COVID-19: UK Chancellor Announces Changes To Furlough Scheme – 29th May 2020

By Nic Hart

01.06.2020

In the daily press conference on Friday May 29th 2020, the Chancellor Rishi Sunak, announced further changes to the Coronavirus Job Retention Scheme.

In essence these are as follows:

  • The CJRS will continue until October 2020.
  • Flexi furlough will commence from July 1st 2020.
  • Grants through the CJRS will be tapered from August 2020.
  • The scheme will close to new entrants on 30 June.

Flexi Furlough

This is commencing on July 1st 2020 -a month earlier than previously announced. Employers can decide the hours and shift patterns their employees will work on their return to work, so that they can decide on the best approach for them. Employers will be responsible for paying the employees’ wages while in work.

Further guidance on flexible furloughing and how employers should calculate claims will be published on 12th June 2020, but HMRC has provided some initial advice:

Any working hours arrangement that you agree with your employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, you will need to report and claim for a minimum period of a week. You can choose to make claims for longer periods such as on monthly or two weekly cycles if you prefer. You will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.

Continue reading COVID-19: UK Chancellor Announces Changes To Furlough Scheme – 29th May 2020

Prompted By COVID-19: The UK Government Introduces Corporate Insolvency & Governance Bill

By Linda Crow

28.05.2020

Last week the UK government introduced the Corporate Insolvency and Governance Bill in Parliament.

The main objective of the Bill is to provide businesses with the flexibility and space needed to continue to trade during this difficult time caused by the COVID-19 pandemic. That said, the provisions around the new moratorium and the new restructuring plan proposal have been under consideration for a few years.

The Bill’s measures can be split into three categories:

  1. Those that provide greater flexibility, allowing companies protection from creditor action and safeguarding supplies whilst it explores options for rescue.
  2. Temporary suspension of parts of insolvency law to support directors continuing to trade during the crisis without threat of personal liability and to prevent aggressive creditor action.
  3. Temporary extension of certain times for filing documents at Companies House and temporary relaxation of strict compliance with constitutional requirements relating to corporate meetings (including AGMs).

The insolvency measures are: Continue reading Prompted By COVID-19: The UK Government Introduces Corporate Insolvency & Governance Bill

High Court Judgement On Restrictive Covenants & Garden Leave

By Nic Hart

22.05.2020

The Queen’s Bench Division of the High Court have held in Square Global Limited v Leonard that the absence of a garden leave set-off clause will not be fatal to a non-compete post termination restriction, touching on a the widely debated relationship between garden leave and non-compete clauses in employment contracts.

The case involved an employer’s attempts to enforce periods of garden leave and subsequent non-compete restrictions on an employee consecutively. The employee in question had resigned and in response claimed constructive dismissal on the basis that his employer had destroyed or seriously damaged the necessary relationship of trust and confidence between the parties, in breach of the implied term in the contract of employment. The High Court held on the facts that the employee was not entitled to resign summarily and by doing so, he had failed to give six months’ notice of termination and was in breach of his employment contract.

The employer sought to enforce a period of garden leave reflecting the six months contractual notice from the date of resignation, in addition to a further six months’ protection from the end date of that notice period on 11 May 2020 under the non-compete clause in the employee’s contract. This would effectively afford the employer a total of 12 months protection. The High Court were satisfied that the six month non-compete clause was pursuant to the employer’s legitimate business interests capable of requiring protection by restrictive covenants, and was reasonable, going no further than necessary to protect the employer’s legitimate business interests.

The High Court then went on to assert as follows:

“The garden leave clause which is included in the contract exists to cater, among other matters, for a situation where [the employer] has concerns about an employee’s conduct (e.g. harvesting client information, or engaging in deceptive behavior), and so chooses to restrict the employee’s duties during the notice period. On the assumption that such concerns have reasonable foundation, it would not then be unreasonable to enforce the full period of the post termination restrictions.” (Paragraph 191)

Continue reading High Court Judgement On Restrictive Covenants & Garden Leave

High Court Rules On The Effect Of Confidentiality Clauses In A Settlement Agreement

By Nic Hart

21.05.2020

The High Court have held in Duchy Farm Kennels v Steels that an employer cannot avoid paying out on a settlement where an employee is in breach of a confidentiality clause, unless confidentiality is genuinely a condition of the agreement.

Here, the employer agreed to pay the employee a settlement sum in instalments in full and final settlement of the employee’s employment tribunal claims. The COT3 agreement also included:

  • a clause under which the parties agreed to treat the fact of and the terms of the agreement as strictly confidential (‘the confidentiality clause’); and
  • a warranty that the employee had not previously disclosed the facts and terms of the agreement to any other person.

The employer subsequently did not pay the final instalment, and the (now former) employee issued proceedings for payment. The employer sought a declaration that the sums were no longer recoverable on the basis of breach of the confidentiality clause in the agreement. Continue reading High Court Rules On The Effect Of Confidentiality Clauses In A Settlement Agreement

Covid-19: The Future Fund for Financing of Innovative UK Companies

By Sam Pearse

21.05.2020

On 20 April the United Kingdom’s Chancellor of the Exchequer announced that the UK Government would launch the Future Fund as part of the British Business Bank Coronavirus Business Interruption Loan Scheme. The Future Fund is intended to provide support to the UK’s innovative companies with good potential, for which we might read start-ups, growth companies or emerging companies. The Future Fund was launched on 20 May. This alert summarises the scheme, eligibility and the application process.

