Throughout the COVID-19 pandemic, Flynn O’Driscoll LLP undertook various steps to ensure business continuity.
We have developed a COVID-19 Hub as an information centre for all your key questions. We are updating the information daily and will continues to do so over the weeks and months. Our experienced legal teams are on standby to assist clients with the business and legal challenges this unprecedented situation is presenting; please get in touch with your usual contact to discuss any particular challenges we can assist with.
FAQs
Banking and Finance – Consumer Protection Issues
The European Banking Authority (the “EBA”) has published a statement on consumer and payment issues in light of the COVID-19 pandemic (the “EBA Statement”), which addresses both temporary payment measures, such as debt moratoria, payment holidays and payment services. The EBA Statement may be found here.
What requirements does the Statement provide for in respect of Temporary Payment Measures?
• Financial institutions must act in the best interests of consumers, particularly when engaging with customers regarding Temporary Payment Measures for consumer and mortgage loans and must grant such measures in compliance with European Union law, such as the Mortgage Credit Directive and the Consumer Credit Directive.
• Financial institutions must make full information disclosure, especially with regards to any potential charges and costs and the transparency and clarity of terms and conditions applying;
• Financial institutions should give careful consideration from a legal and reputational perspective to any new costs and charges specifically introduced in relation to contingency measures, which are ostensibly designed to alleviate the pressure on consumers and businesses and any cross selling of products to consumers;
• Financial institutions should note that given Temporary Payment Measures may not automatically lead to loan classification from a prudential perspective;
• The acceptance of Temporary Payment Measures should not automatically lead to negative implications for the consumer’s credit rating.
What requirements does the Statement provide for in respect of Debt Moratoria?
• The acceptance of Debt Moratoria should not automatically lead to a reclassification in default, forbearance or IFRS9 international accounting standard status.
• When applying the IFRS9 international accounting standard, financial institutions are expected to use a certain degree of judgement and distinguish between borrowers whose credit rating standing would not be significantly affected by the COVID-19 pandemic in the long term and those borrowers who would be unlikely to restore their creditworthiness.
What requirements does the Statement provide for in respect of Adequate Risk Measurement?
• Financial institutions must insist on the importance of Adequate Risk Assessment and prioritise individual assessments of obligors’ likeliness to pay when possible.
What requirements does the Statement provide for in respect of Contactless Payments?
• Well-functioning payment services are vital during the COVID-19 pandemic, and Contactless Payments should be increased to the thresholds permitted under European Union law, i.e €50.
• Consumers and merchants should take all necessary sanitary measures.
• All payment options should be considered when paying in-store.
As the impact of COVID-19 unfolds, parties to commercial agreements need to assess their contractual rights and obligations, and in particular, if force majeure may apply to the performance of their contract.
What is Force Majeure?
A force majeure clause in a commercial contract is one which relieves a party from strict compliance from performing its obligations under that contract. If a commercial contract contains a force majeure clause, the first thing to do is to review the precise wording of the force majeure clause.
Does COVID-19 constitute a Force Majeure Event?
A force majeure clause in a commercial contract usually lists specific events that the parties may agree constitute a force majeure event. These force majeure events would typically include the outbreak of disease, war, work stoppages, actions by government and extreme weather conditions. Some commercial contracts may also include industry specific event, which may or may not cover COVID-19.
A force majeure clause may also refer to some more general examples, such as Acts of God. Such provisions often give rise to debate as to what constitutes an Act of God, and therefore need to be interpreted in their context.
On 11 March 2020, the World Health Organisation (the “WHO”) made an assessment that COVID19 should be characterised as a pandemic. If therefore a force majeure clause specifically refers to a pandemic as a force majeure event, then that clause may be activated by the outbreak of COVID-19.
Can you rely on the Force Majeure provisions?
Whether a force majeure clause can be relied upon by a party will depend on a number of factors.
Forseeability
In order to rely on a force majeure event, that event must not have been foreseen by the parties. Therefore, a party seeking to rely on a force majeure clause in a commercial contract entered into since the outbreak of COVID-19 in China came to light, may find it difficult to prove that it did not foresee the risk of COVID-19 impacting on the commercial contract.
Genuine Failure to Perform
There must be a genuine failure of likely failure to perform the commercial contract and it must be established that COVID-19 caused that failure to perform. The simple fact of COVID-19 existing will not in itself be enough to be able to rely on the force majeure clause if the impact of the COVID-19 outbreak did not actually cause the party’s failure to perform its obligations under the commercial contract. The onus of proving that the event has prevented the performance of the commercial contract rests with the party seeking to avail of the force majeure clause in the commercial contract.
How do you invoke the Force Majeure clause?
The force majeure clause will usually prescribe the scope of the remedy available to the party seeking to enforce it and prescribe the steps to be taken to trigger the force majeure clause. These would normally include an obligation to notify the other party and a duty to mitigate one’s loss. The commercial contract may also contain additional obligations on the party seeking to enforce the force majeure clause, such as an obligation to adhere to good industry practice or to put in place business continuity arrangements.
A party seeking to enforce a force majeure clause is also usually under a duty to demonstrate that it has taken reasonable steps to mitigate or avoid the effects of the force majeure events.
What if there is no Force Majeure clause in the commercial contract?
A force majeure clause will not be implied into a commercial contract as a matter of law. Therefore in the absence of a force majeure clause, there is no provision on which a party would be able to rely.
In the absence of an express force majeure clause, a party might seek to claim that the commercial contract has been frustrated. The legal doctrine of frustration provides that a commercial contract may be discharged where circumstances arise which:
(a) were not envisaged at the time that the commercial contract was entered into; and
(b) render the commercial contract impossible to perform or transform a party’s obligations under the commercial contract such that they are fundamentally different to those that the party originally agreed to perform.
The legal doctrine of frustration requires a very high threshold to be met by the party seeking to enforce it before it can be established. For example, a commercial contract would not be frustrated simply because performance has become more costly for the performing party.
Tips for Dealing with Force Majeure
Attempt to resolve the issue
The parties to the commercial contract should discuss the issue and endeavour to find a practical and reasonable solution. As very few parties will be unaffected by COVID-19, it will be worthwhile to try to reach a practical and reasonable compromise, such as suspending the obligations under the commercial contract or reducing the level of those obligations to a manageable level until such time as they may be resumed in full. Record in writing all decisions reached between the parties.
Follow the procedures in the commercial contract strictly
The force majeure clause will usually set out the steps that must be followed where a party wishes to claim that a force majeure event has occurred. It is important to follow these steps strictly to ensure that no inadvertent breach of contract occurs. Identity any other obligations in the commercial contract which mandate specific actions such as business continuity procedures.
Monitor developments
A redesignation of COVID-19 by the WHO or new legislation or directions by the Irish government or the European Union may affect whether or not COVID-19 falls within the scope of a specific force majeure clause in a commercial agreement. These should therefore be closely monitored.
Corporate – COVID-19 Specific Financial Measures in respect of Nursing Homes
The Government has introduced financial measures in respect of nursing homes as part of combating the COVID-19 pandemic.
What assistance is being provided for Nursing Homes to implement COVID-19 measures?
Funding will be provided to each applicant Nursing Home for COVID-19 pandemic related measures and expected costs for the months ahead, starting with April. These measures include:
• the implementation of enhanced testing processes in Nursing Homes; and
• changes to staffing and governance arrangements.
Financial support will be provided based on the number of Nursing Home Support Scheme residents in situ as reported for the month of March 2020 by the Health Services Executive (the “HSE”) Nursing Homes Support Office (the “Fair Deal Scheme”). Therefore the financial support provided will not be based on the number of Non-Fair Deal Scheme residents, such as private residents in the Nursing Home.
The Nursing Home will receive:
• €800 per resident per month for the first forty (40) residents;
• €400 per resident per month for the next forty (40) residents; and
• €200 per resident per month thereafter.
What enhanced COVID-19 outbreak assistance is being provided for Nursing Homes in COVID-19?
Where a Nursing Home has incurred significant further costs or undertaken necessary enhanced actions arising directly from a COVID-19 outbreak in the Nursing Home, it may submit a separate business case for enhanced funding. The COVID-19 outbreak must be certified as such by the HSE. In such cases, the Nursing Home in question will be required to submit evidence of the measures undertaken and the cost incurred, along with independent certification from an auditor that the expenditure was incurred and it relates directly to the COVID-19 pandemic.
The maximum assistance available to an individual Nursing Home per month will be the lesser of:
• twice that of the agreed monthly support set out above; or
• a maximum amount of €75,000 inclusive of the monthly support.
The Department of Health has yet to provide guidance on what the Nursing Home’s business case should contain, but it is expected that the Nursing Home will need to include the following in the business case:
• details of the COVID-19 outbreak in the Nursing Home;
• details of the measures undertaken to mitigate the effect of the COVID-19 outbreak;
• financial analysis and financial projections on the impact of the COVID-19 outbreak.
The following examples illustrate how the Nursing Home Scheme will work in practice:
Scenario 1
Number of Eligible Residents |
20 |
Standard Assistance Payment per Month |
€800 x 20 residents = €16,000 |
Maximum Enhanced Outbreak Assistance |
€16,000 |
Total Maximum Payment per Month |
€32,000 |
Scenario 2
Number of Eligible Residents |
50 |
Standard Assistance Payment per Month |
€800 x 40 residents = €32,000 €400 x 10 residents = € 4,000 €36,000 |
Maximum Enhanced Outbreak Assistance |
€36,000 |
Total Maximum Payment per Month |
€72,000 |
Scenario 3
Number of Eligible Residents |
80 |
Standard Assistance Payment per Month |
€800 x 40 residents = €32,000 €400 x 40 residents = €16,000 €48,000 |
Maximum Enhanced Outbreak Assistance (capped) |
€27,000 |
Total Maximum Payment per Month |
€75,000 |
Competition – Temporary Changes to the Merger Notification Process
In light of the COVID-19 pandemic, the Irish Competition and Consumer Protection Commission (the “CCPC”) announced on 18 March 2020 temporary measures to assist it in complying with its binding statutory deadlines for considering merger control notifications under the Competition Act 2002 (as amended) (the “Act”) and to ensure business continuity in its review of notified mergers and acquisitions.
What are the temporary filing measures that the CCPC has introduced?
• Where it is possible to delay a merger control notification to the CCPC, the parties are requested to do so until further notice.
• Where it is not possible to delay a merger control notification to the CCPC, the parties are requested to file all notifications forms and supporting documents, including material contained in annexes and appendices to the notification form, in electronic format by email to mergers@ccpc.ie. The notification of a merger or acquisition must be done by completing and submitting the merger notification form to the CCPC which may be found here. The merger notification form specifies the information required from the notifying parties to the proposed merger and gives guidance on issues relevant for making the merger control notification.
• Where filing of a merger control notification is anticipated, the parties are asked to contact the Director of Competition Enforcement and Mergers at +353 (0)1 470 3683 or to email mergers@ccpc.ie.
• If the notifying parties do not receive an automated acknowledgement of their merger control notification within two (2) hours of filing, they should contact the Director of Competition Enforcement and Mergers at +353 (0)1 470 3683 or to email mergers@ccpc.ie.
• These measure acknowledge and seek to mitigate the impact of the COVID-19 pandemic on the CCPC’s merger review functions and in particular, on the availability of staff and the need to collect and assess information from third parties of the notifying parties, including their customers, supplier and competitors.
What impact will the temporary filing measures that the CCPC has introduced have on overall deal timetables?
The temporary filing measures introduced by the CCPC will be of particular relevance to businesses contemplating mergers involving parties with overlapping activities in Ireland, and where therefore extensive investigation by the CCPC would be required. Those businesses will need to consider the implications for their overall deal timetable of delays in obtaining merger control approval from the CCPC and merger control regulatory authorities in other jurisdictions relevant to their proposed transaction.
For those businesses already engaged in a merger review process with the CCPC, the statutory timetables set out in the Act will remain binding.
Corporate – COVID-19 and the Management of Companies
The responsibility for the management of an Irish company rests with its directors, save to the extent that the Constitution of the company provides otherwise. The directors of the company are responsible for anticipating and managing the risks which the company may encounter. It is good corporate practice to have the company adopt policies and procedures to deal with these risks. The COVID-19 pandemic is likely to cause risks for companies carrying out all types of business, which the board of directors of the company should consider and address.
What should the board of directors do in respect of financial reporting risks during COVID-19?
Companies should consider the impact of the COVID-19 pandemic on their financial statements and financial reporting obligations. The Companies Act 2014 requires that the directors’ report to be annexed to a company’s financial statements contain particulars of important events affecting the company which have occurred in the financial year and a description of the principal risks and uncertainties facing the company. The directors should consider whether the COVID-19 pandemic will have an impact on the performance of the company’s business to the extent that disclosure is necessary.
What should the board of directors do in respect of the company’s employees during COVID-19?
The directors of a company should have regard to the interests of the company’s employees during the COVID-19 pandemic. Companies have a duty of care towards their employees and are required to take steps to comply with their obligations regarding workplace health and safety, regardless of whether employees are still working in the workplace or are working remotely. Companies should carry out risk assessments in light of the COVID-19 pandemic. Where a risk of employees potentially contracting the COVID-19 virus is identified, the company should consider what measures they should take to control that risk. The World Health Organisation has issued guidelines for the public to minimise the spread of COVID-19. Companies may find this advice useful in communicate ways in which their employees who must continue working can protect themselves and their fellow employees from COVID-19 infection. These measures may include:
- Ensuring that there is adequate ventilation in the workplace;
- Providing alcohol-based sanitisers; and
- Ensuring employees stay at home if they experience symptoms.
