Draft legislation on clawback of payments under the Coronavirus Job Retention Scheme

Since the introduction of the Coronavirus Job Retention Scheme (the Scheme), it has been made clear in the guidance that HMRC will retain powers to claw back monies paid under the Scheme retrospectively if it transpires that they have been paid as a result of non-compliant or, worse, fraudulent claims.

At the end of May 2020, the Government published draft legislation which is currently subject to a technical consultation. The consultation runs until 12 June 2020 and the legislation will take effect from the date that the Finance Bill 2020 receives Royal Assent.

The legislation will apply to individuals, businesses, individual members of a partnership and employers who receive or apply for payments under the Scheme, as well as other Government initiatives such as the Small Business Grant Fund.

Draft plans

In summary, the draft legislation provides that, where a recipient is not entitled to a grant under the Scheme, or has misused it by, for example, not paying the monies to the employees for whom claims were made, the grant received will be subject to income tax at 100%. Essentially, this will mean that the full amount of the grant will be repayable.

It is clear from the draft legislation that it is possible for the clawback provisions to apply not only to intentional, fraudulent misuse of the Scheme, but also to those situations in which genuine errors have been made by applicants. Whilst this has always been intimated by the Government guidance on the Scheme, it appears as if this will be enshrined in law. One such example of a potential clawback will be where an employee has ceased to be entitled to monies under the Scheme, but their employer has continued to claim.

Key Points

Given that the legislation is still subject to consultation, there may well be changes before we see it in its final form. However, as it stands, the key points are as follows:

• HMRC will be able to investigate any claim within four years after the grant was made, with this time period being extended to six years in respect of careless behaviour, and twenty years for deliberate misuse of the Scheme.
• Employers are required to notify HMRC if they have received payment under the Scheme to which they were knowingly not entitled. There will be penalties for failure to notify HMRC in such situations.
• If, at the time HMRC orders repayment, an employer is insolvent, then directors may be personally liable if they were responsible for the management of the company, and they knew at the time the liability to pay HMRC crystallised, that the company was not entitled to the grant.
• HMRC has the ability to prosecute in situations where claims under the Scheme have been deliberately fraudulent. This is likely to be the case where, for example, employees have been required by their employer to work during furlough, in express contravention of the Scheme rules.

It would seem unfair, and much less likely, for HMRC to utilise the legislation to seek repayment where employers have made claims in good faith, and based on an interpretation of the Government guidance and Treasury Direction which is often woolly at best. However, some commentators have highlighted the more political and economic point that, after the enormous pay-outs which have been made by the Government under its various schemes, it will have an urgent need to raise funds over the next few years. It remains to be seen whether this will result in a more aggressive review of claims made under the Scheme.

A couple of household names have, in the past few weeks, indicated their intention to return monies received under the Scheme, given that their businesses have weathered the storm more favourably than anticipated originally. Although there is no indication that this will be a requirement in the forthcoming months and, in our opinion, it is highly unlikely to be so, we will watch this closely.

For the time being, and as we have been advising our clients and contacts from the outset, a comprehensive paper trail, which includes details of furloughed employees; the corresponding written agreements; the claims made under the Scheme; and wider detail regarding the company’s finances and the impact of the Scheme on stabilising its position; will all be important tools in demonstrating proper use of the Scheme in the months to come.

Working from home: preparing for the long term

Despite the staged reopening of retail, and possibly leisure and tourism, in the coming weeks and months, it is likely that office-based employees, who can carry out their jobs from home, will continue to do so for a long while yet.

Prior to the pandemic, working from home was seen as an attractive proposition by many employees. For a large number of people, this has proven to be the case, and many employers have seen an increase in productivity since the beginning of lockdown. However, the reality of homeworking has brought with it, for others, significant isolation and, rather than an increased ability to balance home and work life, the blurring of the boundaries and the seepage of work further into the evenings and weekends. This will have inevitable consequences on both employees’ mental health and their quality of work, and it will be important to address these issues in order to ensure that homeworking works as effectively as possible in the medium to long term.

We set out a checklist, below, which provides some ideas to help.

þWorking from home policy

Until recently, employers’ working from home policies were likely to be geared towards occasional agile working. Permanent working from home has now been commonplace for almost three months and is likely to continue for several months yet. Ultimately, this crisis is likely to result in more widespread, regular working from home, whether to save on premises costs, or in response to a call from employees to work more flexibly in the long term.

In the light of the above, now is the time to consider an overhaul of your working from home policy, both in terms of the practicalities (such as team communication), as well as the health & safety aspects (such as desk assessments). The other suggestions, below, could also be incorporated into the policy. We have significant experience in advising on working from home policies, so please do get in touch if you would like further information.

Health & safety risk assessments

Employers are under a duty to protect their employees’ health, safety and welfare. This is the case even where employees are working from home.

Your usual risk assessments should be updated in order to deal with the homeworking aspect. As a result, it may be that you will need to provide some online training to employees to ensure that they are working safely. It may also be wise to provide employees with an online desk assessment questionnaire which they can complete and return electronically.

Technology / equipment

At the beginning of the pandemic, sending employees home with a laptop and not much else would have been likely to be justifiable. However, the longer that home working continues, the greater the obligation on the employer to provide the appropriate equipment to carry out their role safely and efficiently. This is closely linked with the need to conduct a risk assessment, above. Whilst employers will need to balance the need to invest in equipment with the probability that at least a partial return to office working will be likely in the future. However, this does not negate an employer’s fundamental duty to ensure that employees have a safe system of work.

Daily interaction between managers and their teams

Working for days on end without contact from colleagues can be very isolating, and increase levels of anxiety. A daily catch-up call/video session with the whole team can help to keep employees feeling valued and engaged. On the flip side, some employees might find daily calls rather overwhelming – “Zoom fatigue” is definitely an ailment of the COVID-19 era. As a result, you may want to make these calls optional; a “drop-in” session where employees can join to have some contact with their colleagues if they wish. Save important announcements for those meetings which are mandatory.

Mentoring system

Particularly in the current situation, where tensions are especially high, many employees would benefit from a more pastoral contact, outside of their immediate team, to whom they can talk confidentially.

Promotion of separation between work and home life

The past couple of months have exacerbated the extended working culture – in many cases, employees are working harder than ever before, despite not having lengthy commutes which take up hours of their day. The proximity of their workspace to their home life is making it all the more difficult to switch off.

Whilst such a working pattern may have been sustainable in the short-term, a lengthier stint may weaken employees’ mental health and worsen productivity. Encourage employees to take plenty of breaks throughout the day, and finish work at a similar time, and in the same manner as they would do in the office.

Working from home: tax relief for home office equipment

During May 2020, the Treasury announced a temporary income tax and National Insurance contributions exemption in relation to the reimbursement for office equipment to enable home working. Whilst there has always been no income tax liability for those purchases made by employers in respect of equipment provided to employees for the performance of their duties (subject to certain criteria being met), a further exemption has now been introduced in relation to home working office equipment purchased by the employee and reimbursed by the employer.

In order to take advantage of this provision, the equipment must be obtained for the sole purpose of enabling the employee to work from home as a result of the Coronavirus (COVID-19), and the provision of equipment would have been exempt if it had been provided to the employee directly by the employer. The exemption is relevant to equipment reimbursed from 16 March 2020 and is in force until the end of the tax year 2020-2021.

Statutory Sick Pay for Test & Trace

An extension has been made to those categories of individuals entitled to Statutory Sick Pay (‘SSP’) under The Statutory Sick Pay (General) (Coronavirus Amendment) (No 4) Regulations 2020. Workers who have been told to isolate under the new ‘Test & Trace’ system will now be entitled to SSP for the requisite 14-day isolation period.

[CONTENT CORRECT AS AT 8 JUNE 2020]

If you would like to discuss any of the issues raised in this article or have other concerns about the impact of Coronavirus, please contact Rachael Lloyd, James Baker, or Andrew Tobey in Michelmores’ Employment team.

CORONAVIRUS STOP PRESS – Click here to keep up to date with all of our latest articles.

This article is for information purposes only and is not a substitute for legal advice and should not be relied upon as such. Please contact our specialist lawyers to discuss any issues you are facing.

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COVID-19’s disruption to the education sector has not gone unnoticed. Not only were schools forced to shut for a large number of pupils, with the exception of children of key workers and vulnerable children, but some excluded pupils and their families found themselves in limbo with uncertainty surrounding the exclusion process. As of 1 June 2020, the School Discipline (England) (Coronavirus) (Pupils Exclusions and Reviews) (Amendment) Regulations 2020  (the New Regulations) came into force clarifying the exclusion procedures to be followed in the midst of the COVID-19 pandemic.

The New Regulations concern all maintained schools, academies and pupil referral units. They will apply to all exclusions from 1 June 2020 until 24 September 2020, including exclusions occurring before 1 June 2020 which are:

• Permanent and fixed, but have not yet been considered by the school’s governing board,
• Permanent and have been considered by the school’s governing board which has chosen not to reinstate the pupil and the time limit to apply for a review of this decision has not passed.
• Permanent where a parent or pupil aged 18 has requested a review of the school’s governing board’s decision which has not yet happened.

