I am agreeing a financial settlement with my ex-spouse. Should we carry on negotiating despite COVID-19?
No. Before continuing any negotiations, you need to strongly consider whether now is the best time to settle. There is a myriad of uncertainty due to the pandemic, with unemployment rates increasing, volatility in the stock markets and difficulties regarding placing valuations on assets. This could all lead to the financial settlement being unfair to you and cause you financial difficulties in the future.
Any financial settlements reached following marital separation should be embodied in to a Court Order, to prevent future claims from your ex-spouse. As a general principle, although maintenance orders are always variable, financial orders in respect of capital (e.g. house, cash, investments, pensions) are final and it is very difficult to set aside a Court Order. The question will be whether or not the pandemic is judged as a Barder event, which broadly means something viewed as unforeseen. It would be challenging for you to argue that the effects of COVID-19 are unforeseen given the widespread expectation of an economic crisis. The Court previously found against a husband who wanted to revisit an Order that he said was unaffordable following the 2008 financial crisis, with one Judge commenting that a 90% drop in the Husband’s share price was a “natural process of price fluctuation”.
Even if you informally agree a settlement with your ex-spouse, and you do not have this reflected in a Court Order, your ex-spouse may still rely on this agreement within future Court proceedings and argue that you should be held to it.
It is, therefore, very dangerous to be reaching any financial settlements at this time with your ex-spouse without careful consideration and legal advice. Further, even if an agreement is reached, market volatility can mean longer implementation times, especially when a settlement relies on the sale of property.
Related FAQs
A reduction in hours or salary or changes to hours or patterns of work is a contractual change – you can’t just impose it without significant risk. The same applies for lay-off or short-time working where there is no existing contractual right to impose these.
In summary, the process that an employer should follow to implement these measures is as follows:
- Communicate the Company’s position clearly and the urgent need to achieve temporary cost-saving to ensure the ongoing financial viability of the organisation
- Explain the proposed changes in detail and seek the employee’s agreement, and
- Record the agreed changes in a letter which is counter-signed by the employee.
If employees will not agree then employers will be at substantial risk of claims for unlawful deduction of wages, breach of contract and/or constructive unfair dismissal if they seek to impose these changes unilaterally. Employers should be mindful that this approach is likely to cause significant employee relations issues and dissatisfaction if only some employees agree to a reduction in pay. Employers should have a clear strategy for what their approach will be if this is the case – for example, they may wish to instead explore a different measure such as redundancies. This may form part of the employer’s communication when explaining the reason for the changes and seeking the employee’s agreement.
Unions: Employers should also be aware that where there is a recognised trade union in respect of any part of the workforce which is being asked to agree to a change to terms and conditions, the recognition agreement or collective agreement will require the employer to consult and/or negotiate with the trade union in the first instance.
Collective consultation: Where 20 or more dismissals are proposed at one establishment in any 90-day period, there are stringent collective consultation rules which apply (regardless of whether the employees have two years’ service or not). All dismissals count towards this total unless the dismissal is “not related to the individual concerned” – therefore dismissals for things such as conduct or capability do not count, but most other dismissals will count. This will include where you are imposing changes to the contract such as reduced hours or pay.
The rules on collective consultation set out a prescriptive and time-consuming process which must be followed, and minimum timescales before any redundancies can take effect. The cost of any claims relating to failure to follow collective consultation requirements are substantial, and specific advice should therefore always be sought before seeking to implement collective redundancies. We will be publishing further guidance on this on the Hub shortly.
Put simply, if it is a requirement of a particular role that PPE is worn, then this should be provided to the employee. If an employer dismissed an employee for refusal to carry out their role due to lack of PPE then this is likely to be an automatically unfair health and safety dismissal.
Furthermore, anyone who is subject to a detriment as a result of raising a health and safety concern, e.g. someone in this situation who refuses to work due to lack of PPE and is sent home without pay, will also have a potentially valid claim in the Employment Tribunal for that detriment, even if they are not dismissed.
The Government has produced and published three new Procurement Policy Notes as a direct result of the ever changing Covid-19 environment.
PPN 01/20: Responding to COVID-19
The purpose of PPN 01/20 is to ensure that contracting authorities are able to procure goods, services and works with extreme urgency, to allow them to respond to the pandemic efficiently.
This PPN provides guidance for the following circumstances:
- Direct award due to extreme urgency (regulations 32(2)(c)) (click here to read our article regarding regulation 32)
- Direct award due to an absence of competition or protection of exclusive rights
- Call off from an existing framework agreement or dynamic purchasing system
- Call for competition using a standard procedure with accelerated timescales
- Extending or modifying a contract during its term
PPN 02/20: Supplier relief due to COVID-19
PPN 02/20 focuses predominantly on the supplier to assist in keeping supply chains open and ensuring that suppliers are kept financially sound during these unpredictable times.
This PPN provides guidance for the following circumstances:
- Urgent reviews of contract portfolios and to update suppliers if they believe they are at risk
- Put in place appropriate payment measure to support supplier cash flow
- Where contract payments are based on ‘payment by results’ make payments based on previous invoices
- Ask suppliers to act on a ‘open book’ basis and make cost data available to the contracting authority during this period
- Ensure invoices submitted by suppliers are paid immediately on receipt
PPN 03/20: Use of Procurement Cards
The third guidance note PPN 03/20 relates to the use of procurement cards to increase efficiency and accelerate payment to suppliers.
This PPN provides the following advice and urges organisations to arrange with their procurement card provider to:
- Increase a single transaction limit to £20,000 for key card holders
- Raise monthly limits on spending with procurement cards to £100,000 for key card holders
- Spend on procurement cards each month in excess of £100,000 should be permissible to meet business needs
Although the above advice has been provided, should these limits not be necessary, organisations should seek an appropriate transaction limit or monthly limit.
The PPN also advises that by 30 April 2020, in scope organisations should:
- Ensure that a number of appropriate staff have the authority to use these cards
- Open all relevant categories of spend to enable these cards to be used more widely
We don’t recommend this. Status determination statements must be issued before 6 April 2021 for current engagements and the appropriate deductions are to be made on payments for services carried out on or after 6 April 2021.