Can I apply a Force Majeure clause?
If a contract contains a force majeure clause this may become operative due to the coronavirus pandemic and related emergency legislation. Such clauses exist to ensure that if some unforeseen event prevents a party from being able to perform their obligations under a contract, either on time or at all, they will be excused from their obligations and not be held liable for non-performance.
The clause must actually be written into the contract to have effect – a force majeure clause cannot be implied into a contract. Whether it can be relied on by a party will depend on the wording of the clause itself as it may only be applicable in certain limited circumstances.
You should seek legal advice at an early stage if you think that force majeure is relevant, because a number of potentially complex issues must be addressed, many of which will turn upon the exact wording of the force majeure clause in the contract in question:
- Has a force majeure event actually arisen?
- What notification process do you have to follow to rely on the provision?
- What mitigation steps do you have to take?
- What is the effect of the force majeure event – is the contract suspended, or can it be terminated (which might not be what you want)?
Related FAQs
Employers and employees can decide the split of the hours of work and the hours of furlough. There is no maximum or minimum requirements. You can change the arrangement, by agreement, from time to time.
When claiming for employees who are flexibly furloughed, you should not claim until you are sure of the exact hours they will work during the claim period.
As we move to look at re-opening businesses and getting people back into the workplace there is work to be done by employers, firstly in planning how they are going to do this, and secondly, communicating those plans to staff. The only way in which businesses are going to be able to manage the transition back to some form of normality is by speaking to their staff and re-assuring them about the measures that will be put in place to safeguard their health and safety in order to enable them to return. Any successful return to work will need to based on carefully thought out plans and providing re-assurances to employees that necessary action is being taken.
Employers will be focusing on:
- How do I get my workforce back safely, and
- How do I give my workforce the confidence to return.
For those with variable pay, if the employee has been employed for a full 12 months before the period claimed for you, can take the higher of:
- The same month’s earnings in the previous year; or
- Average monthly earnings from the 2019/20 tax year.
For those who have been employed for less than one year you can use the average of their monthly earnings since they began their employment until the date they were furloughed.
If they have been employed for less than a month, work out a pro rata for their earnings so far, and claim for 80%.
Employees who are unable to work because they are shielding in line with public health guidance (or need to stay home with someone who is shielding) can be furloughed after 1 July 2020, as long as you have previously submitted a claim for them in relation to a furlough period of at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June.
Yes. You can continue to fully furlough employees until 30 September 2021 (but from between 1 August 2020 and 31 December 2020 and from 1 July 2021 you need to contribute to the cost). If on full-time furlough, employees continue not to be able to undertake any work for you. As before, they can undertake training, or volunteer or work for another employer or organisation (if contractually allowed).