US announces G7 will be held virtually amid COVID-19 pandemic

The US State Department has announced Wednesday that the G7 Summit will be held virtually to better accommodate efforts to prevent the spread of COVID-19 (the novel Coronavirus).

The G7 was originally set to be hosted in Pittsburgh, Pennsylvania later this month. The G7 has included Canada, France, Germany, Italy, Japan, the United Kingdom, the United States, and the European Union. Russia was a member previously until their 2014 annexation of Crimea.

Several of the G7 states are currently experiencing widespread outbreaks of COVID-19. Japan has been fighting outbreak for several months. Italy has recently implemented strict quarantine and travel restrictions nationwide. The US has only recently begun fighting the pandemic with a patchwork of quarantines, travel restrictions, and event cancellations. According to the Centers for Disease Control and Prevention (CDC), the State of Pennsylvania currently has 12 reported cases of COVID-19.

The State Department did thank the City of Pittsburgh for its willingness to host the event and does look forward to hosting events there in the future.

COVID-19: managing the risk of contamination in the workplace

While the World Health Organisation has just declared the COVID-19 epidemic a “pandemic”, with the virus had reached nearly 130,000 people since December 2019, managing the risk of the virus spreading in the workplace has become a major issue for every employer. Following the announcement of multiple cases in Luxembourg and the decision of one Luxembourg bank to require employees to take holiday leave in the event of contamination, it seems more important than ever to remind ourselves of the rights and obligations of employers in the current scenario.

What are the employers’ obligations?

According to the Luxembourg Labour Code, employers have a legal obligation to ensure the safety and health of their employees in all work-related aspects. More particularly, as part of their responsibilities, employers shall take all necessary measures for the protection of the safety and health of employees, including actions for prevention of occupational hazards, information and training, as well as the establishment of the necessary organisational means. In general, employers must avoid risks and take precautions against possible risk factors, plan risk prevention and eliminate hazards or, at least, reduce them as much as possible.
In concrete terms, employers must take all the necessary preventive measures to protect employees and prevent the spread of the virus, such as:

  • display pictograms in the premises explaining basic hygiene procedures (e.g. regular hand washing, avoiding physical contact, avoiding travel in high-risk areas, sneeze or cough into a tissue );
  • reinforce hygiene measures (provision of masks, soaps and alcohol-based solutions for hand disinfection, etc.);
  • encourage teleworking where possible;
  • limit employees’ business travel and use alternatives solutions such as video-conference, phone calls, etc.;
  • postpone organized social events;
  • inform employees about the evolution of the situation in Luxembourg;
  • etc.

The means put in place by the employer should thus be aimed at (i) researching the virus’ origins and (ii) containing and delaying its spread.
In any case, employers shall keep themselves informed of the official recommendations published by the Ministry of Health, and liaise with their occupational health service in case of doubt.

Can an employee refuse to work or to carry out an assignment for safety reasons?

The Labour Code provides that in the event of serious, immediate and unavoidable danger, an employee can choose to leave or refuse to go to his/her workplace. There is no specific procedure to follow: it is sufficient for the employee to inform his/her employer orally or, preferably, in writing. In such event, the employee shall not suffer any harm/be subject to any sanction. A dismissal in violation of this prohibition of sanctions would be automatically deemed abusive.
If the employer has not taken the necessary steps to isolate employees exposed to the virus, an employee may, therefore, exercise his/her withdrawal right, either because he/she has been in a risk area or because he/she has been in contact with a colleague who has been in a risk area. Similarly, if the employer does not offer repatriation to an employee working in a risk area, the employee can again exercise his/her right to withdraw by ending the assignment. This right may also be exercised by an employee in the event that his/her employer asks him/her to go to a risk zone for an assignment.
As mentioned above, the employee’s withdrawal right can only be exercised in the event of serious, immediate and unavoidable danger. Consequently, an employee cannot refuse to attend work simply for fear of the COVID-19; similarly, an employee cannot refuse a business trip to an area that is not considered to be at risk. In such circumstances, the employee’s refusal could be subject to disciplinary action up to, and including dismissal.

Can the employer refuse to approve vacation for an employee who intends to privately go to areas at risk of COVID-19?

Under Luxembourg law, the employer may only refuse to grant leave in limited cases:

  • for operational purposes;
  • because of the justified wishes of other employees;
  • because of the employee’s unjustified absences, when they exceed 10% of the time during which he/she would normally have been required to work.
  • Luxembourg law does not allow the employer to deny leave to an employee for health and safety reasons. In any case, the employer cannot interfere in the private life of its employees.

