home – data protection considerations for[...]
What do businesses need to bear in mind as working from home becomes more commonplace? […]
What do businesses need to bear in mind as working from home becomes more commonplace?
In the not too distant past the phrase ‘working from home’ may have been met with scepticism in some quarters and images of employees lazily checking emails in bed while binge watching boxsets. However, the world has changed beyond recognition in the past few weeks as working from home has become the new norm for many of us. Sales of computer monitors almost doubled[1] in the weeks preceding the government-mandated lockdown as people started moving the ironing board and kitting out the box room as a fully-fledged home office. Now that these initial investments have been made, and more importantly it has been proven that vast numbers of the workforce can work from home for prolonged periods efficiently and productively thanks to reliable technology, it is difficult to imagine working life as we know it will ever be the same again. If there is one thing that can be certain in these ‘uncertain times’ it’s that working from home has demonstrated its value in the landscape of modern working.
For some businesses, working from home (or ‘agile’ working, as it is often known) has long been the norm and the practice has been fully embraced from the boardroom down. For these early adopters, the necessary compliance infrastructure is now tried and tested. For others, agile working is a more recent development, forcibly launched en masse due to the swiftness of the coronavirus pandemic.
Now that the dust is starting to settle, businesses are seeing the value of agile working, and thinking about where it might slot in to the working practices of the future. One key consideration for all organisations is ensuring that data protection compliance standards are maintained irrespective of location. When considering how to develop future agile working practices to maximise efficiency and employee satisfaction, there are some key data protection issues that must be borne in mind.
Key considerations for data protection outside the office environment
- Policies and procedures – Detailed agile working policies should be implemented to demonstrate your compliance considerations to regulators, and ensure employees are fully aware of what is expected of them when working outside the office. These policies should themselves be agile; they should be regularly reviewed and updated as things develop to ensure they remain fit for purpose. If employees are allowed to use their own devices when working from home (mobile phones or laptops for example) then a standalone Bring Your Own Device (BYOD) policy may also be appropriate if one is not already in place.
- Computer security measures – Setting up the IT infrastructure for your organisation involved careful considerations relating to security and continuity. However, the same detailed thought process is unlikely to have been undertaken by your employees when setting up their home systems. Where staff are working remotely, access to servers via a secure virtual private network (VPN), and ensuring that appropriate anti-virus and security software is installed on all devices will mitigate some security risks. Further considerations will be needed depending on the level of risk that home working poses in the context of your business to ensure that your approach is appropriate to the nature, scope, context and purposes of your data processing activities.
- Keeping hard copy and other information at home – Any personal data processed by an employee at home, or anywhere else, will constitute a processing activity undertaken by the organisation (and remember that the storing of personal data is in itself a processing activity). The same data protection principles therefore apply and any personal data must be kept as securely as it would be in the office. Data stored at home will also be subject to the ordinary principle of storage limitation and must be securely destroyed or deleted in line with your organisation’s retention policy. Secure destruction will involve more than just throwing the documents into the general waste bin – where employees don’t have the capability to securely destroy documents, then such documents should be kept safe until they can be taken back to the office for shredding.
- Transporting data – Care must also be taken when transporting personal data to or from remote working locations. We’ve all heard horror stories of people leaving sensitive documents on trains and buses and whilst this may not be an immediate problem with people travelling less frequently on public transport, risks will increase as the lockdown eases. Where personal data is being transported using removable storage devices such as USB sticks then these devices must be suitably encrypted to ensure the security of the data therein. Organisations should also be careful when making data accessible online and due diligence should be undertaken on any file sharing sites used, as well as prohibiting staff from forwarding work emails to personal email addresses.
- Collaborative working software – With the sudden increase in people working from home, the popularity of collaborative working software has skyrocketed. However, care must always be taken whenever new software is rolled out across your organisation. Ordinary due diligence processes should be followed to ensure that the proposed software affords adequate levels of protection to any personal data involved and a Data Protection Impact Assessment must be completed in advance. Where cloud based collaborative working software is involved, the software provider is likely to be acting as a processor on behalf of your organisation. The terms and conditions will therefore need to contain the mandatory provisions in article 28 GDPR and transfers outside of the EEA (to servers in the USA for example) will need to be reviewed to ensure adequate protection is in place.
- Privacy – Employees must ensure that their agile working environment allows for a sufficient level of privacy to avoid any unauthorised disclosures or data breaches. Confidentiality must be maintained when discussing personal data over the phone or on video calls, and laptop screens should be locked when not in use to avoid any inadvertent third party access. Privacy screens should also be used when working with personal data in shared areas or in close proximity to others (even family members). Regardless of where employees are working, any data breaches will need to be reported in the ordinary way.
- Maintaining reporting lines – As part of your organisation’s data protection compliance framework, clear reporting lines should be in place for the escalation of any data protection matters (such as data breaches or requests by data subjects to exercise their rights in respect of the processing of their personal data). These escalation processes must be maintained wherever staff are located. Where a breach is reportable, the ICO must be informed within 72 hours. For this strict timeframe to be met, breaches must be promptly escalated internally for assessment. Similarly, to avoid any failures to comply with requests by data subjects, employees need to be able to independently recognise these and forward them on as appropriate, even when working away from the office.
During the coronavirus pandemic, the ICO has confirmed it will take an empathetic and proportionate approach to regulation, and consider the impact the pandemic may have on organisations’ compliance resources when considering what action to take. As we start to move back towards a semblance of normality, the potential for any leniency is removed and expectations will return to their usual high standards. As agile working is normalised, care must be taken to ensure that data protection obligations continue to be met.
It’s far easier to implement a robust compliance framework for new working practices by building the two simultaneously. Waiting until employees have developed their own ways of agile working before considering the regulatory requirements may cause friction. Bad habits, once formed, are harder to break.
If you have any queries or require any assistance with developing your approach to agile working in a way that complies with data protection regulations then please do not hesitate to contact us.
[1] https://www.gfk.com/en-gb/insights/press-release/it-monitor-sales-almost-double-in-one-week-as-britain-moves-to-home-working/
Visit our Future World of Work hub here.

The future world of work
Back in April, we put together an “eight-point plan” for businesses to use when considering […]
Back in April, we put together an “eight-point plan” for businesses to use when considering their strategy planning for the future world of work. At the time, we noted that businesses would be considering what their “exit strategy” in a post-furlough world should be. As it turned out, the furlough scheme was to be extended for a full 12 month period – and many employers continue to make use of the scheme. We felt then, as we do now, that it is worth remembering that there are positives which can be taken from the changes which were forced upon us back in March. Businesses across every industry have had to adapt in significant ways – and whilst there are likely to be hard decisions to be taken in the near future, there are also many lessons to be learned from this. We should all therefore be considering which aspects of these new ways of working we want to (and should) take forward.
Since we created the “eight-point plan”, we have been thinking about each of the steps along the way and have focussed our briefings and webinars around these very pertinent topics. With the end of 2020 in sight, we therefore wanted to re-release the plan, which now has a full set of links to useful resources. The first four points focus on short-to-medium term actions and the second four points focus on longer-term goals. We hope that this plan helps you consider the question: What can we be doing now to ensure our business is fit for purpose and prepared for the future?
What does a post-furlough world look like?
- Review of workforce roles and numbers – We shall deal with the negative point first: consideration will of course need to be given to which roles your business has been able to operate without and whether there is likely to be a continued reduction in certain areas of work (and therefore a need to consult about potential redundancies, restructures and/or changes to terms of employment), rather than a quick bounce-back. On the flip side, for those people working in key areas (such as shop workers and the food manufacturing industry), we are already seeing demands for wage increases (to recognise their value) – those will have to be factored into planning. Read our recent article “Flexible furlough, post-furlough planning and alternative workforce measures” for more information.
- Up-skilling and re-training – Some roles and skills will have emerged as absolutely key to the running of your business. For example, almost every business will feel indebted to its IT teams. In addition, other employees might have found themselves taking on new tasks and responsibilities, such as developing media content for the business – particularly given the huge increase in the use of social media to stay connected. Are there people who could re-train or up-skill into more business critical roles? Or indeed new roles to service customers’ new demands? If there are skills gaps, employers may well need to look further afield and recruit from overseas. We have set up a business immigration hub to assist employers with this.
- “Just-in-case” model – Many businesses operate on a “just-in-time” model. Should you now be thinking about changing this to a “just-in-case” model in preparation for future unforeseen events such as these? Such a change in approach will inevitably affect your supply chains, production line requirements and contractual relationships with consumers, suppliers and agency workers. Looked at through a different lens, consideration of the issues businesses are now facing should be factored into the next iteration of disaster recovery planning. We discussed this in more detail in our webinar on: The impact of Covid-19 and Brexit on supply chains. You can watch the webinar here.
- Social distancing in the workplace – It seems inevitable that the concept of social distancing will remain imperative for a fair period of time. How can employers effectively implement this? Consideration should be given to staggered returns to work, flexible working/shift patterns (including staggering start and finish times and breaks), and better use of workspaces. This could actually be a useful “testing bed” for some of the “future ways of working” below. Read our Social Distancing article for more information and watch our webinar recording where this topic was discussed in detail.
Future ways of working
- Agile and flexible working – Many businesses had few or no staff working remotely before the pandemic. Of course, for some, such as manufacturing, it wasn’t possible, but for many it was due to a pre-conceived negative view or simple reluctance to tackle the challenges and technology. Attitudes are most likely to have changed. In addition, staff with childcare and other caring responsibilities will have been working flexibly in different ways and at different times. This will hopefully give employers the ability to recruit from further afield and also lead to a more diverse workforce. Just a note here to some comments that the Chancellor made during the first announcement of the furlough scheme, which are likely to be laying the foundations to a wider review of the gig economy/employment status debate. The Government will be likely to pursue changes, as it will raise more revenue via tax and NI and be a general vote-winner as no doubt the message will be, “if you want protection from the State, you have to contribute your share”. The net effect is that businesses should be careful before basing their economic recovery around a self-employed workforce. Watch Charlotte Smith’s video nugget for more information on agile working and read our articles ‘The Age of Agile Working’, and ‘How to deal with flexible working requests as people return to the workplace‘ which explore these issues more indepth.
- Technology and automation – Investing in technology, automating processes and digitalisation may have already been on the agenda, but the current situation has only added to the case for greater and faster investment. Automation and technology can lead to greater capacity, greater monitoring and data collection, and less room for error. This links to the suggestion of up-skilling the workforce and seeking to recruit those who have the skills needed to create this technology, operate and analyse new technology. Such advances will allow even more roles to be carried out remotely (including those which no-one would have previously considered capable of being carried out remotely, such as production line operators). Read our article on ‘The future of the factory’ and watch our recent webinar ‘Technology, automation and people’ which discuss this topic in more detail.
- Motivating and incentivising the workforce – In this uncertain time, people can struggle to feel motivated. It’s therefore important that employers think about how they can make employees feel valued and bring teams together – virtual social engagements such as group exercise classes and quizzes look set to replace traditional team days out! Employers will also want to consider fair remuneration and reward for those who have been key in keeping the business running. Given that cash is likely to be tight, thought should be given to non-cash benefits and even equity/LTIP arrangements for key workers who the business needs to retain to ensure success. This is also consistent with the concept of “stakeholder capitalism” that has been discussed at places such as Davos. Andrew Rayment and Charlotte Smith from our employment team discussed ‘Employee Engagement and future HR trends’ with a panel of HR Directors and Leadership Developers on a live Q&A webinar. You can watch the recording here. You can also read our recent article on employee and stakeholder engagement, and why businesses should prioritise social, environmental and ethical considerations.
- Mental health and wellbeing – Many of us will be blurring the lines between work and home life, so managers will need to ensure they are engaging with staff and consider ways of ensuring employees are taking regular breaks and holidays. There’s also the potential long-term impact on mental health, which employers should prepare for by encouraging employees to talk and share positive experiences, as well as putting in place comprehensive employee assistance programmes. This should be coupled with good old-fashioned communication, in whatever form that takes! Read our Mental Health Awareness week article for some top-tips and recommendations for businesses.
While changes can be difficult to implement, it is important for both employers and employees to embrace the new challenges ahead and maximise possibilities which, prior to this pandemic, may have seemed to be reserved only for the distant-future.
Visit our Future World of Work hub here.

Job Retention Scheme – Maximising the Prospects of[...]
It needs to be recognised that there are inconsistencies between the Government Guidance published on […]
It needs to be recognised that there are inconsistencies between the Government Guidance published on 15 April and the Treasury Direction of the same date (and of course the Guidance has been through various iterations over the last weeks, with requirements and points of emphasis changing). This note sets out our best view of how things will work (as at Noon on Friday 17 April 2020). To aid this view we have included information from unofficial reports of discussions at a Parliamentary Select Committee meeting with HMRC on 8 April 2020. There are likely to be further updates and clarifications from the Government and its representative bodies. We will update here when material changes are made, a downloadable version of this article is available here.
How will a claim be made?
- Employers will be required to submit information to HMRC about employees that have been furloughed and their earnings through a new online portal.
- The online system is expected to be operational by 20 April 2020 according to unofficial reports, with the first payments to be made on 30 April 2020, within 4 to 6 working days of submitting a claim. This will provide HMRC a short window in which to check for fraud.
- An employer and employee must have agreed in writing (which may be in electronic form such as email) that the employee will be furloughed and will cease all work. This is a development from previous guidance which seemingly only required the employer to notify the employee in writing of the fact that they were to be furloughed. The updated guidance confirms that employers are free to consider allocating any business critical tasks to staff that are not furloughed.
- For employers with weekly payrolls, unofficial reports say that claims can be made weekly. Those with monthly payrolls can make claims monthly. Unofficial reports also suggest that businesses can claim up to 14 days ahead (we assume of the period they are claiming for, but this has not yet been confirmed).
- Claims can be backdated to 1 March 2020 if applicable.
- It is expected that further practical guidance on the mechanics of the online portal will be issued by HMRC prior to the portal going live.
Who can be included in a claim?
- Claims can be made by all UK employers that have created and started a PAYE payroll scheme on or before 19 March 2020, have enrolled for PAYE online and have a UK bank account.
- Claims can be made in respect of individuals who were on the PAYE payroll on or before 19 March 2020, and who were notified to HMRC on a real time information (“RTI”) submission on or before 19 March 2020 (i.e. an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020). This includes full-time and part-time employees and individuals on flexible or zero-hour contracts. In order to be eligible, individual employees must be furloughed for a minimum period of 3 consecutive weeks.
- Claims can only be made for employees who have been furloughed, i.e. those who have been “placed on a leave of absence” and who do not undertake any work for or on behalf of their employer or any associated or linked employer (including providing services or generating revenue), but who have been kept on payroll.
Included
- Employees who were on payroll (i.e. notified to HMRC on an RTI submission on or before 19 March 2020).
- Employees who were employed as of 28 February 2020 and on payroll and made redundant or stopped working for the employer after that period and prior to 19 March 2020 can qualify for the scheme, if the employer re-employs them and puts them on furlough. This applies even if the individual is not re-employed until after 19 March 2020.
- However, the latest guidance clarifies that if an individual has had multiple employers over the past year, has only worked for one of them at any one time, and is being furloughed by their current employer, a former employer should not re-employ them, put them on furlough and claim their wages through the scheme.
- It would seem logical that this only applies to individuals who were made redundant or stopped working as a result of the coronavirus outbreak, and not for any other reason. However, the guidance does not expressly include such a requirement. It is not clear whether any statutory (and contractually enhanced if applicable) redundancy payments or other termination payments will need to be repaid as a condition of the employee being re-hired and placed on furlough.
- Employees who started unpaid leave after 28 February 2020 can be put on furlough instead. They should then be paid at least 80% of their regular wages, up to the monthly cap of £2,500. Although the guidance is not clear on this, it is logical that this only applies to individuals who were put on unpaid leave as a result of the coronavirus outbreak, and not for any other reason.
- The guidance states that employees on sick leave or self-isolating in line with Government guidance will be able to get SSP (subject to other eligibility conditions). Short-term illness or self-isolation should not be a consideration in deciding whether to furlough an employee, however if an employer wants to furlough an employee for business reasons and they are currently off sick, they can do so. In that case, SSP should cease and the employee would be classed as furloughed according to the latest guidance. The guidance also states that employers can decide whether to furlough employees who are shielding or on long-term sick leave. Claims can be made under both the furlough scheme and the separate SSP rebate scheme (under which 2 weeks’ SSP per employee can be claimed back) for the same employee, but not for the same period of time. According to the guidance, if an employee becomes sick whilst furloughed, it is up to the employer to decide whether to move them to SSP or keep them on furlough at their furloughed rate. If the employee is moved to SSP, employers can no longer claim for the furloughed salary but may qualify for the separate rebate of up to 2 weeks SSP. If they remain furloughed, employers will remain eligible for salary costs under the furlough scheme. However, the Treasury Direction suggests that where the employer gives the instruction to cease work at a time when SSP is payable or liable to be payable to the employee, the period of furlough cannot commence until the actual or deemed period of SSP has ended. That is so irrespective of whether the employer has claimed SSP. It therefore remains unclear whether an employee who is currently off sick and receiving or eligible for SSP can be put on furlough.
- Employees who are shielding (or are required to stay at home because a person in their household is shielding) in line with public health guidance can be placed on furlough. Previous versions of the guidance contained the condition that such individuals would otherwise be made redundant, however this stipulation has been removed.
- Employees who are unable to work because they have caring responsibilities resulting from coronavirus can be furloughed. There does not appear to be any additional requirement for a business case for redundancy for this category.
- Employees on maternity, paternity, adoption or shared parental leave will receive the normal statutory payments if eligible, and will not ordinarily be eligible for furlough during the period of such payments. However, if they also have an enhanced contractual entitlement, they can be furloughed and the employer can claim the enhancement back under the scheme.Claims under the scheme for employees furloughed on return from such statutory leave should be calculated on their normal gross salary, not the pay they received whilst on statutory leave.
- Foreign nationals working in the UK on all categories of visas can be included (grants under the scheme are not counted as “access to public funds” which is generally prohibited for such individuals).
- Employees who TUPE to a new employer after 19 March 2020 can be furloughed and claimed for under the scheme.
- Employees on fixed term contacts can be furloughed; their contracts can be renewed or extended during the furlough period without breaking the terms of the scheme.
- In addition to employees, the following can be furloughed, provided they are paid via PAYE:
- office holders (including company directors and salaried individuals who are directors of their own personal service company);
- salaried members of limited liability partnerships;
- agency workers; and
- “limb (b) workers”.
Excluded
- Employees who were not on PAYE payroll on 19 March 2020 and who were not notified to HMRC on an RTI submission prior to that date (subject to some people who may have been re-hired). Those employees are to be signposted to other benefits.
- Employees who started unpaid leave on or before 28 February 2020 cannot be furloughed until the date on which it was agreed they would return from unpaid leave.
- Employees who are working on reduced hours or for reduced pay. Practically, an employer who has already introduced short-time working may wish to bring that arrangement to an end and seek to furlough a proportion of the workforce instead, thereby bringing them within the ambit of the scheme.
What costs will be recoverable?
- Employers can claim the lower of 80% of a furloughed employee’s gross regular wage, or £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions (i.e. 3%) on that subsidised wage.
For full-time and part-time salaried employees:
- The employee’s actual salary before tax in their last pay period prior to 19 March 2020 should be used to calculate the 80%.This suggests that any subsequent pay rises, including the increases to National Minimum Wage from 1 April 2020, do not need to be included in the calculation.However, if an employer has already calculated their first claim based on the employee’s salary as at 28 February 2020 based on the advice in previous versions of the guidance, and this differs from the salary in the last pay period prior to 19 March 2020, they can choose to still use that calculation for their first claim.
For employees whose pay varies
-
- the same month’s earning from the previous year; or
- average monthly earnings from the 2019-20 tax year. If the employee has been employed for a full twelve months prior to the claim, the employer can claim for the higher of either:
If the employee has been employed for less than a year, the employer can claim for an average of their monthly earnings since they started work until the date they are furloughed. If the employee has been employed for less than a month, a pro-rata for their earnings so far can be used to claim.
-
- The guidance clarifies that any “regular payments” that an employer is obliged to pay employees can also be claimed, including wages, past overtime, fees and compulsory commission payments. This appears to apply to both salaried workers and those who have variable pay.
- The following costs are not recoverable under the scheme: payments that are conditional, discretionary bonuses (including tips), discretionary commission payments, non-cash payments, benefits in kind, and benefits provided through salary sacrifice schemes (including pension contributions). Where the employer provides such benefits to furloughed employees, these should be in addition to the wages that are recoverable under the terms of the scheme.
- The guidance clarifies that employees are only entitled to the national minimum wage, national living wage or apprentice minimum wage for the hours they are working. Therefore furloughed workers, who are not working, can be paid the lower of 80% of their salary or £2,500 even if, based on their usual working hours, this would be below their appropriate minimum wage. However, any time that is spent undertaking training should be paid at the appropriate minimum rate (taking into account the increase in minimum wage rates from 1 April 2020). Clearly caution should be exercised so that training doesn’t become seen as work.
- Claims should be made using the amounts in the payroll either “shortly before or during running payroll”. If appropriate, workers’ wages should be reduced to 80% of their salary within the payroll before they are paid, as the adjustment will not be made by HMRC.
Once the employer has worked out how much of an employee’s salary they can claim for, they must then work out the amount of Employer National Insurance Contributions and minimum automatic enrolment employer pension contributions they are entitled to claim. Guidance on how these should be calculated and working examples can be found here and the Treasury Direction also contains the relevant rules, which can be found here
- Employees will still pay taxes in the usual way out of the wages they receive (including employee automatic pension contributions).
- Guidance now confirms that holiday can be taken while an employee is on furlough leave, but that it must be paid in line with the usual rules in the Working Time Regulations – as such, even if you have agreed to reduce wages during the furlough period, any days taken as holidays must be paid at the employee’s usual rate of pay. This means that employers would need to “top-up” any holiday days but would not be able to claim the amount topped-up through the scheme. However, it should be noted that the government has reserved the right to amend its position in respect of holiday pay and furlough due to the unprecedented situation.
What evidence will be required?
- The guidance states that in order to claim, employers will need:
- their employer PAYE scheme reference number;
- the number of employees being furloughed;
- the dates the employees have been furloughed to and from;
- National Insurance Numbers for the furloughed employees;
- names of the furloughed employees;
- payroll / employee numbers for the furloughed employees (optional);
- their Self Assessment Unique Taxpayer Reference or Corporation Tax Unique Taxpayer Reference or Company Registration Number;
- the claim period (start and end date);
- amount claimed (per the minimum length of furloughing of 3 consecutive weeks);
- their registered name and address;
- their bank account number and sort code;
- their contact name; and
- their phone number.
- They will also need to calculate the amount they are claiming (see above “What costs will be recoverable?“).
- If an employer has fewer than 100 furloughed staff, they will be asked to enter details of each employee they are claiming for directly into the system – this will include their name, National Insurance number, claim period and claim amount, and payroll/employee number (optional).
- If an employer has 100 or more furloughed staff, they will be asked to upload a file with the information rather than input it directly into the system. HMRC will accept the following file types: .xls .xlsx .csv .ods
- The file should include the following information for each furloughed employee: name, National Insurance number, claim period and claim amount, payroll/employee number (optional).
- Employers will need to have all of this information ready before starting to make the claim under the portal, as the session will time-out after 30 minutes and cannot be saved.
- Once employers have submitted the claim, a claim reference number will be provided which must be noted or print-screened (as it will not be subsequently provided to you in an email confirmation).
Other relevant information about the claim
- Employers cannot make more than one claim in respect of a “claim period”. The guidance does not offer clarity as to what intervals employers should claim in, save to say that employers should make their claim shortly before or during running payroll and that they must claim for all employees in each period at one time, as changes cannot be made to the claim. As such, it seems that employers who run a monthly payroll on the last day of the month should submit their claim either on or shortly before the last day of the month. [
- Employers should retain all records and calculations in respect of their claims, including records of the amount claimed for each furloughed employee and the period for which each employee is furloughed, for at least five years.
- HMRC cannot provide employees with details of claims made by employers on their behalf, therefore employees should be kept informed and asked not to contact HMRC.
- Where an agent is authorised to act for an employer for PAYE purposes, the agent will be able to make a claim on the employer’s behalf. The employer will need to tell the agent which bank account they would like the grant to be paid into. Where an employer uses a file only agent (who files their RTI return but doesn’t act on any other matters) the file only agent won’t be authorised to make a claim for the employer and the employer will need to make the claim themselves.
- To be eligible for the grant under the scheme, employers must confirm in writing to their employees that they have been furloughed, and the guidance states that a record of this communication must be kept for 5 years. However, please note the requirement for the employee and employer to agree to the furlough and cessation of all work in writing as set out under heading 1 above – this evidence should also be kept for the same period.
- HMRC will check the claim and pay the grant via BACS payment into a UK bank account if the employer is eligible.
- The employer must pay the employee all the grant it receives for their gross pay, no fees can be charged from the money that is granted. Furloughed staff must receive no less than 80% of their reference pay (up to the monthly cap of £2,500).
- Payments received by a business under the scheme must be included as income in the business’s calculation of its taxable profits for Income Tax and Corporation Tax purposes, in accordance with normal principles.
How to mitigate against the risk of a claim being denied (or deemed to be “fraudulent or erroneous”)?
- It seems unlikely that HMRC will be able to undertake a forensic analysis of the circumstances of each employee placed on furlough, however there are suggestions that the initial claim will undergo some element of checking for fraud before it is paid.
- HMRC can ask employers to provide any such information as it may require at any time (whether before or after payment of the claim) to establish entitlement to payment under the scheme.
- The Government has indicated there will be certain safeguards, including a whistleblowing hotline for employees if they are being made to work during furlough. In such instances, claims would not be paid. The employees’ guidance expressly encourages employees to report their employers if they suspect they are abusing the scheme.
- Further, the Government can retrospectively audit all aspects of the scheme with scope to claw back fraudulent or erroneous claims. Unofficial reports suggest that they could do this for up to five years. This suggests that the Government does intend to undertake some form of checks made by at least some employers, which could result in repayment on the basis of fraud or error. Fraudulent claims may carry criminal sanctions depending on their severity, according to unofficial reports.
- Although there is currently no guidance on this and no mention of a financial means test, in order to verify that claims have not been made fraudulently or erroneously, the Government may request evidence that a particular business has been adversely affected by the coronavirus outbreak, that it has faced a reduction in demand and therefore work, that some of its employees have been unable to work because of matters associated with the coronavirus outbreak (such as those who are shielding, living with someone shielding or those who have caring responsibilities) if applicable, and/or that its ability to continue meeting salary costs has been compromised.
- Employers therefore ought to keep written records of the following to be prepared in the event that their claim is selected for further scrutiny by the Government, and start collating such evidence now:
- Evidence that their business, or part of their business, had to close due to the pandemic;
- Their financial situation for the period preceding and during any period of furlough leave, and evidence that any downturn in finances is linked to the coronavirus outbreak;
- The business case for furloughing (such as a downturn in the work/particular types of work undertaken by the employer);
- If applicable, evidence that certain staff were unable to work due to shielding, living with someone who is shielding or due to caring responsibilities;
- The criteria applied to the selection of particular individuals for furlough;
- The criteria applied in determining the length of any period of furlough; and
- Details of how they have calculated each claim made under the scheme.