Additionally, the exclusions listed above will remain subject to the New Regulations so long as the procedures for scrutiny have not been exhausted, even if this extends beyond 24 September 2020.

The New Regulations are based on the 2019 statutory guidance ‘Exclusion from maintained schools, academies and pupil referral units in England‘. This has been amended to reflect the temporary changes below, about which further information can be found on the Department for Education’s website.

Remote access meetings

Telephone or videoconference can be used by schools’ governing boards or independent review panels providing that the following conditions are met:

• All participants agree to hold these exclusion meetings virtually.
• All participants are able to use the technology, allowing them to hear and speak throughout the meeting.
• All the participants are able to put across their point of view or fulfil their function during the meeting.
• A fair and transparent meeting can be held remotely.

Arranging a remote access meeting

It is important that meetings are fair. Participants, notably pupils and their families, must be informed that the meeting does not need to be held virtually. Furthermore, school governing boards, arranging authorities and panel members must bear in mind that in some situations remote access meetings may present difficulties for some participants, such as someone with a disability or whose first language is not English. Here relevant equalities legislation must be complied with.

Where a meeting is held via remote access, the chair of the meeting will need to ensure that participants are able to engage using the technology proposed so that the fairness requirement is complied with. It is nevertheless possible for some participants to be physically present and for others to join using virtual means so long as the conditions for a remote access meeting listed above are fulfilled.

Timescales for meetings of governing boards

Where the governing board has not been able to meet within the original time limit this may be extended. The governing board should reassess at regular intervals whether the meeting can be held, so as to minimise uncertainty for pupils and their families as far as possible.

Meetings to consider permanent exclusions, and fixed-period exclusions resulting in the pupil missing more than 15 school days in a term should be held, where possible, within 15 school days. Where this is not possible due to COVID-19 preventing a physical meeting, or where it has not been reasonably practicable to hold a remote access meeting, the time limit will be extended to 25 days, or as long as reasonably necessary for a COVID-19-related motive. In the case of fixed exclusions resulting in the pupil missing between six and 15 days in a term, the usual 50 days period can be extended to 60 days, or as long as reasonably necessary for a COVID-19-related motive.

However, it is important to note that where the time limit for the school’s governing board meeting expired before 1 June 2020, no extension can be made, and an overdue meeting should be arranged via remote access where the conditions for such a meeting are met, or in person, where it is safe and practicable to do so.

Timescales for application for independent reviews of exclusions

Where a school’s governing board takes the decision not to reinstate a permanently-excluded pupil, the parents, or a pupil who is 18 or older, have 25 days from the date they receive the governing board’s decision in which to apply for a review of this decision, or as long as reasonably necessary for a COVID-19-related motive.

Nevertheless, as with schools’ governing board meetings, no extension can be made where the time limit for an independent review panel expired before 1 June 2020.

If you would like to discuss any of the issues raised in this article, or have other concerns about the impact of Coronavirus, please contact: Hollie Suddards, or Tom Briant-Evans in Michelmores’ Education team.

CORONAVIRUS STOP PRESS – Click here to keep up-to-date with all of our latest articles.

This article is for information purposes only and is not a substitute for legal advice and should not be relied upon as such. Please contact our specialist lawyers to discuss any issues you are facing.

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The rules on execution of Land Registry documents have changed, which will help address the challenges of working remotely. In this article we cover the practical impact of some of the key changes.

Updated Land Registry guidance

Mercury signing

On 4 May 2020, the Land Registry published guidance stating it would accept deeds signed using the “Mercury signing approach”.

The Land Registry has also produced step-by-step guidance on how to adopt this process. The key points are that each party will need to sign and have witnessed their own copy of the signature page of the document. They will then send this page via email to their conveyancer along with a complete copy of the final agreed document. The conveyancer will then combine the signed page with the document and submit the combined document to the Land Registry as one document.

All the parties must be represented by conveyancers and agree to this arrangement for it to be accepted by the Land Registry.

This method will be applicable for deeds affecting dispositions of registered and unregistered land, discharges of charges (DS3s and DS1s), and powers of attorney other than lasting powers of attorney.

Witnessing

It is important to note that the witnessing must be done in person, rather than by video call. However, the relevant legislation does not prevent a signatory’s spouse, civil partner or cohabitee from acting as a witness (if they are not a party to a deed). The Land Registry has also suggested that there is no reason why the witness and signatory cannot be separated by glass. This would allow a signature to be witnessed by someone looking through a car or house window, provided they were then able to see clearly the signatory signing.

Plans

The Land Registry has clarified that where a plan is required, that plan can be signed by the conveyancer acting as an agent using a typed signature on the plan, or the parties to the deed can type their name on the plan by way of signature before returning the final agreed copy of the deed and signature page.

Companies using the Mercury signing approach

If a company is executing by way of one director in the presence of a witness then that director needs to sign the document with the witness physically present. If the company is executing by two directors (for which a witness is not required), those directors can sign separate pages, following the Mercury protocol, without their individual signatures being witnessed.

In these circumstances it is possible to sign as part of a chain whereby the first director prints, signs and scans their signature page and the entire document to the second director and solicitor. The second director then prints, signs and scans their signature page and sends it back to the first director and solicitor.

Electronic signatures

It is worth noting that, at this point in time, the Land Registry will not accept electronic signatures on deeds affecting registered land.

Docusign

Docusign is a platform that enables the uploading of documents to a site so that they can be signed electronically by various recipients.

Care should be taken when using this method of signing as it will not apply where wet ink signatures are required and it cannot be used for Land Registry documents.

However, it can be used in the execution of certain documents, provided that the person signing the document intends to authenticate that document and the formalities relating to the execution of that document are satisfied. It is also important to note that a witness still needs to be present alongside the party signing to witness their electronic signature. As outlined above, the witness can be a family member, etc., so long as they are not a party to the document itself.

If you would like to discuss any of the topics raised in this article, please contact Lucy Smallwood, Partner in Michelmores’ Real Estate team.

This article is for information purposes only and is not a substitute for legal advice and should not be relied upon as such. Please contact our specialist lawyers to discuss any issues you are facing.

Metal detecting is something that anyone is lawfully entitled to do. However, you cannot trespass to do it.

If land is tenanted, both the tenant’s and, in most circumstances, the landlord’s consent must be obtained and vice versa if it is the land owner wanting to grant someone permission to metal detect.

That said there are limits to what you can do. Best practice is to ensure that the Portable Antiquities Scheme (“PAS”) Code of Practice for Responsible Metal Detecting in England and Wales (2017) (“Code of Practice”) is followed. If not, those metal detecting could find themselves unknowingly committing a criminal offence.

Ancient Monument and Archaeological Areas Act 1979

The Secretary of State has the power to designate sites of national importance. The Ancient Monument and Archaeological Areas Act 1979 provides the following criminal offences in connection with metal detecting:-

• It is a criminal offence to destroy or damage a scheduled monument “knowing that it is a protected monument” and “intending to destroy or damage the monument or being reckless as to whether the monument would be destroyed or damaged” (section 28).
• It is a criminal offence to use a metal detector on a protected place without the written consent from Historic England or Cadw Wales and to remove an object located by the use of a metal detector in a protected place (section 42). A “protected place” is either a “scheduled monument” or an “area of archaeological importance”.
• It is also a criminal offence to carry out unauthorised works to a scheduled monument without the prior consent of the Secretary of State (section 2).

Can you metal detect on Countryside Stewardship land?

Metal detecting is not permitted on scheduled monuments, SSSIs, and known archaeological sites on CS agreement land. On all other land in a CS agreement, landowners must make sure that metal detecting does not conflict with the requirements of the CS agreement. If metal detecting is allowed the Code must be followed.

Other offences from illegal searching (‘nighthawking’)

• Trespass – metal detecting on land without the landowner/occupier’s consent (this is a civil offence, unless trespass is on a protected site or criminal damage is caused).
• Theft – this is a criminal offence by virtue of the Theft Act 1968 – removing objects from land without the land owner/occupier’s permission.
• Dealing in Cultural (Offences) Act 2003 – it is a criminal offence to deal dishonestly in objects of historical, architectural or archaeological interest if it has been “tainted” by being excavated or removed from sites.

Treasure Act 1996 – What is treasure?

Any object, other than a coin, which is made up of at least 10% precious metal (gold or silver), that is at least 300 years old when found. The exceptions to the above (which are still treasure) are where:-

• two or more metallic objects of prehistoric date are found in the same find (i.e. at the same time) then they will still be deemed treasure irrespective of their metal content; .
• two or more gold coins are found in the same find;
• 10 or more gold coins are found in the same find but they contain less than 10% precious metal; and
• any object would previously have been a treasure trove.

Who owns treasure?

Treasure vests in the Crown, unless it is subject to someone who can establish a prior interest.

Must “treasure” be reported?

Yes. A finding of treasure must be reported to the local coroner within 14 days. Failure to report can lead to a fine and/or imprisonment.

What if something other than treasure is found?

There is no legal obligation to report finds unless they are human remains, which must be reported to the police. Best practice is to report all finds to PAS Finds Liaison Officers.