In accordance with its obligation to ensure safety and health in all work-related aspects, the employer may, at most, recommend to the employee not to travel to the specific place. If the employee nevertheless travels to a high-risk area, the employee may be refused access to the workplace if the health and safety of others employees are seriously at risk, and in order to avoid spreading the virus in the company.

Does the employee have an obligation to inform the employer of possible exposure to the virus?

The Labour Code provides that it is the responsibility of each employee to take care, according to his/her possibilities, of his/her own safety and health and that of other persons affected by his/her acts or omissions at work, in accordance with his/her training and the instructions of the employer. In particular, employees must immediately report to the employer and/or the designated employees and the safety and health representatives, any work situation which they have reasonable cause to believe presents a serious and immediate danger to safety and health, as well as any deficiencies found in the protection system.
In light of the above, and on the basis of the principles of good faith and loyalty inherent in all employment relationships, employees should, therefore, inform their employer of any possible exposure to the virus (e.g. travel to an affected area, contact with a person returning from an affected region, etc.) so that the employer can take all the necessary measures in accordance with its obligation to ensure safety and health at work.

What can the employer do in case an employee is showing symptoms or is coming back from a high-risk area?

First of all, as the employer is responsible for ensuring safety and health in the workplace, and pursuant to the Labour Code, the employer may request employees showing symptoms or coming back from a high-risk area to perform a medical examination in order to ensure that the employee is fit for work. Such medical examination should be carried out by an occupational doctor of the company and at the employer’s expense, and may only be requested if the employer has serious indications of the existence of a risk for safety and health at work.
Where the health and safety of other employees are at stake, the employer may also refuse employee access to the workplace. However, the risk justifying the refusal of access to the workplace must be serious and justified; otherwise, the refusal of the employer could be regarded as discrimination.
Finally, the employer may encourage the implementation of telework for employees whose nature of work allows it, in order to avoid any risk of infection or spread of the virus.
According to the Ministry of Economy, employers could even impose telework in a preventive manner. The employer and the employee would then have to enter into an amendment to the employment contract, allowing the use of telework for reasons objectively motivated by precautionary measures in the context of the fight against COVID-19.
In any case, the employer shall cover the costs directly linked to telework, especially costs in relation to telecommunication. The employer shall also provide their teleworkers with appropriate technical support and is responsible for any cost related to the damage or loss of equipment and data used by the teleworker.
Where the nature of the employee’s job does not allow telework, the employer may exempt the employee from work where there is a risk for health and safety in the workplace.
In any case, the employer shall continue to pay its employees’ salaries. In addition, the employer may, under no circumstances, require the employee to stay at home by taking days off.

How to deal with a sick employee or with an employee stuck abroad due to restriction measures?

In case of sickness or quarantine instructed by a doctor, the employee will receive a medical certificate and the absence will be treated as normal sickness absence (i.e. cost is either borne by the employer or social security depending on whether the 77-day threshold has been reached).
However, if an employee is absent and stuck abroad due to restrictive measures implemented in connection with the prevention of the spread of COVID-19 (e.g. quarantine on a cruise ship, cancellation of flights, etc.), and if the employee is not sick, this absence will not be treated as normal sickness absence.
In such a situation, the employer and the employee may agree that the employee will work remotely, if practically possible. In this case, the employer must continue to pay the salary of the employee.
In any case, absences due to cases of “force majeure” or causes beyond the employee’s control, which have made it impossible for the employee to request prior authorisation, shall not be considered as unjustified absences and shall be assimilated to actual working days. In this respect, the employer shall continue to pay the employee’s salary.
However, if an employee is stuck abroad following his decision to go to a high-risk area despite his employer’s warnings, it could then be considered that there is an impossible performance of the employment contract due to the employee’s gross negligence and that in this case the employer could be justified in not paying the employee’s salary.

Should the employer grant an employee’s request to telework in order to care for children who are temporarily not allowed to attend their school?

An employer has no legal obligation to accept a telework request. Should the child of an employee be infected with COVID-19, placed in quarantine or temporarily unable to attend school, the employee will have to apply for leave.
However, where the child of an employee has potentially been in contact with a person who may be infected with the virus or who has stayed in a risk area, it is in the employer’s interest to permit teleworking as a preventive measure.
draft Grand-Ducal regulation has recently been adopted, providing for the possibility of a right to family leave for parents whose children have been placed in quarantine by the doctor of the Health Directorate, in particular in order to limit the spread of infectious diseases and more specifically of the COVID-19.

