What guidance has the CMA issued about how it expects businesses to behave in response to the global pandemic?
On 30th April 2020, the CMA issued a guidance note setting out its views about how the law operates in relation to refunds.
Where a contract is not performed as agreed, the CMA considers that in most cases, consumer protection law will generally allow consumers to obtain a refund.
This includes the following situations:
- Where a business has cancelled a contract without providing any of the promised goods or services
- Where no service is provided by a business, for example because this is prevented by Government public health measures
- A consumer cancels, or is prevented from receiving any services, because Government public health measures mean they are not allowed to use the services.
In the CMA’s view, this will usually apply even where the consumer has paid what the business says is a non-refundable deposit or advance payment.
This positon reflects the CMA’s previous guidance which they had issued in relation to the requirement of fairness in consumer contracts under the Consumer Rights Act 2015, which was that a clause in a contract that gives a blanket entitlement to a trader to cancel a contract and retain deposits paid is likely to be unfair, and therefore unenforceable – it would be unfair to a consumer to lose their deposit if the contract is terminated without any fault on their part, and if they had received no benefit for the payments made.
The CMA’s latest guidance therefore confirms their view that the Covid-19 outbreak does not change the basic rights of the consumer, and that they should not have to pay for goods or services that they do not receive.
Related FAQs
If you don’t want to make redundancies, or if you can’t reduce employee resource, either in a particular department or across the workforce as a whole, then you need to think about alternatives to redundancy.
Equally, you may want to flex the resource you have available to you – without making drastic changes. For example you may want to consider:
- unpaid leave and sabbaticals
- retraining and redeploying
- forcing annual leave
- flexible working
- capability issues
- lay off
- short time working
- reductions in salary
- reductions in working hours
- changing to shift working
You must exercise reasonable care in assessing status and making a status determination, considering what the position would be if the contractor was engaged directly by the end user client instead of via a PSC.
Status is usually determined by looking a number of factors and how they apply to the contractor’s working arrangements. This is a difficult exercise that is usually carried out by employment and tax lawyers and it is full of grey areas. We have a toolkit that can help you navigate this process which Paul will tell you more about at the end of the session.
The key factors used to determine status are:
- Control:
- How much control does the end user client have over the contractor in terms of working arrangements (hours, place of work) and how the work is carried out? Or is the individual contractor able to determine how and when they work and without direct supervision of the end user client?
- Personal service:
- Is the contractor required to perform the services personally without the right to send a substitute? If there is a right to appoint a substitute is this subject to end user client approval?
- Mutuality of obligation:
- Is the end user client obliged to provide the contractor work with a mutual obligation on the contractor to accept that work?
The government released further clarification on the Coronavirus Job Retention Scheme on 4 April. The wording referred to concerning public sector organisations and organisations receiving public funding remains the same.
The revised guidance does provide a helpful insight into how HMRC will deal with applications made to it for assistance under the scheme. It appears that there won’t be a particularly forensic approach adopted by HMRC. The guidance says you can furlough staff if you cannot maintain your current workforce because your operations have been severely affected by coronavirus.
It goes on to say that all employers are eligible to claim under the scheme and the government recognises different businesses/organisations will face different impacts from coronavirus. The need to demonstrate the impact of coronavirus on your business/organisation is not one of the criteria businesses/organisations are going to need to satisfy, so the government does not appear to intend to set a specific test to determine if a business/organisation is “severely impacted by coronavirus”. It is hoped that this should provide additional comfort to publicly funded organisations facing significant restrictions to their operations during the Covid-19 crisis.
There should be some data collected as to the type and number of interactions MHFA are having, to ensure no one individual or individuals are overloaded. MHFAs should be encouraged to maintain regular self-care practice, to lean in to all support provisions available in their organisation, to engage in peer support, and to take a break from their role as a MHFA to prioritise their own wellbeing as needed. It is also important that those who volunteer to be MHFAs have the support of their managers. So they have the time to do both their core role and their MHFA duties without feeling pressurised to cram work into spare time to make up for time spent on MHFA duties.
No, there is no obligation on employers to offer a flexible furlough arrangement to staff. Operationally, flexible furlough may not be appropriate for your business and equally, returning on a part-time basis may not be suitable for individuals already furloughed for various reasons. Concerns about returning to work part-time or at all should be considered on a case-by-case basis.