Stage 4 Restrictions in Victoria are significant and impact any business that has operations in Victoria. Multiple directions came into effect at midnight on Wednesday 5 August 2020. There are a number of things that business need to consider as a matter of urgency.
Based on the key questions being asked by clients, we set out below some guidance to assist you ensure you are compliant and aware of the key resources available to business.
Can our business continue to operate?
It will depend on what industry your business operates in and the nature of the goods and services you provide.
For some business, all on-site operations will be closed. Others will be able to operate on-site on a full or restricted basis as a Permitted Work Premises.
Additionally, some businesses that are ancillary to, but are necessary for, the continued operations of Permitted Work Premises, are also able to keep operating. This includes businesses, for example, that supply goods and services required for the operation of the Permitted Work Premises.
To find out how the restrictions impact your business and industry see the Restricted Activity Directions (Restricted Areas) (No 6) and the table of Permitted Work Premises that has been published.
If it is not clear how the restrictions impact your business either obtain immediate legal advice or consult with the Coordination Centre in the Department of Jobs, Precincts and Regions who will consider the businesses that fall into grey areas.
If our business can operate, how do I become compliant?
If you are able to operate a Permitted Work Premises you will need to comply with a number of conditions, including:
Your business will be required have in place a COVIDSafe plan by midnight on Friday 7 August 2020. The focus of the plan is on safety, prevention and response in the event that COVID19 is linked to the workplace.
For some industries, this obligation is enhanced and a High Risk COVIDSafe Plan is required. If your business operates in Construction, Warehousing, Distribution (Centre), Meat Processing, Cold Storage and Aged Care, then you will need to have a High Risk COVIDSafe Plan in place.
A template of a COVIDSafe plan can be found on the Business Victoria website. A High Risk COVIDSafe Plan template does not yet appear to be available.
Your business must also comply with record keeping requirements. In short, you will be responsible for ensuring that you maintain records of any employee or visitor who attends the work site for more than 15 minutes.
For businesses that operate across multiple sites, you will need to ensure that employees are not able to attend more than one site – unless it is not practicable for the employee to perform their work at one site only.
There are numerous other requirements for workplaces including complying with density quotients for all shared spaces and publicly accessible areas and cleaning and signage requirements.
For full details of your obligations, refer to the Workplace Directions.
Do my employees need work permits?
If you are operating as a Permitted Work Premises and requiring employees to attend a work site, it is the responsibility of the employer (Permitted Employer) to issue the employee with a permit under the Permitted Worker Scheme.
Employers can issue the permit to their employees if:
- the business is on the list of Permitted Work Premises;
- the Permitted Employer's business is operating a Permitted Service, and the employee is required to perform a 'Permitted Service'; and
- the employee cannot perform their work from home.
There are some limited circumstances where a permit does not have to be issued, for example, where an employee is at risk at home due to family violence and does not feel safe to work from home, or where an employee is law enforcement, an emergency services worker or healthcare worker, who carry employer-issued photographic identification, which clearly identifies the employer.
Employees must carry the permit as well as photo identification when travelling to and from work. The permit can be shown electronically to authorities, including on a mobile phone.
As set out below, there are significant penalties if permits are not issued in accordance with the Scheme, meaning employers need to be satisfied that they definitely require the employee to perform the work on-site and that the employee cannot perform it at home.
Further, the directions also note that if the content of a Permitted Worker Permit is suspected to be fraudulent, criminal investigations may be considered.
If an employee has attested that their child and/or dependent cannot otherwise be cared for during work hours by the employee or another responsible adult in the premises where they ordinarily reside then a Permitted Employer must also issue an employee with an Access to Onsite Childcare/Kindergarten Permit.
The template permit forms are available for download on the Victorian Government website.
If my employees can work from home should they?
Yes, the Stay at Home Directions remains in place. If it is reasonably practicable for person to work from home then they must do so. As above, permits should not be issued to employees who can work from home. Remember, when an employee works from home, the home becomes the workplace, so it is also important that worker has a safe place to work compliant with your obligations under the Occupational, Health and Safety Act (2004) (OHS Act). For guidance on this see the WorkSafe Victoria website.
What if I have to close and there is no work for my employees?
There are a number of options that you may wish to consider that range from standing down staff under the Fair Work Act, seeking staff to take leave or in some instances redundancies may become necessary. Your contracts, industrial instruments and whether or not your staff are currently on JobKeeper are all relevant considerations and you should seek immediate legal advice about the options relevant to your business.