Given that fewer employees are permitted to attend the workplace, companies may consider facilitating their employees to work from home or allowing them to work remotely where possible. Companies should take a flexible approach and review their practices as the COVID-19 pandemic situation develops. Where it becomes necessary to close a workplace, companies should request that their employees work from home where feasible and continue to pay their employees as normal. Failure to comply with contractual obligations to pay employees in circumstances where they are available for work may lead to breach of contract and payment of wages claims against the company, unless the employer has provided for an unpaid period of lay-off or short-time in the employment contract. Companies may also wish to review employment terms in their contracts for emergency provisions situations such as the COVID-19 pandemic or where the COVID-19 pandemic and the emergency measures introduced necessitates closure of the workplace.
What should the board of directors do in respect of risk policies during COVID-19?
In order to manage business risks effectively during the COVID-19 pandemic, it is advisable for the directors of a company to draw up, adopt, publish and enforce risk policies and procedures. It would be common, for instance, for a company to have in place risk policies to deal with business risks associated with health and safety, data protection, bribery and corruption and contract management. Depending on the type and gravity of the risks which the COVID-19 pandemic carries, the directors of the company may consider a risk policy dedicated to dealing with those risks.
Any risk policy that the board of directors adopts should be drawn up in writing, formally considered by the board of directors and adopted by the board of directors by formal resolution, and communicated to all the employees of the company to whom it relates, with training provided where necessary. Any persons to whom authority is delegated by the board of directors under a risk policy should be made aware of their powers and the limits on those powers.
Should the board of directors create a COVID-19 committee?
If they consider it necessary, the directorsgo of a company may delegate some of their powers to a committee specifically in order to address the risks caused by the COVID-19 pandemic. Whether this is relevant will depend on factors such as the nature of the company’s business, the likelihood of an outbreak of COVID-19 affecting the company and the size of the board of directors of the company. Board powers such as organising remote working arrangements or closures of the business of the company may be delegated to the COVID-19 committee.
Committees are established by resolution of the directors of the company.
The ultimate responsibility for the obligations of the board of directors of the company will remain with the board of directors, and not the committee. The directors of the company must ensure that any such authority being delegated is clearly described, document and approved by the board of directors. The delegated authority of the board of directors should also be reviewed on an ongoing basis to make sure that the authority is being properly adhered to and continues to work from the board of director’s perspective.
What should the board of directors do in respect of board meetings during COVID-19?
The frequency of board meetings of a company will depend on the nature of the company’s business. For good corporate governance, it is recommended that the directors of the company meet at least once every quarter to discuss the business of the company. In addition, the board of directors of the company are required to meet as necessary such as to authorise the use by the company of its company seal, or in other prescribed circumstances.
Directors generally take decisions at board meetings or by unanimous written resolutions. Board meetings can be held via videolink, telephone or other electronic means. All participants at the meeting of the board of directors must be able to hear and speak to each other throughout the duration of the board meeting. A director taking part in such a board meeting shall be entitled to vote and will be counted in the quorum for the meeting of the board of directors. It is important to check the Constitution of the company to ensure that virtual meetings of the board of directors of the company are permitted. It would therefore appear prudent in the circumstances surrounding the COVID-19 pandemic for the board of directors to hold their board meetings via distance communications by way of written resolution. However, it should be noted that certain companies may be required to hold physical meetings in Ireland to provide evidence that the central management and control of the company is in Ireland and strategic decisions are made in Ireland.
Corporate Mergers and Acquisitions
As the economic impact of the COVID-19 pandemic increases, companies that are engaged in or which are contemplating corporate mergers or acquisitions are faced with expected and unprecedented challenges.
What should companies focus on in the due diligence process during the COVID-19 pandemic?
- The impact that the COVID-19 pandemic will have on revenues of the target company to be acquired;
- Consider whether to re-open discussions on the purchase price for the target company to be acquired;
- A review of key contracts to ascertain whether obligations under those contracts are still capable of being performed during the COVID-19 pandemic;
- A review of termination rights along with any force majeure provisions to establish whether the COVID-19 pandemic has a triggering effect on the force majeure provisions in the target company’s contracts;
- The implications of the employees of the target company working remotely, if applicable;
- The likely impact of the COVID-19 pandemic on the ability of the key suppliers of the target company to perform;
- A review of all insurance policies of the target company to ascertain whether any business interruption insurance applies and an evaluation as to whether there is any requirement to mitigate loss.
What is the impact of a Material Adverse Change clause?
Parties may look to rely on specific remedies in their commercial contracts, or in law, to avoid liability where contractual obligations cannot be performed in accordance with their terms. As a result, there is now renewed focus on Material Adverse Change clauses.
A party seeking to avail of a Material Adverse Change clause should first consider if other remedies are available to it. Incorrectly invoking a Material Adverse Change clause may result in significant liability for the relevant party and ought therefore only be used where it is highly certain that the entitlement arises.
What is the impact of a Force Majeure clause?
Many commercial agreements include an express Force Majeure clause. It is difficult to persuade a court to imply a Force Majeure clause into a commercial agreement if it has been omitted. A Force Majeure clause can apply where an event that is within the scope of the clause prevents a party, or both parties, to a commercial contract performing a particular obligation under that commercial contract.
What should companies focus on in Warranties and Indemnities during the COVID-19 pandemic?
- Seeking specific warranties on COVID-19 contingency plans or financial assessments;
- Taking particular care in relation to financial warranties and any financial projections;
- Seeking specific indemnities where significant risks have been identified from COVID-19.
What is the impact of Warranty and Indemnity Insurance during COVID-19?
In addition to a rigorous due diligence processes and careful negotiations of warranties and indemnities, Warranty and Indemnity insurance may also have a role to play as the COVID-19 pandemic continues. However, as COVID-19 is now a known risk, it is expected that into the future, underwriters will specifically exclude any COVID-19 pandemic related business losses from Warranty and Indemnity insurance policies.
As part of their due diligence exercise, underwriters will require that the deal parties have proactively assessed all potential financial losses. In particular, it is expected that underwriters will place a renewed focus on:
- Current business continuity plans and financial projections of the target company’s business expectations;
- Any supply chain disruption of the target company;
- The ability to terminate or suspend material commercial contracts without penalty for doing so;
- The target company’s insurance policies and the ability to recover for COVID-19 business losses.
Additionally, it is likely that underwritings will examine how the parties are addressing the risk of the situation worsening between signing and completion of the transaction and the parties’ ability to manage such a situation.
Will COVID-19 increase the potential for hostile bids for undervalued companies?
The on-set of the COVID-19 pandemic may also have an impact on public mergers and acquisitions.
There may be an increase in hostile mergers and acquisitions as opportunistic acquirers may take advantage of depressed stock prices and short-term liquidity issues affecting certain companies’ businesses.
Companied that are incorporated in Ireland may be more vulnerable to such hostile approaches as Ireland is an open and non-protectionist market.
Takeovers in Ireland are regulated by the Irish Takeover Rules (the “Rules”). The Rules are designed to protect the interests of the target shareholders and, for example, allow a bidder to take its offer direct to the shareholders, bypassing the target board of directors. The Rules effectively prohibit target companies from taking any frustrating action to inhibit an unwelcome bid, so that bid defences such as buying or selling stock to interfere with a bid or selling material assets, that would have the effect of impeding a target shareholder’s ability to decide on the merits of the bid are prohibited. Ireland has no generally applicable regime regulating acquisitions in sensitive industries by foreign investors on the grounds of security or public interest or protecting national champion companies.
Regulatory consent will be required for many acquisitions of ownership interests in the regulated financial services sector and in the media sector and proposed transactions may be blocked on media merger competition grounds.
Corporate Governance – Contingency Planning for Board Meetings
The directors of companies face new challenges during the COVID-19 pandemic on how they can effectively deal with decision making in their companies when face to face meetings are no longer possible, while still complying with the provisions of the Companies Act 2014 (the “Act”).
How should notice of the meeting of the Board of Directors be made during COVID-19?
The Act provides that the directors must receive reasonable notice of upcoming meetings of the Board of Directors. Unless the company’s Constitution provides otherwise, this notice can usually be sent by e-mail to the directors.
How should the agenda of the meeting of the Board of Directors be made during COVID-19?
Similarly as the notice, the agenda of the meeting of the Board of Directors, together with any supporting documentation, can be sent to the directors by e-mail. In setting its board agenda items, the Board of Directors should, in the current environment, prioritise COVID-19 related issues for the company, highlighting the main areas of impact for the company and the necessary responses and actions. Although the COVID-19 pandemic will be at the forefront of the directors’ considerations, the directors should also be mindful of the long term goals of the company and the interests of the company’s shareholders and creditors.
How may directors must attend the meeting of the Board of Directors?
A quorum, being a minimum number of directors in attendance at the meeting of the Board of Directors, is required to convene a board meeting. If the Constitution of a company is silent on the quorum for a meeting of its Board of Directors, then the Act provides that the quorum shall be two directors, or one director in the case of a single-director company.
It is important to note, however, that if the Board of Directors is making a declaration of solvency under the Summary Approval Procedure (the “SAP”) provided for under the Act, then all or a majority of the directors must attend the meeting of the Board of Directors at which the SAP is approved.
Different rules also apply to the requisite number of directors in situations where the directors opt to make decisions by way of written board resolution instead of a meeting of the Board of Directors. Subject to the Constitution of the company permitting written resolutions of the Board of Directors, and no other tax residency or other constraints, the directors of a company may opt to consider and approve items of business by way of a written board resolution instead of holding a board meeting. Given the absence of a meeting of the Board of Directors, each director should ensure that he or she is fully informed in relation to the business being considered and the decisions sought before signing the written resolution. In the case of a written resolution, the signature of all the directors or their alternate directors, is required on the written resolution. Counterpart written resolutions are usually acceptable. This is to accommodate situations where one or more directors is unable to sign the same physical resolution but it should be noted that the effective date of the written resolution is the date on which the last director signs the written resolution. The written resolution can be circulated electronically but the document containing all the original signatures must be kept by the company in its minute book.
Are directors permitted to dial-in to meetings of the Board of Directors?
Travel restrictions and the Government’s restrictions in dealing with COVID-19 may now make it impossible for a quorum of directors to physically attend a meeting of the company’s Board of Directors. The directors may therefore wish to convene meetings of the Board of Directors by telephone or video link. The directors should first however check with the company’s tax advisors in relation to any impact on the tax residency of the company of holding meetings of the company’s Board of Directors by electronic means. Absent any such difficulties and if the Constitution of the company does not prohibit it, the directors may participate in the meeting of the Board of Directors by telephone or video link. There is a requirement under the Act that all persons participating on the meeting of the Board of Directors can hear each other. From a practical perspective, each participating director will typically confirm at the beginning of the meeting of the Board of Directors that he or she can hear, or where applicable, see the other participants. A director participating in the meeting of the Board of Directors in this way will be deemed to be physically present and count towards the quorum of the meeting of the Board of Directors. The participating directors need to be mindful, when dialling in to the meeting of the Board of Directors from outside, of confidentiality and take all appropriate measures to ensure that confidentiality is not compromised in any manner.
What is the deemed location of the virtual board meeting?
In a situation where the directors are attending a board meeting remotely, it will be necessary to determine the location of the meeting of the Board of Directors. In the absence of any specific provisions in the company’s Constitution, board meetings are deemed to take place:
- Where the largest group of directors participating in the meeting of the Board of Directors is assembled;
- If there is no such group, where the Chairperson of the meeting of the Board of Directors is located; and
- If neither (a) nor (b) applies, in such location as the meeting of the Board of Directors itself decides.
It should be noted however that although conducting directors’ meetings electronically is a useful and flexible way in which to convene a meeting of the Board of Directors, careful consideration will need to be given to the deemed location of the meeting of the Board of Directors. The actual location of board meetings is important in determining the tax residency for Irish tax resident companies wishing to maintain this status and for Irish incorporated non-Irish tax resident companies wishing to maintain non-Irish resident status. For further guidance from the Revenue Commissioners, please see here.
Do single-director companies need to hold board meetings?
Under the Act, the director of a single-director company may approve items of business by way of written resolution.
Can the board minutes and written resolutions of the Board of Directors be signed electronically?
Yes, board minutes and written resolutions of the Board of Directors can be signed electronically as opposed to by “wet ink” signature. However, the company’s constitution should be checked to confirm that there is no restriction on this. Similarly, it should be possible for most of the documents to be approved by the Board of Directors to be signed electronically.
Corporate Governance – Contingency Planning for Annual General Meetings (an “AGM”)
The Companies Act 2014 (the “Act”) requires that no more than 15 months elapses between a company’s AGMs and that the company must place its accounts before its shareholders within 9 months of the company’s financial year end. Companies need also be mindful of the expiry of any corporate authorities given at its last AGM as well as any proposal to have the shareholders approve the payment of a final dividend at its upcoming AGM. For these reasons, it is important to ensure that, despite the ongoing COVID-19 restrictions, a company must endeavour to hold its AGM during the period prescribed under the Act.
