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Generally, employees are entitled to be paid wages only for work they have performed. So if they cannot attend work, even for reasons beyond their control, the employer is not obliged to pay them. This general rule is subject to any contract or policy, or any collective or workplace agreement, that specifically says otherwise.

Employers need to check employee contracts and policies, and any collective or workplace agreements, to see if they are obliged to pay when staff are prevented from attending work because of matters beyond their control.

Before deciding what steps to take, carry out an audit to assess the scale of the problem and the affect on the business. There are possible alternatives to just docking pay, which many employers may want to avoid given the potential affect on morale and productivity over the long term.

Use of Blackberrys, mobiles and laptops, and use of overseas offices belonging to the business, associated companies or other businesses with links to the affected business may be possible.

If the employee agrees, the time can be taken as holiday.

Under the Working Time Regulations, an employer must normally give twice as much notice than the period of leave if it wishes to impose a holiday period – so 1 week’s leave would require 2 weeks’ notice. Only if there is an exclusion in the contracts of employment or a workplace agreement can employers insist that employees take this time as holiday without that notice. It is unlikely that employers can give very much notice in relation to any absences caused by the flight ban.

This may be an attractive option if working arrangements are sufficiently flexible. The employer and the employee would both have to agree.

Many businesses will have the headache of staff who cannot come back from work meetings and other commitments overseas. Here, there are two principal issues.

First, the employer retains an obligation to take reasonable care for the employee’s safety. This duty will be affected if the staff member is forced to make a long and circuitous journey to return to the UK, using unexpected means, eating food in unusual places and sleeping in strange locations. The employer needs to support those employees as much as possible as they make their odyssey home.

Secondly, there will need to be a reckoning, when the staff member returns, of how much time he or she has been spending actually working. Normally, business travel counts as working, and that would include unexpectedly long journeys. But what of lost weekends and evenings, and extra nights spent away from home? The contract may not be at all clear on these issues and there may therefore not be a right answer. Here, the employer and employee may need to sit down to talk about how that time is to be treated, discussing it on a good faith and common sense basis with a view to coming to an agreement which is fair all round.

Make sure that the chosen approach is communicated to all employees and of course to the employees who are stranded abroad.

Being flexible and giving staff the option to work remotely, to take time as holiday or to take it as unpaid leave but with an opportunity to make up the time at a later date is likely to be the best approach. A lot of employee goodwill and loyalty can be obtained by employers who treat employees sympathetically – holidaying staff may already be in a big financial hole through having to pay for extra accommodation and travel costs, and will remember any generosity they receive when they return to work.

Companies may have been affected in many ways by the ash cloud, and they may have to pick up losses which may include replacement business flights or travel arrangements, extra accommodation, sustenance and vehicle hire. The business may also have suffered disruption to its business involving lost or delayed contracts and having to pay staff even though they cannot get to work.

For the recovery of these kinds of losses, there are likely to be three potential targets:

1. The airline carrier
2. The company’s insurer. Though most insurance policies contain an act of God clause enabling them to avoid liability if the claim was caused by a natural event, some insurers including Lloyds TSB, Halifax and HSBC have said that they may not rely upon such clauses.
3. The credit card company – if the flight was booked using a credit card, the purchaser may be entitled to make a claim against the credit card company, though it may decline if the claim is made by a business rather than a private consumer.

For any of these claims, it is important to keep proper records and an accurate paper trail. It will also be important to be able to demonstrate that the organisation has taken steps to keep its claim to as low a level as reasonably possible.

As a result of the flight ban, some businesses may be unable to perform their contractual obligations. They may for instance have agreed to import or export a certain item but that may not be possible. This will particularly affect goods which are light and of high value and therefore travel by air.

Unless it says otherwise, a contract contains obligations which have to be fulfilled no matter what, and it is not possible to point to the fact that performance has been prevented by forces outside the contracting party’s control. Only where the contract specifically includes a force majeure or act of God clause can the party avoid having to do what they promised to.

If you are faced with the situation where the party with whom you contracted relies on an act of God clause, consider the terms of that clause carefully. The transport Minister conceded on 20 April that the rules prohibiting flights when there was any ash in the atmosphere were too strict and that they would therefore, belatedly, be relaxed. It may therefore be possible to argue that the cause of the flight ban was not the volcano but the faulty rules: hence, not a natural disaster but a man made difficulty.