Are you ready for ‘The Next Normal’
Website to offer free expert assistance on how to survive the COVID-19 crisis and beyond […]
Website to offer free expert assistance on how to survive the COVID-19 crisis and beyond
Digital, financial and legal specialists have collaborated to develop an innovative platform offering free expert advice to businesses on how to survive and thrive during the COVID-19 crisis and beyond.
Aptly named ‘TheNextNormal’, the website pulls together expert advice from digital agency Calls9, accountancy firm Armstrong Watson and law firm Walker Morris. It answers a range of business critical questions on what organisations need to do right now to not only survive the COVID-19 crisis but also to thrive beyond it.
The information covers key business critical areas such as finance, people, premises and infrastructure, products and services, customers and suppliers and staying compliant, all in a Q&A format to enable businesses to readily access the answers they need quickly.
‘TheNextNormal’ is free to use and is available here:
Adam Roney, Founder & CEO of Calls9 commented:
“We recognised that the immediate crisis created a need to bring a range of business critical information together in an easily digestible format. At a time when decision makers’ email in-boxes are overflowing, they don’t have time to research several different firms’ websites to find the information they need. By pulling the material together and keeping it regularly updated, businesses can quickly access the information they need from one place.
“As we look forward to the time when some of the current restrictions are lifted, we will be providing advice on what ‘the next normal’ looks like in terms of economic, social and cultural changes and what that means for the business community. What are the changes in the way we work, the economic environment we’re operating in, our supply chains, the technology we use and how all that impacts the business decisions we make?”

Walker Morris joins global business coalition to provide[...]
Walker Morris makes C-19 Business Pledge Walker Morris has joined over 300 organisations globally who […]
Walker Morris makes C-19 Business Pledge
Walker Morris has joined over 300 organisations globally who have made their C-19 Business Pledge – a powerful global business coalition to deliver grassroots support for action on the ground.
Founded by former UK Cabinet Minister, Rt Hon. Justine Greening, and UK entrepreneur David Harrison, the aim of the C-19 Business Pledge is to encourage businesses and universities to be a force for good by making a commitment to doing what they can to tackle Coronavirus (COVID-19) pandemic.
The Pledge focuses on three key aspects:
- Employees – including practical support and advice on financial security, mental health, personal wellbeing as well as reintegration back into work for those who have experienced an extended period away from the workplace
- Customers – including clear and simple advice and dedicated support for customers
- Community – including practical support, such as food deliveries, collections and financial assistance for organisations that specialise in supporting vulnerable people.
The Coronavirus pandemic continues to affect the contractual and legal obligations of businesses regionally, domestically and internationally. The challenges with which businesses are now being faced are largely unprecedented considering the speed and severity of the outbreak. Companies need to respond quickly and efficiently to this disruption and mitigate the risks caused to their businesses.
We have produced a Coronavirus Q&A guide which summarises some of the most common queries from our clients with our brief guidance. This can be downloaded here and is also available on our Walker Morris on The Go App.
We have also collaborated with digital and financial specialists to develop an innovative platform offering free expert advice to businesses on how to survive and thrive during the Covid-10 crisis and beyond. Aptly named ‘TheNextNormal’ the website pulls together expert advice from digital agency Calls9, accountancy firm Armstrong Watson and law advice from Walker Morris. It answers a range of business critical questions on what organisations need to do right now to not only survive the COVID-19 crisis but also to thrive beyond it, covering key business critical areas such as finance, people, premises and infrastructure, products and services, customers and suppliers and staying compliant, all in a Q&A format to enable businesses to readily access the answers they need quickly.
We also have a free of charge helpline for anyone to call with questions, which goes directly through to senior lawyers within the business. Find out more here.
Read more about our Pledge here.

Coronavirus and contractual obligations: What businesses need to[...]
Walker Morris’ Commercial and Dispute Resolution specialists James Crayton and Gwendoline Davies offer essential legal […]
Walker Morris’ Commercial and Dispute Resolution specialists James Crayton and Gwendoline Davies offer essential legal and practical advice for businesses concerned about Coronavirus and contractual obligations.
What is the commercial context?
By the end of February 2020, new cases of Coronavirus/COVID-19 reported outside China exceeded new cases in China. Despite international efforts to contain the virus, the World Health Organisation formally declared the outbreak to be a public health emergency of international concern and the number of international confirmed cases continue to soar daily. In Europe, many countries have been placed on lockdown (with some taking more draconian measures than others) and vulnerable people have been advised to stay at home. For some, the lockdown is set to continue for at least a number of weeks, whereas countries such as Italy which is a few weeks ahead of the UK, have now started to relax the measures, with some shops such as children’s clothing shops being allowed to reopen. In the UK, sporting and social events have been postponed and cancelled; schools and many offices have closed, and strict guidelines are in place encouraging people to stay at home unless travel is essential and/or work cannot be performed from home. Quite apart from those suffering with or succumbed to the illness, there is no doubt that the human impact of this virus is significant, and is being felt increasingly close to home. But what about the impact on businesses?
It is estimated that some 60 million people in China have faced travel restrictions and around 55 companies in Shanghai alone reported in mid-February that their global operations had been affected – largely by a shortage of manufacturing workers [1]. With businesses around the world being heavily reliant on trade with China, and with existing supply chain inventory now becoming depleted or exhausted, economies and businesses across the world are starting to experience the knock-on effects.
The Port of Los Angeles, the busiest port in the US, expects to report a 25% drop in business for February 2020 [2] and the US Central Bank slashed interest rates in the face of mounting concerns about the economic impact of the virus. In the UK, JCB halted its production line and cut staff working hours because a shortage of components from China has meant that production forecasts cannot be fulfilled. Fiat Chrysler has warned that some of its European plants could be forced to cease production and Nissan has closed a factory in Japan. These are just a few recent examples of the countless reported incidences in which the Coronavirus is impacting international trade.
Apart from the impact on individual businesses, there are a number of factors which, together, mean that the worldwide economic impact of Coronavirus is likely to be more severe than has been the case with other, past epidemics: increased globalisation over recent years; the growth of China’s economy to more than 16% of global GDP; China’s output amounting to around a quarter of the world’s manufacturing; China’s dominance in certain industries (including high technology, electronics and robotics, automotive components and production, pharmaceuticals, and second tier supplies such as batteries and other underlying components); downward pressure on costs; increased outsourcing; and so on.
Over the coming weeks, therefore, businesses are likely to become increasingly concerned about the impact of the Coronavirus on their supply chain arrangements and commercial viability, and many businesses are likely to be feeling the effect already.
Whether or not contracts or common law remedies allow parties flexibility within, or the ability to terminate, arrangements which are affected by the virus, and by the resultant economic climate, will be key.
What do businesses need to know?
Frustration
The English common law doctrine of frustration provides that, on the occurrence of a ‘frustrating event’, parties are no longer bound to perform their obligations and a contract is therefore effectively terminated.
A frustrating event is one which: occurs after the contract has been formed; is so fundamental as to go to the root of the contract; is neither party’s fault; and renders further performance impossible, illegal or makes it radically different from that which was contemplated by the parties at the time the contract was made.
Importantly, however, the doctrine operates within very narrow confines and the courts will not lightly relieve parties of their contractual obligations.
In particular, frustration is not available where a contract has otherwise made express provision for the consequences of the occurrence of the event in question; where an alternative means of performing the contract is possible; or if the contract merely becomes more expensive or less commercially viable to perform. The bar for a successful frustration claim is high.
In addition, because no one party is at fault in an incidence of frustration, neither party may claim damages, and if a party incurred obligations before the time of frustration, it remains bound to perform them [3].
It is possible, however, in light of the scale of the outbreak and the unique underlying economic context, that the impact of the Coronavirus could, depending on the facts of individual cases, found successful frustration claims.
Force majeure
Where frustration does not apply or cannot be established, an express force majeure clause may otherwise excuse one or more parties from performance of a contract following the occurrence of certain events which are outside a party’s control. There are some important points to note:
- A force majeure provision cannot be implied – an express clause will be required.
- A force majeure clause may have a variety of consequences. For example, it may enable the parties to terminate the contract altogether; it may allow the contract or liability under it to be suspended while the force majeure event continues; it may provide for the adjustment of certain terms as a result of changing economic or market conditions; and/or it may allow for the extension of contractual deadlines.
- The China Council for the Promotion of International Trade has reportedly been issuing ‘force majeure certificates’, which seek to shield companies not performing contractual duties from liability by ‘proving’ force majeure. Businesses should note, however, that such certificates in themselves are not conclusive in the English courts, and the usual components of a force majeure claim will still need to be established:
- The burden of proof is on the party seeking to rely on the force majeure clause.
- The term ‘force majeure’ has no recognised meaning in English law and should therefore be expressly defined in the contract. Commercial contracts typically define exceptional events such as ‘acts of God’, natural disasters, terrorism, strikes, government acts, building collapse, fire, and the like as force majeure events. Clauses vary as to whether they are ‘exhaustive’ (where all the events that could count as force majeure are listed), or ‘non-exhaustive’ (where the events listed are illustrative examples of the types of circumstances outside the control of the parties that may count as force majeure). The International Chamber of Commerce includes epidemics within its sample exhaustive force majeure clause – a fact which may be of evidential value in cases where there is a ‘catch all’ provision within the clause and there is a dispute about whether the Coronavirus is caught.
- Depending on the wording of the clause, a party seeking to rely on a force majeure clause may need to prove that it has taken all possible or reasonable steps to prevent or mitigate the effect of the force majeure event.
- Force majeure provisions also often include specific notification requirements and/or timescales which, if not strictly complied with, may prevent an affected party relying on the clause altogether.
- Finally, following a recent Court of Appeal case [4], to successfully rely on a force majeure clause a party must be able to prove not only that the event in question caused the contractual breach/non-performance, but also that it was the only cause. A party cannot invoke force majeure if it would not otherwise have been ready, willing and able to perform its contractual duties if the exceptional event had not occurred.
What practical advice arises?
Where, as a result of the impact of the Coronavirus, a business wishes to extricate itself from, or avoid potential breach of, or re-negotiate the terms of, a contractual arrangement, frustration or force majeure might well assist. Neither of these are necessarily easy options, however, and specialist legal advice will be required.
The following practical tips represent good practice generally, when it comes to anticipating, attempting to cater for, and reacting to an uncertain and ever-changing commercial marketplace.
In terms of existing arrangements:
- Parties concerned about the potential effects of the Coronavirus on any aspect of their business or supply chain should undertake an urgent contract review. As well as checking for the existence and terms of any force majeure provisions, parties may wish to confirm the existence and implications of any other contractual provisions which may assist. These might include (non-exhaustively) break clauses, price adjustment clauses, variation/no-oral modification clauses [5], limitation/exclusion of liability clauses [6], dispute resolution clauses [7], material adverse change clauses, and the like.
- When reviewing existing contracts, parties should note that what appears, on the face of it, to be a force majeure clause, may in fact be an exception or exclusion clause; or it may be a clause which covers contractual frustration. Each of these types of provision has different legal and practical implications, and specialist advice will be needed.
- Where supply chain or other contractual issues do arise, parties should consider commercial and reputational risks, alongside legal issues. For example, in such exceptional circumstances, parties may wish to consider being flexible about restructuring deals or debts so as to preserve relationships, even where there is no legal right or obligation to do so.
- Any business wishing to invoke force majeure (or to ascertain the validity of any force majeure claim made against it) should ensure compliance with any specific notification or other contractual requirements and time-scales.
- It will be prudent for any party wishing to rely on or to rebut a force majeure claim to keep clear records of all relevant factual and economic evidence as the effects of the virus unfold.
- Parties should also consider the potential for alternative ways of performing affected contractual obligations and/or for mitigating any loss or damage.
- As well as primary contractual arrangements, parties should check their various insurance contracts. In some cases, invoking or receiving a force majeure or a frustration claim can impact insurance policies. In particular, parties should ascertain any notification requirements.
- Finally, businesses should also consider their duty of care to employees (and, potentially, to visitors). Employers should monitor the development of the outbreak and government advice carefully, and should take proportionate action. Failure to do so could expose the business to employment contract claims, negligence actions, health and safety/regulatory claim and/or could invalidate insurance policies.
In terms of new arrangements:
- Parties should seek to specify the kind of events that they consider to be within the scope of force majeure. They should be defined precisely and, where relevant, should capture industry-specific, as well as more general, risks.
- The English courts do not look favourably on reliance on force majeure clauses to escape contractual obligations that have simply become more expensive or difficult to perform. Parties can, however, negotiate and expressly provide for a clause of this kind.
- To offer flexibility, parties should consider including within the contract a specified time period after which the contract terminates automatically; or providing for one or more of the parties to have an option to terminate; or both.
- Parties should consider providing for the terminating party to have some form of redress, for example if goods or services have already been paid for at the time of the force majeure event.
- Customers should consider seeking provisions which give them priority in the event that a force majeure event impacts on the supplier’s ability to supply – so that the customer is first in the queue for scarce resources in a time of force majeure, and is first to have supply recommenced following the end of the force majeure event.
- Where parties are part of a supply chain, complexities can arise where each contract in the chain has different terms and/or is subject to different governing laws. When negotiating new deals, parties should aim for consistency and suitability across the chain, wherever that is possible and bargaining position allows.
- An appropriate ADR (alternative dispute resolution) clause should be considered so as to come into play in the event of dispute over force majeure or similar clauses and frustration arguments.
WM comment
Relying on a purported force majeure or similar clause, or attempting a frustration claim, is not an easy, nor by any means a guaranteed, ‘get out’ for contracting parties when times get tough. By far the better advice is to try to anticipate, at the point of drafting, the types of circumstances in which the parties may require flexibility to renegotiate key terms; may wish to extricate themselves entirely from the arrangements; and/or may wish to avoid or limit liability for any breach or non-performance, and then to cater for those eventualities in the contract.
Other commercial issues which the Coronavirus has highlighted to businesses are the risks of becoming overly dependent on any one source or country of origin for vital supplies, and the delicate balance which should be struck between cost and the supply chain resilience that comes from shoring-up with increased inventory. Undertaking an end-to-end review of the supply network will help businesses to determine the right level of redundancy to build into their chain, so as to offer maximum flexibility and facilitate business continuity in the face of Coronavirus or any other unexpected and significant event. Contracts which tie parties into exclusivity need to be carefully considered in this context.
If you would like any further advice or assistance in relation to any of the issues raised in this briefing, please do not hesitate to contact James or Gwendoline, who will be very happy to help.
[1] The Manufacturer, 25 February 2020
[2] Financial Times, 2 March 2020
[3] the Law Reform (Frustrated Contracts) Act 1943 does, however, provide some limited scope for parties to recover monies paid under the contract prior to the frustration
[4] Classic Maritime Inc v Limbungan Makmur [2019] EWCA Civ 1102
[5] See our earlier briefing for further information on variation/anti-variation provisions
[6] See our earlier briefing for further information on limitation/exclusion clauses
[7] See our earlier briefing for further information on dispute resolution clauses

Public Procurement Guidance on Managing Covid-19 in Contracts[...]
PPN 02/20 is addressed to public bodies which are required to comply with the Public […]
PPN 02/20 is addressed to public bodies which are required to comply with the Public Procurement regime. Despite the tenor of its language, the PPN is Guidance only but seeks to offer a consistent basis upon which relief and enhanced payment terms might be given to help all parts of the supply chain remain above water.
Below is a webinar given by David Kilduff, Consultant at Walker Morris, for Efficiency North – a procurement organisation with a wide range of public body members.
The webinar answers many questions that flow from the PPN including:
- Should the public sector identify ‘suppliers at risk’?
- How much diligence should be undertaken?
- What is the extent of relief and terms of advance payment?
- How long should relief be given for?
- How does the guidance sit with contracts about to be let?
- Is it expected that advance payments may be written off?
- How does the PPN sit with underlying powers and governance issues?
Walker Morris is accessible to public bodies under Lot2a of the CCS ‘whole of public sector framework’. For an informal preliminary view on any issue please contact David Kilduff david.kilduff@walkermorris.co.uk 07703 099600.

The Furlough Scheme Portal – Get Ready for[...]
Today is the much anticipated “go live” date on the furlough scheme portal – here is […]
Today is the much anticipated “go live” date on the furlough scheme portal – here is the link.
However, not only was it announced last week that the scheme would be extended until at least 30 June 2020, but there were a number of further Government publications released over the weekend, meaning that there are now a raft of documents for employers to consider when submitting their claims today (and beyond).
With change happening so often, we thought it would be useful to pull things together to help you piece the puzzle together (with links to the relevant documents):
- On Friday night (17 April 2020) the Government released two new guidance documents:
- In addition, both the employers’ guidance and employees’ guidance were updated further on 17 April 2020 (version numbers five).
- The purpose of the employers’ guidance is to provide information about eligibility for the scheme – information about the calculation of the claim and finer detail has been moved to the document at 1(b).
- The employees’ guidance now actively encourages employees to report their employers to HMRC if they suspect they are abusing the scheme.
- A Treasury Direction, made pursuant to the Coronavirus Act 2020, was published on 15 April 2020.
As such, there are now five documents in play. We have therefore sought to continue to pull together the key information from all of those documents in an updated version of our document “How to maximise your prospects of success of making a claim under the scheme” – this can be found here. This is designed to give you a practical guide to submit the claim.
On a headline level, we have picked out five key updates to note:
- The scheme is now open until at least 30 June 2020.
- Whilst there are some inconsistencies between the Treasury Direction and the Guidance in respect of the issue of written consent to be furloughed, the safest course of action is to ensure that you have obtained written consent (which can be via email) from all furloughed employees. Whilst the Guidance has re-opened the possibility of implied consent being sufficient, written consent is obviously better from an evidential point of view. Either way, the key is that there must be an agreement in place between the employer and employee in respect of the furlough leave. More information about the legal requirements when placing employees on furlough leave can be found in our article here.
- Guidance now confirms that holiday can be taken while an employee is on furlough leave but that it must be paid in line with the usual rules in the Working Time Regulations – as such, even if you have agreed to reduce wages during the furlough period, any days taken as holidays must be paid at the employee’s usual rate of pay. However, the Government has, unhelpfully, reserved the right to amend its position in respect of holiday pay and furlough due to the unprecedented situation!
- In terms of headline practicalities:
- To access the portal on gov.uk employers will need to have a Government Gateway ID and password and an active PAYE enrolment.
- Employers are expected to have worked out the value of their claim and have all of the relevant information ready to go prior to accessing the portal, as it will “time out” after 30 minutes and will not save any semi-completed claim.
- Once employers have submitted the claim, a claim reference number will be provided which must be noted or print-screened (as it will not be subsequently provided to you in an email confirmation).
- The Government’s guidance document in respect of how to calculate the claim is not straightforward – it will require your payroll staff to take time and care over the calculations. There are worked examples within that guidance which should be carefully tracked-through.

Innovative firms promised extra funding support
On 20 April 2020, the Chancellor of the Exchequer, Rishi Sunak, announced a new £1.25 […]
On 20 April 2020, the Chancellor of the Exchequer, Rishi Sunak, announced a new £1.25 billion support package designed to protect firms driving innovation during the Covid-19 pandemic. The package includes a £500 million investment fund (called the Future Fund) for high-growth companies impacted by the crisis, made up of funding from government and the private sector and £750 million of grants and loans for small and medium enterprises (SMEs) focusing on research and development.
The Chancellor said the targeted and tailored help “would ensure firms in some of the most dynamic sectors of the UK economy – ranging from tech to life sciences – are protected through the crisis so they can continue to develop innovative new products and help power UK growth“.
The Future Fund
According to the Government’s website, the £500 million Future Fund has been designed to help high-growth companies across the UK receive the investment they need to continue during the crisis. Delivered in partnership with the British Business Bank and launching in May, the fund will provide UK-based companies with between £125,000 and £5 million from the government, with private investors at least matching the government commitment. These loans will automatically convert into equity on the company’s next qualifying funding round, or at the end of the loan if they are not repaid. To be eligible, a business must be an unlisted UK registered company that has previously raised at least £250,000 in equity investment from third party investors in the last five years. The government is committing an initial £250 million in funding towards the scheme, which will initially be open until the end of September.
SME grants and loans
The £750 million of grants and loans to R&D SMEs will be available through Innovate UK’s grants and loan scheme. Innovate UK, which is the national innovation agency, will accelerate up to £200 million of grant and loan payments for its 2,500 existing Innovate UK customers on an opt-in basis. An extra £550 million will also be made available to increase support for existing customers and £175,000 of support will be offered to around 1,200 firms not currently in receipt of Innovate UK funding. The Government hopes that the first payments will be made by mid-May.
WM Comment
Please call your usual contact within Walker Morris if you need any help accessing this government funding.

Keep business moving: What the Single Use Plastics[...]
In light of the current Coronavirus (COVID-19) outbreak, the UK Government has postponed the ban […]
In light of the current Coronavirus (COVID-19) outbreak, the UK Government has postponed the ban of single use straws, cotton buds and beverage stirrers, that was due to take effect this month, until October 2020. The postponed implementation does not, however, give much scope for businesses to take their foot off the pedal as the new legislation is only a small part of an EU-wide drive to curb single-use plastic. Forward planning to secure future compliance remains critical.
In May 2019, the EU adopted the Single Use Plastics Directive 2019/094 (“the Directive”). However, as this Directive was adopted before the end of the current transition period for departure from the EU (due to end in January 2021), its provisions are still directly applicable to UK businesses. Though the UK Government will be able to amend provisions of the Directive after the end of the transition period, given the increasing public pressure for the government to take a strong stance on environmental issues it is unlikely that the UK will move too far from Directive provisions.
The Directive aims to address the unprecedented levels of marine pollution caused by plastics, which currently account for 85% of marine litter.[1] The Directive imposes outright bans and decreased availability of certain single use plastic products and also imposes increased producer responsibility.[2]
The Directive applies to plastics that are most frequently found on beaches as well as lost and abandoned fishing gear. The Directive is concerned primarily with those items that are intended to be used once (or only a few times) before they are thrown away, including single-use paper items with plastic lining, such as conventional ‘takeaway’ coffee cups. Plastics that are covered by the Directive can be split into three categories.[3] Different measures apply to different plastic products:
- Products with alternatives readily available:
- The Directive imposes a complete ban on plastics for which there are already suitable alternatives by mid-2021. Such products include plates, sticks for balloons and cutlery.[4]
- Products with currently less widely available alternatives:
- The Directive imposes an obligation to reduce consumption of products such as beverage cups and food containers by 2026.[5]
- Products already covered by existing EU legislation:
- The Directive aims to strengthen and complement measures already imposed by other EU legislation for these products. Measures such as market restriction, product design, marking/ labelling requirements and awareness raising are all stipulated under the Directive.
The Directive also limits the use of products that have been found to pollute marine environments, but do not fall into any of the three categories, through marketing/ labelling requirements, awareness raising measures and extended producer responsibility schemes.
With such far reaching scope, the Directive will have a significant impact on a wide range of businesses including manufacturers, retailers and importers. It will also impact on smaller businesses delivering food and drinks to consumers, for example, which (in the absence of cost effective replacements) will find themselves without access to products which are essential for their day to day operation.
Market wide bans of some single use plastics and extended producer responsibility in particular will necessitate innovation and adaptation in order to enable businesses to operate without increased cost: UK businesses must be aware that switching to ‘biodegradable’ or ‘bio-based’ single use plastics will not offer a solution to the restrictions under the new Directive.[6] UK businesses must also consider measures that will mitigate against reputational and legal risk that will arise from both domestic and EU legislation. Careful planning now, including a full review of existing supply chains and product alternatives, to prepare for the introduction of the ban will place businesses in the best position to adapt to the pending changes.
[1] Commission Staff Working Document, Impact Assessment, Reducing Marine Litter: action on single use plastics and fishing gear. European Commission May 2018. Available at: https://ec.europa.eu/environment/circular-economy/pdf/single-use_plastics_impact_assessment.pdf
[2] Article 3(1) of the Directive defines ‘single-use plastic product’ as a product that is made wholly or partly from plastic and that is not conceived, designed or placed on the market to accomplish, within its life span, multiple trips or rotations by being returned the producer for refill or re-used for the same purpose for which it was conceived.
[3] Policy briefing, Unfolding the Single-Use Plastics Directive. Zero Waste Europe May 2019. Available at: https://zerowasteeurope.eu/downloads/unfolding-the-single-use-plastics-directive/
[4] A full list can be found in Part B of the Annex to the Directive.
[5] A full list can be found in Part A of the Annex to the Directive.
[6] Recital 11 of the Directive states that single use plastics labelled as bio-based and biodegradable are covered by the Directive.

