Businesses for
Europe's Second

The escalation of the second wave of COVID-19 infections in Europe is prompting a new round of restrictions on businesses and individuals. There are also a host of new rules and work recommendations for sponsors to follow, which will have implications for their own offices, as well as those of portfolio companies. In addition, there are rising financial pressures and considerations for weathering another period of potentially worsening economic performance.

Tightening Restrictions Around Europe

The new spike in COVID-19 infections is leading to diverging approaches by national and regional governments across Europe. Most areas are opting for a patchwork of regional measures and curfews to limit the economic fallout. The UK, where the economic rebound slowed to 2.1% in August, less than half the level expected, highlights the diverging approach across the various regions.

Northern Ireland{{1}}{{{Northern Ireland’s circuit breaker lockdown: why now and will it work?</br>Source: The Conversation}}}

  • Four-week “circuit-breaker” lockdown started on 16th October
  • Bars and restaurants shut, except for take-aways
  • No indoor sports
  • Close-contact businesses, such as hairdressers, must remain closed

Scotland{{2}}{{{Covid in Scotland: What are the latest lockdown rules?</br>Source: BBC News}}}

  • A new five-level system of coronavirus restrictions came into effect on 2nd November
  • A maximum of six people from two households can meet together in hospitality venues, either indoors or outdoors
  • Customers must provide their contact details in case contact tracers need to reach them
  • The use of face coverings is now mandatory in indoor communal settings, such as staff canteens and corridors in workplaces

Wales{{3}}{{{Coronavirus firebreak: frequently asked questions</br>Source: Welsh Government}}}

  • Wales introduced a short, sharp firebreak from 23rd October until 9th November 2020
  • People must stay at home, except for very limited purposes, and must not visit other households or meet other people they do not live with
  • Certain businesses and venues, including bars, restaurants and most shops must close
  • Face coverings continue to be mandatory in the indoor public spaces that remain open

England{{4}}{{{New National Restrictions from 5 November</br>Source: UK Government}}}

  • From 5th November to 2nd December, the Government has advised people to stay at home, except for specific purposes
  • Everyone who can work effectively from home must do so
  • Individuals cannot meet socially indoors with family or friends unless they are part of their household or support bubble
  • Certain businesses and venues, including non-essential retail, leisure facilities, entertainment venues and personal care facilities, must remain closed

France{{5}}{{{Restrictions and Requirements in Metropolitan France</br>Source: French Government}}}*

  • A new nationwide lockdown went into effect on 29th October
  • New restrictions will be enforced initially until 1st December, but schools and creches will remain open
  • People must stay in their homes except to buy essential goods, seek medical attention, or use their daily one-hour allocation of exercise
  • Cafes, restaurants and shops will shut down unless they are deemed to be selling essential goods

Germany{{6}}{{{Germany announces tougher coronavirus restrictions</br>Source: Politico}}}*

  • German leaders have mandated the closure of bars, restaurants and many non-essential businesses nationwide on 29th October
  • The restrictions will run through to the end of November, with a review during the middle of the month
  • Members of one household should only meet outdoors with members of one other household, with the total number of people restricted to 10

Italy{{7}}{{{Covid-19: Italy tightens rules after coronavirus cases surge</br>Source: BBC News}}}

  • Bars and restaurants to close at midnight, or 6pm if not offering table service
  • Meeting up limited to six people
  • Local conferences and festivals suspended
  • No amateur contact sports permitted

*Correct as of 2nd November 2020

Private Equity Office Practices

Since the onset of the crisis, private equity firms in Europe have taken different approaches to managing their own working practices. As restrictions began to ease at the start of the summer, some began bringing staff back into the office. Among them, some firms specified that workers should take taxis and private transport, while others permitted the use of public transport. A number of smaller private equity firms in particular have (so far as possible) maintained a “business-as-usual” approach throughout the crisis, although this is likely to become more challenging as infections rise and businesses are asked to shift back to home working.

Businesses need to be sensitive to employees’ concerns and enable them to work remotely. And where staff do come into the office, firms need to ensure that they follow local rules closely. In some cases, there is uncertainty around the application of restrictions on gatherings to work meetings, the need for face coverings around the office, or if staff can engage in informal chats in colleagues’ offices, communal areas and workspaces.

Firms should study the restrictions in place in their area and put in place corresponding protocols to manage staff interactions and movements to and from the office, while thinking about safety measures, such as daily temperature checks (in the office or at home). They should also consider initiatives that promote mental health and wellbeing, both in the office and for those staff who are homebound for long periods of time.

Financial Support Packages Reduce

As governments have reimplemented closures, many have extended schemes to support employees at affected businesses. Sponsors that own companies across Europe will find a mixture of programmes available, as some countries introduce tighter sets of rules for accessing financial aid and reduce state contributions, while others continue their existing schemes.

Hours before the UK’s Coronavirus Job Retention Scheme was due to end, the government announced it will be extended until December. In recent months, firms have had to top up furloughed wages by 20%, with the government paying 60%, but the state will now contribute the full 80%, with employers only covering pension and national insurance contributions. To be eligible for this extension, employees must have been on the payroll by 30 October 2020, but they don't need to have been furloughed before.

In Germany, the government has extended its Kurzarbeit system, which subsidies part-time working, until the end of 2021 at the earliest. The German scheme enables companies to put staff on part-time hours, with the state supporting salaries up to €6,700 a month – and 87% of net pay for employees with children.

French state measures have also been put in place until the end of next year. The chomage partiel scheme allows workers to be paid 70% of gross salaries up to a ceiling of nearly €7,000 a month. In effect, workers on the lowest salaries have been receiving full pay.

Michael J. Preston

T: +44 20 7614 2255

Gabriele Antonazzo

T: +44 20 7614 2353

Michael James

T: +44 20 7614 2219