The Government’s Environment Bill (Bill), which was reintroduced to Parliament in January this year, introduces a mandatory requirement for Biodiversity Net Gain (BNG) in the planning system. The National Planning Policy Framework 2019 already requires local planning authorities to seek to minimise impacts on biodiversity and provide net gains where possible, but there is currently no standardised approach.

The principle of BNG forms part of the government’s ’25 Year Plan to Improve the Environment’ with an aim to leave the natural environment in a measurably better state than beforehand. The new Bill will require developers (subject to limited exceptions) to provide a mandatory 10% BNG, compared against a pre-development baseline, in respect of all new development under the Town and Country Planning Act 1990 (TCPA 1990), that results in the loss or degradation of habitat.

The Bill proposes to introduce a new Schedule to the TCPA 1990, which requires applicants, as part of their planning application, to gain approval from the local authority of a ‘biodiversity gain plan’. This plan must include, amongst other matters, information about steps to minimise the adverse effect of the development on biodiversity and details of the pre-development and post-development biodiversity value of the onsite habitat.

Measuring biodiversity

In order to measure biodiversity value for the purposes of a planning application, a metric produced by DEFRA, which scores different habitat types according to a predetermined biodiversity value, will be used. This value is then adjusted depending on the condition and the location of the habitat. The predicted biodiversity gain is then calculated in the same way, adding-in new biodiversity elements and new components relating to risks associated to the development.

The NFU, in its response to the Government’s consultation on BNG, has raised concern with the use of a metric, in isolation, in relation to the pre-development baseline and agricultural land. Specifically that ‘normal farm business decisions around cropping on land should not be deemed intentional degradation of habitat’ and ‘Farmers who are already delivering good environmental outputs should not be penalised by the way the metric is applied’. The Government is expected to provide and consult on guidance to assist stakeholders, and we hope that this point is carefully considered.

Maintaining biodiversity

Under the Bill, developers will have to guarantee to maintain biodiversity gains for a period of at least 30 years and longer-term protection will be encouraged, provided it is acceptable to the landowner. It is proposed that developers will sign up to conditions or obligations, or the landowner will be required to enter into legally binding ‘conservation covenants’, designed to give assurance that compensatory habitats will be maintained, in order to promote nature conservation.

Mitigating a net loss of biodiversity

If a developer is unable to mitigate biodiversity net loss on-site, it will be required to pay a cash tariff on the shortfall against net gain obligations. Whilst the thought is that meeting this gain by off-site provision should be a last resort, in practice a 10% gain may be difficult to achieve on some sites and this should be recognised. Under the proposals, this payment should ideally go towards local off-site projects, but if these are not available, then the developer may be able to buy ‘biodiversity units’ provided by the Government.

Opportunities for rural landowners

Whilst we await clarification from the Government on detail as to how a system of biodiversity credits will operate, it is possible that with such a system, there is potential for farmers to deliver the net gain, by the provision of biodiversity units on their land, which they could sell to those developments, which are unable to deliver on-site provision. If a system of biodiversity credits is to operate successfully for farmers, payment undoubtedly needs to offer incentive and funds must be available for the duration of the contract, for the unit to be managed effectively for nature conservation.

Whilst there is not yet a date that BNG will become a national mandatory requirement and further guidance is awaited from the Government, a number of local authorities have already updated planning documents. For example, since 1 March 2020, Cornwall Council has been applying a 10% net gain requirement to all major planning applications. At the time of writing, they are still working on proposals in relation to the position where off-site compensation is appropriate.

The Environment Bill is now being considered by a Public Bill Committee and is expected to report to the House of Commons by Tuesday 5 May 2020.

Update on returning to work processes

Returning to work, and what that might look like, has been the topic of the nation during this past week. Following the Government’s announcement of the possible “roadmap” out of lockdown, and the subsequent publication of the “recovery strategy”, employers have been working out how to do business in this new, socially-distanced world.

Initial “recovery strategy”

In our recent update regarding the “recovery strategy”, we set out the Government’s principles in providing a “safe” workplace, which were common to all eight of the COVID-19 Secure guidance documents for different sectors (NB there is now an additional publication directed at the transport sector). In summary, these were as follows:

1. Employees should work from home where they can, but employees who cannot work from home should return to work (obviously, this latter point would only apply to sectors currently permitted to open by the Government).
2. A COVID-19 risk assessment should be carried out, with involvement from workers/trade unions.
3. Social distancing of two metres should be maintained, wherever possible.
4. Where two-metre social distancing is not possible, transmission risk should be managed by, for example, installing physical barriers.
5. Cleaning processes should be more rigorous and more frequent, particularly in respect of high-contact objects such as door handles and printers.

The initial guidance which accompanied the “recovery strategy” is fairly basic in its detail. However, as we have seen with the guidance regarding the furloughing scheme, the Government’s approach appears to be the publication of a high-level, fairly broad-brush initial document, followed by more detail at a later date.

Publication of further guidance

Over the past week, the Government has provided further information to assist employers in their return strategy. The “guidance for employers and businesses on Coronavirus (COVID-19)” was updated on Friday 15 May 2020. Whilst some of this guidance has been in place since the start of the crisis, in order to help those employers who remained open and operational, it has been updated to reflect the wider cross-section of employees who may now be returning to work. The Government’s “good practice” checklist contains the following recommendations:

• Keep all employees updated on actions being taken to reduce risks of exposure to Coronavirus (COVID-19) in the workplace.
• Ensure employees who are in a vulnerable group (such as those who are pregnant, over 70, or with certain pre-existing health conditions) are following social distancing practices.
• Ensure employees who are in the extremely vulnerable group (such as those with certain cancers) are shielding and are supported to stay at home. We discussed in our update of 16 April 2020 that there is some inconsistency between the guidance, which states that shielded employees can be furloughed, and the Treasury Direction, which implies that shielded employees must first exhaust their entitlement to Statutory Sick Pay. Whilst the position is by no means clear, we would suggest that the Treasury Direction would take precedence over the guidance.
• Make sure managers know how to spot symptoms of the virus, and decide on a company-wide action plan to deal with a situation where someone at work is suspected of being infected. At present, the Government guidance states that those who develop symptoms whilst at work should be sent home as quickly as possible. However, the current advice is that it is not necessary to close the workplace or send all staff home unless Government policy changes. Employers are advised to keep monitoring the Government response page for the latest details.
• Ensure there are a variety of easily accessible places around the building for staff to wash/sanitise their hands. If possible, provide personal bottles of hand sanitiser for all employees, along with tissues, so that they can “catch, kill and bin” any coughs or sneezes.
• Make regular announcements to remind staff to follow social distancing advice and wash their hands regularly.
• Encourage the use of digital and remote transfers of material where possible, rather than paper format, such as using e-forms and e-banking.
• Use floor markings to delineate the required two-metre distance, particularly in those areas which would usually become crowded.
• Where it is not possible to remain two metres apart, staff should work side-by-side or facing away from each other, rather than face-to-face.
• Where face-to-face contact is essential, this should be kept to 15 minutes or less, wherever possible.
• As much as possible, keep teams of workers together (i.e. have a fixed rota of staff which remains the same), and keep teams as small as possible.
• Place Plexiglas barriers at points of regular interaction (such as reception areas).
• In terms of staff canteens, staff should be encouraged to bring their own food. Where there are no practical alternatives, meal times should be staggered to avoid overcrowding, and the social distancing and cleanliness points above should be observed.

Notwithstanding the list of suggestions proffered by the Government to ensure safety in the workplace, the Health and Safety Executive (HSE) has been clear that businesses which cannot enforce adequate measures to protect their employees should stay shut. Sarah Albon, Chief Executive of the HSE, stated that companies which could not take adequate steps to minimise the risk of spreading the virus should “individually not open”.

As discussed in our “Return to work” digest, employers not only have to ensure compliance with Government guidelines, but have to ensure that they are adequately discharging their duty of care, whilst being mindful of employees’ rights to remain away from a workplace if they perceive there to be serious and imminent danger (ss44 and 100 Employment Rights Act 1996).

Some practical suggestions

Our view is that the more you can engage with employees about the potential measures you are taking to make their workplace safe, the less likely you are to face significant push-back. In addition, it is important to consider what will work for your business – this is not necessarily a one-size-fits-all approach. Some creative thinking will go a long way, and we have seen many of our clients and contacts devise inventive ways of ensuring safety in a COVID-19 world. We set out a selection, below:

• Use of thermal imaging cameras at staff entrances, to track temperatures.
• Installation of a “click-and-collect” service for the café, ensuring the transaction does not involve the use of physical paper or money, with staggered times for collection.
• Removal of all fabric communal seating, swapping to plastic or leather surfaces which are easy to keep clean.
• A “one-in-one-out” system for toilet facilities, with an automatic disinfectant spray dispenser installed to clean in between uses.
• Adaptation of internal doors to those with automatic sensors, rather than manual handles.
• Provision of “stylus” pens for every employee, so that there is no need to touch the printer display.
• Temporary removal of access to shower facilities, but providing large face / body wipes for those cycling to work.