What can be done if the AGM cannot be convened as planned?
If following the issue of the Notice of the AGM, the AGM will not be able to be convened as planned or any arrangements related to the AGM change, there are limited options available to the company. It may be possible to adjourn the AGM. The AGM must still be opened with the relevant quorum in order to adjourn it. The company must follow the provisions in its Constitution with regard to whether revised notice of the adjourned AGM is required to be given to the members of the company and whether any proxies submitted for the first convened AGM will carry over.
Can proxies be used in order to avoid shareholders attending the physical AGM?
Yes. The company should encourage shareholders to submit their votes in advance of the AGM by proxy to discourage physical attendance at the AGM. Obviously, in the circumstances of COVID-19, the Government’s measures to restrict social contact shall prevail over the shareholders’ rights to participate at the AGM.
The company should ensure that the form of proxy provides for alternative proxy holders and allows any of the designated proxy holders to appoint a substitute. This precaution will mitigate the risk of a proxy holder becoming unavailable at short notice.
Where should the actual AGM or the meeting to adjourn the AGM take place?
The Act requires the AGM notice to specify the location of the AGM. Obviously, the AGM (if being proceeded with) or the meeting to adjourn the AGM should be held at a location where the prescribed social distancing can be observed by the attendees.
Does the actual AGM or the meeting to adjourn the AGM require the usual quorum?
Yes. While the company should endeavour to convene the AGM or the meeting to adjourn the AGM at a physical location with minimum attendance, it must still ensure that the relevant quorum is present in person or by proxy in accordance with its Constitution.
The company should consider whether it is absolutely necessary to have the company’s advisors attend the AGM or whether they can provide their required services remotely. Under the Act, they are not required to attend the AGM.
What specific information should the company give its shareholders about the AGM in the context of COVID-19?
The company should communicate clearly in the Notice of the AGM that attendance at the AGM or the meeting to adjourn the AGM is strongly discouraged and that the company will be complying with all Government restrictions restricting attendance at meetings. The company will be obliged to comply with all legal restrictions that are imposed by the Government during the COXID-19 pandemic.
The Company should also consider issuing a separate communication to the shareholders before the AGM encouraging them to submit their proxy and discouraging them from attending the AGM or the meeting to adjourn the AGM in light of the COVID-19 pandemic.
Being clear in all communications will protect the company against any accusations by a shareholder of the company of unreasonable behaviour on the part of the company if it decides to refuse admission to a shareholder at the AGM or the meeting to adjourn the AGM.
How should communications regarding the AGM be made to the shareholders during COVID-19?
Under the Act, the notice period for convening the company’s AGM is 21 clear days. The company should therefore consider the position with regard to giving notice of its AGM under its Constitution if An Post can no longer deliver the notices and consider alternative means for their delivery to the shareholders.
Can the shareholders participate in the AGM electronically?
Yes, if the company’s Constitution so permits. The company should consider using technology to enable electronic participation at the AGM and the meeting adjourning the AGM but should not rely on this for the purposes of counting the quorum for the AGM or the meeting adjourning the AGM. The Act does not expressly facilitate virtual shareholder meetings. However, a hybrid meeting whereby some shareholders attend in person while others participate using electronic means, is possible. Electronic communication can also be used to deliver information to shareholders where they are not enabled to participate in the AGM electronically. The company should encourage the shareholders to submit questions related to items on the AGM agenda in advance. The company should also consider making the Chairperson’s address to the AGM or a transcript of the AGM available to the shareholders after the meeting.
The COVID-19 pandemic has seen the directors of Irish incorporated companies turn their attention to the corporate insolvency regime in Ireland as they grapple with the economic effects of the COVID-19 pandemic and consider their options in circumstances where their companies may no longer be economically viable.
What alternatives are there to liquidation for companies in financial difficulty as a result of COVID-19?
Examinership
Examinership is a process available to Irish companies in financial difficulties seeking protection from their creditors. If granted, the creditors of the company will be prevented from enforcing any security against the company for a period of seventy (70) days. This period can then be extended for a further thirty (30) days.
A company seeking the court’s protection will have to present a petition to the Circuit Court or the High Court demonstrating that there is a reasonable prospect of survival of the company as a going concern. This option is not available to companies where a receiver has been appointed to the company’s assets for at least three (3) days.
The Circuit Court will have jurisdiction where the company is considered a small company and satisfies two (2) of more of the following requirements:
- the amount of the turnover does not exceed €12 million;
- the balance sheet total of the company does not exceed €6 million; and
- the average number of employees of the company does not exceed 50.
It is important to note that the petition must be accompanied by an independent accountant’s report in order to support the view that the company has a reasonable prospects of survival. This requires early engagement by all parties. A petition can be presented by the company, its directors, creditors or shareholders holding at least 10% of the voting power of the company.
It is crucial to any application for examinership that the company has the financial resources or funding to survive the period of 70-100 days, or less if the scheme can be approved for a shorter period.
Normal employment law considerations apply during examinership. Accordingly, employees’ rights cannot be adjusted unilaterally by the company or the court. It should be noted that the support of key staff and key creditors is very important for this period as the company must continue trading.
During examinership, the examiner will have to prepare a proposal for a compromise or a scheme of arrangement in relation to the company and present same to the members and creditors of the company for approval. The examiner must then report to the court with such proposal. If the examiner is unable to formulate a proposal, the court may order the winding up of the company.
Once the examiner has been appointed, the company is given protection by the court. During this period of court protection, no creditor can enforce its security or judgement, no winding-up proceedings may be commenced and no receiver can be appointed over the assets of the company.
Scheme of Arrangement
A scheme of arrangement is a procedure which allows a company to agree with a company to pay a percentage of its debt within a specified period of time. The scheme of arrangement can be proposed by the directors of the company or on application to the court by any creditor or member of the company.
If there is a threat of proceedings while the meetings in respect of the scheme of arrangement have already taken place, an application can be made to the court to restrain those proceedings.
The scheme of arrangement, if approved by at least three-quarters of the creditors and members at the scheme of arrangement meeting, shall, if sanctioned by the court, become binding.
A scheme of arrangement can also be informal, without any court involvement.
Receivership
Receivership is a formal process where a secured creditor, such as a financial institution, appoints a receiver on foot of a security document, such as a debenture or charge, for the purpose of taking possession and realising of the company’s assets secured by the debenture. A receiver is usually appointed where the company has defaulted in the repayments or where some other event of default has arisen.
The most common receivership occurs when the secured creditor appoints a receiver under the powers granted to it in the security document. However, if no such power is contained in the debenture, the creditor still may apply to the High Court for this remedy.
A receiver can only be appointed over the company’s assets that are charged under the security document. The director’s powers over those assets would cease. However, their normal powers would remain over any other assets. While the receivership does not automatically lead to the dissolution of the company, a liquidator may be appointed to the company in the meantime.
What kinds of liquidation can take place in respect of companies in financial difficulty as a result of COVID-19?
Members’ Voluntary Winding-up
A members’ voluntary winding-up is available to companies that are solvent. In order to dissolve the company, the members will have to pass the special resolution that the company be wound up and the liquidator be appointed. The company must be able to pay its debts within twelve (12) months from the commencement of the winding-up. During the process of the winding-up, the company’s assets will be realised and the creditors’ liabilities will be discharged. The surplus funds will then be available for distribution to the shareholders of the company.
Creditors’ Voluntary Winding-Up
A creditors’ voluntary winding-up is used in circumstances where the company is insolvent. The procedure is usually initiated by the board of directors of the company who will convene a meeting of the shareholders in order to pass a resolution providing that the company, due to its liabilities, cannot continue its business and must be wound up. Once the resolution of the member is passed, the creditors of the company are notified of same and a meeting of the creditors is held in order to appoint a liquidator. The liquidator will be tasked with the function of realising the company’s assets and distributing the proceeds in accordance with legal priorities set out in the Companies Act 2014. The directors’ powers in respect of the company will cease and the liquidator will take over.
Compulsory Winding-Up
Under the Companies Act 2014, the High Court has the power to appoint a liquidator and order the winding up of a company. The parties who may petition the court include creditors, directors or shareholders of the company.
A company may be deemed to be unable to pay its debts if a creditor is owed a sum greater than €10,000 and a demand has been served on the company and has not been met within twenty-one (21) days to the reasonable satisfaction of the creditor.
Where a winding-up order is made, the company will be placed into liquidation and an official liquidator will be appointed. The powers of the directors cease on the appointment of the official liquidator. The process of the liquidation will be similar to the creditors’ voluntary winding-up. The official will realise the company’s assets and distribute the proceeds in accordance with the Companies Act 2014.
What are the effects of a liquidation?
Once the liquidator is appointed, he or she will take over the management of the company. In practice, the company’s business would usually cease unless it is necessary to continue for the beneficial winding-up of the company. The liquidator will be tasked with verifying the liabilities of the company and realising the company’s assets in order to pay the creditors. In cases of members’ voluntary liquidation, the liquidation will distribute the company’s net assets amongst the shareholders. The end effect of the liquidation is the dissolution of the company.
What is the effect of a liquidation on secured creditors?
If there is not sufficient funds to discharge all of the creditors’ liabilities, the liquidator will distribute the available monies in accordance with the order of priorities set out in the Companies Act 2014. A secured creditor will be able to rely on their security in order to recover its debt. The holder of a fixed charge will rank above any other creditor, whereas the holder of a floating charge will be discharged after the liquidator’s fees and expenses are satisfied and any preferential creditors are discharged.
What powers does the liquidator have?
The liquidator’s powers are very broad but their extent will vary in terms of the powers exercisable by a court appointed liquidator and a liquidator appointed by the creditors. A liquidator appointed by the creditors will generally have more freedom in exercising his or her power.
As the liquidator’s role is to wind-up the affairs of the company and dissolve it, he or she will usually have the following powers:
- to dispose of any of the company’s assets;
- to pay the creditors the amounts due to them;
- to execute any necessary documentation on the company’s behalf;
- to bring or defend any action or legal proceedings; and
- to appoint agents such as valuers or solicitors to do any work that the liquidator himself or herself is unable to do.
The COVID-19 pandemic has introduced a host of new cyber security risks for organisations in Ireland.
What actions do organisations need to take to minimise risk from malicious cyber security campaigns targeting remote workers?
Phishing and other cyber-attacks have increased during the COVID-19 pandemic as businesses and organisations deal with the challenges posed. A standard example of a phishing email is where the recipient receives an infected attachment with a fictitious title such as “COVID-19 safety protocols”. Potential cyber security threats of this nature are expected to increase as businesses and organisations adjust to remote working environments.
Companies and organisations should therefore continue to work closely with their internal Information Technology and business continuity teams in order to identify any potential security gaps in the organisation or additional cyber risks that may arise due to their changing work practices.
What particular actions do organisations need to take with respect to their devices to minimise risk from malicious cyber security campaigns targeting remote workers?
The Data Protection Commission has issued guidance on protecting personal data when working remotely. This guidance may be found here . With regard to devices, the guidance states that organisations should:
- take extra care that devices, such as USBs, telephones, laptops or tablets are not lost or misplaced;
- make sure that any device has the necessary updates, such as operating system updates like ios or android and software antivirus updates;
- use effective access controls such as multi-factor authentication and strong passwords and, where available, encryption to restrict access to the device, and to reduce the risk if the device is stolen or misplaced;
- where a device is lost or stolen, take steps immediately to ensure a remote memory wipe, where possible; and
- make sure that devices are turned off, locked or stored carefully when not in use.
What particular actions do organisations need to take with respect to e-mail to minimise risk from malicious cyber security campaigns targeting remote workers?
The Data Protection Commission has issued guidance on protecting personal data when working remotely. This guidance may be found here. With regard to emails, the guidance states that organisations should:
- put in place applicable policies in the organisation around the use of email;
- make sure that work email accounts rather than personal ones for work-related emails involving personal data. If a personal email has to be used, make sure that the content and attachments are encrypted and avoid using personal or confidential data in the subject lines;
- ensure that before an e-mail is sent, it is being sent to the correct recipient, particularly with regard to emails involving personal data and especially sensitive personal data.
The COVID-19 pandemic has introduced a host of new data protection risks for organisations in Ireland.
What are the implications of COVID-19 for the processing of health data?
The European Data Protection Board has adopted a statement on the data protection issues to consider on the processing of personal data during the COVID-19 pandemic. A copy of the statement may be found here. The Irish Data Protection Commission (the “DPC”) has released a guidance note on the data protection issues to consider on the processing of personal data during the COVID-19 pandemic. A copy of the guidance note may be found here.
The key themes in the statement and the guidance note are that the data protection laws do not stand in the way of an effective response to COVID-19 but that data controllers should still be mindful of their data protection statutory obligations. In particular, organisations should have regard to the following obligations:
Lawfulness
Organisations must have an appropriate lawful basis for processing special category personal data such as personal medical data under the General Data Protection Regulation (the “GDPR”). There are a number of legal bases for the processing of personal data under Article 6 of the GDPR, and conditions permitting the processing of special categories of personal data, such as personal health data under Article 9 of the GDPR that may be applicable in this context.