How can redundancies be avoided in the event of a decline in the activity of the business due to the propagation of the COVID-19?

In order to protect jobs and prevent redundancies, the Labour Code allows businesses, under certain conditions, to resort to various short-time working schemes depending on the nature of the difficulties encountered.
In this respect, the Labour Code provides that in the event of partial or total interruption of the operation of the undertaking due to losses of a “force majeure” nature occurring independently of the will of the employer and the employees, a subsidy may be granted to the employer who, instead of proceeding to dismissals, undertakes to maintain the employment contracts of its employees and to pay them a compensatory wage allowance.
In the event of an agreement, the Employment Fund (Fonds pour l’emploi) covers 80 % of the salaries normally received by the employees (which is capped at 250 % of the minimum wage for an unskilled worker) during the non-work periods with a maximum of 1.022 hours per employee and per year.
The Luxembourg authorities have recently recognized that this short-time working scheme in cases of “force majeure” may apply in principle to all economic sectors as long as the causes invoked are directly related to COVID-19 (e.g. drop in demand from customers or users, employees absences due to external decisions, the company can no longer operate at normal speed, etc.).

The Struggle facing the Retail World

Restaurants Face Challenges

While retail in general faced challenges in 2019, food services faced an extremely difficult period. We expect these challenges to continue into 2020. With a tight labour market, increased competition, rising minimum wages and a strong economy, restaurants continue to be squeezed. For this reason, we expect that landlords will be receiving requests for modifications, notices of bankruptcy filings and ongoing challenges in filling vacated restaurant units.

Looking at 2019, while a number of restaurants closed units, the Papa Gino’s and Real Mex cases continued to work their way through bankruptcy courts. Meanwhile, the Houlihan’s restaurant chain along with several of its subsidiaries filed for bankruptcy with Landry’s acquiring substantially all of the assets of the debtor. In a transaction of this type, landlords need to be aware of their rights as a number of leases were assumed and assigned. In the event of assumption and assignment, a landlord has strong protections under the Bankruptcy Code, including, among other things, the right to have all defaults cured. In the event the debtor is rejecting a lease, to minimize the loss incurred, it is essential that a landlord takes steps to maximize its recovery and preserve any claim it may have. In particular, landlords must act during the bankruptcy case or risk waiving certain rights and claims.

Lifestyle Companies

The proliferation of Lifestyle (i.e., Health and Fitness facilities) has been quite significant over the last several years. Two well-known fitness centre operators, Town Sports and 24 Hour Fitness, have been noted for a change in their financial condition as discussed below.

Recent reports indicate that Town Sports International Holdings, Inc. recently had S&P reduce the credit rating on the certain debt to CCC. According to reports, Town Sports has significant debt which will become due in 2020 and has suffered a decline in revenue. According to reports, Town Sports is attempting to refinance its debt.

Market reports towards the end of 2018, indicated that the value of bonds issued by 24 Hour Fitness declined into the distressed range. Once again, those who are investors, landlords or creditors of 24 Hour Fitness should carefully evaluate their exposure.

Retailers

The pressure is still being felt across the retail space. Fairway Markets is rumoured to be close to filing a second bankruptcy case. Pier 1 is also facing financial challenges and is said to be closing 450 stores and nearing bankruptcy. While these two retailers are noted due to recent reports regarding their financial condition, they are not alone, and the increased minimum wage will only put further pressure on traditional brick and mortar retailers. Landlords should carefully monitor their retail tenants to avoid allowing them to accrue large arrearages. It is also likely that tenants will request modifications or an opportunity to meet to discuss their lease.

Party City also continues to face financial challenges and maybe slipping towards bankruptcy. The company sharply underperformed its third-quarter guidance. If a party has leases or interests in Party City, they would be well-advised to evaluate their current position and to consider what actions could be taken to minimize the impact of a possible restructuring or bankruptcy.

