Swine flu warning for food industry
11 June 2009
The food industry should be prepared for the worst if a Swine flu pandemic strikes, says Kent-based Vertex Law. It has identified the industry as most at risk from severe disruption if large numbers of staff are affected.
The swine flu outbreak should serve as a reminder that there are a number of practical issues to consider before giving yourself a clean bill of health, says Sarah Whibley, solicitor in the commercial team at Kent-based Vertex Law.
Revisit your business continuity plans to ensure you are prepared for significant staff absence; take measures to reduce the risks of infection spreading in the workplace; and deal with sector specific issues, advises Sarah.
But what happens if a flu pandemic or other illness sweeps the country, leaving businesses unable to fulfil their contractual obligations, or suffering because suppliers cannot fulfil theirs? “In the ordinary course of events, a claim for damages for breach of contract would be a potential remedy,” says Sarah.
“However, if the contractual failure was principally caused by a flu pandemic, a claim for breach may not be viable if there is what is known as a force majeure clause within the agreement.”
A force majeure clause excuses one or both parties from performance of the contract following the occurrence of certain events that are beyond their control. Some business supply goods or services on the basis of their standard terms and conditions which include a force majeure clause, but this may not be enough, warns Sarah.
“You should be reviewing your standard terms and conditions to ensure that even if you have a force majeure clause, it does in fact cover pandemic situations and comparable civil emergencies.
“Then, in the event of an outbreak, you would minimise the risk of being in breach of contract if you fail to meet your obligations – for example, failing to deliver goods or supply services within agreed timescales due to employee absence.
“It should be noted, however, that the affected party should have taken appropriate steps to minimise the effect that such a force majeure event has on their business; an up-to-date business continuity plan is a must, for example.”
You may also want to review any larger key contracts if there is a potential risk that a pandemic could cause a breach.
Indeed, if a business fears serious disruption from a contractual failure by a key supplier who may be vulnerable to disruption, it may be worth discussing this with them now. They may be able to ensure that appropriate contingency plans are put into place.
Employers also have responsibilities to their staff, says Sarah. “These include the duty to protect the health and safety of employees. They should communicate with staff about health risks and ensure that good hygiene practices are in place and reiterated in the workplace.”
Managing staff absence resulting from the illness of employees, fear of attending work or looking after sick children or relatives is also important. “Employers will struggle to balance the need to keep genuinely sick employees away from the workplace with the need to prevent unauthorised absence,” says Sarah.
“In the event of a pandemic, it is expected that the overriding concern should be to prevent the spread of the disease and employers should seek advice, where necessary, to ensure they act appropriately.”
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