Coronavirus COVID-19: What is considered an 'essential service' and how will this impact the construction industry?

As at 31 March 2020, it appears that Australian construction sites are not on the list of businesses that have been categorised as ‘non-essential’ by the Australian Government, thereby avoiding forced shutdown in the effort to combat the spread of COVID-19 across Australia. Like many businesses where “remote” working is not feasible, the current guidance is that these businesses can continue to operate, as long as in doing so, ‘social distancing’ measures can be observed. It could also be argued that some construction and infrastructure projects may fall within what is considered as an ‘essential service’, given that the Australian Government has made specific reference to the importance of allowing certain ‘essential’ industries such as the construction and mining sector to continue operating. This is largely due to the importance of having essential services such as energy supply, fuel supply and waste disposal continue, as well the continuation of critical infrastructure projects which includes those in the supply and support chain.

This position could very well change over the coming days/weeks as we are seeing the government continue to tighten restrictions on how the economy will operate over the next 6 months, and what businesses are considered absolutely essential in the delicate balancing act between containing the spread of COVID-19 in Australia, while also maintaining the Australian economy (even if on life support). New Zealand may also provide some insights into what more stringent closures may look like if the packages implemented by the Australian Government to date fail to adequately ‘flatten the curve’.

Is there a definition of ‘essential services’?

There is unfortunately no ‘one-size-fits-all’ definition in terms of who is considered an ‘essential worker’ and what are considered ‘essential services’ during a crisis such as the COVID-19 pandemic. Both the Federal and State Governments have started to enforce restrictions on what they are calling ‘non-essential services’ (with such services being identified across many different sectors). In identifying non-essential services, we have also seen the Federal Government acknowledge some of the services that they are also categorising as essential, although we do not yet have a comprehensive definition.

We anticipate that there will be further clarifications and amendments from the Government over the coming weeks on what is an ‘essential service’, and what services will remain immune from any operational restrictions or forced closures.

Non-Essential vs Essential Services

In a media statement released by the Prime Minister of Australia on 20 March 2020[1], it was announced that from midday local time on 23 March 2020, a number of restrictions would be placed on non-essential services across Australia, such as restaurants, cafes, and certain entertainment and sporting venues. This list of non-essential services continued to expand over the following days, with a number of other business and services facing the same restrictions from 12:00 a.m. on 26 March 2020 such as amusement parks and play centres, beauty services, house auctions and open homes, and community facilities.[2]

The Prime Minister and National Cabinet also identified a number of services that are considers to be essential, and therefore not currently subject to the same restrictions as non-essential services. It was stated by the Prime Minister that for those individuals that cannot operate their business or work from home, then these businesses and services are, for the time being considered ‘essential’. Further to this, the Prime Minister and National Cabinet have also specifically outlined a number of key industries which are also considered essential. These include (amongst other things): public transportation facilities, medical and health care facilities, pharmacies, emergency service facilities, supermarkets, office buildings, factories, construction sites, mining sites, freight and logistics terminals where remaining open is necessary for their normal operation (although social distancing and hygiene practices are required in these settings).[3]

Response from the States and Territories

In additional to the Federal Government position, some State Governments have also released statements around businesses and activities that are essential and non-essential. On 27 March 2020, a Public Health Direction was made in Queensland under the Public Health Act 2005 (Qld), titled the non-essential business, activity and undertaking Closure Direction (No.3) (Qld Direction).[4]

Under the QLD Direction, a ‘non-essential business, activity or undertaking’ was defined as an extensive list of services which are declared as ‘non-essential’ until the end of the declared public health emergency, unless they are revoked or replaced.[5] Following advice of the Federal Government, these business were identified as those such as restaurants, beauty services, entertainment venues, leisure and recreation venues etc.

On 24 March 2020, the Northern Territory (NT) Government announced that any interstate or overseas visitors arriving in the NT must self-quarantine for 14 days. Further, it was also announced that under the Biosecurity Act 2015 (Cth) anyone wishing to enter designated remote area within the NT will be required to self-isolate for 14 days before they can enter, starting from 11:59pm Thursday 26 March.[6]

Importantly however, the above restrictions are not a requirement for those that are considered ‘essential travellers’ that are delivering an ‘essential service’, which the NT Government has announced includes the following (amongst other persons):

• any specialists required for industry or business continuity and maintenance of competitive operations where the appropriate skills are not available in the Territory, where the service is time-critical and where the provision of the service requires that the person be physically present in the Territory;
• any person who in the performance of his or her duties is responsible for provision of services for transport or freight of goods, and logistics related thereto, into, within and out of the Territory. and
• any person who, in the carriage of his or her duties, is responsible, while in the Territory, for critical maintenance or repair of infrastructure critical to the Territory.[7]

Response to 'essential services' in New Zealand

New Zealand’s alert level in response to the COVID-19 outbreak was lifted to ‘Alert level 4’ at 11.59 p.m. on Wednesday, 25 March 2020, and will remain in place for at least 4 weeks. This means that unless the New Zealand government has deemed a business as ‘essential’ (which may involve obtaining approval from the relevant government authority), businesses must either operate remotely or close, with serious penalties for failure to follow these rules.

The New Zealand Government has specifically addressed what it considers to be an essential service or business during the Level 4 Alert period, noting that even when a business is considered ‘essential’, it must still operate in a way that minimises the risk of COVID-19 transmission.

In response to how this will impact the construction and infrastructure sector more specifically, many construction sites in New Zealand have been forced to shut down in light of the Alert level 4 restrictions, and many large scale infrastructure projects have also been put on hold for an indefinite period of time.

As at 26 March 2020, the following services (amongst others) have been listed as essential:

To further clarify the above definition, we understand that the only building and construction industry services that are continuing are strictly the entities that are necessary for the continuation of essential services, such as those involved in the supply of electricity, gas, water, and sanitation services, or any entity involved in the building and construction industry required immediately to maintain human health and safety at home or work, or required immediately to avoid significant environmental harm. The default position is, therefore, than an entity is not an ‘essential business or service’ unless they are deemed to be so at the direction of the New Zealand government or relevant government authority.[12] It will be interesting to see whether the Australian Government continues to maintain the view that the construction and infrastructure industry can continue to operate, or whether New Zealand’s strict measures will be followed.

Summary table of position across Australia