The Coronavirus Act 2020 - what does it mean for your business?
The ink was barely dry on the 329 pages of the Coronavirus Act when it received royal assent on 25 March 2020. It has been nearly 50 years since a British government has resorted to the accelerated adoption of laws using the provisions of the Emergency Powers Act 1920.
The average time for a law to be passed from its first reading, to receiving Royal Assent in the UK, is approximately a year. The Coronavirus Act took just six days.
It is safe to say then that the Coronavirus Act (the Act) is potentially the most unprecedented piece of legislation we have seen for a generation.
The Act introduces a raft of measures with the following key objectives in mind:
- increasing the available health and social care workforce
- easing the burden on frontline staff
- containing and slowing the virus
- supporting people.
But what are the practical implications of these laws and what impact will they have on UK businesses? This article seeks to highlight some of the key provisions that those in the private sector should be aware of.
Powers of restriction and prohibition over events, gatherings and premises
From 20 March 2020 the Government declared that all cafes, pubs and restaurants (save for take-away food establishments) were to close until further notice. The Act goes even further and increases the Government’s powers to restrict or entirely prohibit any gatherings and to close any premises, for the purposes of dealing with a Covid-19 threat which represents a serious and imminent threat to public health. The Act’s definitions of gatherings and premises are deliberately kept wide in terms of scope so as to encapsulate as much as possible.
If a Covid-19 related threat to public health is identified from a particular event, gathering or premises and the Secretary of State wishes to trigger these powers, a “public health response period” is declared. During this response period, the Government has the requisite powers to ensure the prohibition or restriction upon any such gatherings, events and premises as they see fit.
If your premises become the target of closure by the Government, you should co-operate to the fullest extent possible. The police are empowered to enforce these measures and any individual seeking to obstruct this will be committing an offence and will liable to a fine. Where the offence is committed by a corporate entity, a director who neglects the measures imposed or consents or connives in the offence may be prosecuted.
Ultimately, each business needs to take ownership of its own measures to reduce the risk of infection as much as possible. You should ensure that you have adequate provisions in place to ensure business continuity in the event that your premises are shut down. You should also check your business interruption insurance policy to see if events caused by government intervention would be covered.
The Government has issued a call to arms for people to support the NHS and sign up as volunteers. Since then, over 500,000 people have signed up to assist. Under the Act, provided that they have given the required 3 working days’ written notice to their employer, employees and workers are entitled to take “Emergency Volunteers Leave” (EVL) for fixed two, three or four week blocks. These statutory leave periods are solely for those who have signed up to volunteer with an appropriate local authority and provide the required volunteer certification to their employer. Measures have also been introduced to ensure the maintenance of a person’s employment terms during EVL and to ensure that it is not to the detriment of their ongoing employment. Certain businesses, such as those with a headcount of 10 or fewer, will be exempt from the EVL provisions.
The Act also amends the statutory sick pay (SSP) provisions to ensure that SSP is now payable from the first day of absence rather than the third day, as the law has stipulated to date. Businesses which (as of 28 February 2020) employ 250 people or fewer, are entitled to reclaim SSP in respect of each employee who has been off for a period of up to 2 weeks due to contracting Covid-19. It is therefore essential that your business maintains an accurate, written record of staff absences and payments of SSP.
Food Supply Chain Businesses
For those businesses that are directly involved in, or have a close connection to a food supply chain, the Act introduces new measures which require any persons closely connected to such businesses to share such information as may be requested by the Secretary of State from time to time. The purpose of these measures is to counter any potential threats to the food supply chain and build upon the existing voluntary framework between the food industry and government regulators.
Such information is likely to be requested by the Department for Environment, Food & Rural Affairs (DEFRA).
You should ensure that such requests for information are complied with. The legislation states that duties of confidentiality will not be breached in the event that someone is complying with such an information request, and this should provide businesses with some reassurance on a commercial level.
The penalty for not complying with an information request from DEFRA is a fine calculated up to a maximum of 1% of the business’s turnover for the most recent complete financial year.
The Act delays the ability for landlords to re-enter leased business premises, or forfeit business leases due to non-payment of rent until 30 June 2020 (or such other date as the Secretary of State specifies). Landlords will be entitled to forfeit or recover rent following the end of this period.
The measures set out in the Act are truly exceptional and may be considered by some to be draconian in nature. To counter this, the Act states that any powers which are put in place are to stand for a maximum of two years, with a review of the measures to be conducted every six months to assess their necessity in the circumstances.
It is clear from the nature of these new laws that the Government is prepared to introduce rapid legislative change in preparation for the potentially long-term impact of the Coronavirus outbreak. It is essential that businesses understand these developments so they can make the necessary adjustments to adapt to the ever-changing legal landscape.
If you require any assistance on the matters discussed in this article, or if you have any other queries on certain challenges your business is facing in the current climate, please contact a member of the Corporate Department at Trowers & Hamlins LLP, or alternatively please consult our Covid-19 Client Hub for further resource materials.