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Is COVID-19 giving your business a headache?

Last updated: 13th March 2020; 15.38pm

Here at Napthens we’re getting queries from businesses affected by Covid-19, which, it is clear, has a significant potential to disrupt commercial activities worldwide. Here are some Q&As pulled together from calls we have been getting over the last week or so:

Frequently Asked Questions

I am importing goods from a country affected by Covid-19 or the response to it and am worried I will run out of stock to fulfil my own contracts

Consider:

  • your contract with your customer. Can you rely on the Force Majeure clause to excuse delayed performance? Force Majeure clauses can give you protection where you can’t meet your contractual obligations because of matters outside of your control. Read the clause carefully to see if it offers you protection and spells out a process to be followed. Is there a price increase clause allowing you to increase prices if your costs increase for reasons outside of your control? For example, if you have to source alternatives for delayed shipments from affected areas.
  • your contract with your supplier. Can you claim damages from them for late deliveries or is there a Force Majeure clause that could protect them?
  • seeking information from customers and suppliers so you can understand the potential impact of Covid-19 on the supply chain and prepare for it.
I operate a travel business – customers want to cancel. Do I have to refund them and where do I stand?

Consider:

  • what your terms and conditions say. Do your terms and conditions allow for customers to cancel in certain circumstances or upon giving notice? If so, honour what your terms and conditions say.
  • if your customers have already paid are they entitled to cancel and/or to a refund under your contract with them? Will they accept a rescheduling of their booking instead?
  • any relevant insurance policy carefully – note that the Department of Health and Social Care has said it will add coronavirus as a “notifiable disease” which may affect whether you can claim for losses due to the cancellation on your business interruption insurance policy.
  • contacting your insurance broker to find out what additional insurance is available going forward if the situation escalates
  • that your customers may also have an insurance policy they can claim against (depending on what cover they have and any Governmental advisories in place).
My staff are worried about coming to work, what should I do?
  • listen to their concerns carefully and, if possible and appropriate, offer flexible working arrangements such as homeworking.
  • consider requests for annual leave and unpaid leave as you usually would – but remember you have no legal obligation to grant them.
  • consider disciplinary action if they refuse to attend work – although our view (at the moment) is that dismissal is likely to be outside the “range of reasonable responses” required to make the dismissal fair. However, keep this under review as our view on this may change in the medium term.
I think my employee might have Coronavirus, what should I do?
  • If they employee is at work,  send them home immediately and tell them to ring 111, not to visit their GP or hospital.

Note: these points are based on information available at the date of publication, if information changes, so might our view.

If you need help with any of the matters discussed, please contact us:

Rachel Atherton (commercial matters)

Employment team (employment matters).

For further guidance on the Coronavirus and symptoms please go to:

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