Navigating the way forward: steps to prepare your business for the COVID-19 rollback

By Penny Alexander, Stefan Ladd, Tom Bleby

In brief 12 min read

Since the Governor-General of Australia declared COVID-19 a human biosecurity emergency, businesses have faced the unwieldy task of managing the health crisis and the raft of new rules and restrictions put in place to combat it. This has been especially challenging for businesses operating in multiple jurisdictions, given the inconsistencies between the new or revised emergency measures implemented - often daily - by governments across Australia. To help navigate this uncertainty, we have tracked these developments and provided both analysis and (where possible) recommended actions.

However, with governments beginning to roll back certain restrictions and encouraging businesses to be ready to reopen their doors, it is time to step back and ensure you have an effective strategy in place to manage the transition. The path ahead remains uncertain and governmental powers in a health crisis such as COVID-19 are extremely broad. This makes it difficult to predict the exact nature of any further measures that may be adopted going forward, particularly if new outbreaks occur.

At this key juncture, then, we have prepared a selection of recommendations to help businesses and their senior in-house advisors navigate these challenges and, equally, to identify potential opportunities presented by this rapidly changing legal landscape.

1 Adopt a systematic approach to managing the latest COVID-19 rules and restrictions

As the COVID-19 crisis continues, we are continuing to see a high volume of new orders and directions being released every day. In some instances, we have seen over 50 orders or directions introduced in a week across Australia. Critically, these often canvas a wide range of issues and may not be consistent in their treatment of these issues as between individual states and territories. The result is considerable uncertainty for businesses seeking to stay abreast of the latest rules and restrictions in place across Australia. Further, with governments now progressively implementing a series of rollback measures in their respective jurisdictions, we expect the high volume of updates to continue. However, there are steps businesses can take now to be best positioned to navigate this uncertainty.

First, it is important to understand the types of measures currently in force. Broadly speaking, the core orders and directions of relevance to businesses can be understood as falling into the following categories. Crucially, many of the changes we are seeing on a daily basis relate to these core categories:

  • 'Stay at home' directions requiring persons (including employees or customers/clients) to remain at home unless an exemption applies. Exemptions have generally been available to permit a person to leave their home to obtain essential supplies (such as food or drink), or to attend work where this cannot be done from home.
  • Gathering restrictions requiring persons not to gather in certain numbers at certain places and, in some cases, requiring businesses to restrict certain gatherings from occurring on their premises. Exemptions are generally available to permit gatherings at particular locations, such as supermarkets.
  • Density restrictions imposing a limit on the total number of persons who may be in a particular space at a given time. The total number of persons who may be in a particular space will generally depend on the size of the space.
  • Restrictions on 'non-essential businesses' prohibiting or otherwise limiting the operation of certain specified 'non-essential' businesses. In some cases, non-essential businesses will be prohibited from operating at all. In other cases, certain non-essential businesses (such as cafes or restaurants) are permitted to operate on a limited basis (ie take-away only) and will be subject to a range of additional conditions relating to social distancing and hygiene. While in general these restrictions apply across the relevant state or territory, in certain states, such as Tasmania, additional restrictions have been imposed on businesses operating in certain high risk areas or regions of the jurisdiction.
  • 'Border restrictions' restricting access to certain states, territories or regions, or imposing quarantine or other requirements upon persons arriving in such places. Restrictions of this kind have been introduced at both federal and state or territory level. For example, the Federal Government has implemented restrictions on access to a number of remote communities and areas. These restrictions apply in addition to the existing quarantine or border closure restrictions in force at state or territory level.

While many of these rules and restrictions apply directly to businesses, such as the restrictions on non-essential businesses, many apply to individuals (eg stay at home orders, gathering restrictions and border restriction requirements). These measures can affect the employees, suppliers and customers of your business and, therefore, your business itself.

There are a range of measures which fall outside of these core categories, which you should also consider in light of the particular nature of your business.