In circumstances where an organisation is acting on the guidance or directions of public health authorities or other relevant authorities, it is likely that Article 9(2)(i) of the GDPR and section 53 of the Data Protection Act 2018 will permit the processing of personal data, including personal health data, once suitable safeguards are implemented. Such safeguards may include limitation on access to the personal data, strict time limits for erasure and other measures such as adequate staff training to protect the data protection rights of data subjects.
Transparency
The organisation’s employees or other data subjects must be fully informed and aware of any such data processing activities carried out on their special category personal data. Organisations processing personal data must be transparent regarding the measures that they implement, including the purpose of collecting the personal data and for how long the personal data will be retained. The organisation must provide the data subjects with information regarding the processing of their personal data in a format which is concise, easily accessible, easy to understand and in clear and plain language.
Confidentiality
Any personal data processing in the context of preventing spread of COVID-19 must be carried out in a manner that ensures security of the personal data, in particular where health data is involved. The identity of affected individuals should not be disclosed to any third parties or to their colleagues
What precautions need to be taken in order to minimise data protection breaches during COVID-19?
Personnel who are working remotely during the COVID-19 pandemic will largely be doing so on company-issued devices, such as work phones, laptops, computers and printers. This can lead to an increased risk of those devices being lost, misplaced or stolen. It is important to avoid a situation where sensitive personal data accidentally ends up in the hands of third parties.
The COVID-19 pandemic presents two separate challenges in relation to personal data breaches. The first is that the changing working environments may increase the likelihood of personal data breaches occurring. The second challenge is that the team who would normally deal with the response to a personal data breach may not be readily accessible or may not have prepared to manage a large personal data breach remotely.
Organisations should therefore ensure that all mobile devices are properly encrypted and can be wiped remotely in the event that the device becomes lost, mislaid or stolen. These measures, which lower the risk of inadvertent disclosure of personal data, may help organisations avoid notifiable personal data breaches.
Organisations should update their personal data breach response plans to anticipate any new challenges that may be caused by more of their employees working via remote access. Organisations should also remind their employees of their data protection obligations and of what organisation policies apply. It is also vitally important that all employees are clear on who they should contact if they believe that there has been a personal data breach with regard to one of their work devices.
How should organisations deal with Data Subject Right Requests during COVID-19?
Data subject right requests will continue to arrive in organisations during the period of the COVID-19 pandemic. The DPC has issued a guidance note on this point which may be found here.
The timelines for responding to a data subject right request are set down in the GDPR and cannot be voluntarily waived. However, the prevailing working conditions are likely, in most cases at least, to be a valid justification for seeking an extension in the deadline to respond to the data subject right request under Article 12(3) of the GDPR. The guidance note provides that:
- where a response to a data subject access request may be delayed, open and proactive communication with the data subject is important;
- the organisation should consider responding to the data subject access request in phases, so that for example electronic files might be provided initially with hard copies to follow when personnel have better access to their offices;
- where a deadline is missed, and a complaint is made to the DPC, the facts of each case including any organisation specific extenuating circumstances will be fully taken into account; and
- if an organisation thinks that it will miss a deadline for responding to a data subject right request, the organisation should record the facts that have impacted on that failure, as it may need to explain how the COVID-19 pandemic impacted upon its ability to respond.
Redundancy – a high level guide
Some commentators are predicting that a deep, prolonged recession will follow the current public health emergency and it follows that employers may in the weeks and months ahead need to consider redundancies as part of business survival strategy. Employers should be mindful that the Covid-19 emergency is not a licence to dispense with the applicable legal procedural standards, summarised at high level below.
What are the applicable obligations?
Where redundancies short of the threshold requiring collective consultation (see below) are to be implemented, the employer’s obligations, in summary, are:
- to consult as far as can reasonably be done about what is happening, the underlying business rationale, how redundancy might be avoided and, if applicable, about the objective selection criteria that will determine whose roles are to be retained in the business;
- to make statutory redundancy payments to eligible employees; and
- to observe employees’ notice and annual leave entitlements.
Notwithstanding the urgency for some employers, care should, as always, be taken to use formal notices/letters and as far as possible to accommodate meetings or calls to consult with those affected.
An employer would be expected to look at redundancy as a matter of last resort and to have considered alternative, less drastic measures, including lay-off and short-time or use of the Temporary Wage Subsidy Scheme, before proceeding to implement redundancies.
For redundancies at Board level, the employer should take careful account of applicable corporate constitutional requirements before proceeding.
A good redundancy is a fair dismissal
The economic emergency does not displace existing employment legal principles about fair procedures in a redundancy context.
A botched redundancy, if challenged, may be determined to be an unfair dismissal, with a consequential award of up to two years’ remuneration by the Workplace Relations Commission. A true redundancy which is fairly implemented cannot also be an unfair dismissal.
To be prepared to justify a dismissal on grounds of redundancy, an employer must be able to show that (i) a genuine redundancy situation existed; and (ii) the redundancy was fairly implemented. An employer who neglects to manage a redundancy situation appropriately, or who opts to use Covid-19 as a cloak for a dismissal motivated by a personal or performance issue, may find itself exposed to claims under Unfair Dismissal legislation, which involve significant legal exposure as outlined above.
Genuine Redundancy
Broadly speaking, a redundancy, as defined in applicable legislation, arises where (i) an employee’s role ceases to be required due to business change or is proposed to be carried on in a restructured manner for which the employee is not equipped; or (ii) where the employer requires fewer employees due to business change.
Due Process and fair selection
A redundancy should not be presented as a predetermined outcome and the employee whose role is at risk should have an opportunity to influence the employer’s thinking by making representations about the redundancy proposal. There is no “one size fits all” timeframe for this recommended consultation exercise. Best practice would dictate that alternatives to redundancy including temporary lay-off, reduced hours and/or redeployment be considered. Increasingly employers can expect the business case for redundancy (and the decision-making process) to be probed and stress-tested by employees whose roles are at risk.
For employers who are reducing headcount and selecting between employees performing interchangeable or comparable roles, it is essential that objective, skills-based or experience-based criteria drive the selection process. Employers should be aware that in the aftermath of the financial crash, the (then) Employment Appeals Tribunal was particularly vigilant for the use of the economic crisis as a cloak or smokescreen for ‘disguised dismissals’ or ‘sham’ redundancies. A robust redundancy exercise will involve careful mapping or pooling of employees against retained roles, by reference to their skills, qualification and experience. Prudent employers will be mindful as ever about the nine protected classes under employment equality legislation and the need to avoid direct or indirect discrimination on any of those grounds in the design or implementation of a redundancy scheme.
Redundancy Payments:
An employee with 104 weeks’ or more continuous service is entitled to be paid a tax-free lump sum calculated based on length of service. The statutory lump sum entitlement is two weeks’ pay per year of service plus a ‘bonus’ week, but weekly earnings over €600 are disregarded in the statutory calculation.
There is no obligation to top up or enhance the statutory lump sum unless there is an express contractual commitment to do so or an established custom and practice. Enhanced or discretionary redundancy payments are normally made conditional on the employee’s acceptance of same in ‘full and final settlement’ of employment, which involves execution of a waiver and release of claims. Employees asked to sign a waiver should be encouraged to take independent legal advice.
Collective Redundancies:
A collective engagement process is mandatory where the number of redundancies proposed to take effect in an establishment over any rolling 30 days is:
- 5 employees (where 21-49 are employed);
- 10 employees (where 50-99 are employed);
- 10% of the employees (where 100-299 are employed); or
- 30 employees (where 300 or more are employed).
Collective consultation, where triggered, must take place through elected employee representatives, or, for employers whose practice it is to negotiate with Trade Unions, through existing Trade Union representatives. A statutory standstill period of 30 days, during which no redundancy can be confirmed, applies. Consultation must cover prescribed issues including the business case for redundancies and potential ways to avoid redundancy. An employer is obligated to commence collective consultation ‘at the earliest opportunity’ after an employer forms a proposal to implement a Collective Redundancy.
Separately, the employer is required to notify the Minister for Employment Affairs and Social Protection (the “Minister”) about the proposed collective redundancy no later than 30 days prior to the first redundancy taking effect.
Failure to observe the applicable collective consultation obligations can lead to claims by or on behalf of employees, in respect of which the exposure is up to four weeks’ pay per employee, or a fine of up to €250,000 where any redundancy is effected during the 30-day standstill period after the Minister is notified.
Please contact louiseharrison@fod.ie , alanodriscoll@fod.ie or your usual FOD contact for support. The foregoing is intended to be consulted for guidance only and does not constitute legal advice for any individual scenario.
Some Key Issues
The public health emergency has been evolving, Government guidelines and support schemes have changed and the details continue to evolve.
Ireland is presently under lockdown which will continue until May 5 (at the earliest) and people have been asked to stay at home, except in limited defined circumstances. Only individuals engaged in essential work are permitted to travel to the workplace, provided their work cannot be done remotely.
Employers should be aware that their occupational safety, health and welfare at work obligations have not been displaced by enforced working from home. Employers should provide practical support to ensure that remote-working employees have the capability to work safely and securely and to encourage rest breaks. There should be a recognition that the burden of working from home is not equal for all employees.
Where working from home is not feasible e.g. due to the nature of the business, and the business is one which is considered an essential service, employers are advised to take account of public health guidelines and to implement safety measures and policies to mitigate risk.
Certain businesses not involved in essential services may be unable to cater (or fully cater) for working from home and in such cases, the employer may need to resort to the statutory wage subsidy scheme to maintain employment, or to others measures such as lay-off, short-time and/or pay cuts (see below).
Self-Isolation/Illness
Self-isolation does not render an employee unfit for work, since it is a precautionary measure. If an employee is unwilling (as distinct from unable) to work, there is no entitlement to be paid.
Normal principles apply for employees who are sick, save that extra precaution about return to work is advisable for any confirmed case of Covid-19 or Covid-19 exposure, due to the highly communicable nature of the virus.
Irish law does not require an employer to continue to pay employees unable to work on grounds of illness. Many employers do however operate paid sick leave schemes and the Covid-19 crisis of itself has no bearing on the internal contractual limits and eligibility rules imposed by an employer in relation to its own sick pay arrangements.
Employee Pay
For businesses who continue to trade
An employee working from home should be paid in the normal way. The gravity of the economic impact, however, means that many employers are looking to temporary pay-cuts as a means to address cost base and to preserve employment longer-term. The strict legal position is that unilateral pay cuts are not compatible with Irish employment law. Even a general contractual provision permitting pay cuts may not necessarily from a legal perspective legitimise such a measure. The ideal, legally speaking, is that any pay cut would be preceded by workplace consultation and, ultimately, consent. The consent model is unrealistic from a timing and an industrial relations point of view for many employers. For many businesses, a temporary pay cut will serve (and should be presented) as a measure to avoid more draconian outcomes and the more an employer can be transparent about the impact of the economic crisis on its liquidity, the better any measures are likely to be received. Communication is key.
The Temporary Wage Subsidy Scheme (see below) may be available as an alternative to, or in parallel with, pay cuts for employers who continue to operate.
What about cases where the employer is unable to provide work, or where working from home is not possible?
The Irish Government has implemented a Temporary Wage Subsidy Scheme (“TWSS”), which is to operate initially for 12 weeks from 26 March 2020. The purpose of the TWSS is to support employers who keep employees on the payroll during the pandemic, in order that employers can retain links with employees to assist with resumption of business beyond the crisis. Participating employers are expected (but not obligated) to top-up the applicable subsidy and ‘best efforts’ should be made to maintain pay at a rate as close to 100% as possible. The key conditions to entry to the TWSS are that the employer is suffering a significant adverse impact on turnover (minimum 25% decline) and is unable to fully meet its payroll obligations but has a firm intention to maintain employment beyond the crisis. Employees who had been laid off prior to introduction of the TWSS can be brought back on payroll to participate in it.
The TWSS subsidy rate is 70% of an employee’s normal pay, capped at €350 or €410 weekly, depending on what salary band an employee falls into. Employees whose annual pay exceeds €76k are excluded. This is presenting difficulties for employers who are finding that some of their most experienced, skilled and valued talent is unsupported by the scheme.
Unsurprisingly, given the extraordinary time pressure under which it was designed and legislated for, the TWSS is throwing up some operational anomalies and complexities and employers should continue to monitor for updates to Irish Revenue Commissioners’ existing guidance.
Lay-off and Short-time
Employers may need to turn to the ‘traditional’ measures of lay-off and short-time in certain circumstances. There is no ‘right’ to put employees on unpaid lay off (or reduced hours, or “short time” which by definition is where hours are cut by more than 50%) where the contract of employment makes no provision for it. The technical position is that absent a clause in the contract of employment, or a well-established custom and practice, employees need to consent to unpaid lay off, short time or to reduced hours. The primary risk created by unilaterally imposing lay off or short time is that employees may pursue ‘unlawful deductions’ claims under Payment of Wages legislation.
For many employers the consent model will not be feasible. Short of seeking and obtaining consent, the optimal approach is to introduce (and consult as far as possible on) lay off (or short time) as an alternative to redundancy. We recommend use of acknowledgement slips (or voting buttons, where employees are working from home) to record acceptance of measures.
