What can I do as an employer if employees are known to be breaking the local lockdown rules?

The Government’s Corporate Insolvency and Governance Act introduces amendments to the current rules for companies on holding meetings, to address the difficulties companies are facing due to the Covid-19 pandemic.

The new provisions apply to meetings held between 26 March 2020 and 30 September 2020 (referred to as the “Relevant Period”). Subsequent regulations by the Government can be used to shorten this period or extend by up to 3 months but not past 5 April 2021.

The provisions will have retrospective effect, so meetings that were held after 26 March 2020 that may not have met the usual legal requirements due to lockdown, will be validated under these new provisions. These provisions under the Act make amends to relevant legislation and override a company’s articles of association.

For general meetings and certain other meetings of companies, the Act states that:

• The meeting need not be held in any particular place;
• The meeting may be held, and any votes may be cast, by electronic means or other means;
• The meeting may be held without anyone being in the same place
• Persons attending the meeting no longer have the following rights: the right to attend in person, the right to participate in the meeting other than by voting, or the right to vote by particular means.

The aim of these changes is to facilitate virtual meetings, and remove the need for a physical venue.

Where a company was required to hold its AGM between 26 March and 30 September 2020, it can be held at any time before 30 September 2020.  The Secretary of State has the power to make regulations to further extend the deadline.

A break or pause in learning can be initiated where the interruption to learning due to Covid-19 is greater than four weeks. This must be reported as a formal break in learning. In such circumstance the funding to the training provider will be suspended for the duration of the break. Previously, the rules only allowed an apprentice to initiate this break in learning but this has been expanded to give employers and training providers the right to initiate this. Training providers should continue with their monthly IRL submissions to the ESFA. During breaks in apprenticeships it is not necessary for the apprentice to comply with the minimum of 20% on the job training requirement but this will resume when the break ends.

The now defunct Guidance for the Tier system suggested that the clinically extremely vulnerable would be treated in the same way as those who were shielding in Lockdown 1. This means that anyone who is clinically extremely vulnerable and cannot work remotely, will be entitled to SSP. These employees should receive a letter confirming that they are deemed to be clinically extremely vulnerable/shielding and you should ask for a copy of it as evidence to support a claim for SSP. It is likely that the Lockdown 3 Guidance will be the same.

You could also furlough an employee in the clinically extremely vulnerable category. Again we do not anticipate this changing.

In the event that the worst happens and contractor insolvency occurs, there are a number of steps which the employer should take immediately:

• Confirm that insolvency has actually occurred and the type of insolvency (for example liquidation or adjudication) – actions taken based on rumours can have adverse consequences
• Secure the site and carry out an audit of the plant, equipment and materials present – this may extend to changing the locks on site in order to prevent overzealous contractors and sub-contractors seeking to return and take what they see as their possessions. The building contract may contain a provision that these are the employer’s property, but they can be difficult to recover if they are not within the employer’s possession – possession is 9/10ths of the law!
• Ensure that there are adequate insurance and health and safety arrangements in place for the site – these would usually be dealt with by the contractor and therefore may no longer be in place, so alternative arrangements may be required
• Ensure that any further payments to the contractor are stopped pending a more detailed review
• Consider whether any off-site materials have already been paid for and can be secured. This can however be difficult in practice where the materials are not physically within the employer’s possession

In addition, there are also a number of further actions which the employer should consider in the slightly longer term:

• Investigate the options available and ascertain the cost of completing the works to assist in deciding how best to proceed
• Consider whether termination of the contractor’s employment under the building contract is required, and if so take the necessary steps in accordance with the building contract
• Consider whether there are any bonds or guarantees in place upon which the employer can rely, and if so assess their terms as to whether and how to make a claim
• Make arrangements to complete the works – as a general rule of thumb the cost of completing the works may increase by around 30% if it is necessary to get a replacement contractor
• Consider whether direct payment to subcontractors is possible or desirable
• Although we would say this(!) we would strongly recommend taking legal advice, as insolvency and its implications are complex and it is easy to inadvertently fall foul of the various different requirements

If an employee is required under government guidance to wear a face mask during the course of their employment and there is no applicable exemption, any fine issued would be payable by the employee, not the employer.