Major Changes to Bankruptcy Laws in 2020

There are major changes coming to the Bankruptcy Code in 2020. Key among these are changes to the laws affecting Small Business restructuring. Small Businesses are defined as those with less than $2,725,625 in debt. For those companies that qualify, they will be able to obtain relief without being required to abide by the Absolute Priority Rule (i.e., all senior creditors must be paid in full before a junior creditor can be paid or an equity holder can retain its holdings). Moreover, there are rumours that the debt limit could be raised to $10,000,000. If this were to occur, the vast majority of bankruptcy filings could qualify as small business filings. It is unclear if (and when) an increase in this limit might occur.

With changes and new challenges approaching, it is critical to seek counsel with significant experience in bankruptcy, restructuring and out of court workouts to advise you through the process and participate in ongoing negotiations. Rosenberg & Estis, P.C. has represented creditors and debtors in many of the largest and most complex bankruptcy cases, making us the ideal partner for any client-facing these challenges. Please don’t hesitate to call us today.

The New Lawyers: Our Story

SingaporeArbitration

Ex Clifford Chance litigators set up disputes firm in Singapore

Harpreet Singh Nehal, former managing partner of Cavenagh Law, the Singapore Formal Law Alliance (FLA) firm of Clifford Chance, has co-founded a disputes-focused boutique in the city-state called Audent Chambers.

The other co-founder is Jordan Tan, who was previously a counsel at the same firm. The two lawyers will be joint managing partners of Audent.

The firm will have an advocates-only setup, working with solicitor firms.

Nehal, who helped to launch Cavenagh Law, focuses on banking and finance, oil and gas, and TMT sectors. Meanwhile, Tan has experience advising on a number of cases including a minority oppression claim concerning a company with assets above $100 million.

In an interview with Business Times, the lawyers said that they wanted the firm to be one that took on highly complex commercial matters as well as pro bono cases that raised important questions of law and public interest.

ONC Corporate Disputes and Insolvency Quarterly

Dear Clients and Friends,

This special newsletter aims to regularly update practitioners on important and noteworthy cases in the areas of corporate disputes and insolvency in Hong Kong, the UK and other common law countries. In this issue, we have highlighted:

·         5 Corporate Insolvency Cases

·         3 Cross-border Insolvency Cases

·         2 Restructuring Cases

·         3 Corporate Disputes Cases

·         6 Bankruptcy Cases

Our selection of cases and our analysis of them may not be exhaustive. Your comments and suggestions are always most welcome. Please feel free to contact me at ludwig.ng@onc.hk

Best regards,

Ludwig Ng

Partner, Solicitor Advocate

ONC Lawyers

HEADLINES OF THIS ISSUE

Corporate Insolvency Cases

1.        A contributory (as opposed to a creditor) petitioning for the winding-up of a company should normally show a “tangible interest” in the assets of the company or a ‘need for investigation’, which entitles him to ask for the winding up of the company

Haw Par Pharmaceutical Holdings Pte. Ltd v Hua Han Health Industry Holdings Ltd [2019] 4 HKLRD 286

2.        Relevant factors that Court will take into account in giving retrospective sanction

Re Moulin Global Eyecare Trading Ltd (in liquidation) [2019] 4 HKLRD 643

3.        The requisite intention to gift must be proved to establish transaction at undervalue on the basis of gift

Ho Man Kit v Sure Lead Ltd [2019] HKCFI 2914

4.         Petitioner ordered to pay costs on a common fund basis for failing to explain why a winding-up order was sought in the petition

Wong Wai Tung v Lam Chun Fung and Another [2019] HKCFI 3034

5.         Once privileged, always privileged – legal advice attaching to the documents subsisted notwithstanding the dissolution of the company

Addlesee v Dentons Europe LLP [2019] EWCA Civ 1600

Cross-border Insolvency Cases

6.          Indonesian bankruptcy proceedings recognized in Singapore

Heince Tombak Simanjuntak and others v Paulus Tannos and others [2019] SGHC 216

7.         Limits of assistance – it is not open to the assisting court to appoint a different person as the foreign representative

Re Rooftop Group International Pte Ltd and another (Triumphant Gold Limited and another, non-parties) [2019] SGHC 280

8.         Hong Kong Court recognized and assisted Mainland liquidators for the first time

Re CEFC Shanghai International Group Limited [2020] HKCFI 167

Restructuring Cases

9.          English High Court held that a scheme of arrangement only affect the rights of the creditors of a scheme company in their capacity as creditors, not other rights they have, such as proprietary rights in property

Re Instant Cash Loans Limited [2019] EWHC 2795 (Ch)

