Which agreements will qualify for exemption?
There are four criteria which must be satisfied if an agreement is to be considered exempt:
- It must improve production or distribution, or promoting technical or economic progress – the guidance suggests that cooperation ensuring essential goods and services can be made available to the public, or an important sub-set of the public such as key workers, will satisfy this criterion.
- It must allow consumers a fair share of the resulting benefit – the guidance suggests this will be the case where the action prevents or reduces shortages.
- It must not impose on the undertakings concerned restrictions which are not indispensable to the attainment of the above benefits – the guidance suggests this will be the case where the cooperation is the only reasonable option due to the urgency of the crisis and where the cooperation is temporary in nature.
- It must not afford the undertakings concerned the possibility of eliminating competition – therefore the parties must endeavour to retain competition in respect of the products (in particular price competition).
Related FAQs
It is a theoretical possibility that “anti-vax” beliefs could be a philosophical belief under the Equality Act 2010 and therefore anti-vaxers have the right not to be discriminated against for their beliefs. Much will depend on why the individual is against the vaccine. Conspiracy theorists (the vaccine is being used as an opportunity to monitor you or it’s all because of 5G) are highly unlikely to be treated as having a philosophical belief!
In part in response to the Covid-19 pandemic, legislation was passed by the government earlier this year which sought to assist companies to trade through the current economic climate. Included within the measures is a degree of protection from compulsory winding up.
The Corporate Insolvency and Governance Act 2020 (The Act), was laid before parliament on 20 May, and became law on 26 June. It is important creditors are aware of what changes have been implemented and the potential and impact which it may have upon debt recovery action you may be considering or have already commenced.
The main part of the Act affecting creditors is the temporary restriction on presentation of winding up petitions and the factors that the Court has to take into account when deciding whether to wind up a company.
On Thursday 24 September 2020 the government passed a further statutory instrument which extended the operation of these restrictions. As a result, the measures which were due to expire on Wednesday 30 September 2020 have now been extended until 31 December 2020.
A key point to note is that the Act has retrospective effect so any pending petitions presented after 27 April will be affected, along with any winding up orders made after that date.
The Act has introduced the following restrictions:
- A petition cannot be presented by a creditor during the period of 27 April 2020 and 31 December 2020 unless the creditor has reasonable grounds to believe that (a) coronavirus has not had a financial effect on the debtor, or (b) the debtor would have been unable to pay its debts even if coronavirus had not had a financial effect on the debtor;
- A petition cannot be presented after 27 April 2020 if it is based on a unsatisfied statutory demand served between 1 March 2020 until 31 December 2020;
- When deciding whether to make a winding up order the Court will need to be satisfied that the grounds giving rise to the petition would have arisen even if Covid-19 did not have a financial effect on the debtor;
- All winding up orders made between the 27 April and 31 December will automatically be void (that is, of no legal effect) unless the Court would have made the winding up order if the new law was in force at the time the order was made.
Yes, but the Courts have been temporarily restructured into three categories:
- Open courts (open for business including vital in person hearings)
- Staffed courts (for video and telephone hearings)
- Suspended courts (no hearings of any kind)
These changes have been effective from Monday 30 March 2020.
The Chancellor announced that employers will be given £2,000 to employ apprentices and £1,500 for apprentices over the age of 25 for each apprentice they hire from 1 August 2020 to 31 January 2021. These payments will be in addition to the existing £1,000 payment the Government already provide for new 16-18 year old apprentices.
He also announced that employers would be given £1,000 for taking on trainees in response to the traineeship scheme being extended.
If suppliers still wish to terminate the contract, they must contact the directors or the officeholder dealing with the insolvency process and obtain their approval to terminate the contract – which, of course, might not be given.
If the continued obligation under the contract to supply goods/services to the customer would place the supplier in financial hardship the supplier can apply to court for permission to terminate the contract. This will involve time and legal expense.