Secondly, businesses must be alert to inconsistencies in the existing rules and restrictions that are in force across Australia. Crucially, many of the abovementioned restrictions which are of direct relevance to businesses are being implemented at state or territory level, even when announced by the Federal Government. In practical terms, this means there are often differences in the rules and restrictions (as well as the exemptions) which apply in each Australian jurisdiction.

For example, Victoria's 'Restricted Activity Direction' includes a set of specific signage and cleaning requirements which apply to 'open retail facilities'. However, there is no equivalent set of obligations under the corresponding order in New South Wales, meaning the requirements applicable to open retail facilities in Victoria may be more restrictive than is the case in New South Wales.

Be aware, also, that not all states and territories will have implemented each type of restriction. For example, at present, only Victoria, New South Wales, Queensland and Tasmania have implemented stay at home requirements, meaning that the precise restrictions applicable to your employees and customers will likely differ across Australia.

Thirdly, business should ensure they have an appropriate system in place to monitor the latest rules and restrictions. As noted above, we are continuing to see a high volume of new orders and directions each day. This can create significant challenges for businesses to ensure they are across the latest developments and continue to be compliant in each Australian jurisdiction in which they operate. This trend is likely to continue as governments begin to ease (but not necessarily remove entirely) the existing restrictions. As such, it is imperative that businesses take proactive steps to ensure they remain up-to-date, including by ensuring they have an appropriate monitoring system in place.

Fourthly, if your business is affected by a rule or restriction, consider seeking an exemption. Whilst in general there is no specific legislative framework setting out the process for seeking exemptions to these rules or restrictions, many of the governmental orders explicitly provide for the grant of written exemptions. You should consider whether your business is likely to be affected by a COVID-19 rule or restriction, and take proactive steps to seek out appropriate exemptions if needed.

Active advocacy to government in relation to the effect of actual or potential changes may also be warranted depending on the circumstances.

What you can do now: In addition to implementing the four steps set out above, you should seek out additional information and support regarding the rules and restrictions that may be relevant to your business. Further information regarding these rules and restrictions, as well as the range of other emergency measures which have been put in place across Australia, can be found here.

2 Regularly review how COVID-19 affects your contractual arrangements

The COVID-19 pandemic and the Australian governments' responses have the potential to impact businesses' contractual arrangements, including with suppliers, customers and other third parties.

Where the COVID-19 pandemic is impacting a business' ability to satisfy its contractual obligations, the business should consider whether contractual relief is available as a result of the pandemic or any governmental responses which have been implemented. Relief may be available where contractual provisions exist that relate to one or more of (for example):

  • change in law;
  • force majeure; and
  • extension of time.

The general law doctrine of frustration may also be available depending on the circumstances.

Regardless of the form of relief, it is important to carefully consider the trigger for the relief claimed, causation between the trigger and the relief claimed, as well as the desired outcome. For example, some change in law provisions do not include relief for changes in subordinate legislation so may not be triggered by a particular governmental order or direction in relation to COVID-19. Similarly, invoking the doctrine of frustration will bring the relevant contract to an end, which may not be the desired outcome.

Where suppliers or customers of a business are claiming relief because they are unable to satisfy their contractual obligations due to COVID-19, businesses also need to carefully consider their legal options as well as broader issues including the potential long-term impacts on their supply chain and reputation of electing to enforce contractual rights or otherwise refusing relief to suppliers or customers in the current climate. For example, it may be that the contract does not provide relief, but if some assistance or relief is not provided the supplier is likely to become insolvent. This is unlikely to be a good outcome if the business is relying on that supply in the longer term. Likewise, a contractor may not strictly be entitled to force majeure or other relief under a contract, but the business may prefer to agree appropriate relief arrangements for the sake of the long-term business relationship with the contractor and their broader business reputation.

What you can do now: You should understand the impact of COVID-19 on your business' contractual arrangements and the relief that may be available (bearing in mind any associated legal, commercial or reputational risks). Further information regarding the implications of COVID-19 for contractual obligations can be found here.

