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The Coronavirus pandemic is having an enormous impact on communities and businesses around the world. As authorities implement strategies to contain COVID-19, we’ve looked at what it means for you. Below is some of our latest thinking and advice, as well as suggestions for how we can help you.
We’re here to support you through the crisis and beyond.
Q – What are my general health and safety obligations as an employer?
A – At a minimum, employers should conduct a risk assessment and then implement all control measures that are reasonably practicable to either eliminate or, if that’s not possible, minimise an identified risk to health and safety. Risk assessments must consider both the likelihood of a risk eventuating and the magnitude of the consequences if it does. In the context of COVID-19, different workplaces will have different risk levels. For example, a child care centre may have a higher-than-average risk magnitude and a business located within a “hotspot” would have a greater risk likelihood. Ascertaining the degree of overall risk is key to understanding the extent to which a control measure will be deemed reasonably practicable (together with considerations about expense, ease of implementation etc.).
At a minimum, most employers should be encouraging remote working where possible, limiting contact with the general public (to the extent feasible) and providing facilities and information to encourage hygienic practices, such as hand sanitiser and email reminders to stay home from work when sick. If a preliminary “common sense” risk assessment suggests you have any unique or aggravating risk factors, you should engage a subject matter OHS professional to conduct a more thorough assessment and consult in relation to appropriate control measures that are tailored to your environment. Macpherson Kelley can assist you to engage such experts under legal professional privilege to ensure full and candid assessments can be made to protect and enhance safety without exposure to avoidable legal risk.
Q – When can an employee take paid personal/carer’s leave?
A – In the context of COVID-19, under the Fair Work Act 2009 (Cth) (FW Act) personal/carer’s leave will be available to permanent (full-time or part-time) employees if they:
There is no limit on the number of days of personal leave that can be taken for any of the above purposes, subject to the sufficiency of an employee’s accrued balance.
Casual employees may be entitled to unpaid carer’s leave in certain circumstances defined in the FW Act.
Q – What information or evidence should I request if an employee wants to take personal/carer’s leave?
A – Employees generally have to give notice to get paid for personal/carer’s leave in accordance with the FW Act. Essentially, this requires an employee to inform their employer as soon as practicable and to advise the period (or expected period) of the leave. An employee must also give their employer evidence of the illness or unexpected emergency if their employer asks for it.
Medical certificates or statutory declarations are typical examples of acceptable forms of evidence. However, there are no strict rules on what type of evidence needs to be given. The evidence merely needs satisfy a reasonable person that the employee was genuinely entitled to the personal/carer’s leave.
It is noteworthy to consider that as the crisis potentially deepens, attending a medical clinic may not be possible if there is a significant COVID-19 outbreak, as people are likely to be directed to stay at home and in many instances, not attend a hospital or medical clinic to avoid exposing others. Consideration to a more relaxed approach to evidence in such circumstances should be given.
Q – How should I treat an employee who is required to be isolated and confined to their home or ‘quarantined’?
A – The FW Act does not have specific requirements addressing these circumstances. Employers should consider developing a policy to address this situation in advance, ensuring the policy operates within the confines of any express requirements, obligations or restrictions in the FW Act or in any applicable industrial instrument (such as an award or enterprise agreement).
Employers should also consider the following options:
You should also be aware unions are campaigning for employees to be offered special paid leave in such circumstances, so they are not disadvantaged (and to protect their personal leave accruals). The Federal Government is being lobbied to help businesses offset this cost, so you should keep an eye out for further developments in this space.
Regardless, we anticipate many employers will have regard to the relevant circumstances relating to each impacted employee and put in place appropriate arrangements which are consistent with their entitlements, practices and workplace values.
Q – Is an employee required to tell an employer they have been directed to isolate?
A – Yes. In the absence of extraordinary circumstances, it is reasonable to expect employees to contact their employer as soon as practical if they are unable to attend work because they are required to be isolated at home or to enter quarantine because of exposure to COVID-19. Relevantly, employees are obligated to take reasonable practical steps to ensure their own health and safety and those of their co-workers.
We recommend you expressly convey to employees that they must inform you if they are or have been instructed to isolate or are in the category of persons within the scope of any Government travel-related advisory restrictions. In these circumstances, it would not be unreasonable, and would be an appropriate safety control, to require such employees to stay at home and not permit them to attend at the workplace for a reasonable period or until such time that they can produce a medical clearance certifying them as fit and without risk to attend the workplace.
