In her March column for Elite Business, Karen Holden advises bosses on how to approach the on-going crisis in Ukraine, with regards to their employees, supply chains and general disruption.
In this feature I have broken down issues into different areas of concern:
Employers
Employers owe a duty of care to keep its staff safe, so how should UK bosses be reacting to Russia’s invasion of Ukraine? Employees are entitled to a duty of confidentiality, under the Data Protection Act of 2018. If someone doesn’t want their links to a crisis known, then this must be respected. However, there is nothing wrong with an employer reaching out to staff to offer support. Some staff may need time off work and/or given emotional support. This includes Russian nationals living and working in the UK, who may fear reprisals or harassment.
Many employers will already have policies in place with regards to bullying and harassment. It will also cover topics such as health and wellbeing, compassionate leave and disabilities. Right now, safety and wellbeing of staff should extend outside the work place, but this is only going to be possible if the employee informs their boss of their personal struggles and issues.
Mental health is often a silent disability, so employers should have an open door culture so that staff members feel comfortable about speaking on these issues with confidence. Perhaps it might be necessary to refer them to an occupational health advisor or make reasonable adjustments. Employers need to be alert to depression and mental illness, and also need to ensure they monitor behaviour in order to prevent discrimination to avoid staff hostility. At all times management must remain vigilant.
Support
Employers could hire external counsellors and/or medical professionals to talk to staff, or refer them to relevant third party groups. This must be confidential at all times. Perhaps employers could offer flexible working, or even remote working, while permitting additional leave to deal with personal issues.
If the employer has both Russian and Ukraine workers, they need to be sensitive to how both groups can continue working together. Both sides require support which has to be dealt with sensitively
Legal requirements on employers
There is no legal requirement for an employer to provide counselling or medical support unless there is existing knowledge of a medical condition or possible disability. However, emotional wellbeing of staff should be a key concern for all employers who must be ready to offer support where they can.
The 1974 Health and Safety at Work Act specifically informs employers that they have a duty to do whatever is ‘reasonably practicable’ to protect the health, safety and wellbeing of employees. The Equality Act of 2010 states that employers have a legal duty to consider reasonable adjustments to deal with disabilities and that these workers should not be discriminated against.
Social Media
This is clearly troubling many people but some think it’s acceptable to voice opinions that can be described as ‘hate crime’, while also inciting violence. Employers should have a social media policy that makes it clear that any posting by members of staff is purely a personal opinion, and not that of the company. This is something employers may need to reiterate now, more than ever. Make certain this policy is up to date, robust, and has been communicated to all staff.
Business disruption and the supply chain
There will be significant disruption not only for businesses directly affected by issues in Ukraine but also because of sanctions placed on Russia. Many companies have called a halt to trading with Russia, as well as Russian businesses. From a legal perspective, if your business is affected by these issues you should check your contracts carefully to see if you have a ‘force majeure clause’.
Many contracts contain provisions for suspending or terminating contractual obligations as a result of circumstances outside of your control. These are often termed as an ‘act of God’. War is usually considered to be ‘force majeure’ but how far removed you are from the conflict, will decide whether you can rely on a clause like this.
Force majeure events are designed to deal with occasions when you are unable to carry out the terms laid down in the contract. These are meant to be exceptional and rare. It does not mean, for example, that you are able to avoid contractual recourse just because it costs more to purchase goods elsewhere.
Supply chain disrupted?
With most of the world standing in solidarity with Ukraine, you may find your business supply chain has been severely disrupted. Yet you may remain contractually obliged to honour your contractual obligations. In the first instance, having a proper conversion with your contracting parties is essential. It may be that you can agree on a time extension for deliveries, if a transport route has been severely disrupted because of the conflict.
However, any agreement should be properly documented. You may also have to look for alternative producers as a temporary measure, while your Ukrainian partners turn their attention to defending their country. Most Ukrainian businesses are probably in a position to rely on a force majeure clause, thus allowing them to suspend or terminate contractual obligations. If you are contracted with a Ukrainian business, then contact your insurers to check whether you have any cover in these circumstances.
What about contracts with Russian businesses?
As a result of heavy sanctions on Russia, you may find your supply chain or business is badly disrupted. As inflation soars in Russia, their businesses will suffer the repercussions and consequences of sanctions on their economy. If you have a contractual relationship with any Russian person or business, whether as a customer or supplier, you need to take legal advice. You may be able to terminate a contract. However, should you be in breach of an agreement, you may find yourself in Court as a result.
And with Russian banks prevented from using the international Swift system, you may find there are additional hurdles to overcome when attempting to pay someone in Russia ‘ or alternatively being paid by a Russian client. Keep up to date with what’s going on in Ukraine and Russia at all times. This is an exceptionally fast moving situation and you are unlikely to avoid any issues at this moment in time.
Conclusion
Many businesses had been hoping to focus on growth during 2022 following almost two years of the Covid pandemic which, itself, has crippled many companies. Yet now there are new concerns for UK businesses, as war continues to erupt in Eastern Europe. Increasing inflation and rising fuel costs will be two of the main concerns for businesses going forward.
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