Environmental risks with closed construction sites
Introduction Coronavirus (COVID-19) continues to have a dramatic and unavoidable impact across the construction industry. […]
Introduction
Coronavirus (COVID-19) continues to have a dramatic and unavoidable impact across the construction industry. This note considers some of the key environmental issues to be aware of where a site has been or will be temporarily closed due to the COVID-19 outbreak.
Whilst the UK government does not currently require all construction sites to close, many sites have already closed or will close temporarily. Over the last few weeks, much guidance has been issued regarding the effects of such closures on project completion dates, costs overruns and the parties’ respective rights under typical forms of construction contracts in respect of the same.
Whilst these issues are clearly of paramount importance to those involved with any construction project, the parties should also be mindful of the steps which need to be taken in order to ensure that any closures can be achieved as safely as possible and avoid potential issues while the site is not active. For example, what would happen in the event that there is a significant pollution or contamination incident involving a construction site whilst works are suspended/there is a much reduced physical presence on site?
Who takes the blame if there is a pollution or contamination incident?
Contamination from historic uses or pollution spills can migrate off-site or on-site for various reasons including:
- Many types of contaminants are mobile and can migrate significant distances in groundwater and surface water.
- New contamination can interact with existing contamination and result in chemical or biological changes.
- Construction work, remediation, intrusive investigations, mining or other disturbance of the ground can mobilise existing contamination or create pathways for the pollution to escape.
- Flooding can mobilise residual contamination.
Where proper containment measures are not put in place, there is clearly an increased risk of contamination occurring where a construction site has been temporarily closed. Similarly, the absence of a physical presence on site increases the risk of relatively minor pollution incidents going unnoticed and developing into a much greater problem. Who bears responsibility for such contamination or pollution will to some extent depend on what your contract says. However, there are some general rules of application as set out in brief below.
Contaminated Land Regime
The contaminated land regime set out in Part 2A of the Environmental Protection Act 1990 (EPA 1990) is the statutory regime for identifying contaminated land and allocating responsibility for remediation. This regime is one of several ways in which contaminated land can be addressed (e.g. the planning system, environmental permitting etc.).
“Contaminated land” is defined in Part 2A of the EPA 1990 as any land which, by reason of substances in, on or under the land, appears to be in such a condition that either of the following apply:
- significant harm to the environment or human health is being caused, or there is a significant possibility of such harm being caused; or
- significant pollution of controlled waters is being caused, or there is a significant possibility of such harm being caused.
The EPA 1990 identifies who may be an “appropriate person” (i.e. who is liable) to remediate the contaminated land. In this regard, a person is liable if they “caused or knowingly permitted” the contaminating substance “to be in, on or under” the land in question. If no such person, “after reasonable inquiry”, can be found, the responsibility for remediation falls to the owner or occupier of the land (save for incidents that relate solely to the pollution of controlled waters).
Once contamination has been identified and responsibility allocated, the relevant enforcing authority (the local authority, the Environment Agency (EA) or Natural Resources Wales (NRW)) will then need to determine how it should be remediated. The overarching objectives, in taking such action, are to: (i) ensure the contaminated land is made suitable for its current use; and (ii) remove unacceptable risks to human health and the environment.
As above, liability extends not only to an original causer of the pollution, but also to someone who “knowingly permitted” the risk of harm through contamination. In the context of a closed construction site, liability would most likely sit with either the:
- Developer: The developer usually takes 100% responsibility for the costs of remediation action (investigations, clean up and post-remediation monitoring) under planning conditions. It is worth noting that developers often seek to pass this liability down to contractors by including specific provisions to this effect in construction contracts.
- Contractor: For example, by causing pollution or migration by disturbing the ground and mobilising contaminants, creating pathways, or removing protective hardstanding. The Contractor may also have accepted liability, for any enforcement action under the contaminated land regime, in the construction contact.
A buyer/subsequent owner could (through no fault of their own), be liable for remediation of contaminated land where it is not possible to identify the original causer of the pollution (albeit that this scenario is more likely to arise where construction has completed and the original developer has disposed of its interest in the site and is no longer around to carry out the necessary remediation).
Environmental Permitting Regime
Special regard will need to be paid to sites regulated by an environmental permit. Care will also be required on sites which do not already have a permit, but which could be at risk of a breach of the permitting regulations in the event of a pollution incident, such as polluting substances from a site entering a water course.
The Environmental Permitting (England and Wales) Regulations 2016 provides that it is an offence to operate a regulated facility or undertake specific activities (e.g. water discharges) unless an environmental permit is in place. Perhaps more relevant at the present time, an offence is also committed if the permit-holder fails to comply with an environmental permit condition. These are strict liability offences and therefore the enforcing authority is not required to prove intent.
The fines that can be imposed by the Courts are unlimited and therefore the consequences of committing an offence can be severe.
It is therefore important that if any issues have arisen during the closure of a site that they are investigated promptly. It will also be prudent to liaise closely with the Environment Agency as soon as possible. For example, if there has been an unavoidable breach of a permit condition due to COVID-19 then early communication with the Environment Agency, alongside independent expert advice, will usually be beneficial.
Management of Waste
The proper handling of waste may also be an issue when sites have been, or are being, urgently closed.
An offence is committed under the Environmental Protection Act 1990 if waste is deposited on land without an environmental permit (or if a party knowingly causes or knowingly permits the deposit) or if waste is not managed properly on site. An offence can lead to an unlimited fine being imposed, so again the consequences can be very significant.
We would recommend paying particular attention to the following points:
- Where possible, ensure all skips and bins (particularly if containing biodegradable waste) are collected and emptied in advance of the site closing by a properly licensed collector.
- If this is not possible, ensure all waste containers are covered and secured.
- Ensure any hazardous wastes (e.g. soils containing asbestos, COSHH wastes) are separated and stored safely, with signage erected that highlights their harmful nature. Arrange for the hazardous waste to be removed by an authorised collector.
- Continue to maintain a proper inventory of transfer notes and consignment notes.
- Take all reasonable steps to maintain site security and fire safety precautions so as to reduce the risk of trespass or arson leading to an escape of waste or pollution incident.
Practical/special consideration for environmental issues
As the old saying goes, prevention is better than cure. To this end, on 30 March 2020, the Construction Leadership Council (CLC) published its Advice on temporary suspension of sites (Advice), which provides both construction companies and clients guidance on closing a construction site in light of the COVID-19 pandemic.
As well providing useful guidance in relation to (amongst other things) site safety, site security and insurance issues, the Advice includes a helpful checklist of matters for the parties to consider in the context of environmental issues on closed construction sites as follows:
River, coast and reservoir issues
Where the site is near a river, estuary or the coast, where there is a risk of flooding or coastal erosion:
- the parties must determine and provide temporary arrangements including monitoring arrangements to avoid increased risks of flooding or coastal erosion with consequent risk to life and property; and
- river or coastal defences must not be left in a compromised, lowered, weakened, or unstable condition. Works must not be left impeding a river channel unless agreed with the risk management authority.
Where a site impacts a reservoir covered by the Reservoirs Act, temporary arrangements must be agreed with the reservoir panel engineer.
Where a site poses a risk of pollution, you should ensure this risk is removed or minimised prior to the shutdown and that monitoring arrangements are put in place if necessary to ensure that any new risks arising are promptly dealt with.
If the activity requires a permit you should ensure you notify the regulator of the shutdown and how you intend to comply with any relevant conditions to prevent pollution occurring.
Water related risks (including over-pumping and dewatering activities)
Assess the risk of all activities that may directly impact water quality and plan for worst case scenario (i.e. the weather is currently dry and warm, but could change significantly over coming weeks).
Where possible and safe to do so, any activities that could impact on the water environment that can be halted should be done so to minimise risk of uncontrolled future failure.
If working within a flood plain, move all plant and equipment to higher ground in case water levels rise while the site activities are suspended.
For water management processes that need to remain in place, ensure operational control is maintained (many of these systems can be used remotely for relatively long periods of time). The maintenance regime (including refuelling of pumps) will need to be considered.
Make plans to monitor the site either remotely where possible (i.e. CCTV) or ensure regular checks are carried out during the period the site activities are suspended.
Ensure drains are protected from uncontrolled run off that may contain pollutants.
Ecology related risks
The majority of ecological species are unlikely to present an environmental risk while activities are suspended; but consider risk of vermin if bins are not able to be emptied.
Where possible, ensure that any critical elements that will require immediate utilisation once works resume are protected from nesting birds that could use the quiet period of reduced activity to nest on works equipment, plant or work faces.
Due to the timing (spring season) when work does resume consideration should be given to the risk of other protected species establishing habitat in or around construction sites. A thorough check should be made of all work areas prior to recommencing activities. To mitigate this risk, it would be prudent to take steps now to prevent protected species accessing the site. If they are able to access the site, then this could create a scenario whereby works cannot recommence until a protected species licence has been obtained.
Any ecology work that has previously been undertaken in relation to the site should be reviewed. If this work indicated there are protected species in the vicinity of the site then preventative measures should be taken. If no ecology work is available, then it would be prudent to take advice from an ecologist (particularly if the site is to be closed for an extended period).
Insurance
The CLC also advises parties involved in a construction project to revisit their insurance policies relating to the site and to make sure that they remain appropriate for the temporary closure. Where required, the parties should also inform the insurer of the shutdown.
Whilst not specifically mentioned in the Advice (and appropriate insurance advice should always be taken), in the context of environmental issues, it would be prudent for the parties to:
- check that environmental consultants and contractors have sufficient cover under their professional indemnity (PI) and public liability insurance policies; and
- review any specific environmental insurance products which apply to the project (e.g. Contractors Pollution Liability policies and Pollution Legal Liability policies).
If you would like to discuss this note further please contact Alison Ogley, Alastair Robertson or Josh Kitson.

FCA guidance on supporting customers impacted by coronavirus[...]
Following on from the package of relief measures offered in the personal loan, credit card […]
Following on from the package of relief measures offered in the personal loan, credit card and overdraft markets, the FCA has confirmed a range of measures to protect customers in the motor finance market. The guidance is intended to be of a temporary nature, and will apply for three months from the date of the measures coming into force however the FCA has stated that the guidance will be reviewed at the end of this period and may seek to extend its application period for longer if circumstances warrant it.
Given the urgency surrounding the coronavirus pandemic, the FCA has confirmed that the guidance will apply from the 27 April 2020. Firms impacted by this guidance therefore have a short amount of time to ensure the guidance is fully implemented.
Which types of agreements are in scope of this guidance?
The motor finance market involves a number of different types of agreements. The list below sets out which types of agreements will fall into the scope of the finalised guidance:
- Hire purchase agreements (including personal contract purchase agreements, commonly known as PCP agreements);
- Personal contract hire agreements (PCH)
- Conditional sale agreements
- Any other credit agreements where the creditor is also the supplier of the vehicle (including credit-sale agreements)
What does the guidance say?
Granting of payment deferrals
Any customers who are experiencing, or reasonably expect to experience, financial difficulties brought on by the coronavirus pandemic can make a request to the firm of a payment deferral in relation to their specific credit agreement. The FCA expects firms to grant a three month deferral upon receiving such a request on the basis that it is in the customer’s interest to do so. Similarly, where it is reasonably apparent through a firm’s interaction with a customer that they are experiencing, or likely to experience, financial difficulties due to the coronavirus pandemic, the firm must ask whether the customer wishes to be granted a payment deferral even in the absence of an explicit request.
Where payment deferrals are granted, firms should not seek to recover such sums from any guarantor. A customer will not be held out to be in arrears throughout the length of the deferral period therefore firms will not have the right to invoke any guarantor clause in the agreement.
Where a firm determines that a payment deferral is not in the best interests of a customer, a firm should not unfairly prevent that customer from receiving alternative forms of relief. The FCA suggests firms may wish to consider reducing or suspending interest, a reduction in payment amounts or rescheduling the term. There is nothing prevent a firm from ultimately offering a more favourable payment deferral, for example one which exceeds three months. In some circumstances it may be appropriate to offer a payment deferral of less than three months. These circumstances may be rare but should be reasonably apparent, for example where it is evident that a customer’s reduction in income will only last for a month. Although the guidance does not oblige firms to conduct specific enquiries into each customer who requests a payment deferral, good practice would suggest that firms document the rationale as to why an alternative form of relief was offered to demonstrate that the customer’s best interests were acted upon. This may well involve some further enquiries but will also take account of the firm’s existing relationship with each customer.
Customers should not be charged a fee in connection with either the granting of a payment deferral or any other alternative relief measure the firm determines as being in the best interests of that particular customer. Firms can however still continue to allow interest to accrue on the unpaid sums during the payment deferral period.
Firms should be prepared to receive payment deferral requests for the next three months. While firms will be expected to act in line with the guidance when considering these requests for the next three months, the period over which a payment deferral will likely often go beyond the initial three month period for which the guidance applies. Therefore a customer who requests a payment deferral on the penultimate day of the guidance being applicable must still be granted a three month payment deferral as opposed to a payment deferral of one day, provided that such deferral is in the customer’s interest.
The FCA has deliberately not given specified guidance to firms as to their treatment of customers whose agreement term is coming to end and have requested a payment deferral. Under the feedback statement published together with the finalised guidance, the FCA has indicated that it may be necessary for the firm to extend the customer’s term of the agreement or reschedule the remaining balance over the remainder of the term. Customers with a short period left on their agreement should be dealt with fairly and it may be that a payment deferral is clearly not in their best interests. In line with the guidance, the firm should be willing to offer an alternative form of relief, including a shorter payment deferral period.
PCP agreements which end during the guidance period
The FCA has attempted to address the practical difficulties around PCP agreements in which the term of the agreement comes to an end during the guidance period.
Some customers will simply wish to return the vehicle upon the conclusion of the agreement term. Where such a return cannot be achieved or is reasonably impractical in light of the government’s social-distancing rules, a firm should inform the customer that they are no longer entitled to use the vehicle once the agreement has ended. The firm and the customer should then seek to agree on the next steps to be taken.
For customers who wish to retain the vehicle, there may be difficulties in being able to afford the balloon payment due to the pandemic. The FCA’s guidance on this scenario is not detailed and merely states that a firm should “work with the customer to find an appropriate solution”. Particular care should be paid towards the relationship between the value of the customer’s balloon payment and the risk of the value of the vehicle not meeting the amount of the balloon payment due to the current economic outlook. Any agreement reached with the customer should be guided by the FCA’s Principles for Business, particularly the duty to pay due regard to the customer’s interests and treat them fairly.
Definition of ‘refinance’ during this period
From a technical perspective, an extension of the period over which a customer makes one or more repayments will not fall into the scope of the definition of refinance. The FCA has confirmed its intention to not apply CONC 6.7.18 and CONC 6.7.19 in these circumstances. The disapplication is however incredibly narrow and applies only in circumstances where the firm extends the period over which repayments are to be made purely in order to follow this guidance. Any such extension which occurs outside of the circumstances relating to the coronavirus pandemic will still be caught by the rules on refinancing. Firms should therefore take particular care with any refinancing arrangements that are in the process of being agreed during this period, but relate purely to historical financial difficulties that hold no relationship with the coronavirus pandemic.
Entering new agreements to vary aspects of an original PCP or PCH agreement
Firms may need, when granting a payment deferral or another relief measure, to enter into a new agreement in order to vary the original PCP or PCH agreement. The FCA is clear that firms should not take advantage of customers in this situation by attempting to recalculate the Guaranteed Minimum Future Value (GMFV) or the Residual Value (RV) of the vehicle based on current economic conditions in order to recover more of the original car value through repayments. Such an act is likely to breach section 140A of the Consumer Credit Act 1974 (CCA) in relation to unfair relationships.
The guidance is not intended to introduce a blanket ban on adjusting the GMFV or RV of a vehicle but it specifically seeks to address an adjustment based on current economic conditions. The FCA’s feedback statement has clarified that any adjustment should be done fairly and should be done to reflect the expected depreciation value of a vehicle prior to car values being affected by the pandemic.
Repossessions
The guidance is particularly strict in respect of repossessions. Firms are expected to not undertake any repossessions over vehicles which a customer still has the right to use and who is experiencing financial difficulties due to the pandemic. The FCA has been clear in the guidance that any repossession in these circumstances would almost certainly contravene Principle 6 of the FCA’s Principles for Business (namely, the duty to act in the customer’s best interest and treat them fairly).
Only exceptional circumstances may dictate that a repossession may take place, for example if the customer explicitly requests for the repossession to be undertaken, however the reality is that for the vast majority of firms all repossessions should cease. The practicalities of any repossession in exceptional circumstances may also fall foul of the government’s social distancing and self-isolation rules and as such it becomes unfeasible to carry out.
Within the guidance the FCA draws attention to the potential of an unfair relationship under section 140A of the CCA by virtue of the manner in which a firm may enforce its right to repossession. It is highly likely that the vast majority of repossessions would, in current circumstances, not be in the spirit of the guidance and regulation, and therefore would be classed as an unfair relationship.
Reporting to the credit reference agencies
Firms must not report arrears to credit reference agencies in respect of customers who are granted a payment deferral due to the pandemic.
For customers who require additional forbearance due to particular circumstances, firms are expected to continue to report this in the usual manner.
Post-contractual notices
The FCA does not believe that any of the expectations set out in the guidance will prevent firms from complying with statutory requirements under the CCA to send post-contractual notices (for example a NOSIA). Clearly any statutory notice must include the prescribed wording, however there is nothing prevent a firm from including additional wording or a second communication which sets out a suitable explanation or context as to why the notice is being sent in the current circumstances.
Communication and disclosures with customers
All firms impacted by this guidance should begin to make customers aware of their eligibility to receive a payment deferral. This may be best achieved through clear statements on websites, dedicated social media campaigns and letters to customers. Firms should begin developing a consistent and clear communications strategy to help bring these relief measures to the attention of customers. Many customers may have erroneously cut off direct debit repayments before making contact with a firm. In such circumstances it would be good practice to proactively contact these customers to make them aware that they need to request formal relief measures otherwise they risk harming their credit record with missed repayments.
Customers must also be made aware of the consequences of a payment deferral, namely the accumulation of interest over the period which will affect the customer’s total amount to be repaid. While not explicitly specified in the guidance, a firm which offers alternative relief measures to a customer should also ensure any consequences or implications are clearly set out to the customer prior to the customer entering into the relief arrangement. This will certainly represent good practice and is within the spirit of the guidance and regulation.

FCA guidance on supporting customers impacted by coronavirus[...]
The FCA has announced a package of measures to help protect consumers in the high-cost […]
The FCA has announced a package of measures to help protect consumers in the high-cost credit (HCC) market. This guidance has been published alongside guidance for customers in the motor finance market and follows on from finalised guidance issued last week in relation to the protection of customers in the personal loan, credit card and overdraft markets. The confirmed guidance is intended to be temporary, in place for three months from the date of the measures coming into force. However the FCA has indicated that the guidance will be reviewed at the end of this period and may seek to extend its application period for longer if circumstances warrant it.
Given the urgency surrounding the coronavirus pandemic, the FCA has confirmed that the guidance will apply from the 27 April 2020. Firms impacted by this guidance therefore have a short amount of time to ensure the guidance is fully implemented.
Which types of high-cost credit are in scope of this guidance?
The HCC market involves a number of different types of agreements. The list below sets out exactly which types of agreements the FCA intends to be captured under the finalised guidance:
- High-cost short-term credit (HCSTC)
- Rent-to-own (RTO)
- Buy-now pay-later (BNPL)
- Pawnbroking
The FCA has clarified the application of retail revolving credit products which include a BNPL promotional period. These specific products will straddle both this guidance and the FCA’s previously published guidance on retail revolving credit in light of the pandemic. Firms offering these products should ensure the correct guidance is followed depending on the customer’s circumstances, as set out below:
- For customers still within the BNPL, the guidance in relation to high-cost credit should be applied.
- For customers outside of the BNPL period, the guidance published in relation to retail revolving credit should be applied.
You can read our briefing on the FCA’s guidance in respect of other consumer credit products, including retail revolving finance, here.
What does the guidance say?
Granting of payment deferrals
Customers who are experiencing, or reasonably expect to experience, financial difficulties brought on by the coronavirus pandemic can make a request to the firm for a payment deferral. Similarly, where it is reasonably apparent through a firm’s interaction with a customer that they are experiencing, or likely to experience, financial difficulties due to the coronavirus pandemic, the firm must ask whether the customer wishes to be granted a payment deferral even in the absence of an explicit request from the customer.
Given the range of products in scope, there are slight variations on the FCA’s expectations on the exact terms of payment deferrals. The table below sets out the expectations in respect of each type of product:
- High-cost short-term credit – A firm should grant a payment deferral of one month on the basis it is in the customer’s best interests to do so. The FCA has justified this shorter deferral period due to the short term nature of the lending however it does expect firms to implement a longer payment deferral if a customer’s particular needs warrant it.
- Rent-to-own – A firm should grant a payment deferral of three months on the basis it is in the customer’s best interests to do so.
- Buy-now pay-later – Where a customer remains within the promotional period of not having to repay, the firm should extend the promotional period by a further three months on the basis it is in the best interests of the customer to do so. Such an extension should be granted irrespective of when a customer’s promotional period is due to end.
- Pawnbroking – A firm should extend the redemption period for three months or, if such redemption period has ended, agree to not give notice of intention to sell an item taken in pawn for a period of three months. Such an extension should be granted irrespective of when a customer’s redemption period is due to end. Where notice has already been given prior to the guidance coming into force, a firm should suspend the sale of the pawned item for a period of three months.
Firms should be prepared to receive payment deferral requests for the next three months. While firms will be expected to act in line with the guidance when considering these requests for the next three months, the period over which a payment deferral will likely often go beyond the deferral period set out above for which the guidance applies. Therefore a BNPL customer who requests a payment deferral on the penultimate day of the guidance being applicable must still be granted a three month payment deferral as opposed to a payment deferral of one day. Such an example assumes that this payment deferral is in the customer’s interest.
Determining what is in the customer’s best interests
When deciding whether to grant a payment deferral, firms must pay sufficient regard to the best interests of a customer. While there is no overarching expectation in the guidance that firms will conduct further enquiries or investigations into a customer’s specific circumstances, firms are required to balance the customer’s immediate short-term need for support and any longer-term implications on a customer’s situation. Particular consideration will need to be given to the interest rate and remaining term. It may be that for some customers, a payment deferral may create a greater overall debt burden when compared to other measures that could be taken to support the customer.
Where a firm determines that a payment deferral is not in the best interests of a customer, a firm should not unfairly prevent that customer from receiving alternative forms of relief. The FCA suggests firms may wish to consider reducing or suspending interest, a reduction in payments or rescheduling the term. There is nothing preventing a firm from ultimately offering a more favourable payment deferral, and the FCA has specifically indicated that it welcomes firms who look to go above and beyond for customers in light of the guidance. Equally, in some circumstances it may be appropriate to offer a payment deferral of a shorter period than that proposed by the FCA. These circumstances may be rare but should be reasonably apparent, for example it is evident that a customer’s reduction in income will only last for a month. Although the guidance does not oblige firms to conduct specific enquiries into each customer who requests a payment deferral, good practice would suggest that firms document the rationale as to why an alternative form of relief was offered to demonstrate that the customer’s best interests were acted upon. This may well involve some further enquiries but will also take account of the firm’s existing relationship with each customer.
Application of interest during the deferral period
For RTO, pawnbroking and BNPL agreements, firms are permitted to allow interest to accrue during the deferral period. Firms should assess on a case-by-case basis the most appropriate method of the customer repaying this interest. This could include repayment in a lump sum or allowing the deferred interest to be repaid over an extended period that may in some cases go beyond the original term of the agreement. Any decision should be made with consideration as to what is affordable for each particular customer.
In respect of BNPL products, it is the FCA’s expectation that many customers will use the extension to make the voluntary payments they would have made during the original term of the promotional period. Given that firms are permitted to backdate interest for the entire promotional period, including any extension to the period granted, this will still allow customers to avoid having to pay significant sum of backdated interest.
This is not the case for HCSTC agreements, whereby the FCA has stated that no interest should accrue during the deferral period. Firms should be mindful that, while the FCA guidance states that deferral periods should last for one month, where more favourable terms have been offered to a customer due to their particular circumstances, interest should not accrue for the entire period even where it is beyond one month.
Interest should not be charged, however, where repossession, collection or redemption of goods which would otherwise occur cannot be carried out as to do so would breach the Government rules on social distancing and self-isolation.
Warranties and insurance sold on RTO products
Many products sold via RTO agreements will include warranties and insurance policies packaged with the product. The FCA expects firms in these instances to permit customers to be able to rely on the warranty or insurance policy for the extended period. Where this is not possible, a firm should disclose to a customer the implications. Even in circumstances where a warranty or insurance policy has been purchased entirely separately, a firm should still bring to the customer’s attention the wider implications of the extension of the repayment period brought on by the payment deferral.
Repossession, collection or redemption of goods
Firms should not undertake repossession proceedings against a customer who is experiencing payment difficulties as a result of the coronavirus pandemic. The FCA has been clear in its guidance that any repossession in these circumstances would almost certainly contravene Principle 6 of the FCA’s Principles for Business (namely, the duty to act in the customer’s best interests and treat them fairly).
Repossession proceedings against customers whose circumstances do not relate to the coronavirus pandemic may still be impacted given the Government’s rules on social distancing and self-isolation. It will likely be that many repossessions are simply not feasible in the current climate. As such, firms may wish to consider suspending repossessions across their entire portfolio.
Where a customer is unable to make a payment or redeem an item taken in pawn at a store due to the social distancing and self-isolation rules, a firm should not charge any interest, fees or other charges to the customer. This will be particularly important for firms who do not currently have the capability to take payments remotely (such as over the phone or via the internet). Other payment arrangements should be attempted to be made; however, if they cannot, the customer should not be placed at a disadvantage due to circumstances outside of their control.
Communications to customers
All firms impacted by this guidance should begin to make customers aware of their eligibility to receive a payment deferral. This may be best achieved through clear statements on websites, dedicated social media campaigns and letters to customers. Firms should begin developing a consistent and clear communications strategy to help bring these relief measures to the attention of customers. Many customers may have erroneously cut off direct debit repayments before making contact with a firm. In such circumstances it would be good practice to proactively contact these customers to make them aware they need to request formal relief measures otherwise they risk harming their credit record with missed repayments.
Customers must be made aware of the consequences of a payment deferral, namely the accumulation of interest over the period which will affect the customer’s total amount to be repaid. While not explicitly specified in the guidance, a firm which offers alternative relief measures to a customer should also ensure any consequences or implications are clearly set out to the customer prior to the customer entering into the relief arrangement. This will certainly represent good practice and is within the spirit of the guidance and regulation.
For BNPL customers, further disclosures under CONC 6.7.16A may be required. Under this rule firms must give notice to the customer that they are required to meet certain conditions in order to benefit from a promotional period in good time before such period ends. A disclosure in these instances should contain a statement explaining the possibility of deferring the period and set out any consequences or implications this might have in a clear and easily understandable manner.
Systems and controls limitations on the promotional period of BNPL products
Further clarification has been added by the FCA to the finalised guidance in respect of firms whose systems and controls prevent an extension of a customer’s BNPL promotional period. In such circumstances, the FCA has confirmed that a firm can put in place an alternative approach to assist the customer, so long as it delivers the same economic outcome for the customer.

