Guest post: Life after lockdown

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As we await news on the Government’s exit strategy, a team of legal experts from Coodes Solicitors outlines some of the considerations for businesses as they start to plan for life after the lockdown.

Coodes Solicitors’ team of corporate and commercial, employment, commercial property and commercial disputes lawyers share their ten key considerations for businesses.

  1. Supporting employees’ return to work

A key concern among businesses is likely to be around supporting employees to safely return to work. This includes any staff on furlough, as well as those who will have to adjust to getting back to the office after a period of working from home.

Employers will need to be prepared for some staff finding the transition difficult and should ensure they are geared up for dealing appropriately with any mental health concerns.

Employers face a number of practical issues in establishing when and how staff start to come back into the premises. This could involve a phased return, having team members on site on different days, operating staggered shifts or making changes to break times to maintain social distancing. Businesses may also have to provide PPE to keep staff safe.

  1. Dealing with some staff not returning

It is inevitable that, after an extended time away from work, some people will choose not to return. In this case, employees will need to give notice in the usual way and employers will have to decide whether or not staff work their notice period.

While we are awaiting details from the Government, it is likely that employees with some health conditions will need to continue to self-isolate, as others start to return to the workplace. Employers should therefore be prepared to make arrangements for some staff to continue homeworking if that is possible or to extend their furloughed leave, if the scheme is still available, or use sick leave if not.

Many businesses are facing a significant hit to their cash flow and some will, inevitably, be considering making redundancies. The furlough scheme is currently running until 30th June, but there is a question over what will happen after that. Employers are now likely to be considering what staffing levels they might need over the coming months and whether or not redundancies will be necessary.

  1. Enabling changes to working patterns and job roles

The lockdown has forced many businesses to adapt so that employees can work remotely. Many have done this very successfully, embracing new technologies and different ways of working. The pandemic has proved that home working is feasible and could even be beneficial for many companies.

Some businesses may want to continue with a level of homeworking in the future. In addition to offering some employees a better work-life balance, it could also be a significant cost saving for employers. It is likely that some staff will want to continue to work from home, at least some of the time, or perhaps alter their working patterns. To prepare for such requests, employers should ensure their flexible working policies are up to date and fit for purpose.

The last few weeks have also seen some jobs change, perhaps as a result of systems being streamlined or tasks being reallocated as a result of team members being on furlough. Businesses will now have to consider whether they want to make any more permanent changes to their systems and to people’s roles and responsibilities.

Employers must ensure they reflect any substantial changes in employment contracts and in the staff handbook.

  1. Changing the focus of the business

Businesses have had to react to a rapidly-changing situation. Many have adapted remarkably well by diversifying their products, route to market and processes to meet the changing needs of customers. We have seen cider makers producing hand gel for the healthcare sector, food producers delivering direct to customers for the first time and clothing companies producing medical scrubs.

It it is likely that many of those businesses that have quickly diversified will have bypassed some of the usual formalities. Now would be a good time to formalise any changes to the business with a review of their structure. For example, separating out a diversification venture from the main business will offer protection should either of those businesses have difficulties in the future.

This is even more paramount when businesses are collaborating with each other and they should now take a moment to ensure that contracts or terms are adequately set up. It is important to be very clear on contract terms should circumstances change when the lockdown is lifted.

  1. Reviewing the business structure

During the lockdown, some businesses have made significant operational changes. Now would be a good time for them to consider whether they want to make formal changes to their structure to ensure it is the correct one for the future.

If you are a corporate, you should review your structure and your relationship with subsidiaries. This may be a simple case of ensuring that any intragroup loans made to assist in finance between the group structure can easily be identified and terms are clear if any part of the structure gets into financial difficultly.

Any businesses making changes to their structure must ensure that decisions made are properly documented. This includes recording decisions made during video or phone calls and by email.

  1. Maintaining online business

Many companies, including a number of small independent shops and restaurants, have switched to selling online in recent weeks. Some will be considering continuing with digital retailing after the lockdown. Those businesses should ensure that their standard terms and conditions are fit for online sales and that they are trading in a way which is compliant with consumer protection regulations. 

  1. Reviewing your commercial property needs

With the likely increase in homeworking and many companies diversifying and restructuring, business owners are likely to be considering whether their current commercial property reflects their future business needs. For example, offices may need to be adapted to fit with employees’ flexible working patterns, while manufacturing businesses’ property needs could change as they continue to branch out with new ventures.

As companies still consider making a return to their premises, but with social distancing measures still in place, it is reassuring to know that the commercial property legal offering has adapted well to the limitations.

ID checks, which were formerly carried out face-to-face or through Post Office verification, have been conducted during the lockdown using an ID app. Historically, swearing urgent documents for our clients has required face-to-face contact. However, we have been able to work around this, for example by video link in certain circumstances or clients being on the phone in their cars while we swear documents through the glass.

Coodes has also been working with local authorities to review and approve documents online, using a portal, and we have been making more use of email and video conferencing facilities to keep property sales and purchases moving forward. We are keeping a close eye on legislative changes that might allow more legal documents to be signed electronically or remotely in future. It is good to see recent temporary Land Registry changes to give flexibility in responding to some of the challenges.

  1. Addressing cash flow and dealing with insolvency

A lot of business’ focus will undoubtedly now need to be on cash flow.  As many businesses have been forced to temporarily close, many will now be feeling the strain and worrying about the future. While many businesses will have established emergency plans to trade through the crisis, some simply won’t have the cash flow reserves to survive. We recognise that in Cornwall, where we have a heavy reliance on income from tourism, this will be a sad reality for many.

The Government has put in place temporary measures to help businesses that are faced with insolvency. Those include plans to add new restructuring tools to help companies to continue to trade while considering rescue options as well as the suspension of claims against directors that could ordinarily be brought against them personally, should they continue to trade while the company is insolvent.

  1. Settling debt

Managing cash flow goes hand in hand with having solid processes in place in respect of debt.  This firstly means managing, and where possible recovering, existing debt and secondly reducing the risk of exposure to future debt.

While we have seen many clients faced with debtors who have used the current pandemic as an excuse not to pay, there are also the genuine debtors who simply cannot pay. It has been encouraging to see that many businesses who find themselves in the latter category have been quick to negotiate agreements to ensure contractual relationships are maintained. This approach has gone a long way to help them both continue trading.

Now is a good time to review, and if necessary amend, your payment terms to ensure they are clear. This is particularly important if you are a business that could demand payment up front. Having a solid credit control system will assist in reducing the risk to future debt. If you are changing your payment terms, early communication between all parties is always recommended.

Where a debtor cannot pay, a prompt letter of claim or statutory demand can be issued prior to commencing court or insolvency proceedings.

  1. Embracing new technology

One positive thing to have come out of this crisis is the significant technological advances that have been made. Businesses should review how they have been using technology to communicate with their teams, meet customers, manage stock and connect with professional contacts, and what they can take forward into the future.

At Coodes, for example, we have seen a significant increase in the use of electronic platforms to execute documents.  Unfortunately, there are still circumstances where this is not possible but it is positive to see how businesses have embraced this new approach. Companies House has extended its web filing service to include those that were previously only possible to submit by paper. Companies should consider signing up for web filing to speed up any filings that need to be made.

If you are looking for legal advice for your business, contact the Business Services team at Coodes Solicitors on 0800 328 3282 or info@coodes.co.uk