10.      In considering whether a scheme of arrangement is propounded for a permissible purpose for the general benefit of the scheme creditors, the Court will take into account the rate of return to scheme creditors and the amount of the restructuring and liquidation expenses

Re Da Yu Financial Holdings Limited (formerly known as China Agrotech Holdings Ltd) (in liquidation) [2019] HKCFI 2531

Corporate Disputes Cases

11.      Assessing the value of his shares is a proper purpose for a shareholder to seek inspection of the company’s documents and accounts, particularly where a long-standing substantial shareholder is seeking to protect his economic interest as a shareholder

Selvaraj (Moorthy) v GMT Industrial Ltd [2019] 4 HKLRD 572

12.      Court of Appeal: those who alleged fraud should carry the burden of proof and the proper remedy for a forged transfer is to seek a rectification of the share register and the company is a necessary party to the claim

Ngan Pui Chi and Another v Bao Quan [2019] 4 HKLRD 135

13.      Singapore Court of Appeal: discount for lack of control would typically apply where the buyout of a minority shareholding was made pursuant to a consent order in the absence of any finding on the issue of minority oppression

Liew Kit Fah and others v Koh Keng Chew and others [2019] SGCA 78

Bankruptcy Cases

14.      An application for a non-commencement order under the Bankruptcy Ordinance (Cap 6) should be made inter-partes

Re Cai Sui Xin [2019] HKCFI 2547

15.      Bankruptcy petition dismissed as the creditor failed to do all that was reasonable for the purpose of bringing the statutory demand to the debtor’s attention and to cause personal service of the demand to be effected

Re Luo Xing Juan Angela [2019] HKCFI 2674

16.      To prove a debtor has carried on business in Hong Kong, it is not enough to show that a person is running his company’s business even though he is the sole beneficiary shareholder and in complete control. There must be some evidence of activities on the part of the debtor over and above those attributable to the company to show that the debtor has carried on business of his own

Re Chen Mei Huan also known as Liu Chen Mei Huan also known as Liu Mei Huan Chen [2019] HKCFI 3028

17.      Singapore High Court: an annulment of bankruptcy order is not conditional upon all debts being proven

Standard Chartered Bank, Singapore Branch v Chua Seng Kiat (Lim Peng Liang David Llewellyn, intervener) [2019] SGHC 240

18.      Court of Appeal warned against debtor’s opportunistic attempts to invoke the Lasmos approach in the future to stay winding-up/bankruptcy petition by invoking arbitration agreement

Sit Kwong Lam v Petrolimex Singapore Pte. Ltd [2019] HKCA 1220

19.      Trustees in Bankruptcy found not in breach of their duties to act with reasonable care and skill, as they had limited funding available to them at the timed

Lau Chun Ming v Deloitte Touche Tohmatsu (A Firm) [2019] HKCFI 2722

Chile environmental court rules against SQM mining corporation

On Thursday Chile’s Environmental Court ruled in favor of indigenous complaints that had been brought against SQM. SQM is the world’s second-largest miner of lithium. They had planned for expansion but the expansion plans caused questions about Chile’s northern desert’s ability to handle the level of production.

The court put emphasis on how frail the environment in the northern dessert was right now as well as the lack of scientific study that SQM has done to prove that their mining would not affect the area’s water supply. They cite the ruling as a precaution that could change if they found evidence that the environment could be saved.

This is a big win for the indigenous people of the region whose water supply is threatened by the evergrowing expansion of lithium mining.

UK lawmakers vote in favor of EU withdrawal agreement

UK lawmakers voted in favor of the second reading of the EU Withdrawal Agreement on Friday, leading the nation one step closer to leave the EU by January 31.

Parliament voted 358 to 234, a majority of 124, in favor of the Brexit bill. While lawmakers have agreed to the bill in principle, it will now be debated further by both chambers of Parliament in January.

Since its last reading in October, changes to the bill have been seen as controversial. If passed, the new bill would outlaw any extension to the UK’s transition period, which ends on December 31, 2020. Labour Brexit spokesman Keir Starmer warned parliament that refusing any extension beyond 2020 is “reckless and ridiculous” as it puts the UK at risk of “a bare bones deal or no deal at all.”

Since passed, lawmakers will now have another three days to discuss it further, beginning on January 7. The final vote will take place on January 9, and, if approved, the bill will be passed to the UK’s upper house to make a final decision on whether the bill becomes law.

