As the coronavirus spreads, firms need to be preparing for business continuity, writes KAREN HARVIE
The current Coronavirus outbreak is evolving rapidly, from the broader issues around the health and welfare of the population, to the health of the business community.
Airlines and travel companies were some of the earliest businesses to announce difficulties as various countries introduced travel restrictions, and bookings inevitably reduced significantly. Some airlines have already announced that they are reducing their capacity by 70% to 80%.
But it’s not only travel and leisure related firms which are taking a hit. With the population being asked by government to self-isolate if they have symptoms or keep a ‘social distance’, it’s likely that other businesses, such as pubs, restaurants and smaller shops seeing falling footfall and trade will also be affected.
The wider economy is already experiencing a downturn which will likely continue for some time, so the majority of businesses in all sectors will be subject to some economic challenges over the coming weeks and months and they will all be looking at ways to reduce any impact.
The priority will certainly be employee and client safety, and firms will need to have a system to keep abreast of government advice and for communicating with all stakeholders.
As well as ensuring there is good hygiene in the workplace they will also need to carry out risk assessments for higher risk groups. These are not exhaustive measures, but taken together with falling trade and potential staff sickness absence, they can represent a substantial cost.
There is no doubt that people are arguably the biggest asset for any business and they are also likely to be one of the largest costs. For that reason it is no surprise that some firms will be looking at how they manage this, without damaging the business permanently.
In just one high profile example, we have already seen Virgin Atlantic asking staff to take eight weeks unpaid leave, with reduced pension contributions. In return, the cost will be spread over six months. The other benefit is that, hopefully, there will be a healthier business to return to.
If they haven’t already, firms need to be preparing for business continuity and they also need to be considering issues such as contractual sick pay and statutory sick pay.
Also, what happens if the downturn is longer term? Do they need to introduce more severe measures such as reduced hours, unpaid leave or, as a last resort, redundancies?
All of these are critical decisions, not just for the survival of a business, but to ensure that they are following relevant employment law. Employment law is a complex area at the best of times but in what is an uncertain environment, making sure that regulations are adhered to is vital. Failing to do so can not only result in serious penalties but also the longer term reputation of a business.
This will be a difficult time for pretty much every business, large or small, and the key message is that you should take action now to protect your staff, your clients and your business.
Business owners and managers will have a raft of issues to deal with but getting the right advice around staff issues will allow them to focus on the other areas which will help their business through this demanding period, and prepare it for better times.
Karen Harvie is senior associate, employment law, Aberdein Considine
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