Employers should be mindful that lay off (or short time) is by definition temporary in nature. It is appropriate only where the employer believes there is a prospect of resumption of business in a period of weeks or a short few months. Redundancy legislation provides that where lay off (or short time) continues for four consecutive weeks, or for an aggregate six weeks in any consecutive 13, an employee can serve notice declaring himself redundant (with the consequential entitlements). The employer then has seven days to serve a counter notice promising that work (for at least 13 weeks) will be available within four weeks. This mechanism in the Redundancy Payments Acts has, however, been suspended for the time being by the Emergency Measures in the Public Interest COVID-19 Act 2020, in relation to lay off and short time measures taken as a result of the Covid-19 Government restrictions.
Statutory Benefits
Covid-19 Unemployment Benefit
Employees who have been laid off without pay are able to access the COVID-19 Pandemic Unemployment Payment, which is payable at the rate of €350 per week. This payment is also available to the self-employed.
Covid-19 Short-time Support
Employees who usually work full-time and whose hours are reduced to a three-day (or shorter) week are eligible for ‘short-time support’ benefit by way of top up of their reduced pay. The individual benefit rate depends on social insurance contributions and an employee’s normal rate of pay during the reference year. Note that the short-time benefit eligibility threshold specific to the Covid-19 crisis is lower than the threshold for ‘short-time’ as defined in redundancy legislation. Short time under redundancy legislation (which normally can allow an employee declare their role redundant if the revised arrangement persists – see below) involves working for fewer than half of an employee’s normal hours.
Illness Benefit for those affected by COVID-19?
Employees diagnosed with Covid-19 are eligible for enhanced weekly illness benefit payment at the rate of €350 and the benefit is payable immediately (i.e. without the need to wait out six days of incapacity, as would normally be the case).
‘Forced’ annual leave
The severity of the crisis is forcing many employers to look at compulsory annual leave as a means to address cost base. Under applicable legislation, an employer can determine when employees take annual leave, provided account is taken of the employee’s family responsibilities, opportunities for rest and recreation and subject to consultation at least one month in advance. The provision in working time legislation is not geared towards unilateral imposition of annual leave by an employer and once again communication is key.
How to maintain fairness?
The emergency does not give licence to be opportunistic or to discriminate and has not displaced existing employment legal principles. Employers should take care to ensure that lay-off, short time and any other measures (including any ultimate redundancies) are implemented in a neutral way based on business needs. Employers should be cognisant of the need to avoid direct or indirect discrimination on any of the nine grounds prescribed under Irish employment equality legislation, where any measures are being imposed selectively.
Many businesses have employees whose capacity to work within business hours is compromised by the need to take care of their children. Prudent employers will anticipate this issue and confront it head-on by checking in and maintaining a dialogue with staff who have this added pressure and by demonstrating flexibility about expectations for work output and timing.
FAQs – Government Supports
As the impact of the COVID-19 pandemic unfolds, there are a number of Government Supports that have been introduced to assist businesses and we have set out below frequently asked questions in relation to them, in the following areas:
- Employment Supports;
- Business Continuity Supports; and
- Nursing Home Supports.
Employment Government Supports
What sick leave entitlements has the Government introduced where an employee is ill due to COVID-19?
The Government has introduced certain sick leave measures to support employees who are on sick leave as a result of COVID-19.
Where an employee is told to self-isolate by a doctor or the Health Services Executive (the “HSE”) or has been diagnosed with COVID-19 by a doctor, he/she can apply for an Illness Benefit payment of €350 per week.
How to qualify
To be eligible for this payment, the employee must be:
- self-isolating on the instruction of a doctor or the HSE or diagnosed with COVID-19; and
- be absent from work and confined to his/her home or a medical facility.
Length of payment
The payment will be paid for a maximum of:
- two (2) weeks where an employee is self-isolating; and
- (10) weeks if the employee has been diagnosed with COVID-19.
If the employee has been certified for less than ten (10) weeks, he/she will be paid for the duration of his/her certificate.
How to apply
- If the employee is diagnosed with COVID-19 or advised to self-isolate by a doctor, the doctor will complete a medical certificate on the employee’s behalf and send this directly to the Department of Employment Affairs and Social Protection. To complete the medical certification, the employee’s doctor will ask the employee for his/her name, PPSN number and date of birth.
- Alternatively, if the employee has been advised by the HSE that he/she must self-isolate (e.g due to contact tracing), the employee will receive a text or a letter from the HSE. The employee will need to submit a copy of this notification with his/her Illness Benefit application form.
- If the employee is returning from travel abroad and following HSE self-isolation advice and is not being paid by his/her employer, the employee will require his/her GP to complete a medical certificate on his/her behalf.
What entitlements has the Government introduced where an employee is laid-off or short-timed during COVID-19?
Employees who are laid-off temporarily, without pay, due to a reduction in business activity, can apply for a Jobseeker’s Payment. Employees who are put onto short-time working be their employer due to a reduction in business activity related to COVID-19 may apply for a Short-Time Work Support. Employees should be directed to these supports here.
What Short-Time Work Support is
Short-Time Work Support is a form of Jobseeker’s Benefit and is an income support payment if an employee has been temporarily placed on a shorter working week. The payment is made in respect of the employee’s regular salary for the days that he/she is no longer working. For example, if the employee’s working week has been reduced from a five (5) day work pattern to a three (3) day work pattern, the employee can receive support for the other two (2) days. Short Term Work Support is paid for a maximum of 234 days. The employee’s entitlement will depend on the number of social insurance contributions he/she has. To qualify for Short-Time Work Support, the employee must satisfy the two main PRSI conditions for Jobseeker’s Benefit. Employees must work three (3) days per week or less to qualify, having previously been employed on a full time basis.
To qualify for Short-Time Work Support, an employee must be:
- temporarily working a standard reduced weekly work pattern;
- working three (3) days or less per week having previously worked full-time;
- be under 66 years of age;
- be capable of work and available for full-time work;
- have enough paid or credited social insurance (PRSI) contributions at Class A, H, S or P.
What wage subsidy schemes has the Government introduced to deal with COVID-19?
A Temporary COVID-19 Wage Subsidy Scheme (the “TWSS”) was introduced on 24 March 2020. The TWSS is established to replace the earlier Employer Refund Scheme. The TWSS is expected to last for twelve (12) weeks.
The operation of the TWSS will be available to employers who keep their employees on their payroll throughout the COVID-19 pandemic. Employers are being encouraged to facilitate employees by operating the TWSS by retaining the employees on their books and making best efforts to maintain a significant income for the period of the TWSS.
Key Features of the TWSS
- A refund to employers per each qualifying employee per week, capped at the lower of the employee’s actual take home pay or €410, whichever is the lesser.
- Employers should pay no more than the employee’s normal take home pay.
- The TWSS applies to employers that “top-up” their employees’ wages and those that are not in a position to do so.
- Payment is made through the normal payroll process.
- Reimbursement is made to the employer by the Revenue Commissioners and should, in general, be made within two (2) working days.
- Neither income tax nor Universal Social Charge will apply to the subsidy payment.
- Employees’ Pay Related Social Insurance (“PRSI”) will not apply to the subsidy or any top-up.
- Employers’ PRSI will not apply to the subsidy payment and will be reduced to 0.5% on any top up payment.
- The subsidy amount is not to be regarded as “emoluments” of the employees for the purposes of operating payroll on it but will be treated as income chargeable to tax and will form part of the gross pay of the specified employee for the purposes of the Taxes Acts.
The Subsidy Payment
Employees with net pay less than €500 per week
- For those employees with previous average net pay less than €412 per week (equivalent to almost €24,400), the subsidy will be 85% of their previous net weekly pay;
- For those employees with previous average net pay between €412 and €500 per week (equivalent to €24,400- €31,000), the subsidy will be up to €350 per week;
- In addition, where an employer wishes to pay a greater level of top-up beyond the outstanding 15% of previous pay (in respect of employees with net pay less than €412 per week) in order to bring the employee’s pay to €350 per week, then tapering will not be applied to the subsidy.
Employees whose previous net pay was between €500 and €586 per week (equivalent to €31,000- €38,000 per annum)
- For those employees with previous average net pay was between €500 and €586 per week (equivalent to €31,000- €38,000), the subsidy will be 70% of their previous net weekly pay, up to a maximum of €410 per week.
Employees with net pay in excess of €586 per week (equivalent to €38,000 per annum)
- For those employees with previous net pay of €586 per week (equivalent to €38,000), a tiered approach will apply;
- The maximum subsidy payable for these shall be €350 per week;
- The tiered approach takes into account both the amount paid by the employer and the level or reduction in pay borne by that employee as follows:
Gross Amount paid by Employer |
Subsidy |
Up to 60% of employee’s previous average net weekly pay |
Up to €350 per week |
Between 60% and 80% of employee’s previous average net weekly pay |
Up to €205 per week |
Over 80% of employee’s previous average net weekly pay |
No subsidy payable |
- Tapering of the subsidy will apply to all cases where the gross pay paid by the employer and the subsidy exceed the previous average net weekly pay. This is calculated by subtracting the amount paid by the employer from the previous average net weekly pay. This is to ensure that no employee would be better off under the scheme;
- The scheme is now available to support employees where the average net pre-COVID salary was greater than €76,000, and their gross post-COVID salary has fallen below €76,000. The tiered arrangement applicable to gross incomes in excess of €38,000 will apply in such circumstances. Therefore, if an employee was earning over €76,000 gross and has now been reduced to below €960 net pay per week, and their reduction is more than 20%, then a subsidy of up to €205 would be payable, and if the reduction was more than 40%, a subsidy of up to €350 would be payable. To calculate the level of subsidy payable, current gross pay will be compared with previous average net weekly pay for January and February 2020. This subsidy will be tapered so as to ensure that the total net income (employer contribution and wage subsidy) does not exceed €960 net per week.
Who does the TWSS apply to?
The TWSS is available to all employers, excluding public service and non-commercial semi-state bodies, whose business activities are being adversely impacted by the COVID-19 pandemic. The TWSS is available for employers who retain staff on payroll, provided that the conditions set out below are satisfied and subject to the levels of pay to the employees.
Conditions to qualify
- The employer must experience significant negative economic disruption due to COVID-19;
- The employer must be able to demonstrate, to the satisfaction of the Revenue Commissioners, a minimum of a 25% decline in turnover or customer orders received by the employer in the period from 14 March 2020 to 30 June 2020;
- The employer must be unable to pay normal wages and normal outgoings fully;
- The employer must retain its employees on the payroll with the firm intention of continuing to employ the employee during the period starting on 26 March 2020.
The Subsidy Scheme is therefore open to employers who self-declare to the Revenue Commissioners that they have experienced significant negative economic disruption due to the COVID-19 pandemic. They should be able to show that they meet the criteria in the Revenue Commissioners’ Guidance.
Business Government Supports
What specific supports has the Government introduced for early stage businesses to deal with COVID-19?
The Government has acted to mitigate the impact of the likely slowdown in funding for early stage companies in Ireland. It has announced a range of supports for business, many of which are administered through the Department of Business, Enterprise and Innovation (the “Department”) and Enterprise Ireland.
€450 million Strategic Banking Corporation of Ireland (the “SBCI”) Working Capital Scheme (the “Working Capital Scheme”)
The Working Capital Scheme is for eligible businesses impacted by the COVID-19 pandemic. Loans of up to €1.5 million will be available at reduced rates, with up to the first €500,000 unsecured.
The Working Capital Scheme is offered by the SBCI in partnership with the Department and the Department of Agriculture, Food and the Marine and is supported by the InnovFin SME Guarantee Facility, with the financial backing of the European Union under Horizon 2020 Financial Instruments.
The loans will be available through AIB, Bank of Ireland and Ulster Bank (together the “Banks”). Approval of loans is subject to the Banks’ credit policies and procedures. Businesses cannot complete a loan application until they have received their eligibility letter from the SBCI.
What are the principal features of the loans under the Working Capital Scheme?
- Loan amounts of between €25,000 to €1.5 million per eligible enterprise;
- Maximum interest rate of 4%;
- Loan terms ranging from one (1) year to three (3) years;
- Loans unsecured up to €500,000;
- Optional interest-only repayments may be available at the start of the loans;
- The loan amount and term is dependent on the loan purpose.
For what purposes may the loans under the Working Capital Scheme be used?
- Future working capital requirements of the business;
- To fund innovation, change or adaptation of the business to mitigate the impact of COVID.
For what purposes may the loans under the Working Capital Scheme not be used?
- Refinancing of undertakings in financial difficulties;
- Refinancing of existing debt, such as term loans, leases or hire purchase agreements.
What business may apply for loans under the Working Capital Scheme?
Viable micro, small, medium sized enterprises and small MidCap businesses meeting criteria.
€200 million SBCI Future Growth Loan Scheme (the “Future Growth Loan Scheme”)
An additional €200 million will be released in the Future Growth Loan Scheme in tranches, to provide longer-term loans to COVID-19 impacted businesses. Loan amounts will range from €100,000 to a maximum of €3 million per applicant. Loan terms range from eight (8) to ten (10) years and loans of up to €500,000 can be unsecured.
The Future Growth Loan Scheme is offered by the SBCI, with the support of the Department, the Department of Agriculture, Food and the Marine, the European Investment Bank and the European Investment Fund. The Future Growth Loan Scheme benefits from a guarantee from the European Union under the European Fund for Strategic Investments. The loans will be available through the Banks and KBC.