Now more than ever, it might be difficult for businesses to find funds to implement some of the more costly measures suggested, above. Others might wonder whether it is proportionate action to take given that the prevalence of Coronavirus (COVID-19) will, we hope, be minimised within the year. If it is possible to implement these more permanent measures, we would suggest that it is a sound investment to do so.

Whilst Coronavirus (COVID-19) may be brought under control in the medium term, the fact that we have suffered such a pandemic in the first place demonstrates that there is the possibility that something similar will happen again. The key for businesses going forward might well be to “future-proof” themselves against another “attack” of this kind; something for which, unlike terrorism or cyber security, the business world had not really prepared. Even if we are lucky enough to escape a similar crisis in the future, think about the productivity which is lost each year through the common cold. Limiting the spread through more stringent workplace practices will only be of benefit in the long term.

COVID-19 Ministerial taskforces

It was announced on Wednesday 13 May 2020 that five, ministerial-led taskforces have been established to develop work safety guidelines for those sectors which are likely to be the last to re-open – pubs and restaurants, non-essential retail, recreation and leisure (including tourism), places of worship and international aviation. These taskforces have been set up to ensure that the requisite consideration is given to the very specific challenges that these sectors will face in re-opening.

We will update you with developments.

Twitter allows indefinite working from home

Last Wednesday, 14 May 2020, Twitter announced that it would allow its employees to work from home “forever”, even once the lockdown measures are eased fully. The social media platform said that widespread working from home during the pandemic had been a resounding success. It did, however, indicate that employees would be permitted to return to the office once it reopens, if that was their preference.

The announcement follows those from Google and Facebook, both of which have stated that their staff can work from home until the end of the year.

Experts have commented that the pandemic has highlighted the benefits to employers of flexible working arrangements, many of which were reticent to allow their employees to work from home until Coronavirus (COVID-19) forced their hand. There have been widespread reports of an increase in productivity amongst those workforces which are now operating primarily from home.

Spotlight on… small businesses

On 27 April 2020, Chancellor Rishi Sunak announced a new 100% Government-backed loan scheme for small businesses.

The “Bounce Back” scheme went live on 4 May 2020, and small businesses will be able to apply for loans of between £2,000 and £50,000. The loans will be interest-free for the first 12 months, and will be provided by mainstream lenders.

To find out more information, including whether your business is eligible, please read the full article here. If you would like to discuss further, please contact Harry Trick in our Corporate team.

In case you missed it…

With the number of new announcements issued by the Government last week, it would be easy to miss some of the updates. We provide a round-up of the latest news items, below.

Extension to Job Retention Scheme

On 12 May 2020, Chancellor Rishi Sunak announced that the Government’s Job Retention Scheme (the Scheme) will continue to operate until October 2020.

At present, details of how the Scheme will operate going forward are very scant. However, it appears that the rules of the Scheme as they stand will remain in place until the end of July 2020. After this point, there are plans to allow “greater flexibility”, including the introduction of a “partial furlough” category, where employees will be able to return to work part-time, whilst continuing to be furloughed for the remainder of their normal hours. Crucially, it seems that, from August 2020 onwards, the Government will be looking to employers to foot at least some of the payroll bill. It has been intimated that at least 50% of wages will continue to be reclaimable through the Scheme, but the Government is looking to employers “to share the costs of paying people’s salaries”. For employers in sectors which have received little to no income so far this year (such as the holiday and leisure industry, due to its seasonal nature), it will be difficult, if not impossible, to find the cash to contribute in the way that the Government envisages.

We await further details in respect of the new iteration of the Scheme, which should be released by the end of May.

Annual Leave and Furlough

Employers may now require employees to take holiday whilst on furlough

The interaction between furlough and annual leave is something which has not been afforded particular clarity by the Government since the Coronavirus Job Retention Scheme (the Scheme) began.

Previous iterations

The Scheme guidance had seen multiple iterations before we had confirmation that employees were permitted to take holiday during a period of furlough. During any such holiday taken, employers would need to “top up” the 80% Government grant to ensure that employees’ normal holiday pay was paid throughout. This option was attractive to some employees, given that they would receive full pay during the holiday period.

However, others preferred to hedge their bets, saving their accrued holiday entitlement for a time later in the year when the travel industry might reopen, rather than using annual leave to continue to sit in their homes whilst on furlough.

This raised the question of whether employers could compel their employees to take annual leave during furlough, a question on which, until now, the Government has refused to be drawn. Some employees were forging through the holiday year with the majority of their annual leave entitlement intact. This could cause huge operational difficulties upon a return to normal business levels, where (particularly with a reopening of the travel industry), employees might be clamouring to take 100% of their leave in 20% of the usual time.

EU-derived provisions relating to holiday

The widely-held view was that employers could not compel their employees to take annual leave during furlough, as it conflicted expressly with the EU-derived provisions relating to holiday. These require that the primary purpose of the leave be “‘rest, play and away” – i.e. a period of rest and relaxation away from the place of work.

It followed that, if an employee was placed on furlough which, although likely to be subject to consent, was not necessarily a choice made willingly by the employee, and was akin to a “lay-off” situation as a result of the current crisis, this was not consistent with the spirit of the annual leave provisions.

Government clarification

However, the Government has now sought to clarify the position. In what is likely to be a policy decision, rather than a strict interpretation of employment legislation, it has issued guidance entitled “Holiday entitlement and pay during Coronavirus (COVID-19)”. This states:

“If an employer requires a worker to take holiday whilst on furlough, the employer should consider whether any restrictions the worker is under, such as the need to socially distance or self-isolate, would prevent the worker from resting, relaxing and enjoying leisure time, which is the fundamental purpose of holiday.”

This is perhaps not as clear as employers would have hoped. Whilst it now seems unequivocal that there is a right for employers to require employees to take holiday (“if an employer requires a worker to take holiday whilst on furlough…”), this is qualified by the words “the employer should consider whether any restrictions…would prevent the worker from…enjoying…the fundamental purpose of holiday”.

What are the practical implications?

This seems to suggest that, where an employee cannot properly utilise their annual leave in the usual way, the employer may not be able to force them to take such leave. The guidance states expressly that social distancing might be a factor in this decision. As this is something that the entire population is likely to need to continue to observe for some time, it is unclear how any employees will be able to enjoy the “fundamental purpose” of holiday and, by implication, the precise circumstances in which employers will be able to impose it.

The guidance does comment that furloughed employees are unlikely to need to take advantage of the recent expansion of the leave carry-over provisions (where it has not been reasonably practicable for an employee to take some or all of the EU-derived 4 weeks’ holiday due to the COVID-19 pandemic.it can be carried forward into the following two leave years). This is because they will “be able to take it during the furlough period“.

However, this does not give extra weight or clarification to the ability of employers to compel their employees to take annual leave during furlough, as this could relate to voluntary leave only. All that the guidance does make certain is that it would not be reasonably practicable for an employee to take annual leave during furlough where, due to cash flow issues, the employer is unable to fund the “top-up” in order for the employee to receive their normal full holiday pay.

What approach should employers take now?

Given that employers are likely to want to enforce the taking of annual leave in order to avoid future operational issues, we would suggest utilising a broad interpretation of the guidance to facilitate this. It is likely that the Government’s intention was to give employers as much flexibility as possible, although the communication has been somewhat muddled.

However, employers should be alive to the fact that employees may use the contradictory elements of the guidance to contest any unilateral imposition of annual leave. From a financial perspective, given that they will have been paid their full, normal holiday pay, there will be no monetary loss for the employer to worry about.

Having said that, the action may cause wider staff engagement issues, so any instruction to take holiday during furlough should be dealt with sensitively. There may be discontent regarding the lack of clarity and, as with previous guidance, the Government may bow to the pressure to publish revised guidelines in the coming weeks.

[CONTENT CORRECT AS AT 18 MAY 2020]

If you would like to discuss any of the issues raised in this briefing or have other concerns about the impact of Coronavirus, please contact Rachael Lloyd, James Baker or Andrew Tobey in Michelmores’ Employment team.

CORONAVIRUS STOP PRESS – Click here to keep up to date with all of our latest articles.

This article is for information purposes only and is not a substitute for legal advice and should not be relied upon as such. Please contact our specialist lawyers to discuss any issues you are facing.

Since lockdown restrictions were implemented in March, more than 450,000 people have been unable to progress their plans to move house. The Secretary of State for Housing, Communities and Local Government has set out a plan to re-start the housing market so that all buyers and renters will now be able to complete purchases and view properties in person, while estate agents, conveyancers and removal firms can return to work while following social distancing guidelines.

The plan is summarised as follows:

Estate agents’ offices can open; viewings are permitted; show homes can open; removal companies and the other essential parts of the sales and letting process are re-started with immediate effect.

New guidance to allow extended working hours on construction sites and to make the planning system operate again remotely

A ‘Charter for safe working practice’ launched by the Government and the Home Builders Federation, enabling home builders to return to work safely.

To help unlock the housing market, the Secretary of State for Housing, Communities and Local Government has announced a series of measures to get the country building homes for the future, including:

• Allowing builders to agree more flexible construction site working hours with their local council, such as staggering builders’ arrival times, easing pressure on public transport.
• Enabling local councils and developers to publicise planning applications through social media instead of having to rely on posters and leaflets, helping to unblock the service.
• Support for smaller developers by allowing them to defer payments to local councils, helping those struggling with their cash flow, while ensuring communities still receive funding towards local infrastructure in the longer term.