Furloughing – the legal requirements
Most employers will be familiar with the Coronavirus Job Retention Scheme, but they may be […]
Most employers will be familiar with the Coronavirus Job Retention Scheme, but they may be less familiar with the legal requirements in respect of the scheme. This article gives an overview of the legal issues which businesses should be mindful of.
Andrew Rayment, Partner, and Charlotte Smith, Associate, of Walker Morris’ employment team recently held a webinar in which they talk about these matters in more detail including a question and answer session.
In particular, the following key points should be noted:
- There is still no legal definition in the UK of “furlough leave”.
- The Scheme guidance states that being “furloughed” means employees who have been “placed on a leave of absence” – those who are undertaking no work at all for their employer, but who have been kept on payroll.
- The usual employment law principles still apply – meaning:
- a contractual variation must be agreed;
- caution must be exercised when making decisions about who to furlough in order to avoid falling foul of discrimination laws; and
- consultation obligations could arise.
There is no mention in the scheme guidance of a requirement to submit documentary evidence of the “business case” to furlough workers, or the “financial means” of the employer to pay staff. However, once the HMRC portal opens it could, of course, include additional requirements and, in any event, HMRC has clearly reserved the right to retrospectively audit employers who have made claims.
Employers should therefore keep clear records of the reason for placing employees on furlough leave which, in most cases, will show that there was no work that the individual could do (because, for example, the factory was shut), or there was a reduced requirement for the work that individuals could do (because, for example, there has been a down-turn in customer orders – therefore a certain number of individuals completing the same role have been selected to be placed on furlough leave).
Selection
One of the policy reasons behind the scheme is to “avoid redundancies”. However, this does not necessarily mean that an employer must use the same selection criteria that it would for a redundancy exercise in order to select people to place on furlough leave – particularly given the time constraints.
What employers should be careful of, however, is basing selections on criteria that could potentially give rise to discrimination claims (for example, selecting all junior members of staff could give rise to age discrimination claims, or selecting all employees who have child-care responsibilities may give rise to claims for sex-discrimination). As such, the key thing is for businesses to look at areas where the work has temporarily gone or diminished, and use objective criteria to select who to furlough.
Thought also needs to be given to how the furlough scheme inter-relates to sickness arrangements, especially those newly created categories, such as those who are “shielding”.
What needs to go in the letter?
The guidance states that to be eligible for the subsidy under the Scheme, employers should write to their employees confirming that they have been furloughed and keep a record of this communication. As usual employment law principles still apply, this should be completed as a contractual variation. The key points to include in the letter are as follows:
- Set out the context and the reason why the business has made the decision to furlough staff.
- Confirm that the individual is being asked for their agreement to be designated as “furloughed”.
- Make clear that it is a contractual variation to terms of employment (albeit a temporary one).
- Set out the date that the furlough period started (in theory, this date might be prior to the date of the letter if, for example, the employee has already been on leave from work and not completing any work before that date – which may be the case where there have been total business closures) and the length of time which the furlough period will last (noting that the scheme currently closes on 31 May 2020).
- Reinforce the point that the individual must undertake no work at all for the business during the furlough period.
- Clearly set out any proposed variation to their salary.
- Include any information about practical arrangements for keeping in touch.
- Confirm that other terms of the employment contract will remain the same, giving thought to what will happen to any benefits.
What if people refuse?
The usual principles relating to varying employment contracts apply. However, we recognise that this is a time-critical matter (particularly given that the scheme is only open for an initial three month period from 1 March – 31 May 2020), which means that it is difficult to follow a full procedure. Broadly speaking, the options are:
- Get creative in using powers of persuasion – including setting out the likely alternatives to being furloughed.
- Unilaterally impose the change (i.e. stop the individual from working (which could, in extreme cases, require removing them from work systems) and reduce pay where applicable) – this is highly likely to be a repudiatory breach of contract (depending on the circumstances), therefore this is a high risk strategy which could give rise to claims.
- Consult with employees about the proposal with a view to dismissing them (for “some other substantial reason” and then offering them re-engagement on new contractual terms).
- If the business cannot keep staff on and they will not agree to the change, commence a redundancy consultation process.
- Note that collective consultation requirements could be engaged depending on numbers when using options 3 and 4.
To view more similar resources of the Employment team visit our coronavirus hub.

Coronavirus assistance for the workforce – further details[...]
On Monday, we published an article setting out basic details of the new Coronavirus Job Retention […]
On Monday, we published an article setting out basic details of the new Coronavirus Job Retention Scheme (the “Scheme”) announced by the Government on 20 March, under which businesses have been promised grants to cover the costs of 80% of salary (up to a maximum of £2,500 per person per month) for “furloughed workers” who are kept on the payroll but not required to work during the Coronavirus outbreak. The picture continues to evolve and we have summarised some of the key developments over the last week in this article.
Further guidance issued on furloughing staff
Employers up and down the country have spent the past week grappling with time-critical decisions regarding the future of their businesses and workforces, such as who can be furloughed, whether employees who have already been laid off or made redundant are covered, and precisely what employment costs will be recoverable in relation to them, without knowing the full picture and understanding the full ramifications of any actions they have taken.
Last night (26 March 2020), the Government published further guidance on the matter, for both employers and employees. The following has now been clarified:
- Being “furloughed” means employees who have been “placed on a leave of absence” – those who are undertaking no work at all for their employer, but who have been kept on payroll. There is still no legal definition or clear explanation of this term. However, the new guidance reinforces the fact that the usual employment law principles will apply (meaning that the contractual variation must be agreed and collective consultation rules could, in certain circumstances, be engaged) – and recommends caution when making decisions about who to furlough to avoid falling foul of equality and discrimination laws.
- The reimbursement from HMRC will cover the lower of 80% of an employee’s regular wage or £2,500 per month. In addition, employers will be able to recover the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions (i.e. 3%) on the subsidised wage only. Other financial benefits such as fees, commission and bonuses should not be included in the claim.
- The minimum period of time an employee can be furloughed for is three weeks.
- The wages of employees on zero-hour contracts and those who work part-time or variable hours can be included in the claim. The Scheme is also open in respect of agency workers who are paid through PAYE.
- Normal maternity, paternity, adoption and shared parental leave rules apply, but if the employer offers enhanced contractual pay for these types of leave, this is included as wage costs that can be claimed through the Scheme.
- For salaried employees, their salary as at 28 February 2020 will be used to calculate the 80% subsidised wage. For employees with variable pay, employers seemingly have an option to either use average monthly earnings for the last tax year (or, if they have been working for less than a year, their average earnings since they started), or the earnings the employee received in the same month in the previous tax year.
- Employees must have been on payroll as at 28 February 2020. The Scheme also covers employees who were made redundant since 28 February 2020 – if they are rehired by their employer.
- The National Minimum Wage rules will not apply to employees who are furloughed (as they are not undertaking work) – however, if individuals undertake any training while on furlough leave, this will be classed as work and the NMW rules will apply.
- The guidance confirms that employees on sick leave or self-isolating should get Statutory Sick Pay, but states that they can be furloughed after this. As such, those off sick should still be considered as part of the analysis when deciding who to furlough – but it does not appear that any claim can be made for the time they spent off sick. Those who are suffering from certain prescribed medical conditions and are shielding in line with Government advice can, however, potentially be furloughed (but it is wise to exercise caution over furloughing people just because they are worried/don’t think it’s safe to work).
- – In terms of the documents required to make the claim, the guidance states that to be eligible for the subsidy employers should write to their employee confirming that they have been furloughed and keep a record of this communication. No reference has been made to providing evidence of any financial means test, nor any “business case” for furloughing. However, see our comments under “The challenge ahead” below.
There are, however, still a number of aspects of the Scheme that remain unclear. And of course the biggest question of all – when will grants to cover the salary costs of furloughed workers land in bank accounts – is still up in the air. The Government has indicated that the Scheme will be up and running by the end of April, and given that HMRC are having to build appropriate systems from scratch to facilitate the Scheme, it’s not surprising that there will be some delay. But for cash-strapped businesses facing two payroll runs with substantially reduced incomes in the meantime, this may provide inadequate comfort. In the interim, to deal with any short-term cash-flow issues, businesses are being pointed towards alternative loan facilities. Please see our earlier briefing on these.
The key challenge for employers at this stage is to ensure that any decisions to furlough they are taking now are fully compliant with the rules of the Scheme when they are published, so they don’t find themselves falling foul – we have added our thoughts as to what the key questions and pitfalls may be under the section “The challenge ahead” below.
Particular care must be taken when dealing with those who don’t fall neatly into the “employee” or “worker” categories we understand to be covered under the Scheme. Individuals on zero-hour contracts, for example, include a wide spectrum, from individuals who undertake work on a regular basis and are paid through payroll, to individuals who only work sporadically, on assignments. Where such an individual did receive some income via payroll in the month of February 2020, but may have had varying or no income in the preceding months, it seems that employers could in theory claim under the Scheme, although this is potentially contrary to its purpose.
Relief for the self-employed?
For self-employed individuals, there was finally some welcome relief yesterday when the Chancellor announced the Self-employment Income Support Scheme (“SEISS”). The announcement will no doubt also have been welcome news for businesses who engage self-employed individuals directly, who may otherwise have faced employment status claims from those seeking to remain engaged but furloughed for the salary protection afforded to employees and workers. It does, however, mean employers need to be vigilant about including the correct category of individual in the Scheme, otherwise they could still be open to claims around status.
Under the SEISS, the Government will provide self-employed individuals and partnerships a taxable grant worth 80% of their average monthly profits over the last three years, up to a cap of £2,500 per month. The SEISS will be open to those for whom the majority of their income comes from self-employment and who have trading profits of less than £50,000 per annum.
HMRC will use the average profits from tax returns from the past three years to calculate the size of the grant, except where less than three years’ returns are available. Crucially however, as a measure to reduce the possibility of fraud, the individual must have filed a tax return for 2018-19 in order to be eligible, which will automatically exclude some newly-formed start-ups. Those who have not yet submitted their tax return for 2018-19 have four weeks to do so and become eligible.
Like the Scheme, the SEISS will be open for an initial three month period, and will be extended if necessary. It is anticipated that the SEISS will be accessible by the beginning of June, with grants being backdated to March – the lengthy wait has been widely criticised by self-employed individuals who cannot go to work and need the money now. In the meantime, the self-employed will be eligible for other government support including universal credit and business continuity loans.
In contrast to the Scheme applicable to furloughed workers, which is premised on the worker carrying out no work for their employer during the period covered by the grant, the SEISS grant can be claimed whilst the individuals continue to do business. Therefore businesses could benefit from continued productivity from self-employed individuals during the coronavirus outbreak, without putting their claim for a grant in jeopardy.
The Coronavirus Act
The Act (also in the same week!) introduces a number of emergency measures in response to the pandemic. It contains provisions for the changes relating to statutory sick pay (SSP), whereby SSP is payable from the first day of sickness or self-isolation, where an employee whose incapacity for work is related to coronavirus. The Act also gives HMRC the power to fund employers’ payments of SSP in respect of coronavirus-related incapacity – once regulations are made, the assumption is that they will cover the Chancellor’s promise to fund 14 days’ worth of SSP for employers with fewer than 250 employees.
In addition, a new concept of ‘emergency volunteering leave’, has been introduced in the Act, which requires employers to give employees unpaid time off if they wish to volunteer in health or social care. Employers with greater than ten employees cannot refuse such a request. Employees are required to provide their employers with three working days’ notice and produce a certificate from an “appropriate authority” (local authority, an NHS Commissioning Board or the Secretary of State for Health and Social Care) to confirm they have been accepted to act. The period of volunteer leave must be either two, three or four weeks long.
Employers should be mindful that an employee on emergency volunteer leave will be entitled to the benefit of all of the terms and conditions of employment (except remuneration) that would have applied if the employee had not been absent – they are also entitled to return from leave to the job in which they were employed before the absence on no less favourable terms and conditions.
Although the Act has now become law, the SSP rule changes and the emergency volunteering leave provisions both require secondary legislation, and so will only take effect on a date appointed by the Government.
The challenge ahead
Legislation is changing rapidly and updated guidance is being published frequently. There are, therefore, no doubt many unanswered questions which businesses will have, including:
- How exactly does employment law apply to designating an employee as furloughed (and when might collective consultation rules apply)?
- How do you ensure that your claim under the Scheme is valid? While there is no mention of documentary evidence being required of the business case to furlough workers, the employee section of the guidance refers to the Scheme being available to employers who “cannot cover staff costs” in order to “avoid redundancies” – therefore what evidence should employers be keeping, and should this include evidence of the financial damage the coronavirus outbreak has had on the business?
- What are the risks associated with making a claim? It is unclear what the implications are if a business is deemed to include furloughed workers who don’t technically fall into the Scheme. It’s also not particularly clear whether an employer’s “business case” and/or “financial means” to pay staff (despite a reduction in work) will be relevant or not to eligibility to claim. The guidance reiterates that HMRC has the right to retrospectively audit all aspects of the Scheme with scope to claw back fraudulent or erroneous claims. Therefore how do employers reduce the risk of having to foot the bill for furloughed workers’ salaries (and any associated penalties and fines) that can’t be claimed back?
- Claims can be backdated to 1 March 2020 – does this mean that employers who sent employees home on full pay without work prior to officially designating them as “furloughed” and making the requisite changes to their contract can claim for the period prior to that “official” designation?
- How can you re-hire a redundant employee and then place them on furlough leave? Will the redundant employee be required to repay any statutory or enhanced redundancy pay as a condition of being furloughed?
- The updated guidance makes it clear that the Scheme does not apply to those working reduced hours, or for reduced pay, therefore for businesses who have already gone down these routes as a means of avoiding redundancies, what action can they now take to try to benefit from the Scheme?
- How do you ensure that your decision about who to furlough is not discriminatory?
At Walker Morris, we are closely monitoring developments which will impact businesses’ ability to protect their workforce in the long-term, and crucially, to ensure they are ready to do business at their pre-coronavirus pace once the current crisis is over. We are ready to answer clients’ queries, including the above. Please get in touch with your usual contact or the members of the Employment Team below.

The FCA’s guidance for mortgage lenders in light[...]
The Financial Conduct Authority (FCA) have published guidance on the treatment of mortgage customers during […]
The Financial Conduct Authority (FCA) have published guidance on the treatment of mortgage customers during the Covid-19 outbreak, namely those customers who are struggling to meet mortgage repayments. The guidance issued seeks to build upon the principle of a firm’s obligation to pay due regard to customers and treat them fairly and the rule under MCOB 2.5A.1 which holds that firms must act honestly, fairly and professionally in accordance with the best interests of customers. Both the principle and rule remain fundamental in guiding a firm’s behaviour and treatment of customers, particularly as the crisis continues into the months ahead.
The guidance is effective immediately and applies to mortgage lenders, mortgage administrators, home purchase providers and home purchase administrators. The FCA have been explicit in stating that for firms who carry out unregulated lending secured on land, failure to follow this guidance may result in a breach of the Threshold Conditions. Therefore irrespective of the regulated nature of the lending, lenders should heed this guidance carefully.
What does the guidance say?
Payment holidays
Customers who are experiencing, or are likely to experience, financial difficulties brought on by the Covid-19 outbreak may request a payment holiday. The guidance expects firms, upon receiving such a request, to grant a three month payment holiday unless to do so would be unreasonable and outside of the customer’s best interests. There is an onus on firms to equally grant a three month payment holiday in circumstances where it is reasonably apparent that a customer is in financial difficulty, even where no explicit request for a payment holiday has been made. Firms should not levy any charge or fee upon a customer for the arrangement of a payment holiday.
While the FCA have stated that three months should be the starting point for a payment holiday, there is nothing preventing a firm from offering more favourable terms to a customer. Likewise, a payment holiday of less than three months is not necessarily prohibited but as is discussed below, it must be in the best interests of the customer and be reasonable to their circumstances.
Despite the FCA’s intention that the guidance does not oblige firms to conduct their own investigations into the circumstances surrounding a customer’s payment holiday request, in some cases it may be prudent to do so to ensure that such a request is in the customer’s best interests. This investigation becomes vital in circumstances where a payment holiday request is rejected or an alternative form of relief is offered to a customer. It can reasonably be assumed that such actions will likely attract potential scrutiny from the regulator or even the Financial Ombudsman should a complaint be made. Therefore a robust investigation into a customer’s circumstances coupled with clear and recorded rationale should be actioned by the firm to ensure it can effectively demonstrate that the firm’s actions were in the best interests of the customer.
For the majority of firms, most circumstances will dictate that a three month payment holiday should automatically be granted but care, and in some instances independent advice, may be needed on borderline cases.
Customers already experiencing payment shortfalls before the crisis
Customers who are already in a payment shortfall before the Covid-19 outbreak should not be disadvantaged because of their existing position. It is likely that many of these customers will experience further financial strain because of the outbreak. In such circumstances, a firm must considered whether further support and relief should be offered to these customers in light of the FCA’s guidance.
A firm may wish to develop a standalone approach as to what manner of further relief will be offered to this subset of customers. Failure to treat these customers in the same manner as those not in a payment shortfall will almost certainly fail to meet the standards of treating a customer fairly and will likely leave the firm open to complaints.
Communicating with payment holiday customers
Prior to granting a payment holiday, or indeed any other form of relief a firm must explain to the customer the implications of taking a payment holiday, particularly around the impact on future monthly instalment amounts, the total amount that will need to be repaid by the customer and the term of the mortgage. Firms should avoid unilaterally accepting a payment holiday request and only providing the implications and consequences of a payment holiday after the payment holiday period has begun. This will fall far short of the standards set out in the guidance and will likely open the firm up to regulatory scrutiny.
Many firms may benefit from drafting a dedicated Covid-19/payment holiday communication which clearly explains customers’ rights to requesting a payment holiday in light of the ongoing situation and sets out the impact of taking a payment holiday. This could be provided to all customers even before a request has been made to clearly satisfy the requirement under the guidance. Any communication issued should still meet the clear, fair and not misleading principle although further tailored disclosures may be necessary to certain customers who have particularly unique circumstances.
Recovery of sums covered during a payment holiday
Under the guidance there is nothing preventing a firm from charging interest on the unpaid sums that accrue during the payment holiday however the unpaid sums and interest clearly cannot be recovered until the customer’s payment holiday has concluded.
Where a firm wishes to capitalise the unpaid sums, it must disclose in advance to the customer of the impact of doing so on the customer’s mortgage and inform the customer of an alternative means of repaying the unpaid sums, such as through a lump sum. This disclosure must be made in good time and good practice would dictate that such information is provided at least 30 days’ in advance of any intended capitalisation. Firms may therefore wish to start developing a defined and consistent recovery strategy in advance of the conclusion of the three month period. Such a strategy should place the interests of customers at its core. It may well be that some customers continue to suffer the shock of financial difficulties beyond any guidance period. In these circumstances firms should ensure these customers are dealt with on a case by case basis and any measures offered to them meet their specific needs and circumstances. Should subsequent guidance be released extending the three month period, any recovery strategy implementation would need to be delayed in line with revised guidance.
Suspension of repossessions
While the payment holiday relief measure has garnered the most attention, it is not the only relief measure announced in the regulator’s guidance. The FCA expect firms to suspend all forms of repossession against customers for the next three months. This suspension applies to all stages of the repossession process, including those repossessions currently in progress. Where a firm had already obtained a possession order from the courts before the outbreak of the crisis, this order should not be in enforced. Under the Civil Procedure Rules (CPR), Practice Direction 51Z has been introduced which confirms that all new possessions proceedings, including applications to enforce a possession order, are to be stayed from the 27 March 2020 for a period of 90 days.
The FCA expect that only repossessions in exceptional circumstances will occur, namely where a customer requests that the repossession commences. Therefore almost all firms will likely need to halt all current and planned repossession proceedings immediately.
While the suspension of repossessions may seem relatively easy to achieve. There is still an expectation in the guidance that firm’s will communicate with customers to not only state that an intended or existing repossession has been paused, but to go further and explain to customers the implications of the repossession not taking place. This includes the growth of the debt due to interest continuing to be charged and the possibility that property prices may fall meaning that, once repossession can recommence, any sale of the property may be for less than the customer owes.
Short term behaviour will impact long term regulatory relationships
With the Senior Managers & Certification Regime now fully embedded within the mortgage sector, this is likely to be seen as the first major test for senior managers in their handling of a crisis. The guidance is explicit that actions taken here will be assessed in any future applications to the regulator.
It is vital that a firm’s governance maintains a proactive approach in dealing with the crisis. The use of Management Information (MI) to inform relevant senior managers and board committees will become increasingly important when decisions are taken. As alluded to earlier, the need for record-keeping and documenting rationale is imperative to show that any decision taken by a firm is done so in a thorough and diligent manner which seeks to uphold the interests of customers.
Firms may wish to temporarily implement an emergency committee or increase the number of times senior managers or board members meet during the crisis. Given the wider social distancing measures that have been put in place by the UK government and the move of many firms’ entire workforces to remote based working, such measures may not work as smoothly as they would have before. Clearly the availability of technology will go a long way in minimising this disruption and it is unlikely that the FCA will look favourably upon firms whose governance framework is hindered completely.
While the crisis may be rapidly changing day-to-day, this will not absolve the firm nor individual senior managers from demonstrating that reasonable steps were taken.
What are the next steps from the regulator?
The FCA have committed to reviewing the guidance three months from the date of publication (March 2020). The regulator has confirmed that this review will comment on whether an extension to the payment holiday period is required, but it is also reasonable to assume that there will be a statement concerning the extension of the suspension of repossessions.

