Navigating the impact of COVID-19
How to manage workforce issues
The COVID-19 outbreak is causing major disruption across industries and geographies, leading global employers to review and adjust their business continuity plans and, in most sectors, take measures to respond to the contraction in commercial activity.
Below we set out the key workforce risks for global businesses.
Workforce management during a public health crisis
- Duty of care
- Impacts of remote working
- Travel policies
Data protection issues
- Issues around collecting and sharing employee and visitor data, temperature checks and questionnaires
- Data leak/loss risk due to prolonged remote working
Workforce engagement in time of crisis/remote working
- The need for excellent communication (including being consistent and avoiding one-size-fits-all approach)
- Information and consultation requirements to be complied with as far as possible
Impacts of temporary closures or reduction of output; mid- to longer-term outlook and the need to manage employment costs
- Redundancies due to the slowdown and uncertainty of its duration and depth
- Alternative measures to redundancies in order to protect business and talent in long term (including hiring freezes, withdrawing offers of employment, reducing temporary work, cutting salaries, delaying/freezing salary increases, freezing paid overtime, asking employees to work longer hours etc)
- Legal issues triggered by the measures listed in the previous bullet point
- Monitoring packages of support measures as announced by public authorities as these might impose restrictions on restructuring options in return for financial support to businesses
Impact of the crisis on performance-based awards for public companies, and possible remedies/work-around for existing and new incentive plans
- Situation in the UK:
- shareholders may be critical of any decision to do so;
- consideration should be given to whether any adjustments are required to performance conditions or whether a ‘wait-and-see’ approach would be better;
- unintended consequences if grants are made now when share prices are very low (eg an unexpected windfall if a grant is made over a large number of shares in order to achieve the desired grant value, and share prices then quickly recover); and
- employee motivation will be important during these uncertain times.
- Situation in the US:
- adjusting the established performance criteria for performance-based compensation awards;
- modification of performance goals might trigger public disclosure; and
- setting up performance-based targets in connection with new grants of annual or long-term awards requires a structure that minimises the effect of COVID-19.
Impact on behaviour and the need to be firm on the company’s values, governance and culture
- Continued applicability of confidentiality policies when working remotely
- Looking after the mental health of employees who work remotely and suffer from ‘cabin fever’
- Managing individual and team performance and discipline
- Avoiding discrimination
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If you would like to discuss these issues in more detail, please speak to your usual Freshfields contact or one of the lawyers listed below who can direct your query.