[CONTENT CORRECT AS AT 13 MAY 2020]

If you would like to discuss any of the issues raised in this article or have other concerns about the impact of Coronavirus, please contact Partner Louise Peters or Solicitor Ellie Wonnacott in Michelmores’ Residential Conveyancing team.

CORONAVIRUS STOP PRESS – Click here to keep up-to-date with all of our latest articles.

This article is for information purposes only and is not a substitute for legal advice and should not be relied upon as such. Please contact our specialist lawyers to discuss any issues you are facing.

Tom Torkar, our Head of the Technology & Innovation Sector, was joined by guest panellists for our webinar: The accelerated digital revolution – what does it mean for businesses?

Our experts gave their guidance and views on issues affecting businesses during the Coronavirus (COVID-19) pandemic.

The panel debated:

• Whether brave companies that use disruptive business models are still those who are succeeding
• How economic and social upheaval is forcing all manner of organisations to adopt innovative ways of working – accelerating the digital revolution
• What does this mean for the ways that businesses are servicing and engaging with their customers?

In the wake of the Prime Minister’s Sunday statement, on 12 May 2020 the Department for Education (DfE) released guidance on returning to school. It is expected that as with all sectors, this guidance will be updated in accordance with scientific and medical advice. The guidance aims to assist headteachers on the protective measures they should be implementing to keep staff and pupils safe when schools re-open.

As of 1 June 2020 schools will be opening their doors not only to vulnerable children and children of critical workers, but also to children in nursery, reception, year 1 and year 6. The DfE is also asking for nurseries and other early years providers to start re-opening (with further Government guidance to follow) and for some face-to-face support to be provided to year 10 and year 12 students, on top of the remote education they are currently receiving, to assist with their preparation for key exams next year. The aim is for pupils to return to their educational settings gradually, where a risk assessment indicates that it is appropriate for larger numbers to be in schools, placing them in the best environment for their learning and development whilst enabling families to return to work.

This Government advice outlines the following topics:

1. Effective infection protection and control

Schools are expected to implement measures to reduce the risk of both direct transmission (e.g. through proximity to another who is sneezing and coughing) and indirect transmission (e.g. touching contaminated surfaces) of the Coronavirus. Examples given in the guidance include asking pupils and staff to wash their hands more often than usual and for the frequent cleaning of classroom surfaces.

2. PPE, including face coverings and face masks

If an organisation normally uses PPE (personal protective equipment) then it will be expected to continue to do so. However, schools do not normally use PPE and there is no obligation for this to start, in fact the DfE recommends against it except where a pupil’s care routinely already involves the use of PPE due to their intimate care needs. One reason given by the guidance is that where a child is not able to handle PPE correctly this may inadvertently increase the risk of transmission. The only other time that PPE should be issued is where a pupil becomes unwell with symptoms of Coronavirus at school and needs direct personal care until they are able to go home.

3. Shielded and clinically vulnerable children and young people

Extremely clinically vulnerable pupils are being advised to shield and are not expected to attend their educational setting. A list of people who are described as being “extremely clinically vulnerable” can be found here. This includes, amongst others, those who are receiving cancer treatment or who have had a solid organ transplant.

Clinically vulnerable pupils who are not classed as extremely clinically vulnerable should follow medical advice when deciding whether they should return to school.

4. Shielded and clinically vulnerable adults

Staff who are extremely clinically vulnerable should be shielding and not attending work as it is not safe. However, staff who are clinically vulnerable, but not extremely clinically vulnerable, should work from home where possible. However, if their role cannot be carried out from home, they may return to work provided schools take measures to protect them in the workplace, such as offering them the safest available on-site role.

5. Living with a shielded or clinically vulnerable person

If a pupil or staff member lives with a person who is clinically vulnerable, but who is not extremely clinically vulnerable, they can attend school. However where a member of the pupil’s or staff member’s household is classed as extremely clinically vulnerable they should only go to school if stringent social distancing is implemented effectively. If not, it is advised that the pupil or staff member should learn or work from home respectively.

6. Class or group sizes

The staff-to-child ratio for pre-school children in early years settings should continue as set out in the early years foundation stage (EYFS). Primary school classes should be split in half with a maximum number of 15 pupils per group, whose desks should be spaced as far apart as possible, and one teacher. Secondary schools should also halve classes and are expected to rearrange classrooms and workshops so that pupils are sitting two metres apart.

Schools are advised to create an environment where staff and pupils only mix in small, consistent groups. These groups should stay, where possible, two metres away from other groups and follow recommended hygiene and cleaning measures to reduce the risk of transmission.

7. How to implement protective measures in an education setting before wider opening on 1 June 2020

Schools are being advised to take steps to plan and organise effectively the return to school. The guidance suggests steps such as: altering the timetable (e.g. to stagger drop-off and pick-up times, assembly groups and break times), removing soft toys which are hard to clean and refreshing the school’s risk assessment and other health & safety advice.

It is important for staff and parents to have confidence in the measures taken by the school and therefore, it is recommended that schools should be communicating their plans with staff and parents around the return to school. This could include: explaining that any pupils or staff who are displaying Coronavirus symptoms should not return to school, advising on transport options to and from school, and ensuring that parents are aware that they cannot gather at the school’s entrance gates.

8. How to implement protective measures in an education setting when open

As discussed above, schools should do their best to keep small groups together and away from other groups. The guidance sets out a number of measures which should be implemented. For instance: schools should also make sure that efficient cleaning is taking place, that transmission is being prevented as much as possible through staff and pupils following the recommended hygiene practices, and that the use of shared resources such as stationery is reduced.

9. Contact tracing in educational and childcare settings

At present, the Government is developing a national test and trace programme which will bring together an app, expanded web and phone-based contact tracing and swab testing for those with potential Coronavirus symptoms. Further detail will follow on how this will operate in educational and childcare settings.

10. Steps to take when someone becomes unwell at an educational or childcare setting

If a pupil or staff member shows symptoms of Coronavirus they should be sent home and advised to follow the Government guidance for households with possible coronavirus infection. Whilst waiting to be collected they should be moved to a room so that they can isolate behind a closed door with the window open. Where a child awaiting collection requires supervision, staff caring for them should wear PPE if possible. Alternatively, if they cannot be isolated, they should remain at least two metres away from anyone else.

11. Steps to take if there is a Coronavirus case at an educational or childcare setting

In this situation, the person with symptoms compatible with Coronavirus should be sent home to self-isolate for seven days. Here the rest of the household should self-isolate for 14 days and all staff and pupils at the school will be given access to a test should they display Coronavirus symptoms.

If a person tests positive, their entire class or group at the school should be sent home and advised to self-isolate for 14 days. It is important to note here that other household members of this class or group will only be required to self-isolate if the pupil or staff member they live with from the class or group develops Coronavirus symptoms.

12. Reporting on a child’s temperature at the start of each day

This will not be required as the Government does not consider this to be a reliable method for identifying Coronavirus.

13. Testing children and young people

Once schools open to a wider number of children than is currently envisaged for the 1 June 2020, any pupils or school staff, and any members of their households, will be able to take a Coronavirus test if they display symptoms.

14. Testing teachers and other staff with symptoms

Anyone involved in education, childcare or social work is deemed to be an essential worker and as a result, these people already have access to testing if they have symptoms.

15. Managing risks in supporting children and young people with complex needs at special schools and colleges

Further guidance on this point can be found here, including recommendations on how to conduct risk assessments on supporting children and young people with education, health and care plans.

16. Implementing protective measures in Alternative Provision

Alternative Provision settings are expected to follow the same principles and guidance as mainstream schools discussed above. Risk assessments may, however, need to be carried out where it is felt that a child or young person may not be able to follow instructions, as it may be decided, in rare circumstances, that these pupils should stay at home.

If you would like to discuss any of the issues raised in this article, or have other concerns about the impact of Coronavirus, please contact: Hollie Suddards in Michelmores’ Education team.

CORONAVIRUS STOP PRESS – Click here to keep up to date with all of our latest articles.

This article is for information purposes only and is not a substitute for legal advice and should not be relied upon as such. Please contact our specialist lawyers to discuss any issues you are facing. 

Government’s latest announcement

The much-publicised and anticipated Government announcement regarding a possible easing of the lockdown restrictions was delivered by the Prime Minister at 19.00 yesterday (Sunday 10 May 2020).

There was the promise of more detail, which is scheduled to be unveiled in Parliament on Monday 11 May 2020, with an opportunity for the public to ask questions this evening. Until then, we have the following information:

What has changed?

Since the beginning of the lockdown, employees have been told that they should work from home if they can, and only leave their home to attend their workplace if they must. With effect from Monday 11 May 2020, the emphasis has changed – the Government has said that anyone who cannot work from home (for example, those in manufacturing or construction) should be actively encouraged to go to work.

