Coronavirus - Legal FAQ for data centre providers - Ireland

• Ireland

30-03-2020

Background

This legal FAQ addresses certain considerations for data centre providers following the spread of, and the Irish Government’s and public’s reaction to, COVID-19 and its impact on businesses and their contractual arrangements.

The COVID-19 situation continues to develop at pace and governmental advice is being updated on a daily basis. This briefing therefore reflects the position as at 30 March 2020 only.

Whilst this FAQ has been written to reflect the position under Irish law, a number of the principles discussed will have wider application outside of the laws of Ireland.

FAQ

Do data centre operations fall within the definition of “essential services” in Ireland?

The “Information and Communication” section states that the following services are considered “essential services” in the list published by the Department of the Taoiseach on 28 March 2020:

the publishing of newspapers, journals and periodicals as well as video, television programme production, sound recording, radio and television broadcasting; wired and satellite and telecommunications activities; internet and cloud providers; data centres and related services.

The complete list of essential services can be found here.

Does the list of “essential services” extend to the construction of data centres?

While “data centres and related services” may be considered essential services, this would not extend to the construction of data centres.

The “essential services” contained within the “Construction” section provides for:

•  
  • essential health and related projects relevant to the COVID-19 crisis, and supplies necessary for such projects;
  • repair/construcion of critical road and utility infrastructure; and
  • delivery of emergency services to businesses and homes on an emergency call-out basis in areas such as electrical, plumbing, glazing and roofing.

This would appear to be aligned with a statement issued by the Construction Federation of Ireland (“CFI”) stating that construction is not considered an essential service unless it directly relates to the carve out set out above.

It has been confirmed that there is a grace period until 6pm on Monday, 30 March in order to allow companies to make the necessary arrangements to wind down their activities in an orderly way. The CFI have stated that this should also be done in a way to minimise travel and personal interaction as much as possible.

Does COVID-19 constitute a force majeure event?

The applicability of force majeure depends on the wording of the relevant force majeure clause and the definition of the clause in a specific contract.

This will depend on the construction of the force majeure clause. If terms such as ‘pandemic’ or epidemic’ are included in the clause then the clause will likely cover Covid-19. Covid-19 was declared a Pandemic by the World Health Organisation on 11 March 2020.

As the response and steps taken by governments to tackle COVID-19 intensify, it may become more likely that companies can rely on force majeure triggers that refer to “governmental intervention” or similar.

Seeking to rely on more common wording like “acts of God” or “circumstances beyond the party’s reasonable control” will be more of a challenge and will depend on the drafting of the clause.

There will also often be further hurdles to surmount, such as conditions in the force majeure clause itself and the requirement to show a causal link between COVID-19 and the delay or failure to perform.

Relying on force majeure will not be straightforward and, given the potential financial implications of not performing their contractual obligations, data centre providers should consider steps to mitigate the impact of COVID-19 such as resourcing considerations and business continuity planning.

For more information on the impact of COVID-19 on Force Majeure, Frustration and other contractual issues, you can access our Corona Virus – Commercial Contracts article here.

What other contractual considerations are there due to COVID-19?

In addition to force majeure, it will be necessary for data centre providers to understand the position in other areas of their contracts, including:

• Compliance with applicable law – do the obligations to comply with applicable law extend to regulatory / government guidance?

• Change of law - does a change of law, that arises as a result of a public health emergency, mean additional costs or obligations?

• Hardship - do any contracts include a hardship clause which allow a provider to protect itself if the contract becomes too onerous or expensive to perform?

• Termination rights - are there any termination rights which need to be considered more closely in light of COVID-19?

• Insurance - consider the insurance position and check insurance policies to see if they cover losses or liabilities relating to COVID-19.

• Business Continuity Obligations – a careful review of the contractual business continuity position should be undertaken.

• Supply chain/subcontractors - what controls are there over supply chain/subcontractors (for example, restrictions on use of alternative subcontractors)?

• Governance and escalation - how often are the parties obliged to meet to discuss contract operation?

