9 March 2020
We find ourselves in a rapidly changing situation, and the public are already changing their behaviour in response to Coronavirus/Covid-19. Some businesses will be faced with loss of trade whilst others will no doubt experience staff shortages due to illness or fear of it. Our advice is to avoid over-reacting but prepare for a period of disruption.
Clearly some of the first businesses that are going to suffer most are those involved in travel, hospitality and entertainment, with customers taking the decision to stay away. We have already seen the collapse of Flybe and the lesson to be learnt from this is obvious – if you are already in financial difficulties and you see your order book emptying or your supply chain drying up, you need expert insolvency advice. For those businesses which, on the other hand, have a ‘war-chest’ in the form of reasonable reserves, now is the time to plan for damage limitation. To make decisions about the action you should take, you need to understand your cost base and embark on some kind of financial modelling, using your intuition about likely scenarios.
Keep your people safe
Other businesses, even if they experience no extraordinary fluctuations in demand or interruptions in supply, should take reasonable precautions to protect their people. Ensure that your staff have enough information to recognise symptoms of coronavirus and that there is a clear reporting system in place. Develop an action plan for your workplace so that if any team member, or visitor, is suspected of having the virus steps can be taken immediately to mitigate its spread. Make sure that all of your team are aware of the plan.
The most frequently offered advice at the moment appears to be about hand washing. So it goes without saying that washroom checks should be carried out more often to ensure that soap and paper towels are always available.
ACAS recommends that hand sanitiser and tissues should be made available for all staff. However, even if sanitiser is effective against the virus, all stocks have now sold out, so keep emphasising the hand washing.
The same applies to face masks. Their effectiveness is debatable, but you would be lucky to find any at the moment anyway.
Business travel should be reviewed and restricted where necessary. Currently, various hotspots have been identified around the world, but these will be irrelevant if the disease becomes widespread. It’s bad news for the airlines but an opportunity to save on business travel costs for other businesses. No reasonable customer or potential customer is going to object to doing business by phone or video conferencing rather than a personal visit in light of the current situation.
The Government has announced that if a team member falls ill and is suspected of having Covid-19 they will need to self-isolate immediately, so the normal rules on Statutory Sick Pay have been relaxed. See my colleague’s blog for more details.
If your terms and conditions of employment are up-to-date, they will include a provision for allowing time off for dependants. Usually, such time off is paid only for a day or two to allow alternative arrangements to be made, but if an employee is caring for a family member with Covid-19 it is unlikely that they will persuade anyone else to take over. Flexibility is advisable, and, depending on the nature of your business, you may be able to make arrangements for the employee to work from home.
One problem that could arise is an employee refusing to attend their workplace for fear of becoming infected. Provided that you have taken all reasonable precautions, that employee’s rights to paid leave are severely limited. Some negotiation may be needed and the answer again could be homeworking, or perhaps insisting that the absence is treated as part of the contractual holiday entitlement.
On the other hand, if you as an employer instruct an employee to stay away from work because, for example, they have just returned from a virus hotspot, you are obliged to continue to pay them in full.
More detailed advice for employers can be found on the ACAS website. Crucially, however, if you think the survival of your business is in jeopardy, get in touch immediately at email@example.com . I can help you to take emergency or contingency measures that might see you through the crisis.
Finally, let’s be positive. For most businesses this is a temporary situation. For some it will even present opportunities for business growth or reorganisation. In a few months’ time normality and business confidence will return.
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