On 25th February, 2020, the In-House Community hosted a live webinar presented by lawyers from Stephenson Harwood, on Novel Coronavirus: International trade and the employment concerns.
Click below to play a video recording of the webinar.
Below are answers from the team at Stephenson Harwood to some of the questions raised by attendees during the above webinar.
Q. Should an employee be paid during the period in which they are being quarantined?
As staff who are subject to a compulsory quarantine order will be issued with a medical certificate, assuming that they have accrued sufficient sick leave days they should be paid in the same way as other staff taking paid sick leave.
Q. Do you think that some questions must be placed under legal privilege when working on force majeure analysis or a contingency plan?
Where a company simply raises questions internally on force majeure analysis or a BCP these will not attract legal privilege. However, in the event that the company takes legal advice in respect of some aspect of the analysis or plan, at this point onwards, legal privilege will attract to the advice and the queries discussed.
Q. Can an employer request employees to take ‘no pay’ leave?
Taking periods of unpaid leave is not covered by the Employment Ordinance. Therefore, both the employer and employee should agree any periods of unpaid leave by mutual consent.
Q. Are there any requirements or concerns subject to the UK/EU laws for collecting the personal information (e.g. the name, contact information, location, activity record, travel history, etc.) of the foreign employees (e.g. UK, EU) working in China, if there is any mandatory request from the local authorities in China asking the employer to collect its employees’ information including those of foreigners during the Coronavirus outbreak?
An employer would need to comply with any mandatory request made by the authorities in China in respect of the personal data of foreign employees. As a data user the employer would, in its personal information collection statement include the transferees of the employee’s personal data which would normally include government department/authorities of the country in which the employees are working and so the processing of the personal data for this purpose would comply with laws protecting employees personal data.
Q. Would an employer be liable if it didn’t put in place a BCP (Business Continuity Plan)?
There is no legal requirement to implement a BCP. However, by having one an employer can show that they have as far as is reasonably practicable, taken steps to ensure the safety and health at work of their employees which is their legal obligation under the Occupational Safety and Health Ordinance
Q. Can the employer make it mandatory for employees to wear masks at work?
Given that Covid 19 is a highly contagious virus it would be a lawful and reasonable direction of an employer to require its staff to wear masks in the office and if such a direction was made, employees would have to comply with it.
Q. Are employers required to take the temperature of staff coming in / out of the office on a daily basis and keep a log of the same?
There is no legal requirement to take the temperature of staff arriving and leaving work but it would be prudent for an employer to implement such measures so as to monitor the welfare of staff and have self-registration forms for each employee who should take their own temperatures and log them.
Q. In the Li decision, was the tenant excused from paying rent during the 10-day lockout?
Interestingly, the tenant did not claim for any abatement of rent in the Li case, and so he was liable to the landlord for the rent accrued prior to the termination of the tenancy agreement. The argument in the case was entirely based on frustration of contract, which if successful would have discharged the contract entirely.
Q. What is the requirement to claim extension of time or additional cost to the Owner using a `Change in Law` provision, not Force Majeure?
As with force majeure, a change in law provision is a creature of contract and so it will depend on the terms of the contract. If there is such a clause, it might become relevant if Covid-19 leads to any laws being passed that restrict a party’s ability to perform their contractual obligations. Examples that come to mind are travel restrictions, quarantine measures, government-mandated factory closures, or supply chain and transport disruptions. If the change in law were so fundamental as to make performance of the contract entirely impossible, then the doctrine of frustration of contract under English and Hong Kong law could also be considered.
Q. Epidemic could be open to argument depending on the party?
Yes, we agree. The biggest area for argument that we see in relation to force majeure clauses is whether the trigger event has been met on the facts of the individual case. In particular, how Covid-19 is classified in the context of your contract may depend on the geographical area in which performance is due in addition to the legal construction of the term itself. We foresee argument on this point. On a practical level, we suggest looking to WHO/CDC classifications for guidance although these will not be definitive in a legal sense.
Q. In mentioning frustration, if a party claims force majeure is causing a financial impact on its overall business, thus indirectly affecting its ability to continue its contractual performance, where should this ground stand, and should it even fall as a force majeure ground itself?
Financial insolvency or difficulties are very unlikely to constitute a force majeure event. Of course, it will depend on the individual wording of the clause, however the standard form clauses with which we are familiar do not include it as a grounds for force majeure. We understanding that under some systems of law, financial hardship can be a ground to suspend performance, but this is not the case under English or Hong Kong law.
Q. How should I deal with force majeure clauses within the contracts we have already entered into? Similarly, what should we do with regard to future contracts (contracts being negotiated)?
Each contract should be considered on its own terms, as whether force majeure has been triggered or not will depend on the wording of the clause and the facts of how and where performance was due. With respect to future contracts, we have received a number of requests for bespoke clauses to be drafted which deal expressly with Covid-19. This would be the best way to deal with future contracts.
Q. Do you have Singapore law equivalents with the same content as discussed, especially relating to Employment law section.
We are considering to run a webinar which will cover Singapore, please get in touch with Jezamine (details below) for specific points you may wish us to cover.
Thank you for attending the webinar and below is a summary of questions raised during the event, please note however these are not legal opinions and please reach out to Andrew, Jezamine or Elizabeth if you want to discuss further.
Contacts
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| Andrew Rigden Green Partner T: +852 2533 2761Email: Andrew.RigdenGreen@shlegal.com |
Jezamine Fewins
Partner Tel: +852 2533 2877 Email: Jezamine.Fewins@shlegal.com |
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| Elizabeth Sloane Senior associate T: +852 3166 6926Email: Elizabeth.Sloane@shlegal.com |
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To inquire about co-hosting webinars with the In-House Community, please contact our publisher, Rahul Prakash at rahul.prakash@inhousecommunity.com