What are the principal features of the loans under the Future Growth Loan Scheme?
- Loan amounts of between €100,000 to €3 million per eligible enterprise;
- Initial maximum interest rate of 4.5% for loans below €250,000 and 3.5% for loans exceeding €250,000. Variable interest rates are subject to change;
- Loan terms ranging from eight (8) year to ten (10) years;
- Loans unsecured up to €500,000;
- Optional interest-only repayments may be available in certain circumstances.
For what purposes may the loans under the Future Growth Loan Scheme be used?
- Investment for plant or machinery for the business;
- Investment in research and development in the business;
- Investment in business expansion in the business;
- Investment in premises improvement in the business;
- Investment in process innovation in the business;
- Investment in people and/or systems in the business.
For what purposes may the loans under the Future Growth Loan Scheme not be used?
- Financing of specific export operations or finance contingent upon the use of domestic over imported products. In particular, it should not apply to financing the establishment and operation of a distribution network in other States, or current expenditure linked to the export activity;
- Financing of pure real estate development activity;
- Financing of activities constituting pure financial transactions such as the purchase of shares;
- Loans to undertakings in difficulty;
- Financing of activities prohibited by national or European Union law;
- Primary agriculture;
- Refinancing to reschedule an existing loan or complete a project.
What business may apply for loans under the Future Growth Loan Scheme?
An applicant is a small or medium sized enterprise (an “SME”) or small MidCap that applies for a loan under the Future Growth Loan Scheme. Applicant for loans greater than €250,000 must submit a business plan to the relevant financial institution.
€180 million COVID-19 Sustaining Enterprise Fund (the “Sustaining Enterprise Fund”)
The Sustaining Enterprise Fund is administered by Enterprise Ireland, providing up to €800,000 in repayable liquidity support for companies affected by the COVID-19 pandemic. The Sustaining Enterprise Fund will be available to companies who are unable to access adequate funding from the market, financial institutions or the SBCI.
The purpose of the Sustaining Enterprise Fund is to sustain companies that have been impacted by a 15% or greater reduction in actual or projected turnover or profit, and/or have a significant increase in costs as a result of the COVID-19 pandemic.
What are the objectives of the Sustaining Enterprise Fund?
- Ensure that eligible companies have access to necessary liquidity in the short-term; and
- Sustain the business so that the company can return to viability and contribute to the recovery of the Irish economy.
What are the criteria to be an eligible company for the Sustaining Enterprise Fund?
- Employ ten (10) or more full-time employees;
- Operating in the manufacturing and internationally traded services sectors;
- For SMEs, have applied for funding from a financial institution, including, where appropriate, through the Working Capital Scheme and/or the Future Growth Loan Scheme;
- For large companies, have applied for funding with an appropriate financial institution.
How much can a company avail of under the Sustaining Enterprise Fund?
Businesses qualifying under the Sustaining Enterprise Fund will be offered a repayable advance of up to €800,000.
What must a company provide in order to avail of the Sustaining Enterprise Fund?
The Sustaining Enterprise Fund will be used to support the implementation of a business sustainment plan which must be provided by the company, outlining the eventual stabilisation of the business of the company and a return to viability. The COVID-19 Business Financial Planning Grant will help companies to develop their business sustainment plans. The business sustainment plan should set out, if implemented, that it can lead to a stabilisation of the business and a return to viability.
What are the principal features of the funding under the Sustaining Enterprise Fund?
- Repayable funding of up to €800,000 available;
- Funding to be repaid, subject to the project objectives being achieved;
- An annual administration fee of 4%.
How is the funding under the Sustaining Enterprise Fund to be repaid by the company?
- A three (3) year grace period;
- Repayment by the end of Year 5 on successful achievement of the project objective.
€5,000 COVID-19 Business Financial Planning Grant (the “Business Financial Planning Grant”)
The Business Financial Planning Grant is to help companies to develop a business sustainment plan. The Business Financial Planning Grant will support companies with 100% funding to engage the services of an approved financial consultant to develop the business sustainment plan for use when applying for bank or investor funding and when developing their own medium-term financial strategy. Enterprise Ireland will work with such companies on a one-to-one basis to support the implementation of the business sustainment plan.
What is the purpose of the Business Sustainment Plan?
- To help the company to understand its immediate financial position, secure the finance it requires to survive and provide a framework to sustain the business of the company;
- To ensure that the company has a framework to identify and manage its costs and gaps in funding.
What are the principal features of the funding under the Business Financial Planning Grant?
- 100% funding of up to €5,000 to access an approved financial consultant;
- Open to all Enterprise Ireland clients and companies employing ten (10) or more in the manufacturing and internationally traded service sectors;
- Online application.
€2,500 Lean Business Continuity Voucher (the “Lean Business Continuity Voucher”)
The Lean Business Continuity Voucher provides funding for a training project of up to three (3) days carried out by an approved external advisor or trainer directly with an eligible company.
The services may be in the form of management advice or the training of management or staff within the company or a combination of both.
It is expected that this support would be delivered online in most cases.
The service provided should focus on the operations of the company in terms of:
- Crisis response where appropriate;
- Sustaining operations including process re-engineering such as Lean;
- Planning for resilience post the COVID-19 pandemic.
Who is eligible to avail of the Lean Business Continuity Voucher?
The Lean Business Continuity Voucher is open to small, medium or large client companies of Enterprise Ireland or Udaras na Gaeltachta, including high potential start-ups. There will be a limit of one voucher per company in general, although Enterprise Ireland may offer further vouchers where a company has more than one distinct operation (to a maximum of three (3)).
IDA Ireland supported companies should refer to IDA for relevant business continuity supports.
€2 million COVID-19 Online Retail Scheme (the “Online Retail Scheme”)
The Online Retail Scheme provides a grant for retail companies with greater than ten (10) employees to develop a more competitive online offering. The Online Retail Scheme has a budget of €2 million. Successful applicants will receive funding support of up to 80% of project costs, with a maximum grant of €40,000.
The Online Retail Scheme will be administered by Enterprise Ireland on behalf of the Department.
Applications for funding will be invited through a public call for submission of projects.
What is the purpose of the Online Retail Scheme?
The purpose of the Online Retail Scheme is to enable Irish-owned retailers to enhance their digital capability and to develop a more competitive online offering, that will enable an increase in their customer base and build a more resilient business in the domestic and global market place both online and offline. Typical elements involved in developing a sophisticated and transactional online presence include research, consultancy costs for strategy development, implementation and training.
Who can apply for the Online Retail Scheme?
The applicant must be an Irish-owned retail enterprise that has ten (10) or more employees on or before 29 February 2020 and has the potential to sustain or create jobs, generate growth in online transactions and with an ambition to internationalise their business in the future. An application must be submitted in the name of a company registered with the Companies Registration Office and incorporated in Ireland at the time of the application. The business must also:
- Have an existing online presence, such as a website or social media;
- Have a retail outlet(s) and derive the majority of its revenue from the retail outlet(s);
- Have employed at least ten (10) employees in Ireland on a full-time equivalent basis on or before 29 February 2020.
Previous applicants of the Online Retail Scheme who were unsuccessful will be eligible to re-apply with a modified proposal under this Online Retail Scheme. Successful applicants in previous calls are eligible to re-apply under the Online Retail Scheme, once they have fully completed the project funded, fully claimed all eligible costs and propose a clearly different project to that undertaken under previous calls.
Who is not eligible for the Online Retail Scheme?
- Applications which do not propose common expenditure on the project of a minimum of €12,500 will be considered ineligible;
- Franchisees of retailers for whom the franchisor provides material online support;
- Projects which do not propose significant additional functionality to the online presence of the applicant company will be considered ineligible;
- Applicants who were approved for any other state or European Union funding for the project for which they are seeking funding;
- Companies active in the primary production of agricultural products or fisheries.
€200 million Package for Enterprise Supports including a Rescue and Restructuring Scheme (the “Package for Enterprise Supports”)
The Package for Enterprise Supports is available through Enterprise Ireland for vulnerable but viable firms that need to restructure or transform their business.
Micro Finance Ireland COVID-19 Business Loan
The maximum loan from Micro Finance Ireland will be increased from €25,000 to €50,000 as an immediate measure to specifically deal with exceptional circumstances that micro-enterprises, such as sole traders and firms with up to ten (10) employees, are facing.
If a business is impacted or may be impacted by the COVID-19 pandemic resulting in a reduction of 15% or more in actual or projected turnover or profit, and the business is having difficulty in accessing finance from commercial lending providers, the Micro Finance Ireland COVID-19 Business Loan may be able to help the business.
In addition, Local Enterprise Offices in every county provide a range of business supports for micro-enterprises including business continuity and preparedness advisory supports connected with the COVID-19 pandemic.
What are the product features of the Micro Finance Ireland COVID-19 Business Loan?
- Loans from €5,000 to €50,000;
- Supports businesses that have been impacted negatively by the COVID-19 pandemic in Ireland;
- Loan terms typically up to three (3) years;
- First six (6) months, 0% interest and no repayments;
- Reduced interest rate of 4.5% APR for Local Enterprise Office applications and 5.5% APR for direct applications;
- No fees or hidden charges;
- Fixed repayments and no penalty for early repayment of the loan.
Who is eligible to apply for the Micro Finance Ireland COVID-19 Business Loan?
- business, such as a sole trader, partnership or limited company, with fewer than ten (10) full time employees and annual turnover of up to €2 million;
- Not in a position to avail of finance from banks and other commercial lending providers;
- At least 15% of actual or projected turnover or profit is negatively impacted by the COVID-19 pandemic.
SME Credit Guarantee Scheme for COVID-19 (the “Credit Guarantee Scheme”)
The Credit Guarantee Scheme is available to COVID-19 impacted firms through the pillar banks.
What is the purpose of the Credit Guarantee Scheme?
The purpose of the Credit Guarantee Scheme is to encourage additional lending to SMEs by offering a partial Government guarantee of 80% to banks against losses on qualifying loans.
What are the key features of the Credit Guarantee Scheme?
- Facilities from €10,000 up to €1 million;
- Terms of up to seven (7) years; and
- Term loans, demand loans and performance bonds.
How does a company apply for the Credit Guarantee Scheme?
Businesses seeking to avail of the Credit Guarantee Scheme can approach a participating lender. Participating lenders will make all decisions on lending. Currently, each of the Banks are is participating in the Credit Guarantee Scheme. The Department plays no role in the application or decision process, which is fully delegated to the relevant Bank.
Refinancing of existing debt is excluded as the purpose of the Credit Guarantee Scheme is to facilitate additional lending. However, in cases where new lending is sought along with refinancing, the availability of a guarantee in respect of the new lending element should be of assistance in providing an overall package of support to the business, including consolidation of existing debts. Property-related activities are also excluded.
Who can apply for the Credit Guarantee Scheme?
Viable micro and SMEs and small MidCaps. SMEs are defined by Commission Regulation 2003/361/EC as enterprises that:
- Have fewer than 250 employees;
- Have a turnover of €50 million or less (or €43 million or less on their balance sheet);
- Are independent and autonomous, i.e are not part of a wider group or enterprises;
- Have less than 25% of their capital held by public bodies;
- Is establishing and operating in Ireland.
A small MidCap is an enterprise that is not an SME but has fewer than 500 employees.
Who are ineligible to apply for the Credit Guarantee Scheme?
- SMEs that are involved in primary agriculture, horticulture and fisheries are excluded from the scope of the Credit Guarantee Scheme in light of the particular restrictions under the de minimis State Aid rules. The food and drinks sectors will be eligible for the Credit Guarantee Scheme;
- SMEs that are in financial difficulty, excluding cashflow pressures caused by the COVID-19 pandemic;
- SMEs that are bankrupt or being wound up or are having their affairs administered by the courts;
- SMEs that in the last five (5) years have entered into an arrangement with their creditors, in the context of being bankrupt or wound-up or having its affairs administered by the courts;
- SMEs are convicted of an offence concerning professional misconduct by judgment or fraud.
Corporate – COVID-19 Specific Financial Measures in respect of Nursing Homes
The Government has introduced financial measures in respect of nursing homes as part of combating the COVID-19 pandemic.
What assistance is being provided for Nursing Homes to implement COVID-19 measures?
Funding will be provided to each applicant Nursing Home for COVID-19 pandemic related measures and expected costs for the months ahead, starting with April. These measures include:
- the implementation of enhanced testing processes in Nursing Homes; and
- changes to staffing and governance arrangements.
Financial support will be provided based on the number of Nursing Home Support Scheme residents in situ as reported for the month of March 2020 by the Health Services Executive (the “HSE”) Nursing Homes Support Office (the “Fair Deal Scheme”). Therefore the financial support provided will not be based on the number of Non-Fair Deal Scheme residents, such as private residents in the Nursing Home.
The Nursing Home will receive:
- €800 per resident per month for the first forty (40) residents;
- €400 per resident per month for the next forty (40) residents; and
- €200 per resident per month thereafter.
What enhanced COVID-19 outbreak assistance is being provided for Nursing Homes in COVID-19?
