How does a Public Body amend its contracts to enable continued payment to contractors?

The Coronavirus Statutory Sick Pay Rebate Scheme will repay employers the SSP paid to current or former employees and will be available from 26 May 2020. See here.

The scheme covers all types of employment contracts and employers will be eligible to claim if they:

• Are claiming for an employee who is eligible for sick pay due to coronavirus
• Had a payroll scheme that was created and started on or before 28 February 2020
• Had fewer than 250 employees on 28 February 2020

The repayment will cover up to 2 weeks starting from the first qualifying day of sickness, if an employee is unable to work because they either:

• have coronavirus (COVID-19) symptoms
• cannot work because they are self-isolating because someone they live with has symptoms
• are shielding and have a letter from the NHS or a GP telling them to stay at home for at least 12 weeks
• have been notified by the NHS or public health bodies that they’ve come into contact with someone with coronavirus
• they have been notified by the NHS to self-isolate before surgery

You can claim for periods of sickness starting on or after:

• 13 March 2020 – if your employee had coronavirus or the symptoms or is self-isolating because someone they live with has symptoms; or
• 16 April 2020 – if your employee was shielding because of coronavirus.
• 28 May 2020 – if your employee has been notified by the NHS or public health bodies that they’ve come into contact with someone with coronavirus
• 26 August 2020 – if your employee has been notified by the NHS to self-isolate before surgery

Employees do not have to give you a doctor’s fit note for you to make a claim. But you can ask them to give you either:

• an isolation note from NHS 111 – if they are self-isolating and cannot work because of coronavirus
• the NHS or GP letter telling them to stay at home for at least 12 weeks because they’re at high risk of severe illness from coronavirus
• the evidence from the NHS or public health body requiring them to self-isolate

You must keep the following records in relation to a claim you make under the scheme for three years:

• The reason for the employee’s absence
• Details of each period the employee could not work, including start and end dates
• Details of the SSP qualifying days when the employee could not work
• National insurance numbers for each employee you have paid SSP to

You’ll need to print or save your state aid declaration (from your claim summary) and keep this until 31 December 2024.

The majority of hearings are taking place by video or phone.

Court guidance has been issued on telephone and video hearings during the coronavirus outbreak:

https://www.gov.uk/guidance/hmcts-telephone-and-video-hearings-during-coronavirus-outbreak

Where a Judge orders “teleconferencing”, it will take place using BTMeetMe, or video conferencing using Skype for Business or Cloud Video Platform.

All hearings are subject to the relevant jurisdictional rules and practice directions and usual court etiquette, including wearing appropriate attire and not eating or drinking during a hearing.

Electronic bundles of documents and authorities (if required) need to be prepared, indexed and paginated and sent to the Court well in advance of any hearing.

An amendment to the Civil Procedure Rules’ Practice Directions has been approved by the Master of the Rolls and the Lord Chancellor on 1 April 2020, and is now Practice Direction 51ZA. This has the effect of allowing the parties to extend by prior written agreement up to a maximum of 56 days (rather than the usual 28 days detailed at CPR 3.8(4)) any rule, practice direction or order provided that any extension does not put at risk any hearing date. This Practice Direction will cease to have effect on 30 October 2020.

Additionally each regions’ Designated Civil Judge (DCJ) has issued a Covid-19 Protocol. There are some minor variations between the regions, but overall the guidance is very similar.

In Northumbria, Durham and Teesside the DCJ guidance for multi-track cases provides that “The parties are at liberty to extend, by consent, any step in the timetable up to a maximum of 90 days (as opposed to the present limit of 28 days)” and the Court does not need to be notified if the Trial date is not effected. Where Trial windows are likely to be impacted due to Covid-19 and the parties are in agreement to extending this, a letter can be sent to the Court with a draft order proposing a new timetable, including a new trial window and agreed availability within the trial window.

The same guidance also confirms that an electronic signature on all documents including witness statements and disclosure statements will suffice.

Some examples of the key questions to ask include:

• Is there still a viable underlying business that is likely to continue beyond the current crisis?
• What does the revised short to medium cash flow look like and will the company continue to be able to pay its liabilities?
• Does the company have the support of all of its stakeholders – lenders, shareholders, customers, suppliers and banks – even though the business might be in breach of its own obligations?
• What measures could (and should) the board put in place to protect creditors, including making sure that exposure to creditors (both collectively and individually) is not increased, assets are not sold at less than value and no creditor is treated more favourably than another?
• Is there still a reasonable prospect of the business avoiding liquidation or administration?

The key question is always whether accepting the money is in the best interests of creditors as a whole bearing in mind that accepting Government support and continuing to trade might increase the company’s overall liabilities. Directors should be mindful that if the business fails, their decisions during this critical time may be scrutinised and it is therefore important that directors have up-to-date financial information and projections to form the basis of any decisions, take stock, get the right advice and document the decisions that are taken.

Some employers falling into the third group of organisations described above could understandably feel aggrieved that on the first reading of the guidance they are not able to furlough employees and rely on the Government scheme. Many publicly funded organisations that are not public sector employers, receive a package of public funding with little expectation on how that funding is used or applied, other than broadly for it to be used in providing the services it is contracted to deliver. Also, several publicly funded organisations have many different income streams and the element of funding that is received from the public purse can be only an element of their operating costs.

Unfortunately there is still no clear guidance on when employers falling into the third category identified above can use the scheme. The only reference in the guidance on this states that where organisations are not “primarily funded” from the public purse and whose staff cannot be redeployed to assist with the coronavirus response, the scheme might be appropriate to be used for some staff. This seems to suggest that where an employing organisation is not wholly or mainly funded by public funding and staff cannot be redeployed to work in areas in the effort to combat coronavirus, then it would be appropriate for the employer to access the scheme.

If considering applying for grants under the scheme a sensible approach would be to look at the combined total of your public funding and payments under the scheme and make sure it will not represent more than 100% of the level of total income you would have expected to receive during this period in a non-Covid scenario.

Local Authorities are expected to maintain support to suppliers and this should be considered:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/874178/PPN_02_20_Supplier_Relief_due_to_Covid19.pdf