Checking all your t’s and c’s match up to the new normal

Companies should prioritise risk management in their approach to business and review their third-party relationships and contracts as the coronavirus pandemic continues.

While the degree of disruption to supplies and staffing has settled since its initial peak, it is still fragile, and the future uncertain.  Staff are engaged in new ways of working and supply chains continue to experience pressures outside their control.

With the pandemic reaching into every aspect of business, it is important to review practices, policies and processes to be sure they match up to the new normal.

The recent example of fashion retailer Boohoo and the media storm around poor working practices in their supply chain demonstrates how quickly such issues can turn into a financial liability.   A Leicester factory supplying the retailer was found to be paying less than the minimum wage and not complying with Covid-19 safety requirements.  The resulting scandal triggered a major selloff in Boohoo shares.

And it’s not just suppliers of raw materials or finished products, equally detrimental could be the failure of operational providers, for example in technology.

Organisations must take third party risk seriously and every member of staff should understand how vital this is to the future of the company. No one can afford to be passive in a time of crisis, and ongoing due diligence is essential.  Companies will find themselves in difficulty if they fail to anticipate or identify issues in their own operations, or in their supply chains and partnerships.

It’s important to review existing contracts and any new ones proposed, whether with suppliers or customers, to be sure you are maximising protection.  We are likely to find ourselves in unforeseen situations and having the right terms for waiver of rights or contract variation through to indemnities and damages could make all the difference.  Or, if the worst happens, understanding and preparing for invoking force majeure or termination.  It’s always better to anticipate than try and deal with problems afterwards.

Some of the questions to ask yourself:  

Third party relationships

Is our vetting process for new suppliers and partners sufficiently robust in a Covid-19 world?

Do we have processes in place to recognise warning signs with our existing suppliers and partners?

Can suppliers provide proof of meeting standards and regulatory compliance if work is taking place outside the normal working environment, e.g. with workers at home?

What would we do in relation to each of our third-party relationships if they were to shut down temporarily due to the virus?

Do we have alternative suppliers or partners identified if one of our existing relationships were to close permanently?

Employment practice

Are we and all our suppliers responding to the current guidance and complying with safety practice where staff are in the working environment?

How do we ensure third parties are operating within mandated requirements at their local, national or international level, such as those relating to lockdown?

How are remotely operating staff being monitored and managed to avoid breaches in working practice or other standards?

Data protection

Have data security processes been updated and adapted to reflect changes in working practices and sensitive information is protected?

Are we confident our suppliers have addressed intellectual property protection in any home working that is taking place?

Managing operations

Do supply chain timelines need to be adjusted, by us or those who supply us?

If we or our partners need to hold more stock than usual, or cannot sell at all for a period of time, how will this affect cash flow?

Are previously agreed payment terms in need of review?

Is accounting up to date and everyone keeping a close eye on performance so they can identify any potential difficulties well in advance?

If we need to apply for financial support, do we know the options and are we on top of corporate reporting and documentation?

*This is not legal advice; it is intended to provide information of general interest about current legal issues.

 

To discuss this, or any other employment related matter, please contact Jane on 01483 887766 or why not start a live chat today?

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Jane Crosby

Partner, Dispute Resolution & Accredited Mediator

Jane is an employment and commercial litigation solicitor of more than 15 years' experience. Prior to entering the legal profession, Jane was employed in the...

Partner, Dispute Resolution & Accredited Mediator

Jane Crosby

Jane is an employment and commercial litigation solicitor of more than 15 years' experience.

Prior to entering the legal profession, Jane was employed in the aviation industry. This experience is appreciated by many of Jane's clients who note that she is able to take a commercial and pragmatic approach to any legal issue that they face.

Jane acts for a wide range of individuals and businesses and her areas of specialism include aviation, property related industries and IT. Jane regularly advises on aspects of employment law, such as settlement agreements, employment contracts, policies and procedures, redundancies, equal pay, data protection, issues arising from TUPE and reorganisations, the calculation of holiday pay, bonus and commission payments, disciplinary and grievance issues, dismissal and termination issues, the protection of confidential information and the enforcement of restrictive covenants. Jane gets involved in GDPR training for her clients and she is able to deliver tailored employment law training sessions upon request.

As a commercial litigation lawyer, Jane also deals in shareholder and directors disputes, commercial contract disputes and the enforcement of restrictive covenants.

Jane has been involved in successful high value commercial litigation for clients in the High Courts, she is an accredited mediator and she is a member of the Employment Lawyers Association.

Jane is often asked to write for a number of well known publications, including The Daily Mail, The Telegraph and The Week and she has been interviewed on BBC Radio 4.

Here is small selection of the feedback that Jane has received:

“Jane, I cannot sincerely thank you enough for your wise counsel and am delighted to have made your acquaintance. If I am blessed with a new position somewhere I will hand over my contract in the first instance to you. Likewise, any of my friends, peers, romans and countrymen wanting advice, I will point them in your direction.”

“Jane, you have been most resilient on my behalf for which I sincerely thank you for all your endeavours. I have a tremendous working relationship with Hart Brown and you have undoubtedly compounded this further."

“I appreciated the clarity of advice given at a stressful time”.

“A sensitive and highly professional approach and efficient work in the interests of the client”.

“Your advice, conduct and assistance have been indeed outstanding and very professional but also – and most importantly – very humane”.

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