However, public transport should be avoided if at all possible, by travelling to work by car, bicycle or on foot. The Prime Minister’s announcement included reference to “new guidance for employers to make workplaces COVID-secure”, but we have no details of when this may be released.

What may change?

The Government has set out the following “roadmap” for a further gradual easing of lockdown, the implementation dates and detail of which will depend on the “COVID Alert Level” (similar to the terror threat ratings) and the “R” rate (rate of reproduction of the virus).

1. At the earliest by 1 June 2020, there may be a phased reopening of shops and the possible reintroduction of primary school attendance, beginning with Reception, Year 1 and Year 6. There is intimation that those in Year 10 and Year 12 of secondary education may also be back in school before the summer holidays.
2. At the earliest by July 2020, there is a plan to reopen some of the hospitality industry and other public places, provided they are safe and enforce social distancing.

Initial reflections on the latest announcement

It is fairly clear that “actively encouraging” employees to attend the workplace where working from home is not possible is only directed at those sectors which have been permitted to remain open during the lockdown, such as businesses in the manufacturing and construction industry.

For those with jobs in the hospitality or high street retail sectors, the status quo will remain for now, until such time as the Government permits business to resume in these areas.

The difficulty with the phrase “actively encourage” is that it provides no clarity for employers as to whether this is merely a suggestion, or an instruction, to their employees, and does not indicate what options are available to them if such active encouragement does not yield the desired results.

What happens if an employee is “actively encouraged” to return to work, but does not do so, citing the increasing UK death toll and the risk of transmission in an enclosed environment as their rationale? Is the employer able to force a return to work, or initiate disciplinary action in the event of a no-show?

As discussed below, there are legal risks in knee-jerk reactions to such situations. Although very much uncharted territory, we consider that Employment Tribunals will have sympathy with employees who are reticent to return to the workplace, particularly when so little is known about the virus. We provide tips on trying to minimise any legal risk, and maximise employee engagement, later on in this article.

Looking to the future

In line with the Government’s tentative predictions for easing the lockdown,, many employers are starting to plan for an eventuality in which they can at least commence a partial business re-opening. Given the amount of planning involved in such a move, proper organisation and preparation in this instance is key.

Those leading the way….

Several ‘big names’ decided to shut up shop when lockdown began, despite the fact that they operated in sectors which were permitted to remain open under the Government’s rules. However, after over a month of closure, some are taking tentative steps towards getting back to business.

As of 30 April 2020, six branches of hardware store Wickes have re-opened. They are operating with reduced trading hours, and are only permitting a limited number of customers in the store at any one time. Social distancing is enforced by floor markers, Perspex screens have been installed at tills, hand sanitising stations are available for customer and staff use, and all shop floor staff will be provided with PPE (personal protective equipment).

House builder Devonshire has commenced a controlled reopening of some of its sites from early May, after a full-scale closure on 27 March. It is operating in accordance with guidelines from the Health & Safety Executive and has devised a specialised “COVID-19 procedure”, in respect of which all of its site management team will be fully inducted.

Is there any guidance for working practices when lockdown is eased?

Currently, there is no published generic guidance, although the existence of such was mentioned in the Prime Minister’s 10 May 2020 announcement. This is likely to be released to the public in the forthcoming days.

There is already guidance in place for the manufacturing sector, which was expressly permitted to continue to conduct operations by the Secretary of State for Business on 08 April 2020. The guidance, entitled ‘Operating Safely in the Workplace’, will nevertheless provide a good starting point for businesses in all sectors who are looking to return to work. It can be found here.

The Trades Union Congress (TUC) has recently published a report setting out the steps it wants the Government and employers to take to ensure a safe transition from lockdown. Amongst other things, it includes the suggestion that employers conduct a COVID-19 specific risk assessment before bringing employees back to work. Whilst it is unclear whether the Government will take this paper into account when deciding on its strategy, it provides a useful insight into the issues likely to be raised by employees.

A survey conducted by the TUC during April 2020 found that 41% of almost 800 people surveyed were worried about the health implications of returning to work. It is likely that a large proportion of an organisation’s workforce may be sceptical about returning to the workplace and will be looking to their employer for reassurance that the appropriate measures have been put in place.

For those businesses in the retail sector, the British Retail Consortium has published guidance for retailers in respect of warehouse and distribution settings, as well as retail premises when these are permitted to re-open.

Working practices checklist… minimising the risk

As discussed in our Employment Digest dated 27 April 2020, there are provisions of the Employment Rights Act 1996 which state that employees have a right not to be subjected to any detriment or dismissed on the ground that they refused to return to their place of work in circumstances where they reasonably believed there to be serious and imminent danger. Any dismissal in this context will be ‘automatically unfair’, and an employee will not require the usual two years’ service in order to bring a claim. Such a claim might be accompanied by a whistleblowing detriment claim.

It follows that there is a risk of litigation where an employer takes management action against an employee who refuses to attend work due to the risk of contracting COVID-19. There is also the wider risk that employers may be subject to enforcement proceedings by the Health & Safety Executive for breach of their obligations to provide a safe working environment. A clear way of mitigating this risk is to ensure that as many precautionary practices as possible are implemented; certainly those as advised from time-to-time by the Government and Public Health England, but also additional measures as may be relevant for an employer’s particular sector of work.

This is by no means exhaustive, but we have set out a checklist of possible considerations, below. We would recommend carrying out a risk assessment first in order to consider the practicalities and implications of our suggestions. If you employ or engage a health & safety professional, seek their input on the following:

• Whether a full or only partial return to the workplace can be facilitated, whilst complying with social distancing requirements
• Identify those employees who are vulnerable, and how/when they should return to the workplace (perhaps, where possible, allowing them to work at home)
• How the workplace can be rearranged to comply with social distancing measures (for example, rearranging workstations and dividing up large floor areas with partitions)
• Implementation of staggered start / finish times
• Temporary ban on group lunches and after-work drinks
• Temporary ban on team / group meetings and consideration of how these might otherwise be conducted (e.g. utilising technology used during lockdown)
• Temporary ban on external visitors to the workplace (external meetings to continue to be conducted over Zoom / Microsoft Teams / Lifesize etc. where possible). If this is not possible, keep a log of all visitors for contact / tracing purposes
• Rotate the number of groups of employees in the workplace at any one time (and assigning employees to specific groups to minimise risk of contamination)
• Assign particular toilets and kitchen facilities to specific groups to minimise risk of contamination
• If hot-desking is normal practice, avoid this and assign employees their own workstations
• Encourage / require employees to use NHS tracing app or similar, once available
• Ensure the contact details of employees and their emergency contacts are up-to- date
• Consider the use of PPE, where applicable. Although the Government has not currently recommended the generic use of face masks, this may change in the coming days / weeks
• Ensure hand sanitiser and anti-bacterial wipes are available at various points throughout the workplace (particularly at risk points such as printers) and require employees to undertake cleaning of workstations several times a day
• Consider (if applicable) the use of Perspex screens for higher-traffic areas, reception staff etc.

Once the risk assessment has been undertaken, the drafting of a specialist COVID-19 staff policy would ensure that employees have clear guidelines for working safely.

Refusal to return to work… a practical take

We have discussed, both here and in our recent Employment Digest, the legal risks involved in taking action against an employee who refuses to return to work due to a risk of contracting Coronavirus (COVID-19). As set out above, a strict implementation of all possible precautionary measures should limit the risk of any detriment or dismissal claim from an employee against whom management action is taken as a result of refusing to attend work.

However, we are dealing with a virus about which even medical specialists know relatively little. The Government’s lockdown measures have increased the palpable fear amongst the general public and, with the current death toll, employees’ reservations about returning to an environment in which social distancing will be a challenge are understandable.

If all reasonable steps have been taken in respect of health & safety, but an employee still refuses to return to work, there are options outside formal disciplinary action. The consideration of other options might be particularly useful with a well-respected, long- standing employee whom an employer would wish to retain if at all possible. Where working from home is not viable, it could be suggested that the employee use some of their holiday entitlement, or take unpaid leave, during the period in which they do not wish to attend work. Of course, this is not a long-term solution, but the situation with regard to Coronavirus (COVID-19) may have improved sufficiently by the end of such holiday / unpaid leave, to enable the employee to return to work.

Workplace reintegration… which employees should return?

For many employers, any easing of the lockdown will facilitate a partial, rather than a full, reopening of their business in the short-term. With the Coronavirus Job Retention Scheme in place until the end of June, employers are likely to decide to un-furlough only part of their workforce in the initial phase. But how should that selection process take place?

For some businesses, the process will be straightforward, as entire departments will be required to return immediately (subject to any shielding requirements, below). For others, it may be the case that only a proportion of employees in certain areas are required, given a temporary reduction in the amount of work being carried out. This situation is rather less simple – some employees may be very keen to escape the confines of their home and return to work. Others may be less so.

It is clear that those employees who are shielding, in accordance with Government guidance and correspondence issued to them by the NHS, should remain at home until such time as a medical professional advises them that it is safe to leave. For those in the less vulnerable category (such as the over-70s and those with less acute health conditions), who have been advised to social distance, rather than shield, the situation is slightly less clear, as is the case for those who have childcare commitments, due to the closure of schools and childcare facilities.