Covid 19 – Regulator guidance on employer compliance[...]
On 9 April 2020 the Pensions Regulator published the latest of its Covid-19 guidance for […]
On 9 April 2020 the Pensions Regulator published the latest of its Covid-19 guidance for employers. This guidance focuses on employers’ automatic enrolment duties. The guidance, amongst other things, provides helpful clarification on how an employer’s automatic enrolment duties fit with the Government’s coronavirus job retention scheme (Job Retention Scheme) as well as the extent to which an employer must comply with the pensions consultation requirements where it wishes to reduce employer pension contributions.
Automatic enrolment duties
The Regulator is clear that an employer’s (including new employer’s) automatic enrolment duties continue to apply as normal during the Covid-19 pandemic. The Regulator comments that this is the case regardless of whether or not an employer has employees who have been furloughed as part of the Government’s Job Retention Scheme.
Automatic enrolment and the Job Retention Scheme
The Regulator acknowledges that employers have had questions about how the pensions aspects of the Job Retention Scheme operate. The Regulator’s guidance provides the following clarifications.
Payroll processes and pension contributions
Where an employer makes a claim under the Job Retention Scheme, its payroll continues to run as normal. The Regulator is clear that the employer’s and the furloughed employee’s pension obligations remain unchanged: the Job Retention Scheme does not require an employer to make any changes to its existing pension arrangements or payroll processes. The current scheme rules and contribution requirements will continue to apply therefore. However, the employer will also need to calculate 3% of the qualifying earnings of its furloughed employees as part of the process for making the claim under the Job Retention Scheme. This is in addition to the employer’s existing pension contribution calculation in payroll not instead of it.
Employers paying more than the statutory automatic enrolment minimum contribution
An employer may be required to pay more than the statutory minimum automatic enrolment contribution included in the grant under the Job Retention Scheme. This may be for a number of reasons including:
- the employer chooses to pay furloughed employees more than 80% of their salary or more than £2,500 a month,
- the furloughed employee is an active member of a defined benefit (DB) pension scheme or a DB member of a hybrid pension scheme,
- under the scheme rules, the employer contribution rate is higher than 3%, or
- under the scheme rules, the employer pays the total contribution and the employee does not pay any as a result of a salary sacrifice scheme.
The Regulator’s guidance is clear that where an employer pays more than the statutory minimum contributions for whatever reason, the excess will not be funded by the Job Retention Scheme. The employer should continue to make the correct contributions due under the scheme and the amount in addition to that recoverable from the Job Retention Scheme must be met by the employer.
For information concerning defined benefit scheme funding please see our earlier Insight dated 30 March 2020.
Reducing the employer contribution to the statutory automatic enrolment minimum
The Regulator’s guidance states that where an employer contributes to a defined contribution scheme it may be able to reduce its contributions to the statutory minimum. However, the Regulator is clear that an employer cannot legally reduce its contributions below the statutory minimum.
Usually where an employer with at least 50 employees wishes to reduce employer contributions to a defined contribution pension scheme, it would need to complete a 60 day consultation with affected employees before the reduction in contributions would be effective. However, the Regulator’s guidance states that although it encourages employers to undertake as much consultation as possible it will not take regulatory action in relation to a failure to consult for a full 60 days where all the following conditions apply:
- the employer has furloughed employees for whom it is making a claim under the Job Retention Scheme
- the employer is proposing to reduce the employer contribution in respect of furloughed employees only
- the reduced contribution rate for furloughed employees will only apply during the furlough period, after which time it will revert to the current rate
- the employer has written to affected employees and their representatives to describe the intended change and the effects on the scheme and on the furloughed staff.
The guidance states that this regulatory easement will be maintained until 30 June 2020, but the Regulator will review this as appropriate.
For the avoidance of doubt, the Regulator expects employers to comply with the full 60 day consultation if all the above criteria have not been met.
Comment
It is helpful that the Regulator has provided some clarity as to how the automatic enrolment requirements fit with the Job Retention Scheme. It is particularly helpful that the Regulator has confirmed that a full 60 day consultation does not need to take place where an employer wishes to reduce contributions in respect of furloughed employees to the automatic enrolment minimum. In this time of great uncertainty this flexibility from the Regulator is to be welcomed.

FCA confirm measures in the consumer credit sector[...]
Read our most recent article on this topic here. The Financial Conduct Authority (FCA) have […]
Read our most recent article on this topic here.
The Financial Conduct Authority (FCA) have confirmed a proposed range of relief measures for consumer credit customers impacted by the Covid-19 outbreak. These measures came into force on 14 April 2020. The FCA have acted quickly in bringing this new guidance in and it is imperative for regulated firms to ensure this guidance is operationalised immediately.
The new guidance includes measures for the most popular forms of consumer credit, namely credit cards and revolving credit, arranged overdrafts, and personal loans. Further guidance on motor finance and High Cost Short Term Credit is anticipated shortly.
The new temporary relief measures
Personal loans (including home collected credit, guarantor loans and log book loans)
Any customer who is currently experiencing, or reasonably expects to experience, temporary payment difficulties due to the outbreak of Covid-19 should, upon request, be granted a payment deferral of three months. During this period the customer will be effectively granted a payment holiday and will not be viewed as being in arrears. Guarantor lenders are advised that on this basis there should not be enforcement against guarantors. The FCA has clarified that firms are required to offer payment deferrals to customers over a three-month period in respect of all credit products which are covered by its guidance and that consumers should be able to request a three month payment deferral at any point during the 3 months after 14 April; in effect giving a six month maximum timescale for the implementation of payment deferrals.
Firms should take into account both personal and household reductions in income when judging whether such difficulties are associated with Covid-19. The new measures still place a requirement on firms to offer a payment deferral even in the absence of an explicit request from the customer, namely where it is reasonably apparent during a customer’s interaction with a firm that the customer is experiencing, or likely to experience, financial difficulty due to the pandemic.
A firm is permitted to charge interest to a customer during the period of deferred payment. Particular care should be given however to those customers who, due to pre-existing financial difficulties, were already entitled to forbearance measures under CONC 7. Despite the FCA’s statement that firms can continue to charge interest to customers who have deferred payments, for those who were already in difficulties firms should consider suspending, reducing, waiving or cancelling any further interest or charges, deferring payment of arrears or accepting token payments for a reasonable period of time.
Customers who avail of credit deferrals under the temporary Covid-19 measures will not suffer any adverse credit reporting with credit reference agencies.
While payment deferrals are likely to be the most favoured form of relief for customers, the guidance does not preclude firms from offering alternatives or more favourable relief measures. The underlying principle that guides any decision by a firm should be whether such measure is in the best interests of the customer.
The FCA has commented that “There is no expectation under this guidance that the firm makes enquiries with each customer to determine the circumstances surrounding a request for a payment deferral” so customers should not be put to extensive proof as to their circumstances. However the FCA has also made it clear that customers should continue to pay their credit commitments where they can afford to do so.
Credit cards and retail revolving credit
Echoing the above in respect of the personal loan market, credit card and retail revolving credit customers who are experiencing, or who reasonably expect to experience, temporary payment difficulties due to the outbreak of Covid-19 should be granted a three month payment deferral by the firm where requested. Again, even if no explicit request has been received but it is reasonably apparent that the customer is currently experiencing, or likely to experience, financial difficulty then a payment deferral should be offered. Any reduction in personal or household income should be considered by a firm when assessing payment difficulties.
Firms can continue to charge interest during the payment deferral period but where a customer who has received a payment deferral, or an alternative solution for a period as a result of circumstances relating to coronavirus, is entitled at the end of the deferral period to forbearance under the FCA’s existing rules, the FCA has confirmed that as part of this, it expects any interest accrued during the relevant period to be waived.
The FCA has also confirmed that the persistent debt rules under CONC 6.7 will be temporarily suspended during this period. This will allow for the customers, whose circumstances are not so severe that a deferral of payment is required, to make nominal repayments to their credit cards.
There is an expectation that credit card firms should undertake a price review exercise to determine whether the interest rates set are fair “in light of the exceptional circumstances”. Clearly this will be of particular importance to those firms whose customer market is that of customers on low incomes or who have a poor credit history. These customers are likely to be the most disproportionately impacted by the crisis and therefore this should be taken into account.
Overdrafts
Where a firm receives a request from a customer with an arranged overdraft, who find themselves in financial difficulty or reasonably expect to find themselves in financial difficulty, the firm will be required to waive payable interest up to a balance of £500 for a period of three months. In cases where a customer’s overdraft balance exceeds £500, no interest should be payable on the first £500. This measures applies equally to any arranged increases of a customer’s overdraft, though the FCA note that such increases should still be subject to the normal affordability and creditworthiness rules.
Much in the same way these measures apply in the personal loan and credit card markets, if a firm reasonably suspects a customer to be experiencing, or likely to experience, financial difficulty then a firm is bound to implement the pause of interest payable, even in the absence of an explicit request.
Further measures unique to overdrafts include the requirement for firms who have recently changed their overdraft pricing structure to review this in light of the pandemic. Similarly the repeat use rules around overdrafts required relevant firms to develop strategies around identifying and helping customers reduce their reliance on overdrafts. The FCA has suggested that, given the circumstances, firms may wish to reassess how they implement this strategy.
Practical steps and considerations firms should take
Minimise the risk of consumer harm
It is clear from the FCA’s guidance that the immediate focus for firms over the next three months, and indeed possibly beyond, should be ensuring positive customer outcomes are achieved.
Firms should still be mindful to ensure that any payment deferral, or indeed any other relief measure offered, is in the interests of the customer. For customers with longer term financial problems, a wider forbearance package may be more appropriate. Similarly for customers where it is obvious that the payment difficulties will not last three months, a shorter payment deferral period can be offered.
Communications strategy
It is imperative that firms have a clear and defined communications strategy with customers for the next three months and beyond. Given the uncertainties surrounding the pandemic, many customers may still be experiencing difficulties beyond three months. In these scenarios, firms should not wait for payments to be missed beyond the 3 month mark and should instead proactively work with affected customers to come to an agreement as to how these difficulties can be resolved. Ongoing communication with customers, particularly those you suspect may further support after 3 months, is important in managing expectations. Informing customers of next steps and options, with as much notice as possible, can help mitigate your complaint risk further down the line.
The FCA guidance is clear that communications issued to customers that payment deferrals are available for those customers that require it. Equally, it would be good practice to set out to customers other potential options that can be taken and highlight accordingly the risks associated with those options and indeed deferring payments.
Legal implications
The FCA has made it clear that modifying agreements should not be required to effect the payment deferrals in line with its guidance where the lender is showing forbearance and not varying the terms of the contract by agreement with the borrower. This is absolutely the common sense approach given that a modifying agreement is effectively a new agreement requiring a new affordability assessment and any suggestion this is required in each case would place an untenable burden on lenders and borrowers in this time of crisis. However the knock-on effect of this is that, although the FCA has stated that such customers should not be viewed as being in arrears, and not suffer adverse credit reporting where they are afforded a payment deferral, the law requires that borrowers who miss the sum of the last two repayments (4 for home credit loans) must be served with a Notice of Sums in Arrears every 6 months whilst ever they remain behind with their repayments. Failure to serve such notices in the prescribed form and on time renders agreements unenforceable and precludes the charging of interest by reference to the period of non-compliance.
So lenders must continue to serve such notices during deferral payment periods, albeit confusing to customers. A practical solution to protect lenders and reassure customers is to continue to serve such notices under cover of an explanatory letter confirming they do not affect the payment deferral arrangements and are a technical legal requirement.
Reporting to credit reference agencies
It is vital that firms understand the impact of reporting on a customer’s credit file during this period. The FCA guidance is clear that where a customer has utilised the payment deferral relief, that this is not recorded with a credit reference agency as a detrimental arrears. Similarly, if a customer has asked for a payment deferral but a missed payment has already been recorded with a credit reference agency before the relief measure could be applied, it is good practice for a firm to retrospectively fix this report.
A particular difficulty for firms will lie in how they manage those customers who have not formally requested a payment deferral. Any missed payment in these circumstances should technically be registered appropriately with credit reference agencies but in the interests of TCF we would suggest that firms may wish to use this as a trigger contact customers and offer a payment deferral and no adverse credit report to those who are or may be experiencing financial difficulties.
Record keeping
Maintaining records and a paper trail of decisions made, both at executive level and at operational level, will become increasingly more important as time goes on.
Firstly, there remains a risk of an increase in complaints from customers who do not feel they have been treated fairly in the current circumstances. It will be vital that firms can clearly explain why certain decisions were taken in respect of that customer, particular where a complaint has reached the stage of the Financial Ombudsman (FOS). The difficulty for firms will be balancing the FCA’s guidance, which explicitly states that firms are under no obligation to investigate a customer’s specific circumstances to determine whether a payment deferral is appropriate, and the approach by FOS which will, to an extent, consider each the circumstances of each customer and their complaint in isolation.
Secondly, it should be assumed that there will be a level of increased scrutiny from the regulator in the aftermath of the crisis. Firms should therefore be well prepared to respond to any future regulatory interaction. Any response can clearly be made more robust where a firm can demonstrate effectively how a particular strategy or decision was reached.
Unregulated lending
Many regulated firms will offer both regulated and unregulated loans to customers. The FCA’s finalised guidance specifically applies to regulated credit agreements however firms should be mindful of the approach they taken in respect of unregulated loans. Even before the Covid-19 outbreak, the FCA have increasingly scrutinised the conduct of firms in their unregulated activities which impact on their ability to satisfy threshold conditions. It would like be seen as disingenuous and not in the spirit of the guidance if regulated firms did not use the FCA guidance to inform the principles of their approach in the unregulated lending sector.
How Walker Morris can help
We have extensive experience in advising financial services firms, particularly in times of crisis. Our team can help you navigate the regulatory expectations and provide invaluable advice to help you address both present and future issues. Call Jeanette Burgess on 07968 114901 for further advice.

Coronavirus Job Retention Scheme – Welcome Relief for[...]
Since the publication of our previous update on Emergency Funding Support During the COVID-19 Crisis […]
Since the publication of our previous update on Emergency Funding Support During the COVID-19 Crisis on 20 March 2020 and our articles last week on reducing workforce costs and general practical advice for employers, the Government has unveiled a further series of measures to supplement those previously announced to support people, jobs and businesses. These include the introduction of a new Coronavirus Job Retention Scheme, under which the Government will cover the costs of 80% of salary (up to a maximum of £2,500 per person per month) for individuals who are kept on the payroll but not required to work during the Coronavirus outbreak, instead of being laid off. The Chancellor referred to such individuals as “furloughed workers”. These are truly unprecedented measures aimed at keeping people in employment in what are undoubtedly unprecedented times.
At the time of publication, only basic details regarding the scheme have been made available and many questions employers are likely to have remain unanswered. Key details that have been revealed to date include:
- The scheme will be open to all employers, small or large, who should contact HMRC to apply for a grant.
- Employers will need to designate affected individuals as “furloughed workers” and notify them of the change. Such change will need to follow normal processes for agreeing contractual variations, unless the contract contains express lay off provisions. This would involve consultation and agreement with individuals regarding their new status as “furloughed workers”, including collective consultation where 20 or more individuals are affected and the proposals include termination and re-engagement (where agreement to be designated as “furloughed workers” is not reached).
- A “furloughed worker” is not a concept currently recognised in law. However, the clear intention is that such individuals should not do any work for the employer.
- The announcements made so far seem to use the terms “employee” and “worker” interchangeably. However, given that they refer to individuals being “kept on payroll”, the suggestion is that both employees and workers who are subject to PAYE will be covered, and this has been reflected in comments made by the Chancellor. Self-employed individuals therefore appear to fall outside the ambit of the scheme (separate arrangements may be made in relation to them in the coming days or weeks). As such, genuinely self-employed individuals should not be included (at least for the moment).
- Employers will need to submit information to HMRC about the individuals that have been furloughed and their earnings through a new online portal. HMRC will set out further details on the information that will be required in due course.
- The scheme will be open for an initial period of 3 months, after which it will be reviewed and extended if necessary, and grants will be backdated to cover wages from 1 March 2020.
- No limit has been placed on the amount of funding available under the scheme or the number of jobs it will support.
- HMRC are working urgently to set up a system for reimbursement, and expect to be able to pay out the first grants within a matter of weeks. The aim is for the system to be up and running before the end of April.
The Chancellor did confirm that employers will have the option to top-up salaries beyond the 80% that will be covered by the grant at their own expense. However, they will still need the individual’s agreement to pay them only 80% of their salary if they do not choose to top-up. Further, it is currently unclear what criteria will apply before an individual can be designated a “furloughed worker”, what evidence will need to be submitted of the business need to put them into this category, and what information regarding their salaries will be required.
In terms of the maximum £2,500 that is recoverable per person per month, it is currently unclear whether this refers to net or gross pay, or if only basic salary costs are included, as opposed to costs towards benefits also being recoverable. Some Government guidance refers to the figure relating to “all employment costs”.
In addition, for the many employers who have already taken the tough decision to put employees onto short-time working on reduced pay as a means of avoiding redundancies, or have already given notice of redundancy (whether or not such notice has yet taken effect), it is not clear whether any assistance will be available retrospectively.
At Walker Morris, we are closely monitoring developments regarding the scheme and are ready to answer clients’ queries on how it could benefit their business and workers. Please get in touch with your usual contact or the members of the Employment Team below.

Reducing workforce costs in difficult times
The financial impact of coronavirus on business is hitting hard. Inevitably, many employers are starting […]
The financial impact of coronavirus on business is hitting hard. Inevitably, many employers are starting to look at ways in which workforce costs might be scaled back, at least on a temporary basis until the crisis abates.
This is a time to think creatively about the options available. Headcount reduction by way of redundancies may not be the best option given that the current situation, whilst extreme, will not last forever. A well-skilled, knowledgeable and effective workforce is a business asset that may have taken years of investment to build and nurture. Redundancy may be seen as a ‘last resort’ by many employers who are loathe to sacrifice hard-earned and valuable skills and experience to what is likely to be a short to medium term issue.
These are unprecedented times. Consequently, staff and staff representative bodies are more likely to be open to (or at least prepared to have a dialogue about) creative, short to mid-term proposals that might present an alternative solution to job cuts.
These might include:
Lay offs and short time working
It may be tempting to consider laying off employees temporarily or offering short time working (whereby you reduce their hours) however, currently you must have the express contractual right to do this, which is unusual. There are also detailed rules about safety net payments and how long people can be put on lay off or short time working. Although there is some speculation that the government may introduce emergency measures introducing a statutory right to lay employees off, until that happens, in order to introduce either of these options you would need to look to vary contracts instead, see below.
Changes to terms and conditions of employment
The current economic situation means that changes on a temporary or ‘under review’ basis may be an option to consider. Minor changes to terms of employment may be permissible if the contract of employment allows them or it might be possible to mutually agree certain changes with staff i.e. seek their consent (be sure to document any such agreement).
Potential considerations that might assist during the current crisis:
- Flexible working
- Home working
- Part-time hours
- Job sharing
- Change in duties or work location/area
- Change in shift patterns
- Change in payment structures/timings
Always take advice before imposing contractual changes. Fundamental changes carry a high degree of legal risk and it is important to navigate the process correctly in order to minimise exposure to claims. Regardless of how extreme the business circumstances may be, fundamental changes to terms imposed on staff unilaterally are highly likely to be unlawful and the cost of legal claims could well outweigh any short-term benefits.
Dismissal and Re-engagement
Alternatively, there is a potential legal route available where employers wish to invoke more substantial changes, that is to dismiss employees on their existing terms and immediately re-engage them on new terms (for example with reduced hours). Having a genuine and solid business reason and following a text-book consultation process will be paramount to avoid unfair dismissal and failure to consult claims. As the outcome of such consultation could be multiple dismissals, collective consultation obligations may apply (i.e. a 30 day process for between 20-99 potential dismissals and 45 days for more than 100). The usual requirements to elect representatives, complete a S188 letter and lodge an HR1 form with the secretary of state will apply. Again, it is sensible to take advice to ensure following the correct procedures, not least because there are criminal sanctions attached to the lodging of the HR1.
Reducing use of contractors and agency staff
Reduction of non-core/off-payroll staff could be an option to consider. Before terminating or suspending such contracts do first check that you are doing so in accordance with the contract terms. Also, check that such staff haven’t gained employment or worker status. As recent case law (e.g. Uber, Citysprint, Pimlico Plumbers etc) has shown, it is the reality of the relationship and not the ‘label’ applied to it that counts when it comes to determining the employment status of contractors and gig workers.
Temporary unpaid or part-paid sabbaticals
This will either be a conceivable option or not depending on the business. If not, skip this section. If it is something that might work in your business then a period of unpaid or part-paid time off can be mutually agreed between employer and employee. The employee normally retains their continuity of employment and the right to return to their job at the end of the leave period. Properly documenting the parameters of the sabbatical agreement will be essential. For example, give thought to what would happen if the job is not available at the end of the leave period.
Secondment or transfer to another business area
It may be that under-utilised staff could be re-trained or transferred to areas of the business where there is a greater staffing need. Staff may be prepared to consider this is if it presents an alternative to outright job losses. As before, imposing changes without agreement or consultation could give rise to employment claims so it is important to take advice on process.
Freeze on recruitment/deferring job offers
Freezing recruitment is a simple and easily achievable step. If job offers have already been issued, exercise caution before withdrawing them or unilaterally deferring start dates as this could give rise to breach of contract claims.
Consider other business areas where savings might be made
As stated at the beginning of this article, a well-trained and effective workforce is a business asset not to be underestimated. Cutting staff can be inherently costly and carries associated legal risk. With this in mind, it is worth looking holistically at all areas of the business to identify any non-workforce related measures that might present an alternative to staff cutbacks. It is worth mentioning that, in difficult times such as these, solid leadership and maintaining good staff morale will pay dividends.
Ultimately, and after consideration of all feasible alternatives, it may simply not be possible to avoid redundancies. If this is the case, the key will be to follow correct legal process thereby minimising the risk of legal claims and the additional cost this would represent.
Our employment team are here to help with any queries you may have arising from this article. Please contact David Smedley, Andrew Rayment or Laura McLellan.

Coronavirus and employment law – practical advice for[...]
The full effect of the coronavirus on the UK workforce has yet to be seen. […]
The full effect of the coronavirus on the UK workforce has yet to be seen. Aside from the adverse impact on business in general, employers face having to ensure that their staff are protected as far as practicably possible, as well as dealing with the clinical impact of the virus on the workforce (sick employees), but also the wider knock-on effect of precautionary measures such as social distancing and self-isolation. None of this is helped by the ‘fear factor’ which has given rise to panic behaviours such as food stockpiling.
Below, we set out some practical steps for employers and look at some frequently asked questions. Our Employment Team are on standby to help with your queries as and when they arise.
Initial practical steps
Employers have a duty to take steps to ensure the health and safety of their workforce and to ensure a safe system of working and must take the threats posed by coronavirus seriously. This can be done by adopting the following steps:
- Keep staff regularly updated on what is being done to reduce risks of exposure and to mitigate the effects of coronavirus in the workplace
- Check that managers know the symptoms of coronavirus and have a clear understanding of the absence/sickness procedures (including around sickness reporting and sick pay)
- Think through the steps that would be taken if an employee was confirmed as having the virus including isolation/self isolation and taking advice
- Ensure there are adequate handwashing facilities with hot water and plentiful soap (and don’t allow the soap to run out!)
- Encourage staff to wash their hands regularly and put up awareness posters about handwashing, coronavirus symptoms and action
- Provide hand sanitiser (assuming of course that you can obtain it!) and tissues for staff, and encourage them to use them
- Consider if protective face masks might help people working in particularly vulnerable situations (this is in line with ACAS current advice)
- Stay up to date with Government advice and ensure that it is followed. Web links should be provided as the advice is frequently being updated by HM Government
- Consider options with regards to home-working or agile/remote working. Ensure that your IT is fit for purpose and will facilitate home/agile working
- Consider what preparatory steps should be taken at this point in the event of a lockdown. For example, if you don’t have a Home-Working Policy/Agile Working Policy now is a good time to introduce one
- Ensure that people are treated fairly and vulnerable groups are taken into account
- Check that all staff (including contractors) contact numbers and emergency contact details are up to date.
Self-isolation and sick pay
The most common queries are around sick pay and self-isolation. Put simply, if the employee can still work from home during a period of self-isolation then they will be entitled to be paid because they are still working.
The Government and ACAS have stated in their official guidance that if NHS 111 or a doctor advises an employee or worker to self-isolate, they should receive any Statutory Sick Pay (SSP) due to them. If the employer offers contractual sick pay, it’s good practice to pay this. Boris Johnson has announced that, in these circumstances, SSP would be payable from day one of sickness but, at the time of writing, this had not been implemented by legislation.
If the employee is not actually sick but the employer has asked them not to come to work because of concerns that they may be affected by coronavirus, they will be entitled to their usual pay.
Absence due to concern about exposure
Some employees may resist attending work because they are worried about exposure to the virus. Employers should handle such concerns very sensitively but firmly. For example, if the employee is more vulnerable (e.g. they are over 60, have underlying health conditions or a weakened immune system) then their concerns may well be understandable. It may be possible to allay their concerns by making some adjustments, for example, to their hours to enable them to travel on public transport out of rush hour or allowing them to work from home on an agile basis. Alternatively, the employer could allow them to take some time off as holiday. If no agreement can be reached and the employee insists on not coming to work (and they are not sick) then there is no legal obligation to pay the employee.
Ultimately, if an employee refuses to attend work it could lead to disciplinary action. However, exercise great caution when dealing with pregnant or otherwise high-risk employees as there is a risk of discrimination claims (pregnancy/pregnancy related/disability claims). If there is a genuine health and safety risk posed by being required to attend work then disciplinary action might lead to a constructive dismissal or detriment claim. The key is to act reasonably, listen carefully to your employees, follow current government guidance and avoid placing employees at undue risk.
Bear in mind that if there is a vulnerable individual in the workplace (e.g. someone undergoing chemotherapy) it would not be appropriate to tell other staff about this unless the individual wishes the employer to do so as this is obviously sensitive personal data/information.
Employees with caring responsibilities
Employees are entitled to reasonable time off work to help someone who depends on them (a ‘dependant’) in an unexpected event or emergency (such as coronavirus). For example:
- if they have children they need to look after or arrange childcare for because their school has closed
- to help their child or another dependant if they’re sick, or need to go into isolation or hospital
There is no statutory right to pay for this time off, but some employers might offer enhanced pay in this scenario. The amount of time off an employee takes to look after someone must be reasonable for the situation. For example, they might need to take 2 days off to start with, and if more time is needed, they can then take it as holiday. Again a sensible approach needs to be adopted in such circumstances.
Covering sick employees
It is possible that an ‘all hands on deck’ situation may arise where employers need to utilise every resource available and change an employee’s duties or hours to cover for their sick colleagues.
Many contracts of employment give employers an express right to vary duties and hours (although this is always subject to the implied term of trust and confidence so such changes will need to be reasonable under the circumstances). Employees are also under an implied duty to obey lawful and reasonable instructions which can be helpful in certain situations. It is important to consult with affected employees before changing hours or duties to avoid the risk of employment claims but clearly and in extremis, virus related absences will provide a powerful business case for changes on a short-term basis.
Further advice
The Government and ACAS guidance for employers is being kept under constant review as the situation develops. This is an incredibly challenging time for employers but rest assured that employment law allows for flexibility and a fair balance between the needs of the business and the interests of staff in unprecedented situations such as this. More often than not, the key to getting it right is in having solid business reasons for decisions and then in successfully navigating a fair procedure.
Our employment team are here to assist and advise with any queries or concerns that you may have. Please contact David Smedley, Andrew Rayment or Laura McLellan.