Q – What if an employee wants to stay home or refuses to attend work?
A – You may also be asked to consider whether an employee can stay at home in circumstances where there is no requirement they do so and it is otherwise relatively safe to attend work.
Usually in this instance an employee would need to make a request to work from home (if possible) or to take some type of paid or unpaid leave, such as annual leave or long service leave. An employee is not otherwise entitled to be paid if they are refusing a reasonable direction to attend work. That said, it would be prudent for employers to exercise some caution in relation to responding to such requests. In this dynamic environment, you may need to accommodate some flexibility in managing your staffing needs.
In the case of pregnant and high-risk employees (e.g. the elderly or people with a pre-existing condition that increases the risks associated with COVID-19), you should generally be cautious and adopt an even more flexible approach, taking specific legal advice as required.
Q – Can I impose requirements in relation to an employee’s non-work-related travel
A – In normal circumstances, an employer would have little or no influence or control over this. However, to respond responsibly to the threats posed by the COVID-19 outbreak, it is reasonable to expect employers to emphasise the need for employees to abide by the travel advisories of the Australian Government. For the most up to date advice, please visit smarttraveller.gov.au
Accordingly, you may choose to inform employees that, when making travel plans, they should understand the risk they are taking by reference to the Government travel advisories. We recommend you require employees who have visited high-risk destinations to present a fitness for work certification, verifying they have been tested and cleared after the isolation period, prior to being allowed to return to work. This could be incorporated as part of a policy.
Q – What are my obligations in relation to work-related travel?
A – In relation to work related travel, it is critical you ensure travel policies clearly address where employees can travel, under what circumstances this may be allowed, and the permission processes required. Employers should be assessing the risk of requiring employees to travel, particularly overseas, even for critical meetings.
You should also be carefully considering insurance cover and how that would be impacted and whether coverage will extend to a scenario in light of what is now currently known about COVID-19.
Q – Can I stand-down employees where work shortages have been caused by COVID-19?
A – Employers do not have a right to stand-down employees (without pay) other than in accordance with any such right in an employment contract or enterprise agreement, or otherwise in accordance with limited stand-down provisions in the FW Act.
The circumstances where this right exists under the FW Act include where employees cannot usefully be employed because of a “stoppage of work” for which an employer cannot reasonably be held responsible. Generally, a stoppage of work should not be confused with the need for a reduction in headcount to “right-size” or scale down operations to deal with a down-turn, and stand-downs based on COVID-19 should be carefully considered as they are likely to be closely scrutinised and can be challenged in the Fair Work Commission. We recommend you obtain specific legal advice before proceeding with such an option.
Q – Can I redeploy my employees to a new position or adjust their role (e.g. a waiter at a café to be used as a delivery driver for takeaway services)?
A – You can always vary an employee’s position with their agreement, which may be more forthcoming than usual in the current circumstances. If agreed, such changes should be documented (preferably with a new or varied employment agreement and/or new position description). You should also take advice regarding possible flow-on effects, such as changes in award coverage or classifications and consequent impacts on rates of pay and other entitlements.
If voluntary agreement is not an option, the answer to this question will depend largely upon the specifics of the situation. For example, does the employment contract allow for the assignment of different duties? Legally and practically, an employee’s skills and qualifications are an important consideration as well.
Employers should also keep an eye out for changes being made to some awards allowing for extra flexibility to cope with government imposed restrictions – for example, the Hospitality Industry (General) Award 2010 has been varied to include temporary changes (currently set to expire on 30 June 2020) in response to COVID-19.
Q – If one of my employees contracts COVID-19, is our business required to notify our Landlord?
A – Your lease agreement will normally have a provision dealing with your reporting obligation of infectious diseases, such as COVID-19. Usually, you’re required to immediately notify your landlord of an infectious disease.
Your lease may also require you to follow provisions regarding health and safety procedures. These may require you, or your landlord, to enact measures in order to prevent any harm, or exposure to risks such as COVID-19.
It’s important to understand the complete list of your obligations set out in the lease. If you don’t comply with the appropriate clauses during this pandemic, you may be in breach of your lease and be liable to damages. We suggest seeking legal advice to ensure you make the right decisions based on your specific circumstances.
