ONLINE EVENT: How to avoid risks in customer agreements and supply chains during Covid-19

You will need to keep a copy of the written agreement for a period of 5 years. If the hours of work change from that which you initially agree, you are likely to need something new in writing to cover each separate arrangement.

You should also keep records of how many hours your employees work and how many hours they are furloughed (i.e. not working). You must keep these records for 6 years, together with a record of the amount claimed, your claim reference number and your calculations.

The reality of these unprecedented times is that enforcement of health and safety legislation by the HSE (particularly through the criminal courts) in relation to Covid-19 is an extremely unlikely outcome.

The coronavirus outbreak has seen State support being given to businesses on an unprecedented scale.

This issue is likely to be increasingly relevant as Governments seek to protect and stimulate their economies as they emerge from lockdown.

How have the rules been relaxed in the context of the crisis and what facets of the existing law can be used for the State to provide support to undertakings?

Commercial leases generally prevent a tenant from withholding payments of rent. If a tenant stops paying rent there will be a breach of the tenant’s covenant to pay rent which, strictly speaking, will entitle the landlord to forfeit the lease and/or seek to recover the arrears in the courts. 

However, on 23 March 2020, the Ministry of Housing, Communities and Local Government announced that all commercial tenants in England, Wales and Northern Ireland missing rent payments are to benefit from a government ban on forfeiture of their lease. This change, which will prevent landlords from terminating leases and evicting commercial tenants, is included in the Coronavirus Bill. It will come into force very shortly (once the Coronavirus Bill receives Royal Assent, which is expected to be in a matter of days) and will last until 30 June 2020, with an option for the government to extend this deadline.

It is anticipated that many commercial tenants will take advantage of the reprieve and withhold their rent. Importantly note the rules will apply not only to principal rent but to “any sum a tenant is required to pay”, leaving the burden of supplying services and insuring the premises on landlords.

It is also important to note however that the protection offered by the government is from the threat of forfeiture should tenants withhold rental payments. The liability to pay the rent however remains an interest on unpaid rents will accrue. Furthermore, remedies other than forfeiture may be pursued by the landlord e.g. service of a statutory demand before insolvency or ordinary litigation proceedings for arrears etc.. Tenants then ideally should look to reschedule or suspend rental payment through discussions with their landlord.       

The advantage of this being you might be able to negotiate a sensible and manageable repayment program in respect of the suspended rent, free of the threat of litigation.

You should already have a written furlough agreement with your furloughed employees, but if you move them to flexible furlough then you need a new agreement that confirms the new furlough arrangement.

So, you’ll need to speak to your employees and confirm the hours of work with them in writing (or reach a collective agreement with a recognised Trade Union.

As before, an employee does not need to provide a written response. But the agreement needs to be documented in writing.