The implementation of the EU Medical Device Regulations[...]
The European Commission have now considered and accepted their earlier proposal to postpone the entry […]
The European Commission have now considered and accepted their earlier proposal to postpone the entry into force of the EU Medical Device Regulations (MDRs) by one year, in light of the current Coronavirus pandemic.
The Commission have acknowledged that any delays to getting medical devices certified and on the market at this time must be avoided so fighting the global pandemic can be prioritised. This postponement will be welcomed by the health sector and economic operators alike who are now able to put aside preparatory efforts to ensure compliance with the new MDRs and focus their resource on meeting the ever increasing demand for medical devices across the EU.
Stella Kyriakides, Commissioner for Health and Food Safety stated in a Commission press release that ‘Our priority is to support Member States to address the coronavirus crisis and protect public health as powerfully as possible – by all means necessary. Any potential market disruptions regarding the availability of safe and essential medical devices must and will be avoided. Today’s decision is a necessary measure in these very exceptional times.’
The Commission have set a new deadline of 26 May 2021 for the entry into force of the MDRs, by which stage medical device manufacturers and the wider supply chain must ensure they are compliant with the increasingly stringent regulatory requirements. Of course, this date exceeds the deadline of the Brexit transition period, meaning the MDRs will never be applicable in the UK. It remains to be seen whether the government seek to implement similar regulations in the UK following the end of the Brexit transition period.
In the meantime, those in the medical device sector will continue to operate as they have done within the transition period, whereby devices can be placed on the market under the current EU Directives. To further support the continued supply of critical medical devices, regulatory flexibility has been provided at this unprecedented time, meaning non-CE marked medical devices can be supplied where there is a significant clinical need and no CE marked devices are available.
It is clear that the European Commission is taking pragmatic steps to support both manufacturers and end users across the EU by ensuring the availability of vitally important medical devices whist maintaining patient health and safety. Undoubtedly, these actions will be welcomed across the industry at these challenging times.

General Meetings and COVID-19
As annual general meeting (AGM) season gets underway, company secretaries are asking themselves if and […]
As annual general meeting (AGM) season gets underway, company secretaries are asking themselves if and how AGMs can be held whilst the coronavirus pandemic continues and restrictions on movement and public meetings apply in the UK. The UK’s current prohibition on non-essential travel and public gatherings of more than two people means that companies will need to re-consider how their AGM is held, and we set out below some of the practical steps public companies (and private companies which are required by their constitutional documents to hold an AGM) may wish to take in planning for, or holding, an AGM.
Planning
- Delay convening the AGM – if notice of the AGM has not been issued yet, consider whether the meeting can be delayed. However, public companies should note that they are required to hold an AGM within six months of their financial year end, and existing authorities (such as an authority to allot shares) may expire a certain number of months after they were granted – so indefinite delay is very unlikely to be an option.
- Postpone the AGM – if notice of the AGM has been issued, a company can postpone the AGM if allowed by its articles of association (articles) (and if a postponement is permitted, the provisions of the articles of association should be carefully followed). The postponed meeting must be held within six months of the company’s financial year end, so a postponement may be of little practical use.
- Communicate with shareholders – a company should ensure that its communications with shareholders are clear and unambiguous. If a company has issued its AGM notice and arrangements for the meeting need to change (for example, if the original venue is no longer available), the company should notify its shareholders of any changes which are made as soon as practicable.
- Encourage proxy voting – companies should consider encouraging shareholders to vote at the meeting by proxy, and companies may wish to specify in AGM notices that shareholders should appoint the chairman of the meeting as their proxy (as any other proxy is likely to be refused entry to the meeting).
- Hold a hybrid AGM – a company’s articles may allow a hybrid meeting to take place (that is, a combination of a physical and an electronic meeting). However, if the articles do not explicitly allow for a hybrid meeting, it is recommended that this approach is not followed.
Conduct of meetings
- Restrict the number of attendees – as public gatherings of more than two people are currently prohibited in the UK, companies should ensure that their AGM notices specify that shareholders are likely to be prevented from attending the AGM in person, and that shareholders are actually prevented from attending the AGM if their attendance would cause that prohibition to be breached.
- Ensuring the AGM will be quorate – the quorum for an AGM is generally set out in a company’s articles, and is often two members present in person or by proxy. Companies should consider how they will achieve this quorum given the current restrictions. It may be that two directors who are also shareholders can form a quorum, and the proxy votes submitted prior to the AGM can be cast by one of those directors.
- Live streaming – companies should consider whether it is possible to provide a live stream of the AGM to shareholders, either through a dial in or video link. Companies should note, however, that shareholders will not necessarily be deemed to attend an AGM if they choose to participate in this way.
Possible legislation and guidance
The UK government has announced that it will introduce legislation to ensure that AGMs can be held safely and consistently with the current restrictions on movement and gatherings. This legislation is not expected imminently, and it remains to be seen whether it is introduced in time to assist companies currently considering issuing their AGM notices. In the meantime, The Chartered Governance Institute has issued guidance, and a supplement to that guidance, on contingency planning for AGMs during the current pandemic.

Contracting in uncertain times
In this time of social distancing, it is highly likely that a greater number of […]
In this time of social distancing, it is highly likely that a greater number of legal documents will have to be executed by using electronic signatures. In this article we look at the issues that need to be considered to ensure that documents can still be validly executed remotely.
Legal Background
The precautions being put in place globally to address the spread of Coronavirus include recommending or requiring many people to work from home. This has raised the question of how to execute documents in these circumstances and whether it is possible to legally execute documents by electronic signature. Note that this article will not consider electronic execution in relation to registered dispositions under the Land Registration Act 2002, or any general issues surrounding electronic conveyancing and registration.
The law surrounding electronic signatures is continuing to develop to reflect the rapid evolution in the various electronic forms of communication available. The key legal sources are the Electronic Identification and Trust Services Regulation (EU/910/2014) (eIDAS), the Electronic Communications Act 2000 (ECA 2000), various sources of case law and a report publish by the Law Commission in September 2019.
The Law Commission report (see Walker Morris article published on 26 September 2019) in particular detailed the review into the current laws on electronic signing of documents and made various recommendations on the practicalities of doing so. On 3 March 2020, the Lord Chancellor made a ministerial statement confirming that the government agrees with the conclusions of the Law Commission report and accepted that the government should create an industry working group to further consider the practical and technical issues of electronic execution of documents.
Electronic Signatures
So what actually constitutes an electronic signature? Taking one step back, case law provides that a signature can be made through a variety of methods including (but not limited to):
- a party signing with their name in some form (be that surname, first name, initials or a combination);
- signing with an “X” or other mark; and
- a stamp of a handwritten signature.
The key as to whether a mark on a document will count as a signature is whether this was made with the intention of signing and authorising the document and the intention to become bound by the terms of said document.
The eIDAS and ECA 2000 widely define electronic signatures to be anything in electronic form which is attached to, or logically associated with, the electronic data/document and has been used by the party to sign. Again this can be in a wide variety of forms including, but not limited to:
- typing the signatories name;
- a scanned copy of a manuscript signature;
- a signature made digitally by use of electronic pen (e.g. stylus and touch pad); and
- clicking an icon or button on a website to confirm an order or acceptance to terms.
Again to be effective the key point is that an electronic signature must have an intention to authenticate the document and become bound by the terms the signatory has signed up to. Additionally any formalities that would normally be required for the signature to be valid (e.g. the document being signed in the presence of a witness) must still be met.
Deeds
A number of transactions require the execution of a deed in order to be effective, and strict formalities must be observed for the deed to be valid. In particular:
- a deed must be in writing;
- it must be clear from the face of the instrument that it is intended to take effect as a deed;
- the document must be validly executed as a deed; and
- the deed must be delivered.
It is common practice for deeds to be delivered in virtual form, with each party separately signing the final deed with wet ink and then scanning this to circulate between the various parties on completion. The requirement for deeds to be in writing can also be achieved in electronic form as courts are often willing to interpret “in writing” to include electronic communications.
As discussed above a signature can come in a wide variety of forms, but for a deed there is also the additional requirement of a witness. The Law Commission’s view is that so long as the witness is present in the same location, and can witness the signatory applying their signature electronically then it would be valid, and the witness can countersign electronically as well by the same means.
Witnessing documents remotely (e.g. via video conference) is not something that has ever been tested in law and therefore it remains likely that a witness and signatory must physically be present in the same location for the electronic execution to be valid. This obviously may present some issues in the short term due to the restrictions on movement presented by the COVID-19 outbreak. Workarounds, such as members of the same household witnessing a document, could be utilised so long as the witness is over the age of 18.
Summary
The law generally takes a pragmatic approach to signatures and does not prescribe any particular form that they must take. The key to a signature being valid is the intention of the person applying the signature is to authenticate the document and be bound by the terms they are signing.
Even for documents such as deeds that may have additional signing requirements; so long as the additional statutory, or contractual, requirements have been met any form of electronic signature could be applied to the document.

Changes to Competition Law and State Aid Rules[...]
The implications of coronavirus (Covid-19) and measures taken to contain the spread of the virus […]
The implications of coronavirus (Covid-19) and measures taken to contain the spread of the virus are having a significant adverse impact on many businesses and the economy at large. It is becoming increasingly difficult for companies involved in the manufacture and supply of essential goods and services to meet current demand and as such it has become apparent that businesses must work together to adapt to the current situation and ensure security of supply.
The UK’s Competition and Markets Authority (CMA) and, at European level, the European Commission (Commission) continue to enforce competition law to deter companies from engaging in anti-competitive practices. However, recognising the serious impact of Covid-19 and the pressing need for businesses to collaborate in certain areas, competition laws have been relaxed to some degree. This article details some of the key developments.
Distinction between unlawful cartels and lawful “necessary and temporary” co-operation
Agreements between competing businesses that prevent, restrict or distort competition using practices such as price-fixing, market sharing, limiting production or rigging bids (also known as cartels) are prohibited under competition law. Businesses breaching such laws can face heavy fines. Under UK competition law it is also a criminal offence for competitors to engage in such cartels.
These rules continue to apply in the Covid-19 crisis, however, given the exceptional circumstances that we are facing, governments and the competition authorities have acknowledged that a relaxation of competition laws is necessary to enable enhanced collaboration between businesses to facilitate the supply of essential goods and services, particularly to vulnerable customers. The UK Government recently announced plans to pass legislation which will allow cooperation between supermarkets to ensure the continued supply of groceries in stores (covering matters such as the sharing of staff, distribution depots and transport and sharing of data such as stock levels). The UK Government has also decided to waive competition enforcement and allow cooperation to secure essential ferry transport between the mainland and the Isle of Wight. The ferry operators will be able to discuss and agree routes and coordinate staff resourcing and they can also cooperate to allow the transportation of essential food, freight and medical supplies.
The CMA published a guidance document titled “CMA approach to business cooperation in response to Covid-19”. This guidance explains that the CMA will not be taking action against competing businesses which are cooperating or coordinating their efforts provided that “any such coordination is undertaken solely to address concerns arising from the current crisis and does not go further or last longer than what is necessary“. This relaxed approach is not limited to collaboration in the grocery sector but also extends to other sectors manufacturing or supplying essential goods and services.
The guidance clarifies that enforcement action will not be taken against competitors choosing to collaborate, provided that such actions are temporary and:
- appropriate and necessary in order to avoid a shortage, or ensure security, of supply;
- clearly in the public interest;
- contribute to the benefit or wellbeing of consumers;
- deal with critical issues that arise as a result of the COVID-19 pandemic; and
- last no longer than is necessary to deal with these critical issues.
However, the CMA has warned that it will not tolerate businesses exploiting the crisis as a ‘cover’ for non-essential collusion, such as the exchange of commercially sensitive information or denying rivals access to supplies or services.
Action against Excessive Pricing
Dominant businesses are those with a position of such economic strength in a market that they can act independently of customers and competitors. For a dominant business, it is unlawful under competition law to charge an excessive price for goods or services, i.e. a price bearing no reasonable relation to the cost of supply. The CMA has established a Covid-19 taskforce to identify businesses seeking to exploit customers through excessive pricing and has warned against such practices in key sectors such as pharmaceuticals and food and drink. Already the CMA has contacted traders and platforms regarding potentially excessive pricing of hand sanitiser.
State Aid and the Temporary Framework
The UK remains subject to EU State aid regulations until the end of the transition period (currently 31st December 2020). State aid is financial assistance provided by governments or local authorities to companies that has the potential to distort market conditions by providing an unfair advantage. Under the existing regime, unless it falls within an exemption (see below), financial aid granted by the UK Government or other public bodies must be notified to the Commission and approved before it can be administered. The potential issue here is that the UK Government has launched an unprecedented level of economic support and will continue to do so to combat the economic effects of the Covid-19 crisis. Measures which have already been announced include: support to cover up to 80% of the salary costs of furloughed employees; support for small and medium-sized enterprises (SMEs); deferring income tax and VAT payments; loans for SMEs and larger businesses and support to cover statutory sick pay payments for SMEs.
The vast majority of aid which will be issued in the coming months will not require notification because such aid is covered by a relevant exemption, either because it is “de minimis” (i.e. below €200,000 over a three year period) or falls within the Block Exemption Regulation (an exemption which applies to a wide variety of aid including regional aid, aid to SMEs, aid for research and development and aid for certain types of infrastructure). Furthermore, measures which apply to the economy as a whole (e.g. do not confer any advantage on selective businesses) will not constitute State aid. Current State aid rules also allow Member States to grant compensation to businesses for damage which has been directly caused by exceptional circumstances and this would include the COVID-19 pandemic. This could be used to support badly hit sectors including transport, tourism and retail.
In addition, the Commission has adopted a temporary State aid framework (the Temporary Framework) to increase member States’ abilities to support their economies in light of the Covid-19 pandemic – the Commission took the same flexible and responsive approach in 2008 during the global financial crisis. The Temporary Framework will remain in place until the end of 2020, when the Commission will take a view on whether this needs to be extended.
The Temporary Framework specifically allows authorities to provide five types of aid to qualifying companies:
- Direct grants, selective tax advantages and advance payments – Member States may set up schemes to grant up to €800,000 to companies to address urgent liquidity needs (the business must not have been in difficulties on 31 December 2019).
- State guarantees for loans taken by companies from banks – Member States will be able to provide State guarantees to ensure banks keep providing loans to the customers who need them (maximum six year term and the business must not have been in difficulties on 31 December 2019).
- Subsidised public loans to companies – Member States will be able to grant loans with favourable interest rates to companies. Such loans may be used to cover immediate working capital and meet investment needs (maximum six year loan term and the business must not have been in difficulties on 31 December 2019).
- Safeguards for banks that channel State aid to the real economy – Some Member States plan to build on banks’ existing lending capacities, and use them as a channel for support to businesses – in particular to SMEs. The Temporary Framework provides that such aid is considered to be direct aid to the banks’ customers rather than to the banks themselves.
- Short-term export credit insurance – The Temporary Framework introduces additional flexibility on how to demonstrate that certain countries are not-marketable risks, which may enable short-term export credit insurance to be provided by the State where needed.
Where measures do amount to State aid and are not exempted, the Commission has taken a flexible approach so that Covid-19 related aid is typically being approved very quickly (generally within 24 – 48 hours). The Commission has already approved under the Temporary Framework an umbrella measure to allow GBP 50bn (EUR 57bn) aid to support SMEs and large corporates affected by the Covid-19 outbreak in the UK.
It is possible we may see some further developments to the competition and state aid regimes in the next few months but these initial measures take pragmatic steps to ensure that competition law does not hamper the provision of essential goods and services to consumers or a financial lifeline for businesses.

Newsflash: COVID-19 – An employer’s duty to report[...]
The Health and Safety Executive have clarified that, in certain limited circumstances, employers do have […]
The Health and Safety Executive have clarified that, in certain limited circumstances, employers do have an obligation make to a report under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013, or ‘RIDDOR’.
However, there are only two circumstances in which employers must make a report which are:
- Where an unintended incident at work has led to someone’s possible or actual exposure to coronavirus. This must be reported as a dangerous occurrence.
- A worker has been diagnosed as having COVID-19 and there is reasonable evidence that it was caused by exposure at work. This must be reported as a case of disease.
Be careful to properly understand what the Health and Safety Executive actually means here.
The Guidance does help out by providing examples.
Dangerous Occurrences
In relation to COVID-19 a Dangerous Occurrence may be the inadvertent release of the virus in a laboratory or similar setting. This might be where an employee has accidently broken a glass vial containing the virus which has led to either possible or actual exposure.
Diseases
Where someone is exposed to the virus because of their work and is diagnosed with COVID-19, you must report this to the Health and Safety Executive. An example might be a healthcare professional diagnosed with COVID-19 after treating patients. Unlike the Dangerous Occurrences example, this category of exposure is potentially far wider and could easily include care homes and similar settings.
Stuart Ponting, Health and Safety Partner at Walker Morris LLP commented:
“As employers struggle to maintain some semblance of normality within their organisations, they must not forget their duties under the Health and Safety at Work etc Act 1974. Clear protocols for the timely identification and reporting of any COVID-19 exposures that fall within the RIDDOR regime should be established and adhered to, particularly as a failure to comply can result in criminal liability and potential fines for the organisation”.

Proposed delay to medical device reforms in light[...]
The European Commission is currently working on a proposal to postpone ‘the entry into force […]
The European Commission is currently working on a proposal to postpone ‘the entry into force of the new medical device regulations (MDRs) for one year’ Stefan De Keersmaecker, a spokesperson for the European Commission has confirmed.
The MDRs are set to introduce new and extended obligations on manufacturers and others in the supply chain of medical devices. Changes include new risk classification criteria, increased requirements for clinical evidence, new vigilance reporting timescales and obligations on economic operators in the supply chain who must themselves demonstrate compliance.
The EU Regulation on Medical Devices 2017/745 entered into force on 25 May 2017, whereby three and five year transition periods began for the MDRs and In vitro diagnostic Medical Devices Regulations (IVDRs) respectively. It was originally envisaged that these regulations would be directly applicable in EU Member States from 26 May 2020 and 2022 respectively.
Given that the 26 May 2020 date is fast approaching, it is expected that the proposal to postpone the coming into force of the MDRs will be submitted to the European Commission in early April.
What does this mean for medical device manufacturers and economic operators?
It is thought that the delay will relieve pressure ‘from national authorities and industry and allow them to focus on urgent priorities related to the coronavirus crisis’, De Keersmaecker explained. This move will be welcomed by medical device manufacturers and economic operators, who will be able to put aside preparatory efforts to ensure compliance with the new MDRs and instead focus their resource on responding to the Coronavirus pandemic.
A delay of one year will mean that those in the medical device sector will continue to operate as they have done within the transition period, whereby devices can be placed on the market under the current EU Directives, particularly the requirements to obtain CE certificate validity from a notified body. Medical device manufacturers will be able to maintain operation under certificates obtained under the current medical device Directive, which will continue to be valid.
A delay of one year will of course mean that the MDRs are likely to come into effect after the Brexit transition period, meaning that not only will the IVDRs never be in force in the UK, the MDRs will also never be applicable in the UK either. The government will therefore have to address whether they wish to implement similar regulations in the UK following the end of the Brexit transition period.

Covid-19 – the Government announces a temporary suspension[...]
On 28 March, the UK Government announced a series of new measures to ease the […]
On 28 March, the UK Government announced a series of new measures to ease the unprecedented strain which coronavirus is placing on businesses across the country. Part of the package announced is that the wrongful trading provisions of the Insolvency Act 1986 will be suspended retrospectively from 1 March 2020. The Government has said that the purpose of this suspension is to allow directors extra security and certainty whilst they attempt to navigate the current climate and/or attempt a rescue of their companies. In particular the Government has highlighted the need for business to be able to “continue buying much-needed supplies such as energy, raw materials or broadband” which would ordinarily need to be carefully assessed in light of the wrongful trading provisions of the Insolvency Act 1986.
The UK Government’s announcement follows on from similar moves in Germany and Australia. In Germany, legislation has been passed which not only temporarily releases companies in financial distress from their obligations to file for insolvency but also suspends prohibitions of certain payments after the onset of insolvency. These provisions have been initially implemented until 30 September 2020. Similarly, the Federal Government of Australia has announced a six month softening of insolvency legislation which will allow directors to now incur debts “in the ordinary course of business” for which they would ordinarily be personally liable in an insolvency situation.
The initial response to the UK Government’s announcement has been largely positive. The British Chambers of Commerce have said that the suspension of wrongful trading will “ensure that directors are not penalised for doing all they can to save companies…that were viable before the outbreak… [that] can help power the recovery when the immediate crisis is over”. The move will also certainly be welcomed by the Institute of Directors who last week called on the Government to “prioritise jobs and business survival” by relaxing insolvency legislation to offer directors “greater room for manoeuvre” during the Covid-19 outbreak.
However, concerns have been raised that whilst the existing law on director’s duties will presumably remain in place in full, the measures implemented by the Government will have to be finely balanced to prevent unscrupulous directors from abusing the ability to trade without the risk of wrongful trading action being taken against them.
The legislation to back the Government’s announcement is currently awaited and will have to be closely assessed once it is published, though it is not clear when this will be. Walker Morris will continue to closely monitor this situation. In the meantime if you require advice or support then please contact one of our specialists.

Consumer and retail finance: Coronavirus and FCA expectations
The Financial Conduct Authority (FCA) says that it stands ready to take any steps necessary to […]
The Financial Conduct Authority (FCA) says that it stands ready to take any steps necessary to ensure customers are protected and markets continue to function well. It has published a range of information for firms dealing with the fallout from the coronavirus crisis. See the main webpage for links to additional resources, including FCA information for firms on coronavirus (Covid-19) response. We set out below key considerations for firms in the consumer and retail finance sector.
General comments
The FCA expects firms to:
- Take reasonable steps to ensure they are prepared to meet the challenges coronavirus could pose to customers and staff, particularly through their business continuity plans. The FCA gives the example of a firm closing a call centre requiring staff to work from other locations, including home. The firm should establish appropriate systems and controls to ensure it maintains appropriate records, including call recordings if required.
- Provide strong support and service to customers during this period, being clear and transparent. Firms should use the flexibility in the FCA’s rules to support consumers, bearing in mind individual circumstances. The FCA says it welcomes firms taking initiatives going beyond usual business practices to support their customers – they should notify the FCA when they do this so that it can consider the impacts and offer support as appropriate.
- Manage their financial resilience and actively manage their liquidity – firms should report to the FCA immediately if they believe they will be in difficulty. See this statement on the FCA’s expectations on financial resilience for solo-regulated firms.
- Deal with complaints promptly. If the pandemic prevents this, firms should contact the FCA.
Senior Managers and Certification Regime (SMCR)
The FCA does not require firms to have a single senior manager responsible for their coronavirus response. They should allocate these responsibilities in the way which best enables them to manage the risks they face. The FCA recommends that the Chief Executive Officer Senior Management Function (SMF1), or most relevant member of the senior management team, be responsible for the firm’s approach to key workers. See the FCA’s statement on key workers, which sets out steps firms should take to help identify key workers in financial services.
The FCA has delayed publication of the SMCR directory of certified and assessed persons for at least a month. It was due to be published on the Financial Services Register by the end of March 2020.
Permissions
Now that most workers and customers are confined to their homes, firms should check their permissions before changing delivery routes to market and get in touch with the FCA in case other permissions are required. In its recent statement on work-related travel and the responsibilities of Senior Managers, the FCA said that those selling non-essential goods and credit would not be expected to go into work or meet face-to-face.
Mortgages and repossessions
The FCA has issued guidance to mortgage lenders, mortgage administrators, home purchase providers and home purchase administrators on how it expects them to treat customers fairly.
Where a customer is experiencing or reasonably expects to experience payment difficulties as a result of circumstances relating to coronavirus, and wishes to receive a payment holiday, a firm should grant a customer a payment holiday for three monthly payments, unless it can demonstrate it is reasonable and in the customer’s best interest to do otherwise. The guidance will be reviewed in the next three months and amended guidance extending the payment holiday period will be issued if appropriate.
Firms should not commence or continue repossession proceedings against customers at this time. This applies irrespective of the stage that repossession proceedings have reached and to any step taken in pursuit of repossession. Where a possession order has already been obtained, firms should refrain from enforcing it.
Firms should read the guidance carefully and ensure that they comply with the information requirements in their dealings with customers.
Persistent credit card debt
The FCA wants firms to show greater flexibility to customers in persistent credit card debt. Under the rules, after 36 months of someone being in persistent debt the provider must offer options to help repay the debt more quickly. If customers do not respond within a period set by the firm the card must be suspended. The FCA thinks that customers should be given more time, until 1 October 2020, to respond to firms’ communications. It will be in touch with firms shortly to confirm details.
Access to cash
Firms should continue to help vulnerable consumers access their banking services – online or over the phone. They should remind consumers to be aware of fraud and protect their personal data.
Call recordings
Firms that are required to record calls should continue to do so. Where this is not possible, they should let the FCA know. The FCA expects firms to consider what steps they could take to mitigate outstanding risks if they are unable to comply.
Submission of regulatory data
The FCA expects firms to maintain appropriate records and to submit regulatory data as soon as possible, without unnecessary delay. The FCA should be contacted as soon as possible with any concerns.
Financial reporting
On 26 March 2020, the FCA, Financial Reporting Council and Prudential Regulation Authority issued a joint statement and announced a series of actions “to ensure information continues to flow to investors and support the continued functioning of the UK’s capital markets”. They include allowing listed companies which need the extra time to complete their audited financial statements an additional two months in which to publish them.
Ongoing FCA consultations/calls for input
The FCA is extending the closing date for responses to its open consultation papers and calls for input until 1 October 2020. Most other planned work is being rescheduled and routine business interactions with firms are being scaled back.
If you need assistance with any of the issues raised in this briefing, please do not hesitate to contact Jeanette Burgess or any member of the Regulatory and Compliance Team, who will be very happy to help.