Q – What happens if the building/shopping centre my business operates in decides to shut its doors?
A – It isn’t uncommon for a lease to afford certain protections, such as a reduction in rent and outgoings, if you’re unable to gain reasonable access to your premises.
However, it’s unlikely your lease has a rent abatement clause which would expressly cover the COVID-19 situation. If your lease has a “force majeure” clause – meaning an unforeseeable circumstance preventing you from operating and paying rent – this might apply in these circumstances. Another option could be exploring your landlord’s breach of quiet enjoyment.
If your business operates in a shopping centre, each state has specific legislation which governs your protections in the event the landlord is required to close the shopping centre.
If the decision to close the shop resulted from the direction of government authority, and your lease doesn’t have a provision specifically covering, you might be covered under the Common Law. If your contract becomes impossible to perform because of COVID-19, you might argue that the lease has been frustrated and should therefore be terminated. The law relating to frustration is quite complex and Courts have rarely agreed to termination on this basis, particularly where it is foreseeable that the frustration will be temporary. You should speak to us first if considering termination on grounds of frustration.
Q – Am I allowed to close my shop/business as a result of COVID-19?
A – Your lease would have to include a specific provision relieving you of your obligation to trade during a “force majeure” event, for you to close your shop without breaching your lease. It is very uncommon for leases to cover COVID-19 type situations as they are usually restricted to access and / or damage issues.
Your lease will likely have a clause requiring you to trade and keep your premises open during your ordinary opening hours of the shopping centre or building in which your business operates. This means if your business wasn’t included in the government’s list of banned activities, and you decide to close your premises, you may be in breach of your lease.
A list of business and activities currently banned by the Federal Government can be found here by following the links to the Prime Minister’s Statements. We have not included the current list on our webpage as the information is currently changing. You should check this page regularly.
You should talk to your landlord or the managing agent about your intentions for the premises before unilaterally deciding to close your premises. Many of our tenant clients are telling us that their landlords understand that COVID-19 is temporary and will be flexible so they can have a relationship with their tenants when this has passed.
Q – Can I ask for a rent rebate or rent holiday from my landlord?
A – Good questions with no easy answer. Unless the government legislates generally rent is still payable but we are seeing both Landlords and tenants reaching arrangements. Unfortunately, often unclear and undocumented arrangements may cause problems in the future e.g. tenant believes a rent waived while landlord thinks just a holiday from payment but still due.
Q – I’d like to get together with some of my competitors to work on a project or create some efficiencies in our supply chain. Can I do so?
A – The key concern here is ‘cartel conduct’ and ‘concerted practices’, both of which are illegal. The starting position is that competitors shouldn’t be doing deals with competitors. However, if the public benefit of the project is so great it would outweigh the negatives of anti-competitiveness, then it may be allowed. But, you need to make sure you do so lawfully, by falling within the relevant competition law exemptions, or getting approval from the ACCC.
Q – What are the penalties for engaging in cartel conduct without authorisation?
A – The penalties for engaging in cartel conduct are severe. Penalties that can be imposed on a corporation are up to the greater of $10 million per offence, three times the benefit gained from the conduct or 10% of annual turnover. Individuals can face up to $500,000 in fines or jail sentences of up to 10 years.
Q – Are there any other exemptions for engaging in cartel conduct?
A – There are limited exceptions such as joint ventures, joint buying groups, collective bargaining notifications, and related bodies corporate. The application of the exemptions can be unclear and relying on a defence or exception to cartel conduct requires very careful consideration. If the defence or exception is not available the consequences are very serious. We can advise you on your options in your particular circumstances.
Q – I want to take my services or goods offering online. What do I need to consider?
Q – I want to change the services or goods my business offers to accommodate changes in customer demands. How do I go about this?
A – Some businesses, in particular manufacturers, are considering changing their business model to accommodate the production of supplies in need during the COVID-19 pandemic. For example some manufacturers are offering to make face masks, ventilators and hand sanitiser. If your business chooses to make a similar change, you will need to enter into new supply agreements with distributors, and consider what your obligations are to current distributors. It is imperative that your business considers the long-term implications of signing a new supply or distribution agreement. In particular, distributors will require you to meet certain standards and you must consider whether your organisation is equipped to do so. More importantly, your business may need to meet new product and safety standards, and understand the product liability your business is accountable for in the event of a breach. We are skilled in negotiating supply and distribution agreements to mitigate future risks and ensure the change in goods or services your business intends to provide does not encounter any hiccups.
