The ISPM 15 standard could lead to the introduction of inspection regimes at UK-EU borders and slow the movement of goods
This article is the view of the author and not necessarily of Ready for Brexit
The Covid-19 pandemic has already led to major change for many businesses. And as this analysis from Flexioffices suggests, workplaces ‘may never be the same again’ – particularly with potential Brexit complications at year-end.
Michael Dubicki, Business Development Director highlights the main findings of their new survey;
- Companies are now focusing on 3 key areas: downsizing current office space; moving to flexible contracts; prioritising employee well-being and office cleanliness.
- 57% of businesses will be looking to downsize; 44% will be looking to downsize and encourage their people to work remotely
- 44% of people who currently own their office space are looking to rent next time
- 42% of London businesses are now moving or considering moving as a direct result of COVID-19
- Of those considering a move – 58% will be downsizing, and 55% expect to make a decision in the next 3-6 months
Michael Dubicki comments:
“It seems the face of the UK workplace is changing like never before. What do offices actually do? Why do we have them? Do we need them? The pandemic has asked businesses to re-look at office space and include the perspective of how it affects people – their productivity, their wellbeing, how they interact together and engage in positive experiences. Again, simply put, the office has become much more than just walls and desks. Companies won’t abandon offices, but they will become more demanding of what workspaces deliver and the role they play in attracting people to them.
“At Flexioffices, we have spent 20 years re-looking at real estate challenges with our roots planted firmly in flexible office space, putting us in a strong position to deliver against these key drivers when new office space is needed. Our solution to property challenges will never be to just ‘throw square feet at it’, but to understand where efficiencies can be created in utilizing space more intelligently.
“Importantly, the focus that drives our service is people. We want to ensure that when new office space is required, we can use our expertise to pin-point a space that will make employees want to come back to it, and which will help your business thrive in the future.”
Most companies are rightly focused on the managing the impact of the Covid-19 pandemic. But the risks of a No Deal Brexit at the end of the year are rising. We can only hope next week’s final round of EU27-UK talks produces a sudden breakthrough.
The issue is that the timetable set up under last year’s Withdrawal Agreement allowed for a 2-year transition period after the UK left the EU last January. But it required this to be agreed by the end of June. And as we discussed last month, the UK government seems more inclined to simply leave by the end of the year with No Deal.
The recent ‘mood music’ in the negotiations certainly seems negative, with UK negotiator David Frost writing to his opposite number, Michel Barnier:
“We find it perplexing that the EU, instead of seeking to settle rapidly a high-quality set of agreements with a close economic partner, is instead insisting on additional, unbalanced, and unprecedented provisions in a range of areas, as a precondition for agreement.”
And Barnier’s reply suggests that attitudes are hardening in Brussels:
“The UK cannot expect high-quality access to the EU Single Market if it is not prepared to accept guarantees to ensure that competition remains open and fair. The EU has been clear about this since 2017.”
One key issue is that EU27 are clearly becoming more focused on addressing Covid-19 issues at the expense of Brexit.
This week has seen the launch of a proposed new €750bn (£675bn) EU recovery fund – which will require a lot of negotiation before it is finalised. It also seems possible that the EU27 are no longer so worried about the impact of No Deal on their economies:
- The pandemic has already broken existing supply chains and reduced demand
- If EU companies have to rebuild, then reshoring production from the UK to the EU27 might help to protect jobs and reduce costs
In the meantime, the UK has confirmed our view that there will indeed be a need for border checks on goods crossing the Irish Sea after the Transition period ends. The government is also aiming to recruit 50,000 new Customs staff to handle the extra 400 million Customs Declarations needed each year.
June will be a critical month in the Brexit process. As always, we will be focused on keeping you up-to-date with the key developments.
Businesses are now having to grapple with the risks that Covid-19 poses to their supply chains and their ability to fulfil contractual obligations.
This article is the view of the author and not necessarily of Ready for Brexit
COVID-19 is particularly likely to impact on the provision of services (whether B2B or B2C), the movement of goods and labour.
Many businesses are concerned that through no-one’s fault, they or another party may struggle to meet contractual commitments. Businesses must take a deep breath and review:
- what they will do if there is a lack of supply to them or if they can no longer supply;
- how they will deal with claims for relief from suppliers;
- what action can be taken to continue to supply or seek relief itself from its contractual obligations.
Every contract will be different and will also depend on the particular governing law, but there are some steps all businesses can take to manage and mitigate the potential risk.
Contract Terms and Insurance
A business should start by reviewing the contracts that are in place. Businesses should then start to understand the potential risks under each contract.
For example, if the business delivers goods late, are the penalties harsh under the contract? If the business receives goods late, what action can be taken? Which contracts contain force majeure or other relief provisions that may be helpful? What are the termination provisions under the contracts?
It isn’t always obvious how contracts need to be dealt with (even if certain clauses such as force majeure or change of law are included and applicable). A business must take a commercial and pragmatic approach:
- For example, a contract may create a financial loss in the short-term during this bizarre period of time
- But it may then come good and deliver significant profit once everything has returned to normal
- The contract must be reviewed and looked at in its entirety (legal and commercials) before a decision is taken on how to proceed
Businesses must, therefore, look at the full picture, understand what action can be taken under contracts and then prioritise their efforts and resources to ensuring that the best plan possible is executed.
Businesses should also look at insurance policies to understand what is and isn’t covered, as this will also have an impact on the decisions a business will take.
What else to look out for
Businesses should be watching supply chains carefully and speaking to staff about spotting early warning signs:
- payment terms – if parties request money on account, accelerated payment, deposits, etc. then this can indicate cash flow problems;
- failure to deliver – supply chain members not delivering in accordance in-line with what has been agreed – this can cause significant problems and must be dealt with one way or another;
- if force majeure or release notices are served – make sure the business understands these, report them to senior stakeholders and assess the wider business implications;
- market intelligence – a real time version of events – contacts at the supplier, other customers or even the media and the internet may give you an insight in to what is happening;
- communication – radio silence from another party – can indicate that the supplier is avoiding contact.
Any of these should act as a trigger for further investigations to be carried out and for action of some kind to be taken.
This article is for general guidance only and should not be used for any other purpose. It does not constitute and should not be relied upon as legal advice.