Legal Guidance for businesses affected by COVID-19 from JMR Solicitors

Buisness Insights

As well as severe implications for people’s health, COVID-19 (coronavirus) is drastically affecting businesses of all sizes.

The Office of National Statistics reported the following on 4th June 2020:

  • Out of all businesses in the UK who have temporarily closed or paused trading, 16% reported they expect to restart trading in the next two weeks and 9% expect to start trading again in the next two to four weeks (from the point of completion of the survey).

  • At a UK level, 62% of all businesses continuing to trade reported their turnover had been lower than normal between 4 May and 17 May 2020.

With government guidance and legislation changing constantly to help us adjust to the new normal, here we look at the latest information that businesses may need guidance on amid the Coronavirus pandemic.

Small Business Rates Relief: Small businesses in England which pay little or no business rates are eligible to a one-off cash grant of £10,000 from their local council. If you need help making an application JMR Solicitors can help.

Commercial tenants: The initiation of the Coronavirus Act 2020 provides a freeze on the forfeiture of business tenancies for three months. As landlords cannot terminate a business tenancy on the grounds of non-payment of rent until 23 August 2020, this has triggered debates between landlords and their tenants around finding a feasible resolution for both parties. If you are affected by commercial tenancy issues, contact us for further legal advice.

Settlement Agreements and Redundancy: A lot of employers are looking at reorganising of their employees and workers due to the decline in business activity caused by Covid-19. This has resulted in an increase in redundancy procedures for employees and termination of workers contracts. It is important that the employer tailor the settlement agreement terms to meet the individual circumstances of terminating the employee or worker’s contract of employment. It is a requirement that the settlement agreement specifically refer to the complaints or legal claims being compromised, which makes the drafting of the agreement a critical step to ensure the agreement has the preferred effect. For legal representation for settlement agreements or redundancies, contact our employment law team on 0161 491 3933.

Corporate Insolvency and Governance Bill: On the 20th May 2020, the Government published the Corporate Insolvency and Governance Bill which, once passed as official legislation, will bring about the greatest change in UK Insolvency law in nearly 20 years. The Bill is currently at the stage of being officially debated in Parliament.

The Bill proposes eight measures introduced to help businesses manage the economic damage caused by COVID-19.

Business Insurance: Successful COVID-19-related claims on your business insurance will depend on the terms and conditions outlined in your insurance policy. When the government added COVID-19 to the list of notifiable diseases on 5th March, this did not routinely change business insurance policy coverage.

Your business might still be covered under business insurance if you have a non-damage business interruption added policy which may refer to human disease-related disruptions. However, to be eligible for a claim the wording the in policy needs to state it includes infectious diseases. Also check to see if there is a clause about denial of access, which means if circumstances stop access to your business premises.

Also, you may need to look at events cancellation policy clauses to see if you are covered for exclusion for communicable diseases. JMR Solicitors can check your business insurance policy documents and advise you on whether you are eligible for a claim.

Employment Contracts:

COVID-19 has caused many employment contracts being altered or modified due to the suspension of company activities or the breakdown of the contract itself. Within this framework, the key issues to consider include force majeure and government measures that have been put in place to support companies and employees during this exceptional situation. We have vast experience in drafting and amending employment contracts. Get in touch for a free 30-minute* consultation to discuss your needs.

*£10 booking fee application to reserve your time slot for consultation.

Contact JMR Solicitors if you are a business owner affected by Coronavirus

If your business is affected and you need legal advice on any of the matters mentioned above, contact JMR Solicitors on 0161 491 3933