Where a Nursing Home has incurred significant further costs or undertaken necessary enhanced actions arising directly from a COVID-19 outbreak in the Nursing Home, it may submit a separate business case for enhanced funding. The COVID-19 outbreak must be certified as such by the HSE. In such cases, the Nursing Home in question will be required to submit evidence of the measures undertaken and the cost incurred, along with independent certification from an auditor that the expenditure was incurred and it relates directly to the COVID-19 pandemic.
The maximum assistance available to an individual Nursing Home per month will be the lesser of:
- twice that of the agreed monthly support set out above; or
- a maximum amount of €75,000 inclusive of the monthly support.
The Department of Health has yet to provide guidance on what the Nursing Home’s business case should contain, but it is expected that the Nursing Home will need to include the following in the business case:
- details of the COVID-19 outbreak in the Nursing Home;
- details of the measures undertaken to mitigate the effect of the COVID-19 outbreak;
- financial analysis and financial projections on the impact of the COVID-19 outbreak.
The following examples illustrate how the Nursing Home Scheme will work in practice:
Scenario 1
Number of Eligible Residents |
20 |
Standard Assistance Payment per Month |
€800 x 20 residents = €16,000 |
Maximum Enhanced Outbreak Assistance |
€16,000 |
Total Maximum Payment per Month |
€32,000 |
Scenario 2
Number of Eligible Residents |
50 |
Standard Assistance Payment per Month |
€800 x 40 residents = €32,000 €400 x 10 residents = € 4,000 €36,000 |
Maximum Enhanced Outbreak Assistance |
€36,000 |
Total Maximum Payment per Month |
€72,000 |
Scenario 3
Number of Eligible Residents |
80 |
Standard Assistance Payment per Month |
€800 x 40 residents = €32,000 €400 x 40 residents = €16,000 €48,000 |
Maximum Enhanced Outbreak Assistance (capped) |
€27,000 |
Total Maximum Payment per Month |
€75,000 |
Conclusion
For other relevant information, please see below:
We are living and operating in unprecedented times with unprecedented measures being implemented by the Government. As a result, it is incumbent upon business owners and operators to consider their policies of insurance to ascertain if insurance coverage exists for events which directly affect and impact their business during the COVID-19 pandemic.
What kinds of insurance policies might offer cover for losses sustained during COVID-19?
Companies and businesses whether large or small will have policies of insurance for certain aspects of their business, such as insurance cover for Employers’ Liability, Public Liability or for Buildings and Contents insurance. Employers’ Liability insurance provides indemnification subject to policy conditions for any liability which might fall on an employer for actions, errors or omissions by members of the business which may cause an injury or damage to other staff members. Similarly Buildings and Contents insurance cover is an insurance which protects against damage or destruction to the building(s) within which the business is located. It will also cover damage and destruction to the contents of the business premises such as machinery, computer systems and replacement of furniture etc. Buildings and Contents Insurance is normally triggered by damage to the premises and/ or the contents of the building.
What actions do organisations need to take to best position themselves to recover under their insurance cover for COVID-19?
- The business should clarify if it has any relevant insurance cover that might cover losses sustained by it as a consequence of the COVID-19 pandemic. This might be in the form of business interruption insurance or insurance for event cancellation that it itself contained in a wider form of insurance cover. Another possibility is credit insurance which protects the insured against the risk of non-payment of bad debts.
- In the case of business interruption or event cancellation, it will be essential to ascertain whether the particular circumstances of the COVID-19 pandemic in fact trigger the cover provided in the relevant insurance policy. The insurance policy wording will be critical. While hospitality and entertainment enterprises are expected to be hit particularly hard by the COVID-19 pandemic, most businesses are expected to face this and similar issues under their insurance policies. A key battleground between businesses and their insurers is likely to be around whether business interruption policies are triggered in the COVID-19 pandemic.
- In the case of credit insurance, the reason for the non-payment needs to be examined. It will be necessary to establish whether there was an actual obligation on the debtor to pay the insured party or whether a force majeure clause in its contract could have come into operation releasing the debtor from its obligation to pay.
- Potential cover exclusions will need to be examined. These may prevent a claim for cover for losses arising in a particular situation or alternatively, certain types of losses may be excluded.
- If there is a potential insurance claim, the insurer will need to be informed in time and any other requirements under the insurance policy will need to be adhered to. There may be a need to mitigate loss under the insurance policy. A business should examine any such provisions carefully and take any necessary action. It is important to note that the insurance cover may be excluded where policy requirements relating to notification and loss management are not complied with.
- Good record-keeping is essential at each stage of the process to avoid future disputes and also to document why certain steps were taken and why these steps were appropriate at the time.
What is Business Interruption Insurance?
Within Building Insurance policies there are defined covers provided such as business interruption cover. At its simplest, business interruption insurance cover can be described as insurance cover to meet the loss of income that the business may suffer as a result of damage to property. That is to say that business interruption normally flows from damage to the insured premises.
Such policies are constructed to provide headline cover for the building, be it reinstatement or replacement costs. This will be the maximum amount of cover available under the policy.
Within the limit of insurance cover and depending on the nature of the insurance cover purchased, there may well be extensions to the insurance cover. The primary cover of the insurance policy relates to the reinstatement or market value of the subject premises insured. However, if the premises suffers property damage, other events can also occur such as relocation of the premises in the short term, closure of the premises, interruption or cessation of the business and/or production. This is a follow on consequence from the serious property damage and can be provided for in the Buildings and Contents Insurance policy. Such extensions of cover can attract the same policy limit of cover as the building or more often a sublimit of cover within that main amount. That means that closure of the premises or interruption of production can cause an insurer to provide an insurance cover.
A sublimit of insurance cover will be for a definitive amount (normally less than the amount of cover for the premises) and for the occurrence of specific events.
What specific events may be covered by Business Interruption Insurance?
- Public Authority direction on closure; and
- Human infectious and contagious diseases.
Such insurance cover normally flows from material damage to the property. The insurance policy will define the meaning of material damage. Thereafter, the insuring clause of the insurance cover policy will outline how such insurance comes into being and what events must occur for the insurance cover to be triggered.
Generally, there has to be material damage to the property and then one of the covers within the business interruption suite of extensions must also apply.
What does a business need to be if it has Business Interruption Insurance?
- It is imperative to look at the sub-limit insurance covers within the Business Interruption insurance policy. Normally an outbreak of infectious diseases or contagious diseases must have emanated from the insured premises but given current Government directions, such a qualification to the insurance cover may not apply.
- Each policy of insurance is bespoke and constitutes a contract between the insurer and the policyholder. No two insurance policies are necessarily the same. It is important to review the Business Interruption insurance policy and covers purchased to ascertain if there is applicable business interruption insurance cover in place.
- Flynn O’Driscoll Business Lawyers will be happy to review the Business Interruption insurance policy and advise on whether there is appropriate insurance cover with the insurance provider.
Conclusion
Given the scale of COVID-19, there will be disputes around insurance cover over the coming months and a rise in related litigation is expected. Careful and considered steps taken now by businesses can help to maximise the prospect of recovery under an insurance policy and minimise exposure to expensive and time-consuming litigation. In a recent statement on the issue, Insurance Ireland has pointed out that some business interruption policies may only cover loss of income due to physical damage caused by a named peril. This typically only covers events such as fire or rodent infestation.
The outbreak of the COVID-19 pandemic has led to the necessary scaling back in the work of the courts and of the other bodies charged with resolving disputes in a business context. Critically, while the relevant bodies are subject to the Government’s emergency provisions, businesses should rest assured that where urgent matters relating to their business arise, the courts will be available to assist them where appropriate.
What hearings and in-person litigation activity are still going ahead?
The Superior Courts
- In the High Court as of 18 March 2020, all Non Jury, Judicial Review, Chancery, Commercial and Family Law cases are adjourned generally with liberty to re-enter. This effectively means that all matters currently listed for hearing are no longer going ahead. For the remainder of the current court term which ends on 3 April 2020, judges are available to deal with current applications in respect of bail matters, extradition matters, habeas corpus, wardship, injunctions and their enforcement and urgent applications for Judicial Review. The High Court will likewise deal with urgent examinership applications and urgent winding up petitions. All matters adjourned in light of these directions will be given new dates for hearing when the High Court lists are re-instated. There is, as of yet, no indication as to when this will be but in any event it will not be before the Easter vacation, which is from 3 April 2020 to 20 April 2020.
- The position of the Court of Appeal and of the Supreme Court is that all matters listed for hearing up to the end of the current term on 3 April 2020 will be adjourned on consent. Adjournment applications are being dealt with remotely via email. Where a party does not consent to adjournment, that party must demonstrate particular urgency by writing to the relevant Registrar. The parties to a case are not required to attend court for the delivery of judgment. New Court of Appeal and Supreme Court hearing dates will be fixed for hearing at the earliest possible available opportunity when the situation sufficiently improves.
- In light of the additional restrictions announced by the Government on 27 March 2020 and in order to ensure compliance with the Government’s COVID-19 pandemic policy while retaining access to justice, the court offices will be open for essential business by appointment only. Members of the public and legal practitioners will not be served at a court office without an appointment. Only those with urgent applications for any court office, which cannot be dealt with by email or post, will be given an appointment by the court office. All court offices remain operational, subject to some limitations, and can continue to be contacted by email and post in the normal manner. All email accounts for court offices continue to be monitored. Contact details of all Circuit Court and District Court offices in Dublin and the Criminal Courts of Justice may be found at courts.ie and appointments may be arranged, as appropriate, by e-mailing the relevant court office. The several offices of the Superior Courts have relocated their public offices to the Central Office of the High Court. Attendance at the Central Office of the High Court will be facilitated on an appointment basis for urgent business only. To secure an appointment with the Central Office of the High Court, an email may be sent to dublincivillaw@courts.ie from 9.00am on Monday 30 March 2020, indicating briefly the nature of the business.
The Workplace Relations Commission (the “WRC”)
- The WRC has postponed all adjudication hearings, conciliation meetings, face to face mediations and on-site inspections from 13 March 2020. However, the WRC remains open for business and parties can submit complaints for adjudication online here.
The Labour Court
- The Labour Court has suspended all scheduled hearings. Appeals and referrals can be submitted to appeals@labourcourt.ie up to midnight on the 42nd day following the making of a decision by the Adjudication Officer.
How does the COVID-19 disruption affect limitation periods?
While the majority of court hearings are adjourned for now, the relevant limitation period to initiate proceedings as provided for by the Statute of Limitations 1957 or by other statutory regimes is unaffected. Similarly, procedural rules concerning the time limits for making filings or lodging documents in the relevant court office are unaffected.
However, Order 122 Rule 3 of the Rules of the Superior Courts provide that if the last day on which a plaintiff may initiate proceedings within the limitation period falls on a day when the court offices are closed, the plaintiff has until the end of the next day when the court offices are open within which to issue proceedings.
How might a Force Majeure clause affect a business’s ability to take legal proceedings for a breach of contract?
A commercial contract may contain a force majeure clause which, if applicable in the circumstances, has the effect of suspending the parties’ mutual obligations affected by the COVID-19 pandemic, until that event subsides. The force majeure clause will only be applicable however if there is some specific reason linked to the COVID-19 pandemic that prevents performance of a particular obligation under the commercial contract. Force majeure will provide a defence to a breach of contract claim against the party in default. It is important generally that notice of intention to rely on a force majeure clause in a commercial contract be served on the other party in the manner provided for in that commercial contract. For its part, the party facing a breach should take steps to mitigate the potential harm that they might suffer as a result of the breach, by putting contingency arrangements in place to the extent possible.
How might the doctrine of frustration affect a business’s ability to take legal proceedings for a breach of contract?
Where a commercial contract is silent on force majeure or the force majeure clause is not applicable, the doctrine of frustration may come into play in the alternative. Frustration is established where a situation outside the control of the parties prevents the performance of the commercial contract and was both unforeseen and unforeseeable. The effect of frustration differs from force majeure in that it fully discharges the entirety of an otherwise valid commercial contract and it is difficult to prove in practice.
Can a business seek an injunction from the court during the COVID-19 pandemic?
Businesses requiring injunctive relief in the High Court come within the class of specified applications which the High Court will continue to hear while other matters are adjourned.
Can a business avail of business interruption insurance to cover losses sustained during the COVID-19 pandemic?
A critical issue for businesses will the extent of any insurance cover that the business has under any relevant insurance policy that might be triggered as a consequence of the COVID-19 pandemic. The wording of the specific business continuity insurance will need to be carefully reviewed in order to assess whether business losses sustained as a result of COVID-19 are covered.
The COVID-19 pandemic will create challenges for the owners and occupiers of commercial buildings.
Is there a legal duty on the owners and occupiers of commercial buildings to act?
The State has strengthened its enforcement powers in respect of the COVID-19 emergency measures with the enactment on 20 March 2020 of the Health (Preservation and Protection and other Emergency Measures in the Public Interest) Act 2020 (the “Act”). The emergency measures and the Act have implications foe venues of all types including hotels, conference facilities, stadiums, theatres and cinemas. Owners, occupiers and managers of all of these building types need to ensure that they remain closed during the emergency period and need to monitor closely and further announcements and the implications for each of them of any additional guidance, orders or directions of the Government if and as they are made.