Break clauses in commercial leases and practical implications[...]
In times of economic decline or uncertainty, many businesses look to divest themselves of surplus […]
In times of economic decline or uncertainty, many businesses look to divest themselves of surplus property to reduce rental commitment. Break clauses are common in most fixed term commercial leases and can allow a landlord and/or a tenant to bring the lease to an end early on one or more specified dates. In light of the current situation, this note aims to highlight some of the break clause-related issues of which tenants should be aware, and to provide practical advice for those considering their lease break options.
Commercial context
The enforced closure of a large proportion of commercial premises in the UK and the wider economic impact of the Coronavirus crisis will leave many tenants faced with the prospect of having to pay rent and other lease sums whilst being unable to generate income from their business. Where a lease contains an immediately available or upcoming break option, this may be an attractive and convenient escape-route for a tenant in this predicament. Alternatively, in some cases a break notice may have been exercised relatively recently, before lockdown measures were imposed. In both of these scenarios tenants must be acutely aware of, and must comply with, any requisite formalities and conditions, so as to ensure that the break option is validly exercised.
Traps for the unwary
Once the decision has been made to bring a commercial lease to an end, the failure to serve a valid break notice can have drastic consequences. The business may lose the opportunity to break the lease and may therefore remain liable and tied into the property with long-term, unwanted commitments.
In the leading case of Mannai Investment v Eagle Star [1] in 1997, Lord Hoffmann famously said: “if the [termination] clause had said that the notice had to be on blue paper, it would have been no good serving a notice on pink paper, however clear it might have been that the tenant wanted to terminate.” In doing so he vividly articulated that strict compliance, with both contractual break conditions and any particular service provisions, is required for lease breaks to be effective.
As such, very careful consideration must always be given to the exercise of any break. The starting point when serving a break notice must always be to examine the lease and the contractual provisions which set out the option to determine; any particular requirements for service (including when notice must be given, how notice must be served and on whom, and by whom, it must be served); and any conditions which must be complied with.
- When?
The question of when a break notice can be served is very important, especially if the option is a one-off or ‘once and for all’ break (as opposed to a ‘rolling break’). Where break clauses specify time limits, time will be of the essence. This means that where a tenant is unsuccessful in exercising a once and for all break clause, it may not get any other chance to break.
There are then three dates to ascertain: the break date; the date by which notice must be served (that is, when the notice must be received by the other party); and, working back, the date by which the notice must actually be issued. If any of these are calculated incorrectly then there is a real risk that the break notice will not be validly drafted or served, and the lease will continue.
- How?
It is essential to check whether the break clause contains a specific methodology for serving notice or whether the lease contains general ‘service of notices’ provisions elsewhere. Service must be effected in accordance with any contractually specified provision. For example, the lease may specify that service must be by fax or e-mail at a particular address; by first class or registered post; on an agent as well as, or instead of, on the party; or even that notice must be written on pink paper [2]!
- Who?
As indicated earlier, it must be ascertained exactly who must give the notice and on whom the notice must be served. However determining the correct party/ies is often more difficult than first imagined. In most cases the landlord and tenant are no longer the original contracting parties; the land or tenancy may be unregistered; the landlord/tenant may not be based in the UK; and/or the lease may specify that the notice must be served on an agent.
- What? Conditional Break Options
Some break options will have a number of conditions attached and must be approached with real caution. If the lease requires absolute compliance with one or more conditions, then failure to do so, no matter how trivial, will render the break ineffective. For example, if a break option was conditional on making payment of all lease sums and just a penny remained outstanding at the break date or other prescribed time, that penny would render the whole break invalid.
If conditions in a break option are not absolute, they are often drafted to say that the tenant must materially, substantially or reasonably comply with certain conditions. This is to try and protect the tenant from rendering the break invalid due to minor and inconsequential breaches. The problem here is that each of these terms can have a slightly different meaning and no guarantees can be given to provide absolute certainty of compliance. In these circumstances a tenant may be well advised to undertake the fullest possible compliance. Apart from the risk of a break being ineffective, a party will always face the risk of a damages claim for breach of covenant either during or after the end of a lease in any event. The fullest possible compliance has the dual-effect of mitigating that risk.
The most common condition is the payment of all rent due. On the face of it, that seems straightforward and fair enough. However, is rent is defined within the lease and does it include service charge and/or insurance rent. If it does, can these be properly calculated or ascertained? Does rent (and potentially other sums) simply need to have fallen due under the lease, or do sums have to have been demanded?
Other common conditions include for a tenant to comply with its repairing obligations [3]; for the tenant to return the premises with vacant possession; and/or for there to be no material breach of the tenant’s covenants and obligations under the lease outstanding as at the break date.
Owing to the lockdown restrictions currently in place, many tenants will find that it is practically impossible to comply with certain break conditions, such as the removal of property and belongings where removals companies are not allowed to work or where contractors are unable to undertake a strip out or any requisite repairs.
Practical steps
In the current climate, it is perhaps even more important than ever for tenants to carefully consider their ability to exercise any break options and, crucially, their ability to comply with break conditions.
Where the time limits of a break option allow, it may be better for tenants to wait for current restrictions to be relaxed.
Where this is not possible, it will be crucial for tenants to plan, prior to service of the break notice, exactly how they will comply with any break conditions.
Where compliance will simply not be possible, tenants may have no option other than to negotiate with landlords to seek to agree an approach. Any such negotiations should be handled with the assistance of expert advice. It will be essential, in these circumstances, for tenants to tread a fine line between not openly admitting any failure to comply with covenants, and between agreeing that compliance with break conditions can be waived.
Alternatively, where a break clause remains unexercised, tenants may want to investigate any rent free period that may be tied to a delay of any tenant break, and potentially negotiating an extension. This would not trigger any SDLT liability for tenants as the term of the lease would not be extended.
Should you require any specific advice on the terms of any break clause, any further guidance on the successful execution of a break notice and/or any expert assistance with landlord and tenant negotiations in these unprecedented times, please do not hesitate to contact Martin Mckeague, David Manda or Lewis Couth in the Real Estate Litigation team.
[1] Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749
[2] See our recent briefing on serving legal notices amid the Coronavirus crisis
[3] albeit it is important to note that the landlord is under no obligation to confirm exactly what work it expects to be carried out, nor to provide any certainty prior to the break date that any works carried out are satisfactory to discharge the tenant’s obligations

Covid-19: Pensions Regulator provides guidance on defined benefit[...]
On 27 March 2020 the Pensions Regulator published its latest guidance relating to Covid-19. The […]
On 27 March 2020 the Pensions Regulator published its latest guidance relating to Covid-19. The guidance is particularly relevant for schemes currently undergoing an actuarial valuation as well as for employers who are seeking to suspend/delay deficit recovery contributions (DRCs). The key points from the guidance are considered below.
Schemes completing their valuations now
Some schemes are in the process of completing their actuarial valuations at the moment. The Regulator’s guidance is clear that the Regulator does not expect trustees who are close to completing their valuations to revisit their valuation assumptions. That said, whilst trustees are not required to take into account post valuation experience, the Regulator expects them to consider that experience when agreeing recovery plans, with a focus on whether provisionally agreed DRCs are still affordable for the employer.
If trustees need more time to consider the scheme’s and employer’s situation, the guidance provides that they may decide to delay their recovery plan submission by up to three months. The Regulator comments that although it cannot waive trustees’ statutory obligation to submit a valuation within 15 months of its effective date, it will not take regulatory action in respect of a failure to submit.
Employers’ requests for contribution easements
Requests to suspend or reduce DRCs
The Regulator comments that in accordance with its earlier guidance, trustees should be open to requests to reduce or suspend DRCs. Trustees may not have sufficient information in order to make a fully informed decision, however. In that case, trustees should, where appropriate, agree to requests to suspend or reduce DRCs for as limited a period as possible while appropriate information is being provided. The Regulator notes that trustees will need to consider carefully any requests to suspend or reduce DRCs if they are expecting annual or substantial contributions.
The guidance provides that deferral should not be longer than three months. A condition of the trustees’ agreement should be full and ongoing provision of information so that the trustees can monitor the employer covenant. The less confidence the trustees have that they will have access to timely, relevant information, the shorter the reduction or suspension period should be. However, extensions beyond this three month period may be appropriate where other creditors commit to support for longer periods and restrictions on trustees’ extensions would limit that support. That said, in agreeing DRC waivers, trustees should ensure that banks and other funders are being supportive and that no dividends, or other distributions are being made from the employer.
The Regulator notes that trustees should take legal and actuarial advice not only on whether a suspension or reduction of DRCs is appropriate, but also on the most appropriate method to suspend or reduce DRCs. This is to avoid unintended consequences such as missed payments accidentally triggering scheme wind-up.
The guidance notes that the Regulator ideally expects suspended or reduced DRCs to be repaid within the current recovery plan timeframe and the recovery plan is not to be lengthened unless there is sufficiently reliable covenant visibility (for example, if the existing recovery plan is short).
The Regulator comments that it cannot waive trustees’ statutory obligations. However, it will not take regulatory action in respect of late reporting or a failure to make contributions during the three months after the 15 month period for completing an actuarial valuation.
Requests to suspend or reduce payments for future service
The guidance provides that requests to suspend or reduce future service contributions, for the employers and possibly members, should be treated in the same manner as requests to suspend or reduce DRCs. However, the Regulator recommends legal advice is taken.
Payments to related entities or shareholders
The guidance notes that in agreeing to any reduction or suspension of DRCs, trustees should ensure that dividends and other forms of shareholder return are also suspended, and this should be underpinned by legally binding commitments. However, in exceptional circumstances, it may be appropriate for employers to make extraordinary and essential intra-group payments to support the wider group liquidity and going-concern status. In that instance, the trustees should (a) understand the intention behind the payment and the expectation and ability of the employer(s) to retrieve funds and (b) seek mitigations. Such payments should be assessed in the context of whether they are in the interests of the employer’s ongoing covenant strength.
Requests to release security
The Regulator is clear that it is unlikely that a release of security is in the best interests of members. An employer’s request that trustees release security is likely to have significant legal and financial implications, compromising the security of members’ benefits. Trustees should take appropriate specialist advice and carefully consider such requests in full knowledge of the facts and implications. Trustees should contact the Regulator if they are concerned.
Advice and governance
The guidance provides that trustees should consider whether real time, specialist advice is required in the circumstances of the case. It is important in these difficult times that trustees continue to fully document their decisions, whether they seek advice or not.
Investments
The Regulator’s guidance also considers what trustees should be doing in relation to scheme investments. In particular the trustees should:
- Review their scheme’s cashflow requirements and how they expect those obligations to be met. They should allow for issues such as additional ‘cash strain’ arising from increased member movement, potential reduction in or suspension of DRCs, lower levels of investment income and investment ‘cash calls’.
- Review and manage specific risks which may now exist within their portfolios or within their sponsoring employer’s business.
- Review any previously agreed investment and risk management decisions due to be implemented in the future to ensure they remain appropriate, efficient and do not introduce risks or crystallise losses.
- Review their investment governance structures and delegations to ensure they can continue to function and make decisions in the event of trustee incapacity or absence.
- Assess, following the recent performance of their scheme, whether they should make any changes to their investment and risk management governance framework.
Employers of DB schemes provision of information to trustees
The guidance acknowledges the challenging circumstances faced by many employers. Nevertheless, it is important that employers provide trustees with the information they need (or, at least, whatever can reasonably be provided) in a timely manner and treat the scheme fairly compared to other stakeholders.
The Regulator’s overall approach
- The Regulator will take a reasonable, pragmatic and proportionate approach to its regulation of schemes.
- The Regulator will continue to reflect prevailing market conditions in its DB operational processes.
- The regulatory easements announced will be maintained until 30 June 2020, but will be reviewed as matters progress.
- The trustees of schemes in relationship-managed supervision should contact their named supervisors with any queries.
- Trustees and employers of all other schemes should contact customersupport@tpr.gov.uk if they require assistance.
WM Comment
It is helpful that the Regulator has published some guidance which is directed at the funding and investment issues faced by defined benefit scheme trustees and employers. For every scheme which has to deal with the challenge of a distressed employer, other schemes are facing up to finalising their valuation in a climate which has changed substantially over an incredibly short period of time. At the end of the day it is surely better for scheme and their members that the Regulator provides assistance for employers to try to weather the current crisis, rather than for an increased number of schemes to potentially end up in the Pension Protection Fund.
At the same time it will not necessarily be an easy decision for trustees to agree to suspend or reduce DRCs. The trustees will need to weigh up the case put to them by the employer and take all necessary advice before making a decision. The trustees should note that employers are unlikely to be able to gather the same level of financial and forecasting data they would in normal times. In addition the trustees need to ensure that any decision to reduce or suspend DRCs does not result in cashflow issues such that pensions are unable to be paid.
Although we have not commented on this above, it is welcome that the Regulator will not take regulatory action against trustees who suspend transfer payments for the next three months. The Regulator in its 20 March 2020 guidance had already highlighted the risk of scams in relation to members who are looking to transfer out.

Newsflash: FSA publishes guidance for food businesses on[...]
The Food Standards Agency (FSA) has published guidance to help food businesses in their response […]
The Food Standards Agency (FSA) has published guidance to help food businesses in their response to the coronavirus pandemic. The guidance has been produced in conjunction with the Department for Environment, Food and Rural Affairs (DEFRA) and covers a range of topics including good hygiene practice, managing employee absences and social distancing in specific food business settings including food processing plants. The FSA is keen to ensure that businesses within the food and drink industry know what their responsibilities are and what actions they need to take to maintain safety standards and protect staff during the outbreak. You can read the full guidance here.

Coronavirus crisis: Risk management and dispute resolution advice
Walker Morris has recently provided practical advice for employers and for businesses concerned about the […]
Walker Morris has recently provided practical advice for employers and for businesses concerned about the impact of the Coronavirus/COVID-19 on their supply chain and contractual arrangements generally.
The outbreak has been declared a pandemic and countries across the world are taking unprecedented steps to restrict travel and movement. Walker Morris’ Head of Commercial Dispute Resolution Gwendoline Davies pulls together some of the key legal and commercial issues facing businesses in these extraordinary times, and offers an essential checklist of risk management and dispute resolution advice.
What are the key areas of impact for businesses?
- Supply. Manufacturing closures in China and, increasingly, elsewhere across the global trade network, as well as travel restrictions, border checks and delays and labour shortages as a result of illness and isolation are starting to impact supply arrangements, not least in respect of logistics and inventory. The supply of essential services (such as IT support, cleaning and maintenance and other outsourced services) may also be impacted as the outbreak develops.
- Customers. Businesses need to consider both customer expectations and customer demand. Are supply issues or the prevailing economic climate likely to impact a business’ ability to honour its commitments to customers; and/or how is any fluctuation or drop in customer demand over the coming weeks and months likely to affect cash flow and longer-term financial viability.
- Workforce. Businesses need to consider their duty of care to employees (and, potentially, to visitors). Failure to do so could expose the business to employment contract claims, negligence actions, health and safety/regulatory claim and/or could invalidate insurance policies.
- Continuity. Whether and to what extent a business can continue to trade or operate will differ across industries. Where possible, businesses will need to consider remote working and corporate governance, and reducing travel.
- Commercial. Businesses should assess the likely impact of Coronavirus-related disruption/default on their commercial plans, commitments and short- and long-term financial viability. Will projects or investments need to be delayed or should investment/shoring-up be deployed urgently to help the business to weather events as they unfold; what will be the impact on cash flow and working capital; where do commercial and contractual arrangements incorporate tolerance and flexibility, and where are the pressure/breaking points; where can savings be made; and is there a genuine risk of insolvency, either for the business or any of its counterparties?
What can businesses do?
As businesses become increasingly concerned about the impact of the Coronavirus on their commercial arrangements and financial viability, whether or not contracts or common law remedies allow the flexibility to renegotiate, or the ability to terminate, commitments will be key; as will the ability to avoid or mitigate disputes.
The following checklist of legal and practical advice should assist.
- Undertake a review of all key contracts and ascertain the existence and terms of any force majeure provisions which may excuse one or more parties from contractual performance. Any business wishing to invoke force majeure (or to ascertain the validity of any force majeure claim made against it) should ensure compliance with any notification or other requirements, and any time-scales, specified within the particular contract, and should keep records of all relevant factual and economic evidence as the effects of the virus unfold.
- Where force majeure does not apply, businesses should take specialist advice as to whether the common law doctrine of frustration may assist to effectively terminate a contract.
- Parties should check their various insurance contracts. In some cases, invoking or receiving a force majeure or a frustration claim can impact insurance policies. In particular, parties should ascertain any notification requirements.
- Consider commercial, reputational and regulatory risks, alongside legal issues. For example, in such exceptional circumstances, parties may wish to be flexible about restructuring deals or debts so as to preserve relationships, even where there is no legal right or obligation to do so. Parties may also wish to liaise with customers, counterparties, regulatory bodies, etc. to provide reassurance as to the safety and resilience of the business/products/services/staff.
- Businesses should also ascertain the existence and implications of any other contractual provisions which may provide flexibility and/or commercial assistance. These might include (non-exhaustively) break clauses to terminate contracts or leases early, forfeiture clauses, insolvency provisions, price adjustment clauses, variation/no-oral modification clauses [1], and material adverse change clauses.
- Commercial disruption, uncertainty, financial hardship, and contractual default can all prompt disputes. Businesses should therefore review contractual arrangements to ensure that they understand the extent of their, and their key counterparties’, obligations and liabilities. Key clauses in this context include any guarantees, indemnities or performance bonds, limitation/exclusion of liability clauses [2] and any endeavours obligations [3].
- Where possible and financially feasible, parties should consider the potential for alternative ways of performing affected contractual obligations and/or for mitigating any loss or damage. Again, parties should also keep clear records of all factual and financial evidence upon which they might wish to rely in the event of any dispute.
- Where disputes do arise, parties should check whether the relevant contract contains any mandatory dispute resolution provisions. An effective dispute resolution clause requires the parties to follow a pre-agreed route to resolution, which can prevent any potential secondary dispute about whether and how the primary issue should be resolved; minimise the scope for any tactical game-playing (thereby helping to preserve commercial relationships); and ensure that the time and costs of dealing with formal litigation are only incurred as a last resort.
- Businesses should ensure that they keep open communication channels with staff, suppliers, customers and other key counterparties. Dialogue can minimise disruption or discord within a business and can often avoid or effectively resolve disputes, saving both commercial relationships and cash.
- Businesses should monitor the outbreak and government advice carefully, and should take proportionate action to protect employees and visitors. Businesses should note that what might be disproportionate action in respect of one individual may actually be proportionate in the case of another.
- In terms of continuity, as well as considering technical and operational matters such as remote-working and reduced travel, business should give some thought as to whether physical presence is necessary for any essential testing/inspection/surveying (depending on the particular business/industry) or whether alternative desk-top processes/procedures could be deployed in these exceptional circumstances. Particular consideration should also be given to whether physical presence is required for the signature, witnessing and execution of different documents. Electronic execution of documents is a complex and fast-developing area, and specialist legal advice may be required.
How can Walker Morris’ Commercial Dispute Resolution team help?
Whilst the factual context of the Coronavirus crisis is unique and the scale of disruption may be extraordinary, the legal and practical implications of an adverse event on a business are not. Walker Morris’ Commercial Dispute Resolution experts are experienced in helping businesses to successfully navigate uncertain times and sometimes even seemingly devastating incidents. Whatever the particular circumstances and concerns for your business, Walker Morris’ specialists have the legal, technical and commercial expertise to be able to provide essential advice and assistance, whether it be from a risk management (‘prevention’) perspective, and/or to help with the resolution (or ‘cure’) of a dispute. Please do not hesitate to contact us.
[1] See our earlier briefing for further information on variation/anti-variation provisions
[2] See our earlier briefing for further information on limitation/exclusion clauses
[3] See our earlier briefing for further information on endeavours clauses

COVID-19 Digital Solutions Grant
Following the government’s decision to require all but essential workers to stay at home, the […]
Following the government’s decision to require all but essential workers to stay at home, the NHS has made available grant funding of up to £25,000 for each company which devises digital support solutions for those people who need to stay at home, in particular the elderly, vulnerable and self-isolating.
The purpose of the funding is to enable each company to develop or test their proposed solutions.
The funding scheme is known as the Tech Force 19 challenge and digital support solutions in the following areas are sought:
Remote Social Care
- finding healthy and qualified carers who can provide support for those in need
- managing and delivering care in care homes
- delivering domiciliary care and technology in the home.
Optimising Staffing in Care and Volunteering Sectors
- recruiting, training and certifying of doctors and nurses and professional carers
- volunteering – recruiting and triaging volunteers into clinical and non-clinical workers
- projecting demand for health and care workers across the country to improve deployment and management of resources
- tackling data gaps in the care sector to understand the financial sustainability and needs of care businesses.
Mental Health
- discovering and delivering mental health services
- accessing relevant and inclusive peer 2 peer communities
- supporting self-management of mental health and well-being
- facilitating employee well-being.
Any company interested in meeting the challenge and seeking funding can express interest by submitting a short online questionnaire found at https://www.smartsurvey.co.uk/s/techforce19/
Applicants will be assessed based on (i) solution feasibility; (ii) company credibility; (iii) impact; and (iv) digital maturity.
Applications need to be submitted no later than 1 April 2020.

