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Coping during the Coronavirus aftermath - key points for farm businesses

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Julie Robinson, Head of Agriculture flags up some of the legal issues that are likely to matter as we live through the coronavirus aftermath.  

The coronavirus pandemic has impacted on almost every area of our lives. The legal frameworks within which we operate are no exception. This blog looks at the areas of employment, supply contracts and landlord/tenant to highlight where rules have and have not changed and what farmers in England need to be aware of.  This blog reflects the position as at 17 July 2020, but please do check for updates as the situation is still fast-moving and liable to change.

Employment

Despite the massive impact on employment, the fundamentals of employment law have not changed. Queries from farming clients have been about (a) furloughing staff and/or potential redundancies where there are diversification projects that have been hit (e.g. tourism/public attractions) and (b) how employers fulfil their health and safety responsibilities to workers.

Flexible Furlough

  • Since 1 July and until 31 October it is possible for employers to bring back employees who were previously furloughed, on a part-time “flexible furlough” basis, a welcome development. 
  • However, there are conditions attached, and employers will need to be careful not to ask or encourage affected employees to work during their furloughed time, even to prepare something for their next working day.
  • Carefully worded new furlough agreements, giving the business the flexibility it needs, will need to be agreed with employees.

Redundancies

  • Where diversified farm businesses are contemplating staff redundancies, the law has not changed. Proper procedures need to be followed, a fair and reasonable process used and supporting paperwork needs to be in place. Getting redundancy wrong can end up with an employer facing a tribunal claim.  

Health & Safety

  • The basic law has also not changed in relation to an employer’s health and safety responsibilities. An employer’s duty is to ensure, so far as practicable, the health, safety and welfare at work of employees. The “so far as practicable” is important and the Government recognises that there will be limits to what is achievable e.g. in terms of social distancing when it comes to managing harvest, packing and livestock treatments.
  • One thing all employers must have in place, and keep under review, is a health and safety risk assessment. This will then guide what policies and measures are put in place to ensure workers can operate in a safe environment.
  • A key question we have been asked is about face coverings and whether they should be compulsory. As a general rule, the less social distancing is practicable for a particular operation, the more likely that a face-covering policy will be appropriate. If this is implemented as a policy, employers should provide face-coverings/masks in the same way as they provide other protective clothing.

Supply contracts

  • Again, the basic principles of contract law still apply. If delivery of a supply contract is affected by the pandemic, parties will need to look carefully at the small print and what it says about who carries the risk of non-performance.
  • There are some particular issues to bear in mind, such as which addresses to use to communicate with other parties where offices are closed.
  • The new Corporate Insolvency and Governance Act gives struggling businesses a formal breathing space to pursue a rescue plan. It creates a moratorium during which no legal action can be taken against a company without leave of the court, in place until 30 September 2020.
  • The Act also prevents suppliers from being able to rely on contractual termination or other terms to stop the supply of goods or services to a customer when that customer enters a formal insolvency procedure.
  • We expect a greater use of repayment plans as an alternative to issuing legal proceedings.

Landlord/Tenant

This is one of the areas which has seen significant Government intervention.

  • For those farmers renting out residential properties, there is a stay on eviction proceedings until 23 August 2020 (this may be extended further).
  • There is a moratorium in place until 30 September 2020 on a landlord’s ability to forfeit a commercial lease for non-payment of rent. This does not apply to agricultural tenancies. However, there is also a halt on all court possession proceedings relating to land and buildings in place until 23 August 2020, and this does cover agricultural tenancies.
  • There is no general right for tenants to withhold rents that are due. Any concessions need to be negotiated with landlords. The Government has issued a Code of Practice for Commercial Property Relationships. The code also applies to agricultural tenancies but is advisory only.

It can be difficult for small farming businesses to keep up with the changes, particularly in a fast-moving situation. Anyone faced with an employment claim, a landlord’s demand or a customer’s refusal to pay would be well-advised to take advice on the latest position before responding. Please do get in touch with your usual contact at Roythornes; alternatively, contact Julie Robinson at julierobinson@roythornes.co.uk or on 07730 760968.

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