New Guidance on the UK Gov Flexible Furlough Scheme – 12th June 2020

By Nic Hart

15.06.2020

As advised, the Government Guidance for the new Flexible Furlough Scheme (FFS) was released on Friday evening – June 12th.

Accessibility to the new Guidance is not the most straightforward as the information is spread across the existing CJRS Guidance and three new pieces of Guidance. The Government has also produced a  summary overview of the key changes to the CJRS and the timetable for the same.

The major changes to the existing scheme with effect from July 1st are:

  • there will no longer be a minimum three-week period for furlough. Whilst there will not be a required minimum period to furlough employees, any claim made to the CJRS portal must be in respect of a minimum one week period regardless of how many days may have been worked in this one week period.
  • Employers can no longer put in claims to the portal that cover more than one payroll period. All claims through the portal must start and end within the same calendar month.
  • An employer cannot furlough any greater number of employees than have been furloughed previously – subject to the provisions of those returning from parental leave.

The key principles of FFS are clear. Continue reading New Guidance on the UK Gov Flexible Furlough Scheme – 12th June 2020

UK construction & Engineering: Practice and procedure: Pre-action disclosure

By Vijay Bange and Matthew Friedlander

Please Sir may I have some more…

Requests by a party for disclosure of further documents is often a vexed issue, and the motives may in some instances be tactical, and inevitably it’s a costly affair. Recently, its been reported that the insurers for HCC International Insurance Company, PLC in its dispute with Roc Nation LLC (Rapper Jay-Z’s management company), has sought a motion before a New York federal judge seeking disclosure of documents from a UK Broker, and which will entail the discovery requests to be ultimately pursued via the process in the UK courts. Roc Nation has alleged that this is an attempt to “kick the can farther down the road[1], and is objecting to the motion. Continue reading UK construction & Engineering: Practice and procedure: Pre-action disclosure

UK Corporate Insolvency & Governance Bill: Termination Clauses & Temporary COVID-19 Relief

By Linda Crow

09.06.2020

The new Corporate Insolvency and Governance Bill will introduce new provisions to protect a company from suppliers wishing to terminate supply contracts or invoking more draconian terms when the company is entering into certain insolvency procedures, a CVA, or a new restructuring plan or moratorium (as introduced by the Bill), (each an “Insolvency Procedure”).

The purpose behind the new provisions is to maximise the possibility of a company being rescued or being able to sell its business as a going concern by helping it to trade through an Insolvency Procedure.

Where a company (the customer) becomes subject to an Insolvency Procedure, the supplier will be prohibited from: Continue reading UK Corporate Insolvency & Governance Bill: Termination Clauses & Temporary COVID-19 Relief

IMPORTANT COVID-19 UPDATE: UK Gov Furlough Scheme Cut Off -10th June

By Nic Hart

05.06.2020

Further to our earlier blog posts on this topic, please be reminded that the Coronavirus Job Retention Scheme (CJRS) is closing to new entrants from 30 June 2020. You must furlough new entrants on or before 10th June. 

From 1 July 2020, there will be a new flexible furlough scheme where furloughed employees will be able to return to work on a part-time basis. Full guidance has yet to be issued (proposed for 12 June 2020) but present Guidance has advised that only employees who started furlough on or before 10 June 2020 will be eligible for the new scheme.

The Government Guidance states;

“From this point onwards, employers will only be able to furlough employees that they have furloughed for a full 3-week period prior to 30 June”

Continue reading IMPORTANT COVID-19 UPDATE: UK Gov Furlough Scheme Cut Off -10th June

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