For more information on the impact of COVID-19 on Force Majeure and other contractual issues, you can access our Corona Virus – Commercial Contracts article here.

How do we continue to hold board meetings and enter into contracts?

With the growing spread of COVID-19, restrictions have been put in place which have made it difficult to conduct business as usual. The majority of businesses have faced disruption in one way or another, to include limiting of face-to-face interactions and employees and management being required to work from home.

However, despite, and often because of, the impact of COVID-19, businesses need to continue to enter into agreements and make decisions in the altered corporate and commercial landscape.

We have prepared a helpful guide for businesses on how they can continue operating as ‘normal’ as possible, particularly in respect of remote execution of documents and remote decision making. This can be accessed here.

Can visitors to a site be asked questions about their potential exposure to COVID-19?

In collecting visitor personal data (whether related to possible exposure to COVID-19 or otherwise), a data centre provider will be subject to rules relating to such collection, including that the collection is necessary, justified, proportionate and fair.

This would most likely be justified as necessary for legitimate interests in promoting the health, safety and welfare of employees and visitors to sites (though care should be taken in relation to explicit questions about an individual’s health which would require additional lawful grounds and policy documentation).

While data protection obligations should not stand in the way of an organisation implementing processes and procedures to contain, manage and mitigate risks identified by COVID-19, these processes and procedures must comply with data protection legislation such as the General Data protection Regulation (“GDPR”) and the Data Protection Act 2018.

You can find more information on the data protection implications of COVID-19 for organisations set out in our recent article accessible here.

Can someone be denied access to a site based on information provided relating to potential exposure to COVID-19?

Given the seriousness of this pandemic and the latest Irish Governmental advice, we would expect parties to take a sensible approach to this and anyone who is deemed to be at risk of having contracted the virus should be refused entry and directed to self-isolate.

From a privacy and data protection law perspective, whilst it is unlikely that a person would object to being denied access, even if this was the case, our view is that the negative impact on that person’s rights is outweighed by the need to protect the health of employees and other visitors and this reflects the latest approach being taken by the Irish Government.

You can find more information on the data protection implications of COVID-19 for organisations set out in our recent article accessible here.

How long can information be kept for?

A Legitimate Interest Assessment will need to be recorded and it should be considered how long the data should be retained, based on how long the information is needed for. This will likely depend on the most up to date governmental advice.

You can find more information on the data protection implications of COVID-19 for organisations set out in our recent article accessible here.

What about employment related considerations?

The Irish Government is appealing to employers to try to find ways of continuing to pay their staff, where possible. However, for many employers, paying employees in these circumstances simply won’t be feasible on either a temporary or an ongoing basis and they will need to take measures to ensure their businesses stay afloat. One option may be to ask employees to use their annual leave or agree to take some unpaid leave. However, it may also be necessary to consider introducing further, and potentially more drastic, measures under the Redundancy Payments Acts 1967-2014, which provide for the concepts of lay-off and short-time.

To assist employers in these uncertain times, you can access our COVID-19 Guidance for Employers here.

Following increased pressure on the Government to intensify support to businesses affected by the economic fall-out from the COVID-19 crisis, a new scheme has been announced which will support certain employers in continuing to pay their employees during the crisis period. The COVID-19 Wage Subsidy scheme (the “Scheme”) aims to maintain the viability of businesses, jobs and incomes and the link between employers and employees during the period of business disruption. The Scheme replaces the ‘Temporary Refund Scheme’ which had been introduced to assist employers in paying employees who had been temporarily laid off as a result of the COVID-19 crisis. The Temporary Refund Scheme will no longer operate.

Based on the current Government and Revenue guidance and the Bill, our Employment team have prepared helpful FAQs in relation to the Scheme and you can access it here.

Further assistance and next steps

Guidelines are being updated rapidly and, as with all other businesses, data centre operators should actively follow and act in response to up-to-date governmental advice.

As the situation develops, please check our Coronavirus Hub for further updates and contact us if we can assist with any of the topics set out in this FAQ.

< Go back