In case you missed it: August 2023
This month, search on SeedLegals went live, all your option holders were combined onto one table and we updated our docu...
Coronavirus isn’t going away anytime soon, and it’s going to have a significant impact on every business. Sooner or later every business will need a Work From Home Policy, either allowing employees to work from home if they want, or shutting the office completely and requiring all employees to work from home (which we’ve just done at SeedLegals).
There’s plenty of information out there on washing your hands, but precious little on the legal position, your employer obligations, use of company equipment at home, sick pay, and more. We needed to research these for our own team, so we made that information available here for you.
Once you’ve read this, sign up to SeedLegals and create your custom Work From Home Policy now. You’ll specify the policies that work best for your company, and then you can either download the policy as a PDF, or share it with your team on SeedLegals. It’s totally free, and you don’t need to be an existing SeedLegals customer, so please spread the word.
The safety and peace of mind of your team should be your first priority.
You should be creating a clear policy on how you are dealing with coronavirus as a business (whether that be requesting working at home, giving extra time off for dependants, whether you are cancelling business meetings) and communicating that policy to your workforce.
Click here to create your own in minutes, you’ll find it in Company Policies once you’ve signed up and created your company.
See where they will feel the pinch and focus your efforts on helping them. This will increase your lifetime customer value if you can demonstrate to them that you want to help them even when times are tough.
You owe it to them. They’ve put their trust and their money in your business. Keep them calm by explaining what actions you are taking to respond to coronavirus in a sustainable way. If you can pull it off, you might be the first company in their portfolio that they want to inject more cash into when their appetite for investment returns.
Review all of your business assumptions:
If you have a contingency plan in place, review it. If you do not have one, make one. Consider where you could lower overheads without too much damage to your business. Think about redundancy planning, compromise agreements, slowing down production in the event things get worse. Whether you will require additional funding in the event of poor performance and what steps can be taken to delay that funding need as long as possible.
How long did you think your runway would be when you last raised? Are you still confident it will get you that far? Do you need to adjust or stress test the forecast that the runway is based on? You need to be able to trust your estimations as all businesses are likely to experience poor performance in the face of an economic downturn.
Look at your sales forecasts and growth plans. You should be thinking about focusing on servicing existing customers and closing deals, rather than allocating resources to new projects that might fail when there is less demand than expected. Anticipate and plan for ‘banker’ deals, that always closed in the past, not closing while the coronavirus threat is real.
Slow down hiring efforts. Team acquisition and retention is one of the biggest expenses of a startup. You do not want it to swell out of control or have to lay off people that you have just brought on.
Review all areas of your business for productivity and see where you can achieve quick wins. Get ongoing deals closed.
Forget about the new shiny things you want to do. Consolidate what you already have in your business and ensure you have squeezed as much profit from those things as you can before things get worse.
If you have any upcoming marketing campaigns or events it is sensible to cancel them as soon as you can so that you do not lose deposits, fees, or customer goodwill in the event you have to cancel something at short notice.
Keep abreast of government relief to help small businesses. The chancellor announced that a £3,000 grant is available for small businesses made available by local councils, look into these initiatives and see whether you are eligible.
Nobody knows how bad or for how long coronavirus will last so better to get as much money in as you can now rather than betting on the world response being an overreaction.
If there is an investment opportunity available to your business, take it. We are starting to see deals on our platform breakdown as investors become increasingly nervous about the impact coronavirus could have on their investee company’s ability to hit their milestones/deliver on their promises.
If you have an ongoing round on the platform, or are not a SeedLegals customer already but are in this situation, please get in touch with us through our chat icon as we can close your round faster than anyone else on the market.
It is really difficult. You might have your shareholders’ agreement already signed and the obligation for your investors to send funds has arisen, but the investors are withholding those funds.
You could attempt to enforce the contract in the courts but this might end up being nearly as expensive as the investment.
If you are in this situation gently press your investors to transfer the funds as soon as possible before they get scared and refuse. If they do get scared and refuse, contact us.