What financing is available?

Continue reading Covid-19: The Future Fund for Financing of Innovative UK Companies

COVID-19: Insolvency & The UK Gov’s Temporary Suspension of Wrongful Trading Liability

By Linda Crow

19.05.2020

Wrongful Trading

On 14 May 2020, the UK Government extended the temporary suspension of wrongful trading liability until 30 June 2020.

On 28 March this year, the Government announced that it would “at the earliest opportunity“ introduce legislation, retrospective to 1 March 2020, to relax the insolvency rules which can make directors of limited liability companies potentially liable if they continue to trade and incur liabilities when they knew or ought to have concluded that there was no reasonable prospect of avoiding an insolvent liquidation or administration.

The relaxation of the wrongful trading rules is to give directors confidence to do all that they can to continue trading during the pandemic emergency, knowing that they have no threat of personal liability should the company subsequently fall into an insolvency procedure.

The current laws relating to fraudulent trading and directors’ disqualification continue in full force and effect. Continue reading COVID-19: Insolvency & The UK Gov’s Temporary Suspension of Wrongful Trading Liability

New Guidance Documents on Green Loan Principles and Sustainability Linked Loan Principles for a Post-COVID-19 World

Many hope to see an expansion in areas that stimulate growth in a more environmentally friendly manner

By Drew D. Salvest & Natalie A. Stewart

19.05.2020

While the world is currently focused on the impact of COVID-19 on the global economy, with “COVID-19 Bond” issuance easily outdistancing the current volume of green financing, it is time to consider post-COVID-19 activities. One positive effect of the pandemic is the demonstrable improvement of carbon levels and other environmental measures. So, as national governments consider measures to reopen their economies, lenders and borrowers may want to consider how best to finance the economies’ reemergence. Many hope to see an expansion in areas that stimulate growth in a more environmentally friendly manner.

In this context, loan market groups including the Asia Pacific Loan Market Association (APLMA), Loan Market Association (LMA) and Loan Syndications and Trading Association (LSTA) have recently published guidance to market participants on how to apply the Green Loan Principles (GLP) and Sustainability Linked Loan Principles (SLLP) in practice. The aim of the guidance is to develop the market for green financing, following the publishing of the GLP in March 2018 and the SLLP in March 2019.

The key difference between green loans and sustainability linked loans is that green loans place greater significance on the use of proceeds for green projects, whereas sustainability linked loans look to the sustainable nature of the borrower measured against specific targets. Loans can follow both the GLP and SLLP, but are rarely seen in the current market.

Further guidance has been given on the following aspects: Continue reading New Guidance Documents on Green Loan Principles and Sustainability Linked Loan Principles for a Post-COVID-19 World

Open All Hours – Greater flexibility with site opening hours for UK construction

By Vijay Bange

Throughout the lockdown in the UK, the construction industry has been allowed to remain open for business providing that compliance with the Public Health England measures is maintained. However, most national house builders at least had taken a decision to close sites. Boris Johnson on Sunday 10th May, in his long awaited press briefing on the potential relaxation of social distancing road map, made clear that those in construction and manufacturing should go back to work, if they could.

The distancing restrictions will require those at sites to plan their works to ensure compliance with the still in force social distancing measures, and to also consider that other safety requirements also need to be put in place. Adherence to safety at work guidance remains paramount. Sites will be a different place to how they were before. The net effect will be that works may take longer, and potentially there will be risks of delays to delivery of projects. Contractors will need to do what they can to mitigate this risk. Continue reading Open All Hours – Greater flexibility with site opening hours for UK construction

UK Construction & Engineering: Lean Thinking Re-Visited

By Vijay Bange

Lean Isn’t for Lockdown, It’s for Life” was a thought provoking treatise by my fellow partner at Duane Morris, Alexander Geisler (London office co-head, author, journalist and creator of the Lean Law Suite of lean practice methods). He discussed how our “New Norm” in the COVID-19 era is forcing industries to adopt Lean Thinking principles to work efficiently and effectively. This paper seeks to consider the extent to which these concepts are applicable to the UK construction & engineering industry.

Lean Thinking as a concept has its roots in Toyota’s production system. One of the primary tenants of this concept is to aim to perfect process, as continuous improvements address root causes of quality issues, and the elimination of waste. Continue reading UK Construction & Engineering: Lean Thinking Re-Visited

COVID-19: UKGov Holiday Pay and Entitlement Guidance

By Nic Hart

13.05.2020

This UKGov guidance outlines how holiday entitlement and pay operate during the coronavirus pandemic. It is designed to help employers understand their legal obligations, in terms of workers who:

  • continue to work
  • have been placed on furlough as part of the government’s Coronavirus Job Retention Scheme (CJRS)

This guidance should not be treated as legal advice. Employers and workers should always check individual contracts and if necessary seek independent legal advice.

Holiday entitlement

Almost all workers, including zero-hour contracted workers and those on irregular hours contracts, are legally entitled to 5.6 weeks’ paid holiday per year. The exception is those who are genuinely self-employed. Continue reading COVID-19: UKGov Holiday Pay and Entitlement Guidance