The Government pushed the emergency legislation through both houses and the Coronavirus Act 2020 subsequently received Royal Assent on the 25th March 2020. Do you know what this new legislation could mean for you and your business?
The Act has three main objectives:
- to give further powers to the government to slow the spread of the virus;
- to reduce the resourcing and administrative burden on public bodies; and
- to limit the impact of potential staffing shortages on the delivery of public services.
The legislation also provides the legal basis for the current ‘lockdown’ and gives the government wide-ranging powers to respond to the current coronavirus pandemic, time-limited to two years.
Below, we have highlighted and explained some of the most important sections for businesses.
Definition
“Coronavirus” is defined in section 1 of the Act as meaning severe acute respiratory syndrome coronavirus 2 and “coronavirus disease” means COVID-19 (this is the official name of the disease which can be caused by coronavirus).
Emergency Volunteers
Sections 8-9 introduce a new statutory right for workers to take ‘emergency volunteering leave’, a new form of unpaid leave created to enable workers to volunteer in the health and social care sector. The intention is to prevent risk to employment and employment rights and loss of income.
Food Supply
Sections 25-29 introduces a data sharing protocol between the government food retailers that will address food supply. This prevents a food retailer from refusing to share information in regard to their food supply and productions.
The food supply chain is defined to include all those from the agriculture, fishing and aquaculture producers of food and drink, to those selling to individuals for personal consumption at the end of the chain, and all intermediaries in between, as well as all closely connected suppliers to those businesses.
Statutory Sick Pay (SSP)
Sections 39-44 contain information on SSP. This is usually paid by an employer to sick employees at a flat rate for a maximum of 28 weeks. This Act allows companies which have paid statutory sick pay for an employee with coronavirus to recover some or all of that payment. The usual 3-day waiting period before payment of SSP will be disapplied.
Powers to direct suspension of port operations
As the Border Force may not have sufficient resources to maintain adequate border security, section 50 allows arrivals to be directed to key locations where there are sufficient Border Force officials. Port operators can be ordered to suspend relevant operations.
Powers relating to events, gathering and premises
Section 52 streamlines legislation allowing the Secretary of State to prohibit or restrict public events and gatherings and to close premises.
National Insurance Contributions
Sections 72 to 74 will allow the Government to temporarily modify the existing procedures around introducing national insurance contribution changes, in order to respond quickly to the Covid-19 outbreak if required.
Financial assistance to Industry
Section 75 details that the £12 billion cap on financial assistance to industry under the Industrial Development Act 1982 does not apply if financial assistance is provided by the Government to address the impact of COVID-19 on industry.
HMRC functions
Section 76 will enable HMRC to pay grants to businesses to aid the Coronavirus Job Retention Scheme. Under this Scheme, employers will be able to contact HMRC for a grant to cover the wages of people who are furloughed and kept on payroll.
The Scheme will cover 80% of the salary of workers retained, up to a total of £2,500 per month. It will cover the cost of wages backdated to 1st March 2020 and will be open initially for at least three months.
Up-rating of working tax credit
Section 77 has increased the rate of the Working Tax Credit. The rate of the basic element of Working Tax Credit for the 2020/2021 tax year was set at £1,995, by the Tax Credits, Child Benefit and Guardian’s Allowance Up-rating Regulations 2020. Section 77 replaces the reference to £1,995 with a reference to the amount of £3,040 for that tax year.
Extension of BID arrangements (sections 79-80)
Sections 79 to 80 relate to Business Improvement Districts (BIDs), business-led partnerships which are created voluntarily to deliver additional local services and upgrade the local environment for the benefit of business.
There is usually a legal maximum of five years within which BIDs can operate. Sections 79-80 temporarily extend the maximum duration of English BID arrangements. BID arrangements that are in place on the day of Royal Assent but are due to terminate on or before 31st December 2020 are to be extended until 31st March 2021.
Business tenancies: protection from forfeiture
Commercial leases may usually be forfeited for non-payment of rent, however the sections 82-83 ensures that leases cannot be forfeited for non-payment of rent for a three-month period for all types of commercial tenants. Landlords will still be able to claim forfeiture after that the three-months period.
Do you think some of these sections apply to you, but you are unsure how to proceed? Proelium Law is here to help you. We are continuing to work during this difficult period. Call or email us if you have an enquiry, we will call you back at a time convenient for you.
Jasmin Bonello is a paralegal at Proelium Law LLP. Having obtained her Law LLB (Hons) Degree at Bournemouth University, Jasmin is now undertaking the Legal Practice Course at BPP University. Jasmin is currently writing her LLM research project on private military and security companies.
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