What should businesses do now?
Many will have worked collaboratively with their suppliers and customers to deal with the immediate public health crisis. This will have meant offering flexibility as to contractual arrangements, whether in delivery dates, volumes of goods or services supplied, or even in the specification of what has been delivered.
If this is the case, it is important that businesses now do their legal housekeeping and make sure they have a proper record of what has been agreed. Unfortunately, our experience shows that many legal disputes arise out of amendments to contracts, typically where the parties to the contract each have a different view about what exactly they agreed to change.
We would therefore advise businesses to review any amendments that they might have agreed either verbally, by email, or otherwise, and consider whether they need to be captured in a more formal way which will make clear exactly what has been agreed to be varied, and (where appropriate) how long that variation will remain in force.
It’s also important to remember that some contracts contain provisions that set out specific requirements about how amendments are to be made. For example, they might require that amendments are made in writing (rather than verbally). These “No Oral Modification” clauses are commonly found in commercial contracts, and the courts have recently shown that they are willing to enforce them.
Failing to deal with amendments in accordance with contractual requirements could therefore have a serious impact on businesses as they recover from the disruption caused by the lockdown. If they end up in dispute with a customer or supplier, a business could find that the contract has not actually been amended in the way that they think – potentially leading to legal costs and liabilities at the worst possible time.
Related FAQs
It would be prudent to take legal advice early in relation to any issue you foresee in performing a contract. This will allow you to:
- Ensure that initial contact with your counterparty is framed in the correct way
- Ensure that any variations are fully documented so that both parties are fully protected
Employers should ensure that apprentices are paid at least the Apprenticeship Minimum Wage, National Living Wage or National Minimum Wage (AMW/NLW//NMW) as appropriate (and taking into account the new rates which will take effect from 1 April 2021) for training carried out where their wage received through the Coronavirus Job Retention Scheme does not cover this.
The application has to be made before the date on which the accounts should have been filed, so this process can’t be used if you are already late. If you don’t make the application before your filing deadline, then a fine will automatically be generated if your accounts are filed late. Whilst you could appeal against such a fine on the grounds that the delay was caused by coronavirus issues, this is likely to be a much more time consuming and uncertain process that applying in advance.
It does not appear that the process applies to Confirmation Statements or other returns.
Hosted by NewcastleGateshead Initiative, Partners Damien Charlton and Jane Garvin discussed in this webinar contracts, managing supply chains and the role of directors, with a particular focus on cancellation of events and businesses in the tourism and hospitality sector.
You can find a recording of the webinar from NGI here.
Yes, but your claim will be limited to any enhanced contractual payments you make to employees who qualify for the relevant family related pay.
All maternity and parental rights remain in force for anyone in this category who is furloughed. However you may need to calculate average weekly pay differently if the employee was furloughed and then started family related leave on or after 25 April 2020.
Furlough pay cannot be claimed for the period that an employee is receiving Maternity Allowance. An employee can agree to accept furlough pay but they must contact Jobcentre Plus to stop their Maternity Allowance payments for this period.