Government announces moratorium on Coronavirus-related commercial forfeiture
Along with other unprecedented measures to protect the public and the economy, the UK government announced on […]
Along with other unprecedented measures to protect the public and the economy, the UK government announced on 23 March 2020 that commercial landlords are to be precluded from forfeiting commercial leases [1] and evicting the tenant for non-payment of rent.
It was initially extended until 31 December and then on 9 December the Government announced a “final extension to protections from the threat of eviction” by extending the restriction until 31 March 2021.
Despite the Government’s announcement in December 2020, on 10 March 2021, the Government announced that the restrictions on forfeiture would be extended until 30 June 2021 with an indication that further steps will be introduced from 1 July 2021.
These measures form part of the emergency Coronavirus Act 2020. The full Act can be accessed here.
For these purposes the relevant section is Section 82 of the Act. The Act is expressed to apply to a ‘relevant business tenancy’ and precludes the landlord from effecting a right of re-entry or forfeiture for the non-payment of “rent” for the “relevant period”. These terms are defined as follows:
Relevant Business Tenancy
- A tenancy to which Part 2 of the Landlord and Tenant Act 1954 applies, or
- A tenancy to which that Part of that Act would apply if any relevant occupier were the tenant.
Rent
Includes any sum a tenant is liable to pay under any relevant business tenancy.
Relevant Period
“relevant period” means the period— (a) beginning with the day after the day on which this Act is passed, and (b) ending with 30 June 2020 or such later date as may be specified by the relevant national authority in regulations made by statutory instrument (and that power may be exercised on more than one occasion so as to further extend the period);
In the case of an applicable tenancy, the moratorium extends not only to the unpaid principal yearly rent but to any sums payable under the lease. In light of the Government’s recent measures, in these circumstances, the landlord would be precluded from effecting re-entry or forfeiture for any sums owed by the tenant until at least 31 June 2021. There had been some suggestion that the moratorium would only apply in circumstances where the tenant could not pay as a result of coronavirus but there is no such qualification – it applies across the board.
The definition of relevant tenancy may give rise to arguments about certain classes of commercial tenancy or occupation not falling within the moratorium. So for example it appears the following are not caught by the moratorium :
- Licences including serviced office accommodation;
- Tenancies at will;
- Mining leases, a tenancy of an agricultural holding, a tenancy granted in consequence of employment, a tenancy not exceeding 6 months and a home business tenancy all of which are specifically excluded from the 1954 Act;
- Code Agreements under the Electronic Communications Code 2017 and where Part 2 of the Landlord and Tenant Act 1954 does not apply.
and the following are arguably not caught by the moratorium:
- Tenancies where the tenant (or a group company) is not in business occupation and the occupier is in occupation or possession without landlord’s consent i.e. is in occupation unlawfully.
- Tenancies where the tenant is holding over under the Landlord and Tenant Act 1954 but where it is no longer as a matter of fact in business occupation. Although if the tenant is not in business occupation as a result of the Government’s orders and outside of the tenant’s control then so long as the tenant continues to assert his right to occupy then it will still likely to be caught by the moratorium.
The rent will continue to accrue together with interest and there is provision that no step taken by a landlord will waive the breach for non-payment of rent, save for an express waiver in writing. So in theory and in the absence of any further extension of the relevant period, the landlord’s entitlement to forfeit will be immediately restored at the end of the relevant period.
The moratorium on commercial forfeiture does not apply to breaches of other tenant covenants and arguably will not extend to the requirement to pay unliquidated amounts such as damages for dilapidations.
In addition, under the Taking Control of Goods and Certification of Enforcement Agents (Amendment)(Coronavirus) Regulations 2020, the Government has restricted the use of Commercial Rent Arrears Recover (“CRAR”)[2] . The amended statutory provisions in relation to CRAR are such that the use of CRAR will be restricted until 30 June 2021.
Walker Morris will continue to monitor and advise on the progress of the Coronavirus Act, and on options for landlords and tenants as matters develop.
[1] See our briefing on the basics of forfeiture for further information about this landlord’s remedy
[2] See our recent briefing for information and practical advice on CRAR

Serving and receiving legal notices amid Coronavirus disruption
What businesses need to know to avoid missing deadlines and ensuring valid service As businesses […]
What businesses need to know to avoid missing deadlines and ensuring valid service
As businesses endeavour to carry on so far as is possible amid the disruption caused by the Coronavirus crisis, one area in which practical difficulties will need to be quickly overcome is the service and receipt of legal notices. Commercial dispute resolution specialists Gwendoline Davies and Nick McQueen offer their expert advice.
New challenges in a notoriously tricky area
Legal and procedural traps for the unwary mean that the drafting and service of legal notices is a notoriously tricky area even in the best of times. The consequences of getting a legal notice wrong, or of missing immediate receipt of any notice served on your business, can be so significant that our advice is routinely that legal notices should be prepared or reviewed respectively, by experts in the field. In these unprecedented times, however, where the impact of the Coronavirus is forcing the closure of offices and other business premises, the practical difficulties associated with serving and receiving legal notices are brought even more sharply into focus.
Whether you are a business seeking to serve notices to terminate contracts, break leases, commence warranty or other claims, or similar; or whether you are a business concerned to ensure that any legal notices served upon you are received, reviewed and dealt with urgently and effectively, the following legal and practical advice should assist.
Advice in relation to the receipt of legal notices
The immediate receipt and review of any legal notice served on a business is necessary for a number of reasons. For example, it will be essential, in every case, to ascertain the validity of any notice served, so that the business knows whether or not the notice has legal force. Where a notice is valid, it will inevitably be the case that some consequential action or decision will need to be taken by the business – usually within a strict period and often with time being of the essence.
The closure of business premises, not to mention potential disruption to postal and other delivery services, will cause significant practical difficulties when it comes to the receipt and urgent review of legal notices – not least in circumstances where a notice is deemed served at the point of posting (as opposed to at the point of receipt), which is very commonly the case.
So what can businesses do?
- Businesses should familiarise themselves with the service of notices provisions in their various contracts and leases and should note, in particular, any specified address for service. This may differ from contract to contract, or from lease to lease.
- Companies should ascertain whether any business address is also their registered office address at Companies House; or/or whether any business address is the address for service given at HM Land Registry.
- Where any registered office is the address of a third party, it will be essential to enquire how post to that address is being monitored.
- One option, where a registered office is closed, might be to change the registered address at Companies House to an address where post can be collected. However, it is important to note that this may not cover all potential notices, as the notice provisions in some contracts/leases allow service at locations other than the registered office (such as the last known place of business, or at another specified address).
- Once a business has an overview of the different service of notices provisions which govern its various contracts and leases; and once it has ascertained any specified addresses for services, it will be in a position to put into place practical arrangements to continue to collect post during any period premises are closed, even if this is temporary.
- Practical arrangements might include:
- Collecting post (which might involve agreeing with any landlord that access will be permitted once or twice a day in order for post to be collected), where it remains physically possible for post to be left at fully locked-down premises
- Setting up a forwarding service with Royal Mail
- Setting up an external post box, at a suitable location, which is checked daily. Security, and whether external fixings are permitted, would need to be considered
- Some contracts/leases allow the parties to notify each other of alternative addresses for service. If your contract allows you to do this and it is necessary or preferable in these circumstances, you should give notice of a suitable alternative address as soon as possible. (As to advice in relation to the giving of legal notices, including such as this, please see below.)
- If a contract/lease does not contain a specific provision allowing change of the address for service by giving notice, this might be a variation that the parties can agree between themselves in any event [1].
- It is unlikely to be practical to formally vary all of your contracts/leases for a temporary period, but if you have a concern about a particular contract where time-sensitive notices are likely to be served in the coming weeks, it might well be worth seeking to formally vary those arrangements.
- Where addresses for service can be altered as a result of Coronavirus disruption, the most sensible solution would be to permit service by email.
- Where any change of address for service is effected (including any change to permit service by e-mail) it will be important for that change to be notified to all customers, suppliers, other counter-parties, and third parties. Apart from any contractually-specified obligations as to giving notice of the new address, businesses could insert a note in all emails, letters and on their websites and social media postings. By way of example, such a note could advise that, following the closure of premises due to Coronavirus, the business will accept service of legal documents by email (specifying any conditions or limits, such as with regard to email size mbs), and providing a specific email address to which any formal notices may be sent.
- Where any change of address for service is effected, it will also be important for that to be considered alongside other relevant clauses within the particular contact/lease and for any changes to be monitored on an ongoing basis. For example, what happens if a party gives a PO box or external post box as its service address, but the contract specifies service by recorded delivery? (You cannot effect recorded delivery on an unmanned box.) What happens if the contract specifies that the service address is to be a party’s registered office, but the contract is assigned in due course to an individual? (Individuals do not have registered offices.) What happens if a residential address for service is given, and then the (presumably senior) individual living at that address moves house? And so on…
- Where a contract/lease does not allow for a change of service address and this cannot be agreed between the parties, it may be a helpful practical measure to inform parties of an additional address at which you can receive notices in the event your place of business is closed. In these circumstances, however, you may not be able to insist on notices be served on the new address, and so suitable arrangements to check post delivered to the closed premises will remain essential.
Advice in relation to the service of legal notices
As is apparent from the above, most modern commercial contracts and leases contain detailed service of notice clauses which contain specific legal and procedural obligations and requirements. If those provisions are not strictly complied with, any notice can be invalidated. The consequences of that can be devastating for the serving party – for example where an invalid notice means that a once-and-for-all break option is lost, or a time-limited warranty claim is precluded.
A good tip, when it comes to the service of any legal notice, is to remember the mantra: who, when and how?
Immediately a party considers serving a notice, it should ascertain exactly:
Who is required to give notice and on whom the notice should be served. (Consider the party/counter-party itself? Legal representatives? Other agents? Have there been any assignments, novations or variations which change the position? What are the current names and addresses/contract arrangements for the relevant parties/agents?)
When the notice should be served, including whether there are any long-stop dates for service or for completion of any other conditional/procedural steps (such as commencing any follow-on court claims, or the like) [2].
The ‘how‘ is particularly important in the context of Coronavirus-related closures. It covers the content of the notice; the form of the notice and any strict procedural requirements; and the fact that service must be effected in accordance with any contractually specified method and at any contractually specified (or any new/recently agreed?) place.
WM Comment
The consequences of dealing with service or receipt of any legal notices can be too costly to gamble in the ordinary course of business – never mind in light of the additional legal and practical hurdles that arise from Coronavirus-related disruption.
The best advice is therefore for businesses to seek specialist legal advice at the earliest opportunity as to likely options or requirements for the service or receipt of notices over the next few months, so that suitable legal and practical preparation and planning can be undertaken.
For further information, advice and expert assistance, please do not hesitate contact Gwendoline Davies, Nick McQueen or any member of Walker Morris’ Litigation and Dispute Resolution department.
[1] Albeit parties should note the legal position if the contract/lease contains any anti-variation/no oral modification provisions. See our recent briefing for further information and advice
[2] It is also important to bear in mind, when calculating dates, that there may be different dates to ascertain. For example, depending on the nature and wording of the notice clause, you may need to know the date on which a notice actually has to take effect; the date by which it has to be served on (i.e. received by) the receiving party; and/or the date by which it has to be issued. All of those dates can be influenced by other factors (such as the required method of valid service; how long that will take; whether the contract designates when service will take place or whether the contract relies on external deeming provisions; whether there are any weekends/bank holidays to take into account and/or whether only working/business days count (which can differ across different countries); and so on.

Covid-19: what does it mean for pension schemes?
We are all living in difficult and testing times. The COVID-19 pandemic has resulted in […]
We are all living in difficult and testing times. The COVID-19 pandemic has resulted in unprecedented pressures on cashflow for the business community and global stock markets have suffered significant falls over the last few days. Against this backdrop pension schemes (whether defined benefit or defined contribution) face their own challenges.
Challenges for pension schemes
UK pension schemes will undoubtedly face a number of challenges as a result of COVID-19. These challenges range from the immediately practical to the long term. One of the main immediately practical issues is to ensure that day to day scheme administration can continue. The global stock market falls of recent days is likely to result in possibly both immediate and longer term funding and covenant issues.
The Pension Regulator’s guidance
On 12 March 2020 the Regulator published the first of what is likely to be many statements on the effect of COVID-19 on UK pension schemes. It was then followed up by further guidance on 20 March 2020.
Trustees: scheme administration issues
The Regulator expects trustees both to have a business continuity plan in place for their scheme and to understand the business continuity arrangements for their service providers, for example third party administrators. In particular “trustees should understand what contingency is in place to mitigate any under-resourcing due to, for example, increase in work volumes or unavailable staff. They will also want to establish which scheme activities would be prioritised in the event of under-resourcing, for example pensioner payments, retirement processing and bereavement services, and confirm this with their administrators / providers.” The Regulator commented in its 12 March statement that it is currently engaging with key administrators to understand their current preparedness.
Trustees: protecting members from scams
The Regulator notes that savers may look to transfer their pension benefits to another arrangement as a result of their employer’s instability or the fall in the financial markets. As such the Regulator considers that members may be more likely to be scammed. The Regulator states that members should be advised to exercise extreme caution before they transfer their benefits and visit ScamSmart which has specific guidance relating to COVID-19.
Trustees should also signpost their members to the Money and Pensions Service – particularly those approaching retirement and whose pension may have been affected by the current economic conditions.
Trustees: employers who are distressed
The Regulator considers that it is important that trustees understand the position of the employer in these difficult times. The guidance sets out a series of questions to put to the employer. The questions include:
- Has the employer considered how the impact of the virus and the measures to contain it may affect demand for its products, their business continuity plan and cashflow
- Are there any key payment dates in the next three months that will affect the business (eg rent quarter dates)?
- What are the positions of lenders?
- What are the positions of key suppliers and creditors? Have they imposed any restrictions on normal credit availability or supply volumes?
- What payments are proposed to associated or connected companies or shareholders in the next six months? Is this appropriate in the context of the directors’ primary duties to their creditors where there is uncertainty over the solvency of the employer?
- What support is expected to be available for the employer under the package of measures announced by the Chancellor on 17 March 2020? What is the timescale for this and are any key conditions attached?
The Regulator is clear that trustees should also consider the approach taken by other creditors, shareholders and associated companies to ensure that the scheme is being treated fairly.
Some employers may seek to defer the payment of deficit recovery payments (DRCs). The Regulator comments that this action may be appropriate but that the trustees should consider any request carefully to ensure that any support given is part of a co-ordinated and fair response across key stakeholders.
The guidance sets out the following principles for trustees to take into account when considering requests to defer DRCs:
- establishing the need: trustees should understand the drivers for the request and ensure that payments will not be made to related entities or shareholders,
- ensuring all parties are playing their part: banks should be supportive of the business. Where other parties are strengthening their access to the employer’s assets through security the trustees should ensure that the scheme is given a fair share of the new security. Agreements should be put in place to prevent new dividends or intra-group loans.
- flexibility ability to restart making DRCs: any suspension should have an end date but also triggers to restart if trading returns to normal
- ensuring the trustees are well advised: legal and covenant advice should be taken from advisers with experience in situations of corporate distress and restructuring
- getting the right information and taking account of what is achievable in the time available: where timescales are very short, any concessions should be short term deferrals to enable information to be provided later for a more considered decision.
Scheme administrators
The Regulator states that administrators should prioritise payments of benefits, retirement processing and bereavement services, as well as any administrative functions required to support these.
The Regulator accepts that many non-critical trustee and member services may be affected by the COVID-19, for example administrators may have to delay responding to member queries or producing annual benefit statements.
Trustees and administrators should report to the Regulator immediately if they believe they will be unable to pay members’ benefits. The Regulator comments that it will take a pragmatic approach in its response.
Employers
The Regulator recognises that this is a challenging time for everyone and that it is putting a strain on employers.
The Regulator comments that it will take a proportionate and risk-based approach towards enforcement decisions, in light of these challenging times, with the aim of helping to get employers back on track and supporting both employers and savers.
Timings of the Regulator’s communications, publications and events
The Regulator is temporarily suspending all regulatory initiatives. The Regulator comments that if a scheme has been selected to take part, it will be in direct contact regarding our expectations and next steps.
In its 12 March guidance the Regulator states that it would publish guidance for schemes with funding valuations in March and April as part of its annual funding statement. It is not clear whether or not this will go ahead.
WM Comment
We are living though strange and challenging times. For employers with defined benefit schemes it is to be hoped that the Regulator, as it did in 2008 with the credit crunch, allows for post valuation changes to be taken into account for valuations. Whilst the Regulator has commented that its funding consultation is still open it will also be interesting to see whether or not the current situation means that it steps back from its recent more aggressive stand point as to how quickly schemes should be funded.
If trustees or employers have any questions about the impact of COVID-19 on the pensions industry please do not hesitate to contact a member of the Walker Morris pensions team.

Coronavirus and commercial leases: What landlords and tenants[...]
Click to watch our webinar on ‘Dilapidations and disrepair in commercial leases’. Click to watch […]
Click to watch our webinar on ‘Dilapidations and disrepair in commercial leases’.
Click to watch our previous webinar on this topic.
How does COVID-19 impact commercial lease obligations?
As the UK continues to tackle the challenges caused by the spread of Coronavirus/COVID-19, Walker Morris continue to receive a number of enquiries from landlord and tenant clients as to how this may affect their property arrangements and obligations.
We have already seen the challenges that have been caused by the pandemic and the introduction and extension of restrictions imposed by the Government. It is therefore essential that land owners and occupiers in all sectors understand the implications for their real estate-related rights and liabilities.
So, what are the key issues and concerns facing commercial landlords and tenants?
Can a tenant withhold rent or terminate a lease?
Given the potential adverse financial impact on tenants, a common question is whether tenants can refuse to pay rent, pay less rent and/or seek to terminate the lease prematurely.
The starting point is to review the terms of the particular lease. The relevant provisions to consider include:
- Any break clause that may enable the tenant to terminate the lease early;
- Any turnover rent provisions that are dependent upon the income generated from the premises; and/or
- Any force majeure clause (although these are rarely found in commercial leases and there is no common law right to terminate for force majeure).
Most modern commercial leases will provide for rent to be payable without deduction or set off. In those circumstances a tenant is unlikely to be able to withhold payment of rent for Coronavirus-related reasons unless any specific provision in the lease enables it do so, or unless it reaches an agreement with the landlord.
Rent suspension clauses generally only apply where premises have been damaged or destroyed. Tenants may therefore struggle to argue for a rent suspension in reliance on such provisions.
Tenants may look to the common law doctrine of frustration where the lease provides no express option for early termination. To terminate a lease or any other commercial contract by frustration, a party has to prove that there is some form of illegality or failure of common purpose that renders performance of the lease/contract impossible or so radically different from the parties’ expectations that termination is justified. Importantly, however, the doctrine operates within very narrow confines. The courts will not lightly relieve parties of their contractual obligations and the bar for a successful frustration claim is high.
It is possible, in light of the scale of the outbreak and the unique underlying economic context, that the impact of the Coronavirus could, depending on the facts of individual cases, find successful frustration claims. However, potential claimants could face arguments that public health issues were not so far outside the parties’ contemplation at the time the lease was granted that they could not have negotiated lease terms to allocate any associated risks; and that any inability to occupy premises would be for a short period of time only (when compared with the term of the lease), rather than a permanent arrangement. In addition, it is especially difficult to successfully argue for frustration in the case of a lease, because a lease affords a tenant the benefit of the demised premises whether or not the tenant wishes to make use of it, plus there usually remains the possibility of the tenant assigning or subletting [1].
Can a Landlord forfeit the lease and evict the tenant for non-payment of rent?
Along with other unprecedented measures to protect the public and the economy, the UK government announced on 23 March 2020 that commercial landlords are to be precluded from forfeiting commercial leases [2] and evicting the tenant for non-payment of rent. This measure was subsequently extended until 31 December 2020 and then further to 31 March 2021 which the Government announced would be “the final extension to protections” for business tenants. However, on 10 March 2021, the Government announced that the restrictions would be extended until 30 June 2021 and announced that further steps were very likely to be imposed from 1 July 2021.
These measures form part of the emergency Coronavirus Act 2020 which was enacted on 25 March 2020.
For our full note on Government’s announcement on the moratorium on Coronavirus-related commercial forfeiture see here.
Where a tenant is unable to pay its rent in full, the Government is encouraging Landlords to follow its recently introduced, voluntary, Code of Practice that is designed to ‘promote good practice amongst landlord and tenant relationships.’
Must Tenants Keep Open or Re-open their Premises?
Some modern commercial leases (particularly in the retail sector) contain ‘keep open’ clauses and/or ‘operating/opening hours’ clauses.
In light of the restrictions that came into effect on 26 March 2020 under the Health Protection (Coronavirus, Restrictions) (England) Regulations 2020 (“the Regulations”), a large number of premises closed to the public. Although a number of sectors are being permitted to re-open that may prove difficult for some business owners do not wish to expose their staff and customers to potential health risks.
Where a tenant is obliged to “keep open” the premises it is likely that the Regulations will provide a defence to the requirement to “keep open” especially if it can be established that by keeping the Premises open will be unlawful. Further, the courts are generally reluctant to order specific performance of keep open provisions to force tenants to re-open. . However, where the Regulations no longer apply to the tenants business, a tenant is once again likely to become obliged to “keep open” the premises.
Will insurance help?
Landlords and tenants should review their insurance policies and speak with their brokers/insurance companies to understand the cover available to them. Some policies include business interruption cover but this may only be in place where there is a damage to property or where government action has meant that it is illegal for premises to remain open. In many cases, cover for infectious diseases will have been an opt-in extra and most will require the disease to have been classified as ‘notifiable’. The UK government’s declaration on 5 March 2020 that COVID-19 is a notifiable disease will assist in such cases. Landlords and tenants should note that invoking a force majeure or a frustration claim can impact insurance policies and, in any case where cover may be available, parties should ascertain and carefully comply with any notification requirements.
We are aware that a number of insurers were refusing claims made by both landlords and tenants. As a result, the FCA announced the unprecedented step they were to obtain a court declaration to resolve uncertainty regarding business interruption insurance and whether certain insurance policies will cover for business interruption related to the current pandemic crisis. The Supreme Court has now handed down its judgment and it found that some, but not all, of the same business insurance policies provided cover.
Who will be liable to provide/pay for additional services?
The starting point is that landlords remain liable to provide, and tenants remain liable to pay for, services in accordance with the express service charge provisions in the lease.
Where a lack of staff or materials rendered it impossible for a landlord to provide certain services, whether a landlord’s failure amounted to a breach of the lease would depend on whether the lease contained any carve-out for circumstances where a landlord is prevented from complying with its obligations due to circumstances beyond its control.
The ability of a landlord to recover from tenants the costs of the enhanced cleaning regimes that are currently underway in the majority of premises will also depend on the terms of the particular lease. Generally speaking, most service charge provisions include the recovery of cleaning costs and, whilst the costs of enhanced cleaning may exceed usual expenditure, we would anticipate that such costs would be likely to be seen by the courts as reasonably incurred subject to any cap that may apply. Alternatively, a landlord might be able to rely on any ‘catch all’ provision regarding costs associated with good estate management.
What other options might be available?
There have recently been a number of high profile Company Voluntary Arrangements (CVAs), particularly in the retail sector, that have been used to reduce lease liabilities. This virus has also contributed to a trend towards CVAs in other sectors too such as hospitality.
However, some landlords/creditors may not be amenable to such a proposal. This may leave some tenants with no option but to seek urgent rent concessions, lease surrender by agreement or some form of administration or other insolvency process.
In many cases, it will be sensible for parties to consider commercial and reputational risks, alongside strict legal issues. For example, in such exceptional circumstances, parties may wish to consider being flexible about re-gearing or restructuring rent payment schedules or debts so as to preserve relationships, even where there is no legal right or obligation to do so. If and when any alternative arrangements are agreed, it will be important, from both parties’ perspective, to ensure that these are properly documented and accurately reflect the parties’ intentions and understanding.
WM Comment
Whether you are a landlord or tenant, it is important to understand your legal obligations and commitments; to act responsibly; and not to assume that you are or will be automatically released from your legal obligations under a lease even in light of current circumstances.
However, regardless of the legal framework, in the majority of cases it will remain in both parties’ interests for tenants’ businesses to withstand the continued difficulties the Coronavirus outbreak has caused and continues to cause. Given the sudden and negative impact on cash flow for most tenants, the most sensible option may be for landlords and tenants to try and agree practical and commercial solutions to navigate the coming months.
A good tip for when disputes do inevitably arise, is to check whether the particular lease contains any mandatory dispute resolution provisions. An effective dispute resolution clause requires the parties to follow a pre-agreed route to resolution, which can prevent any potential secondary dispute about whether and how the primary issue should be resolved; minimise the scope for any tactical game-playing (thereby helping to preserve commercial relationships); and ensure that the time and costs of dealing with formal litigation are only incurred as a last resort.
In terms of future lease agreements, it will be interesting to see how the market reacts and what sorts of clauses parties seek to negotiate to allocate the commercial risks that may arise from public health crises or other unexpected and significant events.
Finally, please note that this article aims to provide a high level summary of the key issues and concerns facing commercial landlords and tenants in these unprecedented times. Should you require any specific advice – whether from a risk management or a dispute resolution perspective – please do not hesitate to contact David Manda or any of Walker Morris’ experienced and expert Real Estate Litigation team.
Learn more on our Future World of Work hub here.
[1] See our earlier briefing on the Canary Wharf v EMA case for further advice and information on frustration in the context of commercial leases
[2] See our briefing on the basics of forfeiture for further information about this landlord’s remedy

Emergency funding support during the COVID-19 crisis
Click here to view our coronavirus series. It goes without saying that in these testing […]
Click here to view our coronavirus series.
It goes without saying that in these testing times, a large proportion of the business community is having to cope with unprecedented pressures on cashflow and may require access to emergency funding solutions. Below is a brief summary of the measures that have been announced recently by Government. The list has been put together by the Bank of England’s agency staff in Leeds and although it doesn’t claim to be totally comprehensive, it collects together the most obvious places where you can check what support is available and how it will be delivered.
The government announcements are coming thick and fast and many of the proposals are still understandably light on detail but as more information becomes available we will pass it on.
Government
The announcement on the Gov.uk website lists the various measures available and who is administering them – it is comprehensive and updated as they add additional measures.
It includes a package of measures to support businesses including:
- a statutory sick pay relief package for SMEs;
- a 12-month business rates holiday for all retail, hospitality and leisure businesses in England;
- small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief;
- grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000;
- the Coronavirus Business Interruption Loan Scheme to support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance; and
- the HMRC Time To Pay Scheme.
In particular, you will see from the website that grants and business rate relief measures will be administered via Local Authorities (for example Leeds LA are signposting people to the LEP for triage to increase support across multiple issues).
The Coronavirus Business Interruption Loan Scheme (up to £5m loans) will launch next week and will be delivered through the British Business Bank and lenders.
If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.
Bank of England
There is a term funding scheme aimed at SMEs delivered via the banks. You should ask your bank relationship manager about support.
Insurance
The Association of British Insurers have issued a statement on business insurance cover which can be found here and have a COVID-19 Q&A here which includes business insurance, trade credit, income protection and pensions and investments.
Also, Visit Britain/Visit England have a dedicated COVID-19 webpage which contains the latest updates and key links for businesses and industry.
WM Comment
Please call your usual contact within Walker Morris and we will do all we can to help you get through the next few months.
#WMCOVID19

Suspension of matches – impact on clubs
As you will have seen, the Premier League and English Football League have today made […]
As you will have seen, the Premier League and English Football League have today made the decision to suspend matches until at least 3 April 2020 to help delay the spread of coronavirus (COVID-19).
The Walker Morris Sports Team act for half of all Premier League and English Football League Clubs, and as a result we have already spoken to a number of football clubs about the actions they needed to take to prepare for this announcement. We have produced an at-a-glance summary of the key areas of your business which are likely to be affected. These include:
- Ticket Terms and Conditions
- Kit Supply
- Commercial/Partnership Agreements
- Retail
- Pre-season tour
- Venue Hire Agreements
- Employment/Casual Workers’ Contracts
- Other match-related agreements
For more detailed advice on the agreements you have in place (including, where relevant, the impact of force majeure provisions in those agreements) and to share our unparalleled experience in the market please contact Christian Slinger from the Walker Morris Sports Team