Businesses in Sheffield should set up dedicated coronavirus teams, say lawyers

Firms are also being advised to check the small-print of contracts with suppliers as fears grow over the impact of the disease.

A reported £200bn has already been wiped off the value of UK firms and experts are warning the situation is only set to get worse.

A Sheffield law firm is advising local businesses to be proactive in the way they dealt with the crisis.

Katrina Leaf, a specialist in employment law at Harper James, said companies needed to be flexible and implement a strategy to protect employees.

And she set out a 12-point action plan in the event of a confirmed case:

- Discuss the possibility of workplace closure with staff prior to closing;

- Update any policies or procedures (eg sickness absence, dependent care leave, flexible/home working) which may be affected by an outbreak, such as the requirement to obtain a fit note from a doctor.

- Contact Public Health England/a local PHE centre immediately.

- Contact a hazmat company to clean and disinfect the workplace.

- Inform other employees of potential signs and symptoms.

- Appoint one person to communicate to employees such an individual or help desk/team.

- Deploy multiple communication channels including digital communications to physical handouts.

- Restate the sick leave policy and encourage employees to take time off if they start showing such symptoms.

- Consider creating a special policy to tackle the situation as a precautionary measure.

- Introduce a business continuity plan that incorporates flexible working arrangements wherever possible.

- Allow employees to work from home. If individuals have only worked in office managers need to communicate their expectations e.g. establishing how they want to communicate, if there are organised times they want to communicate and what they expect each day.

- Schedule weekly meetings to include remote workers so that employees feel involved.

- Explore salary reduction or unpaid leave as an alternative to termination of employment where business has slowed down.

Miss Leaf said that once the employee feels they have recovered, confirmation from a doctor should be sought prior to their return to work to ensure that they no longer pose a risk to other members of staff.

But she added: “You must respect employee’s health data privacy and Information about an individual's health will amount to "special category data" under the General Data Protection Regulation. You should seek the employee’s consent to process such information.”

Meanwhile it is feared firms could be dragged into expensive compensation cases in the aftermath of the growing crisis.

Rana Chatterjee, a commercial solicitor with Harper James, said coronavirus was likely to lead to many entrepreneurs checking the small-print of their contracts with suppliers.

He said: “In relation to the liabilities of businesses if their suppliers can’t supply items due to coronavirus the rights rights will always depend on the wording of the individual agreement. It is fairly common for a business to be able to procure an alternative supply of goods or services but then to have that cost met by the defaulting supplier.

“Under most circumstances, there is a reasonable expectation that any failure to supply may trigger a right for the other party to terminate and claim damages associated with the default.”

Mr Chatterjee said a ‘force majeure,’ a clause that relieves parties from performing a contractual obligation, is likely to become more and more commonplace in business to deal with health crisis like this.

He said: “Recently we have seen force majeure clauses being tailored so that an outbreak of disease is specifically mentioned. In most cases, depending on the severity of the disruption caused by the coronavirus, it would constitute a force majeure under a contract that has provision for this. The important thing to note is that it will be for any business which has been unable to perform its obligations under a contract to show that it was prevented from doing so as a result of the outbreak.

“In most scenarios it is unlikely any company could claim contractual frustration. This is primarily because, in order for the doctrine of frustration to apply, a party has to show that the performance of the contract was impossible because one of the elements essential to the contract is destroyed. In extreme cases, if a death of a key person related to the contract becomes ill or dies before they can perform their obligations, this may qualify as frustration but, in this situation, such an event would likely trigger the termination of the contract altogether.”

Mr Chatterjee added that the longer the crisis goes on the harder firms may find to rely on insurance as a means of recovering losses caused by coronavirus.

He added: “This type of event is covered by some insurance policies in relation to contractual risks but recently business owners are checking this point and, where necessary, taking out additional cover to protect themselves. As time goes on, insurance companies who see the risks increasing may become less willing to offer the same products, but this depends on how much worse the situation gets.

“Businesses can protect themselves by ensuring they carry out a review of their business relationships to understand precisely how an outbreak might impact their ability to manage their day-to-day operations.

“Thereafter, taking steps to establish how their existing commercial contracts would operate in these scenarios would help them to prepare for the potential negotiations and formal notices that might need to be served if a significant impact occurs.”