Commercial Brief market insights - September 2020

A summary of recent developments, including the treatment of employer status within the Coronavirus Job Retention Scheme, how employers can stay GDPR compliant during COVID-19, the new changes to permitted development rights brought in August, the current rise of turnover rents, business adjustments in times of financial concern and the recent introduction to the Code of Practice for Commercial Property Relationships.

Vicarious liability and the Coronavirus Job Retention Scheme (CJRS): how important is it to identify employment status?

Concepts of employment and worker status are colliding and causing confusion. An example of this is the application of the CJRS to “limb (b) workers”.

The fact that the CJRS is based on a tax law definition, rather than an employment law definition in determining eligibility for the scheme, has meant that many contractors, who for all intents and purposes are “limb (b) workers” at any other time, have not been able to be furloughed, if they are not paid through the PAYE system.

Employment status therefore remains a concept that is fluid, depending on whether you are looking at vicarious liability, employment law, tax law or social security rules. Without standardisation, employers remain uncertain and workers of whatever category may find themselves unintentionally “slipping through the gaps” in terms of the support available to them. The CJRS will shortly come to an end on 31 October and it will be interesting to see whether the new measures announced by the government on 24 September 2020 (including the introduction of the Jobs Support Scheme) will change this.

Contacts: Alison Loveday, Alex Fielding

Related item: Vicarious liability and the Coronavirus Job Retention Scheme: how important is it to identify employment status?

Staying GDPR compliant during COVID-19

Coronavirus has changed so much of life as we know it. Systems being put in place, such as track and trace and workplace monitoring, are raising questions about privacy and of course GDPR. What information can an employer ask for? How should it be stored? And for how long?

Employees should be kept informed about cases within the organisation, but employers should consider whether this can be done without identifying a particular individual. There must be a balance between a company’s duty of confidentiality and data protection obligations and its duty of care on the health and safety of staff.

Contact: Amanda Beaumont

Related item: Staying GDPR compliant during COVID-19

Changes to permitted development rights

In August, we welcomed three changes to the Town and Country Planning Regulations which will help the current chronic shortage of affordable and decent housing.

Permitted development rights are set out in the Town and Country Planning (General Permitted Development) (England) Order 2015, as amended. The rights allow certain building works to be carried out without submission of a planning application to the local authority.

The new Regulation and Orders have been greeted well and will allow certain types of developments to take place in our immediate surroundings. This is good news for the economy. However, any breach of the limitations or conditions relating to permitted development rights will constitute a contravention of planning control. Enforcement action can be taken by a local authority and the letter of the law needs to be followed.

Contact: Angela Bhaseen

Related item: Planning ahead (Part 1) – An overview of the changes to permitted development rights

The rise of turnover rents

In the current climate, there is a growing move towards turnover rents. This is because they provide tenants with the opportunity to rebuild their businesses, which in turn, could deliver landlords with rental payments in excess of what they would have received under a quarterly rental payment arrangement.

As such, we are seeing a rise in landlords proposing turnover rents for tenants in the retail and hospitality and food and beverage sector. In doing so, commercial landlords and tenants share in both the pain, and ultimately, the rewards of surviving and adapting to the post COVID-19 landscape.

Contacts: David Jones, Simon Dawes, Angela Bhaseen

Related item: Are turnover rents the answer to accommodate the interests of both business tenants and landlords?

Business adjustments and considerations in times of financial concern

Many individuals and business owners have credible and valid claims that they do not pursue, as they have no funds available to do so. This is especially so following the COVID-19 lockdown. A good example of this is the many debts which are left unpursued. This impacts not only the individual and/or business, but also the wider economy. Indeed, Britain’s national debt has hit £2tn for the first time due to the cost of fighting the COVID-19 pandemic.

There are a number of options open to individuals and business owners who wish to pursue or enforce debts. Kennedys IQ have recently created a bespoke debt collection platform, Recovery Manager, to help clients manage their debt. We fully support a move towards greater efficiency that provides a positive client experience, whether they choose an option that is in person or remote.

Contacts: Andrew Davidson, Alison Loveday, Carlyn Weale

Related item: Business adjustments and considerations in times of financial concern or distress

Introduction of the Code of Practice for Commercial Property Relationships

On 19 June the government published its long awaited Code of Practice for Commercial Property Relationships (the Code). The Code was developed to foster relationships between landlord and tenant to reduce financial hardships and avoid insolvencies. The main aim of the Code is “transparency and collaboration”.

Whilst a useful guide, the Code does not contain anything which landlords and tenants were not already aware of or indeed have been negotiating. More importantly, the Code is not binding and enforcement will not therefore be straightforward.

Contacts: Sanam Hussain, Simon Dawes, Angela Bhaseen

Related item: Decoding the Code of Practice for commercial property – where are we now?


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