Checking all Your T&Cs Match up to the ‘New Normal’

It’s all about risk management these days! We may be over the first wave of Covid-19 related disruption but things may still be a little fragile, and the future uncertain.  The ‘new normal’, sees many staff engaged in new ways of working while supply chains continue to experience pressures outside their control. Now is a good time to review practices, policies and processes in light of 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 problems become catastrophes; a 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.  

“Organisations should take third party risk seriously and every member of staff should understand the part they play in the management of that risk, whether by simply protecting its reputation or by ensuring that recognised minimum standards are met” explained Jolyon Berry, head of the TSP employment team that works with employers and businesses. “Now is not a good time to be failing to carry out due diligence or cut corners. Companies will find themselves in difficulty if they fail to anticipate or identify issues in their own internal operations, or in their supply chains and partnerships.”

He added: “It’s important to review existing contracts and any new ones proposed, whether with contractors, employees, suppliers or customers, to be sure you are maximising protection and not in breach of the ever changing legal requirements.”

“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

• Do our staff have written terms and conditions (on day one of employment)?
• Do we carry out the correct right to work in the UK checks?
• Do we do all that we can to prevent discrimination at work (to avoid being vicariously liable for the discriminatory acts of an individual employee or worker)?
• 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?  

The employment team at TSP works closely with the corporate and commercial teams and delivers sensible advice designed to help your business do what is necessary.  If you have any concerns about your business at this difficult time, please do not hesitate to contact the TSP Employment team on 01206 574431 or email info@tsplegal.com