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Should we issue petitions?

Our advice to you here is simple. It will depend on the circumstances surrounding your debt but for the most part, unless it is crystal clear that there has been a debt outstanding long before Covid-19 and there was an inability to pay prior to the Covid situation we would recommend that you hold off issuing any further petitions until after the 31st December. Unless the criteria set out above is met, a judge is likely to exercise their discretion leniently and could dismiss the petition. This could also lead to cost consequences which would adversely affect you.

We are happy to discuss individual cases to assist creditors at this difficult time, however, generally any cases proceeding to petition would be the exception as opposed to the rule. Even if presenting a winding up petition is not available for now, there may still be other forms of legal proceedings that you can use to collect money owed to you, like county court proceedings.

Related FAQs

What are the early warning signs that a contractor may be in financial difficulty?

As the project progresses, it is important to continually monitor the contractor’s performance.  Any one or more of the items below can be early warning signs that the contractor is in financial difficulty, and that further actions may be necessary:

  • Decrease in labour or contractor’s personnel on site, and/or rapid turnover of contractor’s personnel
  • Slowdown in progress on site
  • Plant, equipment or materials suddenly disappearing from site for no apparent reason – unpaid subcontractors may unilaterally decide to remove items from site regardless of their contractual rights to do so
  • An increasing number of defects and reduction in the quality of the contractor’s work
  • The contractor seeking changes in the payment arrangements, and in particular early payments
  • The contractor making spurious claims or contra charges
  • The contractor seeking assignment of its benefit of the building contract
  • Late filing of accounts by the contractor at Companies House
  • Unsatisfied court judgements against the contractor
  • Subcontractors and suppliers not being paid or being paid late
  • Rumours in the press, in the industry, on site or elsewhere regarding the solvency of the contractor
  • Unusual visits to site, for example from the contractor’s senior management or other personnel who had not previously been present or are not expected to be present
  • Increasingly aggressive behaviour by the contractor
  • The contractor’s parent company or another company within the contractor’s group displaying any of the above signs
Are any suppliers exempt from this?

Small suppliers (defined by reference to certain financial indicators) are temporarily exempt from these new restrictions until 30th March 2021 in order to account for the difficulties to small suppliers during the Covid-19 pandemic.

There are also certain industries that are exempt from these restrictions (for example financial services).  The Secretary of State may also create further exemptions framed by reference to kinds of company, supplier, contract, goods or services or in any other way.

What steps can we take to avoid sub conscious bias being a factor in our decision making?

There has been a significant amount of press coverage talking about institutional racism within the NHS not only in terms of the treatment of patients but also in terms of the low representation of ethnic minority staff in management positions. Whilst tackling that issue is beyond the brief here, it is important to recognise that sub conscious bias can, regrettably, play a part in decision making processes. An Employment Tribunal will explore a alleged discriminator’s conscious and sub conscious decision making and working in an environment which has not set out sufficient controls to avoid such sub conscious stereotyping places someone at a greater risk of being discriminated against.

In the context of the issues we are addressing here, i.e. risk assessments around BAME staff, as we have stated above, it is essential that BAME staff are represented at all levels in the discussion. Trusts need to be mindful that BAME are underrepresented in management positions.

BAME staff need to be included in the dialogue and need to have a safe place where they can challenge decisions that are being made in relation to them. There needs to be accountability in the processes applied. Meaningful conversations need to happen and concerns should not be dismissed.

Which agreements will qualify for exemption?

There are four criteria which must be satisfied if an agreement is to be considered exempt:

  • It must improve production or distribution, or promoting technical or economic progress – the guidance suggests that cooperation ensuring essential goods and services can be made available to the public, or an important sub-set of the public such as key workers, will satisfy this criterion.
  • It must allow consumers a fair share of the resulting benefit – the guidance suggests this will be the case where the action prevents or reduces shortages.
  • It must not impose on the undertakings concerned restrictions which are not indispensable to the attainment of the above benefits – the guidance suggests this will be the case where the cooperation is the only reasonable option due to the urgency of the crisis and where the cooperation is temporary in nature.
  • It must not afford the undertakings concerned the possibility of eliminating competition – therefore the parties must endeavour to retain competition in respect of the products (in particular price competition).
Can I require my staff to inform me should their circumstances be such that they need to self-isolate?

Yes.

Workers (and agency workers) who are aware of the requirement to self-isolate and are due to work during their isolation period at a place other than their designated place (see below) must, as soon as reasonably practicable and in any event before they are next due to start work within the isolation period, tell their employer that they are self-isolating, and set out the start and end dates of their isolation period.

Clear communication to all workers about their obligation to do this is strongly recommended.