New Zealand Parliament passes zero carbon bill

Lawmakers in New Zealand approved a bill on Thursday that aims to reduce the country’s non-biogenetic greenhouse emissions to zero by 2050. The Zero Carbon Bill provides a framework for limiting average global temperature increase to 1.5° Celsius above pre-industrial levels, as set forth in the Paris Agreement.

The bill establishes a Climate Change Commission, which will advise the government and monitor and review the government’s progress towards meeting the goal. The 2050 targets set forth are: gross emissions of biogenic methane to be reduced to at least between 24 percent and 47 percent below 2017 levels and net emissions of all other greenhouse gases to be reduced to zero. The separate targets for biogenic methane, the greenhouse gases released by livestock such as cattle and sheep, will make it easier for New Zealand to hit their zero emissions goal. Greenhouse gases from agriculture make up 48 percent of the countries total emissions.

The Minister for Climate Change, James Shaw praised the bill:

Climate change is the defining long-term issue of our generation that successive Governments have failed to address. Today we take a significant step forward in our plan to reduce New Zealand’s emissions. … We’ve led the world before in nuclear disarmament and in votes, now we are leading again…This Bill belongs to New Zealand, and together we have ensured law that ensures we shift towards a low emissions country that keeps us all safe.

New Zealand joins more than sixty other countries that have committed to zero carbon emissions by 2050. However, the countries with the largest greenhouse emissions—China, India, and the US—are not on that list. On Monday US Secretary of State Mike Pompeo announced on twitter:

Today we begin the formal process of withdrawing from the Paris Agreement. The U.S. is proud of our record as a world leader in reducing all emissions, fostering resilience, growing our economy, and ensuring energy for our citizens. Ours is a realistic and pragmatic model.

A number of US states have passed their own zero emissions goals including California, Washington and New Mexico.

How Will Plans to End Free Movement Affect EU Workforce?

The Home Office has recently issued a factsheet indicating that freedom of movement as it currently stands will end on 31 October 2019 and that arrangements for people coming to the UK for longer periods for work or study will change. What does this mean in practice and how should employers prepare?

A draft Immigration Bill drafted published by Theresa May’s government had already envisaged an end to free movement following a no-deal exit. However, to avoid a “cliff-edge” until a new immigration system could be put in place, the Home Office planned to introduce transitional arrangements for EU, EEA and Swiss citizens and their family members arriving in the UK between exit date and 31 December 2020. Those coming to the UK for short visits for any reason would be able to enter as they can now and stay for up to three months for each entry. Those wishing to stay in the UK for longer would need to apply to the Home Office for EU temporary leave to remain within three months of arrival (giving 36 months’ permission to live, work and study) after which they would need to apply under the UK’s future immigration system (expected to be introduced from January 2021).

The Home Office announcement and further reports now indicate the shelving of these transitional arrangements to be replaced by a new immigration system immediately applicable to new arrivals following a no-deal exit. There is very unlikely to be the time and resource to put in place such a system or the legislation which will underpin it. The Home Office is already stretched and the UK’s current Points Based System took nearly four years to design and implement. We may, therefore, still end up with some form of transitional registration system but the Government’s current direction of travel suggests this is likely to be more onerous than the EU temporary leave envisaged under Theresa May. Employers who had good reason to believe that they would be able to continue to recruit from the EU with relative ease until the end of 2020 (even in a no-deal scenario), should prepare for the possibility of new hires arriving the EU from 31 October 2019 needing some form of immigration permission prior to starting work. Exactly what this will entail, including the qualifying criteria, cost and application process, remains to be seen and we will providing updates as matters develop.

In any event, the Government has made clear that an immediate end to free movement following a no-deal exit will not affect the ability of EU, EEA and Swiss citizens and their families already resident in the UK by 31 October 2019 to continue living and working here, as long as they apply for status under the EU Settlement Scheme before 31 December 2020. Nonetheless, as a precaution, employers should support their affected employees to obtain (or apply for) pre-settled or settled status under the Scheme before 31 October 2019 (or at least prior to their next trip outside the UK) to reduce difficulties on re-entry by having to prove their prior UK residence by some other means. Current average processing times under the Scheme are reasonably quick – between one and four days. Those travelling outside the UK after 31 October and before they have been granted status would be well-advised to take with them some proof that they are already resident in the UK (ideally in line with the documentary evidence recommended by the Home Office when applying under the Scheme such as recent UK payslips, an employer letter or utility bill).