Whilst employers might consider that excluding these individuals from any initial return-to-work process might be the considerate thing to do, they should avoid making generalised assumptions which, in themselves, could pose a risk of discrimination. It is likely that those with childcare responsibilities will need to remain at home during school closures, but it should not be assumed that this is the case.

In light of the above, a sensible first step might be to ask for volunteers to be un-furloughed and return to work. This minimises the risk of discrimination arising from generalised (if well-meaning) assumptions being made. It will give employees who wish to return the opportunity to do so. If sufficient volunteers come forward, there is no need to enforce a return on anyone. If employees do need to be required to return, then employers can be safer in the knowledge that they have given everyone an opportunity to return voluntarily, and have therefore not excluded individuals unintentionally by virtue of pre-conceptions.

Return to work and mental health

The last few weeks have been a struggle for many, and the change in environment, working patterns and caring responsibilities, alongside the worry surrounding the virus itself, have left a large number of people suffering with mental health issues, even those who had not previously suffered with symptoms.

Alongside this existing anxiety, a new wave of emotions may come with the prospect of returning to the “outside world”, to a workplace in which social distancing cannot be guaranteed and the complications, such as commuting on public transport, that a return to work may bring. Some employees may have suffered bereavements during the lockdown, which will make a reunion with colleagues even more difficult.

With this in mind, it would be useful for employers to review their support packages, such as complimentary counselling or employee assistance programmes, and make sure that employees are aware of how to access them. If employers do not currently subscribe to any such programmes, and do not have the funds to do so at present, they could signpost their employees to any of the mental health charities, or the NHS website. Another option would be to appoint ‘mental health first-aiders’ – employees within the organisation who are happy to have confidential conversations with colleagues who are feeling vulnerable.

The future of flexibility… permanent working from home?

The recent weeks have shown a seismic shift in the way we work. Organisations with no working-from-home policy, whose cultures centred on ‘presenteeism’ and chats in the communal kitchen have, in a matter of days, shifted their entire operations online, to permanent remote working and ‘virtual coffees over Zoom’. Many businesses doubted their IT infrastructure could cope but, aside from a few teething problems, it seems that office work has been brought successfully into the digital sphere.

In the longer term, we predict that many businesses will shift to remote working on a more permanent basis, particularly in areas of the country where office space is at a premium and the average commute is long. Savings in rent and increased productivity from employees can only be an advantage. The model has been trialled in the most testing of times – and it works.

However, other organisations may be less amenable to the shift. Undoubtedly, there are drawbacks to remote working. Junior members of staff learn most of their craft by listening to and observing more senior colleagues, something which cannot achieved as easily over video link. There may be less opportunity for the spontaneous sharing of ideas, than when sitting next to a colleague day-to-day, and it may be more difficult to foster the organisation’s culture and collegiate atmosphere.

One thing seems certain – there is likely to be a large increase in the number of flexible working requests. Employees have seen that agile working can be successful in practice, and employers will, as a result, find it harder than ever before to justify a refusal of such a working pattern. Although the financial award in the Employment Tribunal for breach of the flexible working legislation is relatively low, the refusal of a request with a childcare or disability element comes with potential for uncapped compensation. Paper trails of decisions, and rationales for refusals, will become more important than ever.

Coronavirus (COVID-19) and redundancy

A sad, but perhaps inevitable, consequence of Coronavirus (COVID-19) is the clear impact that it will have on businesses, their revenue and, at the heart of it all, their employees. A large number of businesses are already making preliminary preparations for potential redundancies when the Government’s Job Retention Scheme comes to an end.

Unfortunately, these redundancies are unlikely to be isolated pockets; rather, there are likely to be large-scale employee cuts as businesses try to keep trading in very uncertain economic times. Such widespread job losses are likely to engage collective redundancy obligations, which apply where 20 or more employees are proposed to be made redundant at one establishment within a period of 90 days or less. For between 20 and 99 redundancies, the statutory consultation period must be 30 days. For 100 or more redundancies, the minimum period is 45 days. If an employer does not recognise a trade union, and there are no other employee representatives already elected, an election process will need to be conducted prior to the start of the consultation period.

The latest iteration of the Government’s guidance on the Coronavirus Job Retention Scheme has clarified that, whilst on furlough, employees who are union or non-union representatives may undertake duties involved in collective consultation. This will be of some comfort to employers, who will not have to un-furlough employee representatives in order to conduct collective consultation, and will be able to continue to claim 80% of their salary (or £2500, if lower) during this time.

Spotlight on Property… the move to a virtual office

Some businesses might already be considering the continuation of home working for the foreseeable future. But what does that mean for the leases entered into by these organisations in respect of expensive business premises, which are currently lying empty? Depending on the terms of the lease, there may be ‘break clauses’ which could be utilised to bring an early end to the arrangement. It is always worth having the lease reviewed by a specialist in order to understand all the options available.

If you require specialist advice in respect of your business premises arrangements, please contact Andrew Baines in Michelmores’ Property Litigation team.

Coronavirus (COVID-19) testing and data protection

Testing for Coronavirus (COVID-19) is now available to all individuals classed as ‘essential workers’ with symptoms, as well as those who are symptomatic and carry out work which cannot be done from home (e.g. construction workers, shop workers and delivery drivers). The full list of essential workers is here, and includes those working in the NHS, social care staff, transport workers, education and childcare workers, and those individuals involved in the production and distribution of food, drink and essential goods.

Employers of essential workers are able to register and refer members of staff for tests. They can obtain a login for the official portal by emailing portalservicedesk@dhsc.gov.uk with the organisation name, nature of the organisation’s business, the region, and names and email addresses of two users who will be responsible for uploading essential worker contact details. More information can be found here.

The test results received by the employer will constitute ‘special category’ (sensitive) personal data. Under the General Data Protection Regulation (GDPR – a hot topic alongside Brexit and COVID-19) an employer is entitled to process special category data where necessary to comply with their obligations under employment law, which includes ensuring the health, safety and welfare of their employees. However, this must be conducted in a necessary and proportionate manner.

Given that employers will have a clear legal basis for processing such data, they do not need to obtain consent, but the employee must be clearly informed that the data will be used to take decisions about their employment (such as sending them home to self-isolate), with whom the information may be shared, and that it will be retained on the employee’s HR file for a period of time (which should be no longer than is necessary).

If an employee tests positive for Coronavirus (COVID-19) then their identity should not be shared with their colleagues as a matter of course, although generic information that there has been a confirmed case of the virus in the workplace may need to be shared. If it is considered necessary to share the name of the employee, we would advise that their consent be obtained in advance.

 [CONTENT CORRECT AS AT 11 MAY 2020]

If you would like to discuss any of the issues raised in this briefing, or have other concerns about the impact of Coronavirus, please contact Rachael Lloyd, James Baker or Andrew Tobey in Michelmores’ Employment team.

CORONAVIRUS STOP PRESS – Click here to keep up to date with all of our latest articles.

This article is for information purposes only and is not a substitute for legal advice and should not be relied upon as such. Please contact our specialist lawyers to discuss any issues you are facing.

The continued growth of crowdfunding as a popular means of raising finance indicates that it is here to stay. Whilst “crowdfunding” is a general term which describes funds being raised from multiple individuals (whether by issuing debt, equity or rewards and donations, for example), in this article we will be looking only at “crowdfunding” of shares in private companies (equity fundraising) using a mainstream online crowdfunding platform.

It is estimated that in 2018 crowdfunding was involved (typically alongside other private investors) in 22% of all equity investments into high growth British businesses. To put this into context, as recently as 2011 only 8 deals included funding from a crowdfunding site. There are various reasons for this growth, and the ongoing emergence of alternative finance generally. Some obvious examples would be the increasing number of successful exits being achieved by crowdfunded companies, the ongoing desire for wealthy private individuals to pursue tax-efficient investment opportunities, and further investment in crowdfunding platforms by venture capital firms and the crowd itself.

One of the great attractions of crowdfunding through an online platform is that it is generally perceived to be user-friendly. Crowdfunding platforms tend to have very engaged in-house teams who help fundraising companies through the process of issuing equity to investors – usually with relatively accessible, standardised documents. For many start-ups and high-growth companies, the funds raised through the crowd are essential to the continuation of their business, and so there is little appetite to spend hard-earned cash on professional advice to support the raise.

However, professional advisers (primarily lawyers and accountants) can add significant value in supporting a fundraising company through a crowdfunding raise. In many instances it will be cost-effective and proportionate to engage some expert help. Whilst some companies raise funds successfully through a crowdfunding platform without outside help, deciding not to instruct lawyers (even on a lightweight budget) could result in serious problems further down the line, some of which may prove terminal to the lifeblood of the company.

Each board of directors will need to decide on the best approach for their particular company, but here are some scenarios where involving lawyers to assist with a crowdfunding campaign can add value far exceeding the initial cost of the advice.

1. Choosing your crowdfunding platform

Even at this preliminary stage there are certain differences between crowdfunding platforms that are worth discussing with your legal advisers.