3 Regularly review what other legislative and regulatory measures are in place to address COVID-19 issues

The COVID-19 crisis has also led government to implement legislative and regulatory changes to deal with a variety of practical impacts of the current situation. Many of these changes are directly relevant to businesses and their operations, and so should be carefully considered. Among the issues that government has sought to address are:

  • the execution of legal documents in an age of social distancing;
  • how strictly company directors should be regulated at a time in which many are struggling to keep their businesses afloat;
  • the need to ensure continued access to essential community supplies at a time of heightened demand; and
  • a range of matters relating to commercial and residential tenancies.

To address these challenges, the Australian governments have implemented a range of additional measures to ameliorate the indirect consequences of the COVID-19 pandemic and otherwise support the long-term health of the Australian economy, including:

  • the grant of additional regulation-making power to the executive government in certain jurisdictions to amend various laws (including procedural requirements and laws relating to leases);
  • the provision by the Federal Government of temporary relief for company directors from personal liability relating to insolvent trading;
  • the amendment of planning laws and regulations to permit businesses such as supermarkets to operate for longer hours than would otherwise be the case; and
  • the implementation of new rules and principles relating to leases, including a moratorium on evictions for tenants under residential tenancy agreements.

What you can do now: You should take steps to ensure you are across these key changes, consider their relevance to your business and seek expert advice as required.

Further information regarding issues relating to the execution of legal documents, the regulation of company directors, access to essential community supplies and commercial tenancies, can be accessed via our COVID-19 hub.

4 Consider whether your business may be entitled to support from government

Both the federal and state and territory governments have announced, and are implementing, a range of economic support measures to address the impacts of the COVID-19 emergency. Such measures include relief for businesses in the form of direct funding support, as well as relief form certain government charges or taxes.

What you can do now: You should consider whether your business may be eligible for such relief and seek further information where required.

Further information regarding the range of economic measures which have been put in place by government to support businesses can be found here.

5 Consider whether your business may able to take advantage of new opportunities

New opportunities are being presented by the current environment, including the anticipated pipeline of new government projects to help to stimulate the Australian economy. In New South Wales, for example, the government has fast-tracked its assessment of 24 projects as part of its plan to stimulate the economy. These projects include large-scale infrastructure works, new schools and community housing developments.

Similarly, we anticipate that there may be increased opportunities for businesses to successfully present unsolicited and market-led proposals to government pursuant to the relevant frameworks in each state or territory as part of governments' renewed focus on economic stimulus.

What you can do now: You should consider whether new opportunities (including through government channels) are available to your business, and seek further information as required.

Additional information regarding unsolicited and market-led proposals can be found here.

6 Plan for the future, but stay flexible

With governments now looking to ease restrictions and encourage businesses to reopen their doors, it is important to plan for the future. This might involve considering when and how to reengage your workforce, and/or recommence existing projects or initiatives. As businesses look to return staff to office environments, they also need to be alert to social distancing, hygiene and other requirements to contain any further outbreak once the core restrictions are eased. Relevant government guidance should also be considered as part of this process. For example, Safe Work Australia has published a guide to minimising the risk of exposure to COVID-19 in the workplace, with targeted information available for a range of industries.

Most importantly, businesses will need to keep front of mind that governmental powers in relation to a health crisis such as COVID-19 at both federal and state and territory level are extremely broad, making it difficult to predict the exact nature of any further measures which may be adopted in the future, particularly in the event that a further outbreak occurs. Given the unique circumstances being faced by each state or territory, there are likely to be differences in how each will approach the easing of restrictions and the timeline by which this is to occur.

What you can do now: You should take steps to ensure your business has a plan for the future, particularly as restrictions begin to ease. However, it is imperative that your business stays flexible, and can adapt to the challenges as well as opportunities presented by this rapidly evolving legal landscape.

Our team of experts has been assisting our clients to manage the challenges posed by the COVID-19 outbreak. If you have any questions, or require any assistance, please get in touch.

Further information regarding the measures currently in place is also available on our COVID-19 Hub.