In the midst of the spread of the COVID-19, businesses are experiencing a slow but probably prolonged business interruption scenario of unprecedented magnitude. The Maltese and the multi-national business community in Malta are facing business interruption challenges including sickness, voluntary and possibly soon forced lock-down directives, major economic slow-down, significant dips in revenue and perhaps cash-flow problems. Inevitably, these necessitate important business decisions to ensure business continuity. In this context, any action or inaction on the part of businesses/employers has legal implications.
Below are six legal recommendations to business owners who are also employers to help them take quick but legal actions in these trying times:
1. Ensure your Employees’ Health & Safety
The employer has a duty of care towards his employees. Article 6 of the Occupation Health and Safety Authority Act 1 provides that it is the duty of the employer to ensure the health and safety, at all times, of all persons who may be affected by the work being carried out for the employer.
At the very minimum this implies maintaining the place of work clean and safe. However, in the context of the COVID-19 pandemic, this obligation has definitely evolved into higher dimensions.
Employers should ensure that they:
- implement basic measures to limit the spread of COVID-19 such as providing for hand sanitizers, cleaning and sanitizing the place of work more often and following practices recommended by the national authorities;
- reduce to necessity or stop business travel;
- send employees home if ill and enforce on employees quarantine leave and other measures imposed by the Superintendent of Public Health to safeguard the health of other employees;
- reduce as much as possible human interaction for the employees. This may include holding meetings and exchanging documents remotely, reducing the number of people sharing the same office (space permitting or through scheduling time when employees share the same space) and prohibiting social gatherings at the place of work e.g. prohibiting employees from taking lunch together in the leisure areas of the workplace;
- consider teleworking, if this is possible. In setting up a teleworking contingency plan, it is important to address the ‘who, what, when and how’ to ensure clarity of the plan of action.
2. Watch Your Contractual Obligations and Risks
Inevitably, in a world where free movement of people and of goods is the norm, this new COVID-19 reality has disrupted life as we know it, and has impacted several sectors, including contract performance and execution.
In a situation where the employer himself as well as his customers and suppliers may be facing challenges, it is important that key contracts of the employer are reviewed with particular attention to: the possibility of enforcing contractual protection, risk of suspension of performance of obligations, default, liability, termination possibilities and the applicability of force majeure.
Employers should consider re-negotiating contractual terms and the implementation of new conditions for the benefit of their business. (you may want to insert link to Charlene's publication on this here)
3. Know Your Employment Law
It is not excluded that the current state of affairs may affect employers’ liquidity and impact staff levels. It is advisable that employers know what measures may be taken withing the parameters of applicable employment law. Redundancies are generally the last resort. Maltese employment law provides for other routes that may enhance business survival, whilst saving jobs. Options may include relocation of idle employees to busier departments, forced leave, unpaid leave, sick leave for employees that fall ill, reduction of working hours and redundancies.
Employers should be familiar or obtain advice about these legal options. Employers should keep in mind that COVID-19 is temporary. Any decisions should be framed in a context where the employer’s business is viable post COVID-19 and, therefore, avoid brain-drain.
4. Observe the Employee’s Privacy and Data Protection Rights
At all times employers should ensure compliance with relevant data protection legislation. Under GDPR any data concerning health is subject to enhanced protection and processing of such data is generally prohibited.
That said, there are exceptions to this rule especially when the processing of data is a necessity, in the public interest, or to protect the vital interest of others. In this context, we are of the opinion that employers should ask about the health status of their employees and use such information to take decisions that protect others.
Separately, if teleworking has been implemented by the employer, the privacy of the employee has to be respected as per legal requirement 2.
5. Benefit from the Fiscal Incentives You Are Entitled For
Using state-aid measures to support businesses’ survival may be crucial for particular employers in this unprecedented situation.
The Government of Malta has already issued an incentive to facilitate telework. The incentive is open to all undertakings irrespective of size and sector. The grant, subject to conditions, awards 45% of the eligible cost which must be incurred after the 1st of March 2020 and closes on the 30th March 2020.
Additionally, a Government aid package aimed at supporting the business community, totalling around €1.81 billion has been unveiled yesterday. (you may want to insert link to our news item on this here)
Employers should get advice on the terms, conditions, time-frames and applicability of such state-aid incentives/benefits and seek to ensure they apply for such benefits as part of their business continuity plan.
6. Communicate
It is essential that employers are clear in their plans, directions and instructions to employees whilst maintain a constant channel of communication. On a legal level, it is important that measures are well researched, reasoned, in line with law and communicated in writing. On a human level, communication and clarity of action helps with focusing the employees’ energies towards a common scope – that of business continuity. On a personal level, information is knowledge and employers should endeavour to empower their employees with information for employees’ peace of mind, enhanced team cohesion and efficacy.
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1 Chapter 424 of the Laws of Malta.
2 Telework National Standard Order, Subsidiary Legislation 452.104
