This week’s update looks at firstly the impact of the Health Protection (Coronavirus, Restrictions) (Self-Isolation) (England) Regulations 2020, which came into force in England on 28 September 2020 (“Regulations”), plus the concept of good faith in contracts, which seems timely given the current negotiations over the BREXIT withdrawal agreement.
The duty to self-isolate
The Regulations place a legal requirement on employers and employees regarding the enforcement of self-isolation for individuals in England who test positive for coronavirus, or who have been identified as close contacts of someone who has tested positive for the virus.
The Regulations introduce a legal duty to self-isolate, breach of which is a criminal offence.
There are 2 key areas to consider.
Firstly, the Regulations make it an offence for an employer to knowingly allow a worker who is self-isolating to attend any place other than the “designated place” where the individual is spending their period of self-isolation (in most cases, their home) for any purpose related to the worker’s employment. Employers will be subject to a fixed penalty notice of £1,000 for the first offence, rising on a sliding scale to £10,000 for a fourth and any subsequent offences. An employer will have committed the offence if they knowingly “allow” a worker to contravene their self-isolation. The point to note about this is that the bar here for employers is low – they do not have to require or even facilitate the worker breaching their self-isolation. It is the case that the employer may end up being liable even when the employee voluntarily leaves their designated place for work-related reasons.
Secondly, the Regulations also require an employee who has been instructed to self-isolate to inform his or her employer in writing (or agency, if the worker is an agency worker) of the obligation to self-isolate as soon as practicable. Failure to do this will amount to a criminal offence. It is also important to note that the obligations imposed by the Regulations apply not just to “traditional” employees but also to workers and agency workers.
This requirement to notify their employer only arises where the worker:
- has been told by an authorised person (such as a doctor or NHS or local authority employee) that they have either:
- tested positive for COVID-19 as a result of a test conducted after 28 September 2020; or
- have, after 28 September 2020, come into close contact with someone who has tested positive for COVID-19; and
- is due to undertake work-related activities at a location other than their designated place.
Given that many office workers are now back working from home, it may be that this notification requirement is not triggered in many cases and the employer may remain unaware of the fact that their worker is currently self-isolating.
It is worth noting that a self-isolating worker attending another colleague’s home to collect work-related documents, while maintaining social distancing and without entering the colleague’s home, would be caught by the Regulations and, if the employer was aware of the encounter, the employer would have committed an offence.
Good Faith and its use in commercial contracts
With both the UK and the EU accusing each other in recent times of breaching good faith clauses in the Withdrawal Agreement, the obligation to act in good faith in commercial contracts is a useful one to consider what that duty is.
Good faith clauses are increasingly seen in commercial contracts but what do they mean?
The starting point is what good faith means. What seems clear is that it is more than just acting honestly. Duties of ‘fidelity to the bargain’ or not to act dishonestly or undermine the bargain’ have been identified by the courts together with a party acting reasonably having regard to the interests of the parties.
What does this translate to? The answer it would seem is that the parties are required to do no more than refrain from conduct which in the relevant context would be regarded as commercially unacceptable by reasonable and honest people.
The courts are showing themselves to be increasingly willing to imply good faith clauses into “relational” contracts and has provided guidance on what it considers a “relational contract” to be. This has included guidance that whether a contract was a relational one depended on the circumstances of the relationship, defined by the terms of the agreement, set in its commercial context, at the time the contract was entered into with a number of different characteristics to then be considered. It looks like a court will also consider whether the language of the contract, viewed against its context, permits such an implication. Where a contract has been negotiated carefully between sophisticated parties who have carefully considered the terms it is unlikely that the courts will imply a duty of good faith.
The sensible advice though, has to be then that if you do not want a duty of good faith implied into your contract, you can state this expressly in the contract.
Conclusion
Throughout the pandemic, the important thing for employers has been to risk assess workplaces and ensure that employees are supported.
The Regulations above have been brought into force in the face of criticism of what they are trying to achieve for both employers and workers. For example, as notice of self-isolation has to be given by a worker to their employer in writing, it is, therefore, conceivable that a worker may incorrectly assume that their manager understands that the worker is required to self-isolate and that the worker has, therefore, discharged their obligation to notify (for example, having informed their manager that the worker’s child has a temperature and is currently off school).
Employers should ensure that employees are aware of their obligation to tell them if they or someone in their household is required to self-isolate. The sensible way to do this is to update relevant policies and communicate these, setting out clearly the restrictions on self-isolating workers and the new obligation on workers to when they are required to self-isolate. It may also be worth making it clear that such notification needs to be in writing and also to whom such notifications be made. Record keeping is vital to record those employees who are required to self-isolate, including when they notify and the dates when they should not be permitted to attend work or carry out any work outside of the place they are isolating.
Finally, good faith can be an important concept in contracts where there are requirements for a high level of mutual co-operation and goodwill. If a good faith obligation is wanted to bind and regulate the parties to a contract, it should be expressly drafted in. However, any drafting should look at limiting the scope of any such clause to certain clauses or sections of the contract to reduce uncertainty. A well-drafted contract can help to stop arguments over any possible breaches of good faith clauses before they begin.
We have a HR and employment specialist Lucy Churchill, who can assist with any queries on the above on either 01603 677077 or lucy.churchill@spiresolicitors.co.uk.
Please drop us an e mail or call if you need any further details and stay safe and well.
Lucy and Roger