We’ll start with the easy bit. If one of your team is feeling unwell or actually has coronavirus, they should obviously stay at home and you should pay them in accordance with your policies on sickness. If you have no policy and there is nothing in their employment contracts they will still be eligible for statutory sick pay “SSP” (currently £94.25 a week) because they will be considered “absent from work due to incapacity”.
What gets more confusing is that if your employee has been advised to self-isolate because they are a coronavirus risk, but at a point where they have not been diagnosed with coronavirus or exhibited any symptoms, their absence is unlikely to meet the definition of a day of incapacity.
To a degree, the government recognised this problem and stepped in with emergency legislation allowing for statutory sick pay to be paid from the first day of absence for employees who are in government sanctioned quarantine/self-isolation (e.g. specifically told by the NHS to self-isolate) so that now, for the purposes of the legislation, they will now be considered incapable of working for SSP purposes as soon as they are given this advice.
Where there is a gap in sick pay cover is where an employee has not been told by the NHS to self-isolate (either because they have not contacted the NHS or because the NHS did not feel they needed to self-isolate after they got in touch) but a company nevertheless wants that employee to self-isolate.
This is a large gap, because there are many plausible situations where an employee may feel as though they may have been exposed to the virus. A cautious employer thinking of the health and safety of the rest of his team may wish to keep that employee away until they can be sure the employee in question is not infected. But, they are not sick yet. So, on what basis could you stop them coming into work?
The easiest solution is to request that the employee work from home for a long enough period to discover whether they have coronavirus. Provided they are working at home, then you should continue to pay their wages as normal, easy. But what if the nature of their job means they are incapable of working at home?
The law would see that as suspending the employee from work rather than them being incapable of working. The law on suspension is that if the employee is fit and able to work, then an implied duty to pay wages to the employee arises. A company might argue that an employee is not able to work because of the risk they pose to their colleagues. But, in our view that is a weak argument, as being a risk, in itself, does not affect their ability to come into work and perform their duties, so it would be risky to withhold pay on this basis. Withholding pay may also discourage employees from identifying a risk they may have been infected and then indirectly lead to a risk of infection in the workplace.
So, in our opinion (and the opinion of ACAS) is that in this gap, a company should pay their employee their full wage during their period of suspension, even if they cannot perform their duties.
If this would prove impossible to your business or would cause it to collapse, you could argue the risk of infection makes the employee incapable of working, but as mentioned this would be a risky position and may lead to an unpaid wages claim.
The last piece of this puzzle is where an employee is neither suspended by their employer nor compulsorily detained through instruction given by the NHS, but is nevertheless remaining at home in accordance with public health guidance, despite not exhibiting any symptoms and being unable to work from home due to the nature of their role.
In terms of SSP, where self-isolation is done in compliance with general public health advice but in the absence of specific instruction to do so, it is unlikely that they would be deemed to be incapable of working under regulation 2(1)(b)(i) of the SSP Regulations. This is because they are arguably not subject to a written request made under an enactment to abstain from attending work.
In that scenario, it would seem that they would not be entitled to any pay (subject to any contractual rights) because they are neither being excluded by their employer nor subject to a request or notice made under an enactment not to work.
A quick one, you do not need to pay your self-employed staff. However, you should still be nice to them. So, if they explain to you that they may struggle without payment, you could suggest they look into Employment Support Allowance or Universal Credit as the conditions for eligibility for both forms of social security have been softened in response to the coronavirus threat.
The Chancellor announced that businesses with fewer than 250 employees would be able to claim back from the government two weeks of SSP paid to staff affected by coronavirus.
SSP need only be payable to staff who earn at least £118 per week.
If your staff request time off to care for dependants you must give that to them but you are not obliged to pay them.
Tell your staff that if they think they have coronavirus or think they might have been in contact with someone who has it, to call 111 (the NHS helpline).
Although this is understandably a stressful and frightening time for all business owners, believe you can be the ones to ride the coronavirus wave. Show your team that they have strong leadership. Demonstrate to your investors you can react well to changes in the business cycle and increase their trust in you. Impress your customers with how you are dealing with the emergency. Become the thought leader in your market sector for how to manage coronavirus, and come out the other side of this pandemic ready to acquire the customers of all the other businesses who did not plan properly.