In addition to these emergency statutory duties, legal duties can also arise indirectly on owners and occupiers of commercial buildings. Employees owe particular duties to their employees under the Safety, Health and Welfare at Work Act 2005 (as amended) (the SHWW Act”). The SHWW Act places certain duties on persons in control of a work place or any part of a work place to ensure the place of work is safe and without risk to health. These duties apply beyond those owed directly to employees. Almost all commercial buildings permitted to remain open during the emergency period will also be workplaces for essential employees, and therefore these duties apply to all those in control of these commercial buildings even if the persons in control of the work place do not themselves have employees in those commercial buildings. The obligations may be, and are regularly, passed on to property managers, tenants and occupiers by lease, licence or other agreement.
Outside of the COVID-19 specific emergency measures and the provisions of the SHWW Act, as a matter of general law, each of us owes a duty to each other not to act, and not to fail to act, in a way that causes the other harm. The closer the relationship and the more foreseeable the harm, the greater the duty. Therefore, this legal duty of care may place a duty on the owners and occupiers of commercial buildings to prevent any harm associated with the spread of COVID-19. Owners and occupiers of commercial buildings must therefore decide what containment measures might be appropriate to the relevant commercial building, its use, its users and other occupiers in light of the relationship which that owner or occupier has to those other users and occupiers.
What actions may need to be taken by the owners and occupiers of commercial buildings?
Appropriate actions for all commercial buildings that are permitted to remain open and operational during the emergency period of COVID-19 may include:
- Increasing cleaning schedules and using more effective cleaning products;
- Revising procedures to include routine cleaning of door handles and commonly used touchpoints;
- Making liquid soap, hand sanitizer and anti-viral wipe available for use in appropriate areas;
- Re-arranging the lay-out of work spaces such as seats, desks and tables to ensure that recommended social distancing parameters can be adhered to.
What considerations does the COVID-19 pandemic have for commercial landlords and tenants?
The rights and obligations as between landlords and tenants are governed by the terms of the lease made between them. There is no legislation that alters how the agreed terms of the lease should operate in a crisis such as COVID-19. Unless the lease could be said to be frustrated, it is business as usual between the landlord and the tenant. This means that unless the lease expressly provides otherwise, in respect of those parts of the commercial building for which they each have responsibility under the lease:
- each party must comply with all applicable laws, including health and safety legislation and the Government ordered closures and restrictions;
- except where closure has been ordered by the Government, keep open covenants (particularly relevant in retail leases) and obligations not to leave leased properties unoccupied for any prolonged period (more relevant in office and industrial leases) must be complied with and have the potential to create dispute if a decision to close, whether temporarily or not, is made unilaterally by the tenant;
- the general duty to act to prevent the spread of COVID-19 arise for both landlord and tenant;
- the right to recover the costs of any action taken will very much likely be recoverable by the landlord through the service charge (being taken for the benefit of the tenant), but the costs of any actions taken by the tenant would be the tenant’s own responsibility (being taken for its own benefit, without recourse to the landlord;
- rent must continue to be paid irrespective of any financial hardship, temporary or otherwise; and
- if the tenant’s business were to suffer irreparably, no legal right of termination would generally arise, although other avenues may be open to the tenant, including the exercise of a contractual break option or subject to the landlord’s consent, assignment or sub-letting of the tenancy.
It may be possible that following a confirmed case of COVID-19, a commercial building may be the subject of a specific health closure order. At that point, a tenant would likely find that there is an obligation in its lease requiring it to comply with the general law. If the lease did not, the landlord could also seek to enforce the tenant’s covenant to ensure compliance. It could be that the COVID-19 pandemic will pose a question as to the obligation on both landlords and tenants to continue to perform obligations where there is a fundamental change in the overall circumstances affecting the commercial building itself.
In exceptional cases, the legal doctrine of frustration, whereby a truly fundamental matter going to the heart of the lease cannot be performed or a force majeure clause in the lease, excusing non-performance of an obligation on grounds of a major intervening act, could be relevant to assist a tenant to a lease, but neither or these remedies would be widely available. The likelihood that any closure of the commercial building is to be temporary would hamper any argument for frustration which is very difficult to prove generally and force majeure clauses are not typically agreed in Irish leases.
While the terms of the lease govern the legal relationship between the landlord and the tenant, as with any relationship, when matters become difficult, communication is key to the survival of the relationship. The best outcomes for both landlord and tenant may involve a little compromise on both sides. Consultation and co-operation on COVID-19 containment measures would seem to make best sense from each party’s perspective.
Publications
Publication
Publication
Publication
23 March, 2020
23 March, 2020
23 March, 2020
The arrival of COVID-19 has wide ranging implications for owners, managers and occupiers of commercial buildings. We set out below some of the considerations in the current environment. Who is responsible? The closure order announced by the Government on the 12th March last imposed obligations on colleges, schools and leisure outlets to close their doors […]
The arrival of COVID-19 has wide ranging implications for owners, managers and occupiers of commercial buildings. We set out below some of the considerations in the current environment. Who is responsible? The closure order announced by the Government on the 12th March last imposed obligations on colleges, schools and leisure outlets to close their doors […]
The arrival of COVID-19 has wide ranging implications for owners, managers and occupiers of commercial buildings. We set out below some of the considerations in the current environment. Who is responsible? The closure order announced by the Government on the 12th March last imposed obligations on colleges, schools and leisure outlets to […]
Publication
Publication
Publication
24 March, 2020
24 March, 2020
24 March, 2020
There is no “cooling off” period available in times of crisis as far as the Landlord and Tenant relationship is concerned. Landlord and Tenant relationship The Landlord and Tenant relationship is governed by the lease agreement itself and in circumstances such as those we are experiencing at the moment the status quo is preserved. There […]
There is no “cooling off” period available in times of crisis as far as the Landlord and Tenant relationship is concerned. Landlord and Tenant relationship The Landlord and Tenant relationship is governed by the lease agreement itself and in circumstances such as those we are experiencing at the moment the status quo is preserved. There […]
There is no “cooling off” period available in times of crisis as far as the Landlord and Tenant relationship is concerned. Landlord and Tenant relationship The Landlord and Tenant relationship is governed by the lease agreement itself and in circumstances such as those we are experiencing at the moment the status quo is preserved. There […]
Publication
Publication
Publication
23 March, 2020
23 March, 2020
23 March, 2020
The arrival of COVID-19 has wide ranging implications for owners, managers and occupiers of commercial buildings. We set out below some of the considerations in the current environment. Who is responsible? The closure order announced by the Government on the 12th March last imposed obligations on colleges, schools and leisure outlets to close their doors […]
The arrival of COVID-19 has wide ranging implications for owners, managers and occupiers of commercial buildings. We set out below some of the considerations in the current environment. Who is responsible? The closure order announced by the Government on the 12th March last imposed obligations on colleges, schools and leisure outlets to close their doors […]
The arrival of COVID-19 has wide ranging implications for owners, managers and occupiers of commercial buildings. We set out below some of the considerations in the current environment. Who is responsible? The closure order announced by the Government on the 12th March last imposed obligations on colleges, schools and leisure outlets to […]
Publication
Publication
Publication
24 March, 2020
24 March, 2020
24 March, 2020
There is no “cooling off” period available in times of crisis as far as the Landlord and Tenant relationship is concerned. Landlord and Tenant relationship The Landlord and Tenant relationship is governed by the lease agreement itself and in circumstances such as those we are experiencing at the moment the status quo is preserved. There […]
There is no “cooling off” period available in times of crisis as far as the Landlord and Tenant relationship is concerned. Landlord and Tenant relationship The Landlord and Tenant relationship is governed by the lease agreement itself and in circumstances such as those we are experiencing at the moment the status quo is preserved. There […]
There is no “cooling off” period available in times of crisis as far as the Landlord and Tenant relationship is concerned. Landlord and Tenant relationship The Landlord and Tenant relationship is governed by the lease agreement itself and in circumstances such as those we are experiencing at the moment the status quo is preserved. There […]
Publication
Publication
Publication
21 April, 2020
21 April, 2020
21 April, 2020
As companies of all sizes continue to grapple with the continued uncertainty created by the Covid-19 crisis, problems of liquidity and solvency will become more widespread. What is Examinership? An examinership involves the court placing a company under its protection to enable a court appointed examiner to investigate its affairs and to […]
As companies of all sizes continue to grapple with the continued uncertainty created by the Covid-19 crisis, problems of liquidity and solvency will become more widespread. What is Examinership? An examinership involves the court placing a company under its protection to enable a court appointed examiner to investigate its affairs and to […]
As companies of all sizes continue to grapple with the continued uncertainty created by the Covid-19 crisis, problems of liquidity and solvency will become more widespread. What is Examinership? An examinership involves the court placing a company under its protection to enable a court appointed examiner to investigate its affairs and to […]
Publication
Publication
Publication
14 April, 2020
14 April, 2020
14 April, 2020
The COVID-19 environment has necessitated travel restrictions and will have important consequences for validly executing documents under the correct corporate authority that may be overlooked during this time. This note is intended to shed some light on the company law […]
The COVID-19 environment has necessitated travel restrictions and will have important consequences for validly executing documents under the correct corporate authority that may be overlooked during this time. This note is intended to shed some light on the company law […]
The COVID-19 environment has necessitated travel restrictions and will have important consequences for validly executing documents under the correct corporate authority that may be overlooked during this time. This note is intended to shed some light on the company law […]

Publication
Publication
Publication
3 April, 2020
3 April, 2020
3 April, 2020
There are also a number of other non-statutory restructuring tools which were commonly used in a financial or economic crisis and these should be explored in the first instance. This is particularly the case in circumstances where one of the key drivers of any cash flow crisis is the company’s ability to service leverage (debt) within its structure. […]
There are also a number of other non-statutory restructuring tools which were commonly used in a financial or economic crisis and these should be explored in the first instance. This is particularly the case in circumstances where one of the key drivers of any cash flow crisis is the company’s ability to service leverage (debt) within its structure. […]
There are also a number of other non-statutory restructuring tools which were commonly used in a financial or economic crisis and these should be explored in the first instance. This is particularly the case in circumstances where one of the key drivers of any cash flow crisis is the company’s ability to service leverage (debt) within its structure. […]
Publication
Publication
Publication
27 March, 2020
27 March, 2020
27 March, 2020
As businesses are facing unprecedented times, the availability of governmental support is critical to support business over the coming weeks and months.We have set out below the details of the support being provided by the Irish government and its agencies and offices, as of 27th March 2020. Financial Support […]
As businesses are facing unprecedented times, the availability of governmental support is critical to support business over the coming weeks and months.We have set out below the details of the support being provided by the Irish government and its agencies and offices, as of 27th March 2020. Financial Support […]
As businesses are facing unprecedented times, the availability of governmental support is critical to support business over the coming weeks and months.We have set out below the details of the support being provided by the Irish government and its agencies and offices, as of 27th March 2020. Financial Support […]

Publication
Publication
Publication
26 March, 2020
26 March, 2020
26 March, 2020
As businesses are facing unprecedented times, the availability of governmental support is critical to support business over the coming weeks and months.We have set out below the details of the support being provided by the Irish government and its agencies and offices, as of 25th March 2020. Financial Support […]
As businesses are facing unprecedented times, the availability of governmental support is critical to support business over the coming weeks and months.We have set out below the details of the support being provided by the Irish government and its agencies and offices, as of 25th March 2020. Financial Support […]
As businesses are facing unprecedented times, the availability of governmental support is critical to support business over the coming weeks and months.We have set out below the details of the support being provided by the Irish government and its agencies and offices, as of 25th March 2020. Financial Support […]
Publication
Publication
Publication
26 March, 2020
26 March, 2020
26 March, 2020
The Covid-19 crisis has seen Directors of Irish incorporated companies turn their attention to the corporate insolvency regime in Ireland as they grapple with the economic effects of the crisis and consider their options in circumstances where their businesses may no longer be economically viable. Introduction The purpose of this summary is to give a […]
In light of the outbreak of the coronavirus COVID-19 and the impact it has had on businesses globally, many companies are now faced with a situation where they are no longer able to perform their contractual obligations due to various government restrictions, lack of supply, or some other form of disruption. The effect of such […]
In light of the outbreak of the coronavirus COVID-19 and the impact it has had on businesses globally, many companies are now faced with a situation where they are no longer able to perform their contractual obligations due to various government restrictions, lack of supply, or some other form of disruption. The effect of such […]

Publication
Publication
Publication
26 March, 2020
26 March, 2020
26 March, 2020
The Covid-19 crisis has seen Directors of Irish incorporated companies turn their attention to the corporate insolvency regime in Ireland as they grapple with the economic effects of the crisis and consider their options in circumstances where their businesses may no longer be economically viable. Introduction The purpose of this summary is to give a […]
The Covid-19 crisis has seen Directors of Irish incorporated companies turn their attention to the corporate insolvency regime in Ireland as they grapple with the economic effects of the crisis and consider their options in circumstances where their businesses may no longer be economically viable. Introduction The purpose of this summary is to give a […]
The Covid-19 crisis has seen Directors of Irish incorporated companies turn their attention to the corporate insolvency regime in Ireland as they grapple with the economic effects of the crisis and consider their options in circumstances where their businesses may no longer be economically viable. Introduction The purpose of this summary is to give a […]