What are the penalties for non-compliance?
Penalties are significant and vary depending on the nature of the breach.
If an employer operates despite not being a Permitted Work Premises, the penalty will be up to $19,826 for individuals and $99,132 for businesses.
If an employer issues a permit to a worker who does not meet the requirements of the Permitted Workers Scheme or who otherwise break the rules, the same penalties apply, and if fraudulent, a criminal investigation may commence.
There will also be on-the-spot fines of up to $1,652 (for individuals) and up to $9,913 (for businesses) for anyone who breaches the Worker Permit Scheme requirements.
It is also important to remember that the Workplace Directions run concurrently with the obligations that businesses have under the OHS Act as an employer or otherwise. For example, failure to have in place a COVIDSafe Plan could result in penalties being applied under the relevant direction but also the under the OHS Act – potentially resulting in the prosecution of individuals as well as the business.
What happens if I can no longer deliver or perform under a contract that I have entered into?
Parties to a contract should consider whether the contract includes a majeure clause. Force majeure clauses differ between contracts and a clause may not be drafted in a way which provides relief in the current circumstances. Parties to a contract may also look to the doctrine of frustration to discharge their obligations under a contract. We discuss these issues in detail COVID-19: Force majeure and frustration contracts
How can I delay or get out of a contract that I no longer need because my business is closed or suffering?
As a general matter, if the supplier is still willing to perform their part of the bargain, then the force majeure clause is unlikely to assist in this event, and it is unlikely that the contract has been frustrated. A party to a contract in this situation should carefully examine the contract to see what other options might be available. In some cases a material adverse change clause might provide assistance, as well as clauses that deal with delay. Some contracts provide for full or partial termination options, and in some cases a termination fee might be payable. A carefully planned negotiation strategy is often also of great assistance.
What happens if my suppliers or customers try to cancel their contracts or orders?
On the supply side it is important to see if the event is covered by the force majeure clause, which will depend entirely on the specific wording in the contract. The doctrine of frustration should also be considered (as this may excuse performance), but if performance is simply more burdensome or expensive that does not mean that the contract is frustrated. We discuss these issues in detail COVID-19: Force majeure and frustration contracts
If customers are cancelling their orders, then the business will need to look carefully at what rights the customer has under their agreements. They may have specific rights to do so (see our answer to #8 above), or they may be in breach of their contract, for which remedies might be available to the business.
What Govt assistance is available?
To support businesses impacted by the Stage 4 restrictions, one-off grants will be made available by the Victorian Government to eligible businesses under the Business Support Fund – Expansion program:
- $10,000 for employing businesses in metropolitan Melbourne and Mitchell Shire in recognition of spending longer under restrictions; and
- $5,000 for employing businesses in regional local government areas (except Mitchell Shire).
The Victorian Government is also establishing a $20 million CBD Business Support Fund to help small businesses in Melbourne’s CBD faced with a large and sustained shock to their trading environments.
More details are expected to be released by the Victorian Government soon.
Who is eligible for the Govt assistance and how do you apply?
Businesses can apply where they meet all the criteria listed below. They must:
- operate a business located in metropolitan Melbourne or regional Victoria;
- be a participant in the Commonwealth Government’s JobKeeper Payment scheme;
- employ people;
- be registered with WorkSafe on 30 June 2020;
- have an annual payroll of less than $3 million in 2019-20 on an ungrouped basis;
- be registered for Goods and Services Tax (GST) as at 30 June 2020;
- hold an Australian Business Number (ABN) and have held that ABN at 30 June 2020; and
- be registered with the responsible Federal or State regulator.
Business owners that do not employ people (non-employing businesses) are not eligible for funding through this program.
Applicants must certify that they meet the eligibility criteria and must provide evidence of the address of their eligible business operation through their most recent:
- utility bill (gas, electricity, telecommunications, water);
- lease agreement; or
- council rate notice.
Applicants must also provide evidence of their participation in the Commonwealth Government’s JobKeeper Payment scheme. The evidence required will be the most recent JobKeeper Business Monthly Declaration Receipt ID or Enrolment ID generated from the Australian Taxation Office Business Portal.
More details of the scheme can be found on the Business Victoria website. Eligible businesses may apply by submitting an application online.