For example, will there be one ‘nominee’ shareholder (managed by the crowdfunding platform) or will each individual member of the crowd be registered as a shareholder of the company? There are benefits to both approaches, but certain crowdfunding platforms tend to favour one over the other – and this might not correspond with your preference.

A shock for many entrepreneurs is the amount of time and effort required to get a crowdfunding campaign over the line – whilst simultaneously trying to drive forward the growth of the business. It is tempting to focus solely on the financial cost of involving lawyers to help with managing and negotiating a crowdfunding raise, but this should always be weighed against the opportunity cost of an entrepreneur being pulled away from the core priority of growing their company.

1. Due diligence and resolving historical issues

As part of the onboarding process to set up the crowdfunding campaign, a crowdfunding platform will perform due diligence on your company. Depending on the age and progress of the company, responding to due diligence enquiries can be time-consuming and complex – an undertaking with which lawyers are ideally-placed to assist.

Issues will often arise during due diligence which need to be addressed prior to the crowdfunding campaign launching. Typical examples include problems with share capital, commercial contracts and the ownership of intellectual property. Involving lawyers at the outset will help to flag difficulties early, and resolve them swiftly, without causing delays to the crowdfunding campaign and a loss of momentum.

1. Independent advice

Whilst a crowdfunding platform will often provide assistance with legal documents, it is not providing legal advice to the company, and inevitably, there will be areas where there is an inherent conflict of interest between the company’s/founder’s best interests and those of the crowd.

It is in these key areas – such as the negotiation of warranties, limitations on claims or non-compete covenants from the founders – where independent advice will be hugely valuable; simply because the financial repercussions for the company/its founders of failing to negotiate a fair and reasonable position could be extremely damaging.

1. SEIS/EIS relief

As suggested above, the availability of advantageous tax treatment – primarily SEIS (Seed Enterprise Investment Scheme) and EIS (Enterprise Investment Scheme) relief – is one of the primary reasons why crowdfunding has grown so quickly. The majority of crowdfunding opportunities are SEIS/EIS-qualifying, and investors will expect to be eligible for the relevant relief. As we have explored previously, the consequences of losing SEIS/EIS relief can be very severe and great care should be taken to ensure that this only happens where there is a tangible benefit to the parties in doing so.

In broad terms, these reliefs provide three key benefits to investors (in addition to advantageous inheritance tax treatment), which are currently:

1. Income tax relief of 30% or 50% of the value of the investment (i.e. a reduction to the individual’s tax bill in that year of £3,000 or £5,000 on a £10,000 EIS/SEIS-qualifying investment).
2. Capital gains tax relief on any gains accrued on the subsequent sale of the shares, with the ability to defer this by investing in another EIS/SEIS-qualifying company.
3. In the event that the company fails, and a loss is suffered on the investment, loss relief of an equivalent rate to the highest rate of income tax that the individual pays.

The rules relating to SEIS and EIS relief are complex and ever-changing. Whilst crowdfunding platforms will help with certain aspects of compliance (such as issuing the relevant certificates to investors), it is worth obtaining expert advice very early in the life of the company to try to ensure that the proposed structure and growth plans of the business are, and will continue to be, SEIS/EIS-compatible. For example, many companies will apply to HMRC for ‘advance assurance’ that their fundraising will be SEIS/EIS-qualifying, which will typically involve assistance from professional advisors.

1. Negotiating the shareholders’ agreement and articles of association

Usually, it will be a condition of a successful crowdfunding raise that the company adopt a new set of articles of association and the shareholders of the company enter into a shareholders’ agreement. Typically, these will contain various protections for the crowd, which may include the right to appoint a director or board observer, commercial warranties to be given by the founders, and certain restricted acts which cannot be undertaken without specific shareholder consent.

Crowdfunding platforms tend to offer standard templates which provide a good starting point for negotiations, but sometimes it will be more appropriate to amend these or to use existing documentation. This will be particularly relevant where a company already has angel or institutional investors.

Negotiating shareholders’ agreements and articles of association can be complicated and may challenge even the most experienced investors and entrepreneurs. Even if no other advice is taken, we would always recommend that you ask a lawyer to carry out a red flag review of the proposed documents to highlight potential areas of risk or concern.

1. Managing the relationship with existing shareholders/investors

Where a company already has a number of existing shareholders and investors, or perhaps is planning to issue shares to investors alongside the crowdfunding raise, quite a bit of relationship management can be required to get the raise over the line.

For example, certain shareholder resolutions will need to be passed to issue new shares and adopt new articles of association, some of which will require the approval of shareholders carrying 75% of the voting rights in the company. This can be a delicate procedure and it can be beneficial to have an experienced legal adviser helping to manage shareholder communications.

1. Making recommendations and introductions

Over time a growing company will often find that it needs increasing levels of external support – whether from accountants, R&D tax credit specialists or industry experts. It will often be appropriate to explore new, experienced additions to the management team.

Law firms tend to be well-positioned to make these recommendations and introductions and are well-placed to offer an opinion about individuals that will be a good fit for your business – both in terms of skill-set and personal chemistry.

1. Sorting out post-completion filings and admin

After the crowdfunding raise has been completed, and the funds have been transferred to the company, there will often be a raft of post-completion administration to deal with.

Given that the founders’ primary responsibility is now to deploy the funds effectively and press on with growing the business, it is often sensible to ask lawyers or accountants to deal with updating company registers, submitting Companies House filings and issuing share certificates, where this is not undertaken by the crowdfunding platform itself. In some circumstances these processes can be complicated significantly by the addition of many new shareholders. At this stage, it may be worth considering appointing an external company secretary.

Investors will want to know that the company is being managed properly – and failure to draw together any loose ends can cause real problems with subsequent fundraising efforts.

1. Supporting post-fundraising growth plans

A successful crowdfunding raise is usually a springboard for various new opportunities and exploits, many of which will require legal assistance. For example, you may be entering into new commercial contracts, introducing new employment contracts, setting up employee share schemes and planning follow-on funding rounds.

As discussed above, there is also the consideration of ensuring that your business plans comply with SEIS/EIS legislation.

1. Financial promotions and crowdfunding

There is a strict regulatory regime which applies to offering investments (including shares) to the public. Even small fundraises are caught by the legislation, whether or not an online platform is used.  This is because when you invite or induce others to engage in an investment activity (for example investing in your company), you fall within what is widely termed ‘the financial promotion regime’.

Whilst the regulation around offering investments to the public and that of financial promotions goes well beyond the scope of this article, it is vital for fundraising companies to grasp that this is a heavily-regulated area, with potential for financial and criminal sanctions if breached. It is also essential to understand that whilst commercial crowdfunding platforms are regulated by the Financial Conduct Authority (FCA), and therefore able to promote their fundraising companies within the parameters prescribed by it, this does not give fundraising companies themselves carte blanche to promote their pitch in whichever way they see fit. This is equally important where the fundraising company is communicating with potential investors outside of the crowdfunding platform, for example via email or social media.

If you have any concerns about financial promotions and crowdfunding, then expert legal advice should be sought at the earliest opportunity.

Next steps: finding a suitable law firm

If you decide that you are going to need some legal assistance with your crowdfunding campaign, the next step is to find a suitable firm. You should check that the firm has sufficient expertise to help you where required, and identify a lawyer you can get on well with and who understands what your company is trying to achieve.

If you are concerned about fees and proportionality, then you should ask your lawyer to quote on a phase-by-phase basis so that you can make an informed decision about those stages of the process with which you most need help.

Michelmores has advised numerous clients raising funds from the crowd, including Mindful Chef (on its campaigns with both Seedrs and Crowdcube) and Velorution. We advised Downing LLP on the launch of Downing Crowd and Triodos, the sustainable bank, on the launch of its own crowdfunding platform.

If you would like to discuss your fundraising campaign with us, then we would be pleased to speak with you. Please contact Harry Trick in Michelmores’ Corporate team.

This article is for general information only and does not, and is not intended to, amount to legal advice and should not be relied upon as such. If you have any questions relating to your particular circumstances, you should seek independent legal advice.

Michelmores’ specialist policyholder Insurance Team is considering launching a series of group actions on behalf of businesses affected by the Coronavirus pandemic who have had their Business Interruption claims declined by insurers.

Our team has currently identified the following insurers, whose policies it believes may respond to the current circumstances:

1. Aviva (in particular Resilience policies)
2. Hiscox / Geo Specialty
3. NFU Mutual (in particular Commercial Select)
4. RSA (in particular, those administered by Eaton Gate MGU Ltd)
5. New India Assurance
6. QBE
7. Ecclesiastical (in particular Historic Britain Insurance)
8. Argenta Syndicate 2121 (in particular those arranged by HIUA)

If your business has business interruption insurance with one of these insurers and you would like to register your interest in a potential group action, please email us at insurance@michelmores.com and provide the following details:

1. Name of policyholder
2. Name of Insurer
3. Copy of Insurance Policy if available

All information provided will be kept confidential and not shared with anyone outside of Michemores LLP.

Garbhan Shanks has consulted with the Financial Conduct Authority (FCA) in respect of their proposed declaratory proceedings and has asked the FCA to include wordings from the above listed insurers as part of their test case.

For more information on our specialist policyholder Insurance Team, visit our website.