Existing products may be protected by patents and designs. Copying those products may infringe those patents and designs. It is safest to search for existing intellectual property rights first, or enter into an agreement to produce the products under licence from or as a subcontractor for the original producer.
You will also need to review your trade mark portfolio to ensure that your trade marks protect you in the new goods or services offering. If you do not have trade mark protection in this area, it is important that you conduct a trade mark search to ensure that use of your trade mark in this way would not infringe any other marks. Our Intellectual Property team is experienced in reviewing trade mark portfolios to ensure proper protection of businesses, and in conducting trade mark searches and providing advice to ensure your trade mark use does not infringe another business’.
Q – I tried to negotiate with an existing manufacturer to make their products. There is a real shortage at the moment, but they simply won’t licence their patents and designs. Is there anything that I can do?
A – Compulsory licences can be ordered by a court or by the federal, state or territory government where the patent or design holder is not meeting demand. Where the goods are necessary to provide government services, the government has broad powers to order compulsory licences in an emergency. If you believe that you can assist in a meaningful way, consider approaching the federal or your state or territory health department.
Q – My business can adapt its production lines to make face masks/hand sanitisers/ventilators. It’s great PR for my business and I want to put my trade mark on those goods. Is that okay?
A – While you may have established trade mark rights in your existing industry, other people may have rights in those trade marks or similar trade marks in relation to face masks, etc. It is safest to conduct trade mark vetting searches first, to ensure that you do not infringe anybody’s trade mark rights.
Q – I operate a registered food business, what do I need to do in order to provide takeaway/delivery services?
A – The Food Act 1984 (Vic) outlines the requirements of businesses in handling and selling food products. If your business has their food premises (either restaurant, café or manufacturing premises) registered with your local council as a class 1 or class 2 premises under the Food Act, then there are no further registration or administrative requirements needed to provide takeaway or delivery of food products. However, you should ensure that your business complies with the Food Standards Code (with attention paid to hygiene, handwashing, cleanliness, labelling, storage, delivery, packaging, and takeaway standards). If your business is a class 3 premises under the Food Act we recommend contacting your local council as the type of food products you handle/sell may require changes to your procedures and records prior to moving to a delivery/takeaway service.
The Department of Health and Human Services has a number of helpful publications as follows:
Q – I wish to open a new food business to provide takeaway/delivery food products, what do I have to do?
A – Under the Food Act 1984 (Vic), businesses are required to register a food premises with their local council prior to the operation of any food business. If you wish to begin providing takeaway/delivery food products, you should contact your local council. Be careful, Council may prosecute businesses and business operators who conduct a food business without having the required registration.
Q – I source supply from overseas, and re-supply locally. Delivery to me has been delayed as a result of COVID-19 concerns, and I am worried I will not be able to supply to my customers on time. What are my rights?
A – These matters will most likely turn on your contracts or terms and conditions in place with your supplier and your customers. Ideally, your contracts or terms and conditions with your supplier will give you rights against your supplier in the event you suffer loss or damage by reason of the delay in making delivery to you. Similarly, your contracts and terms and conditions with your customers will ideally provide that you are not strictly bound by any estimated delivery date. If your contracts or terms and conditions don’t provide these protections, you might still be able to rely on other rights arising from the fact that the delays are beyond your control (see force majeure and frustration below). If you have questions or concerns, let us know and we can take a look at your contracts or terms and conditions for you.
Q – My shipment is stuck at port. Can I seek alternate supply?
A – Your contract or terms and conditions will generally provide for your rights in the event of a delay. However, where no such provision exists, you may be able to rely on a force majeure clause or the operation of the doctrine of frustration (both discussed below) to cancel your contract and seek supply from an alternate supplier. Before doing so, we recommend you are clear on your rights, to avoid defaulting under the terms of your contract or terms and conditions and exposing yourself to unexpected liability. An important consideration is terms of trade – for instance, if your trading partner’s obligation was simply to deliver the goods the subject of your order to the port, and you are responsible for everything that happens thereafter, you may not have rights against your trading partner or an ability to cancel the contract. We can assist you to interpret your rights and obligations if you have any doubts.
Q – What is force majeure, and is it relevant to the issues posed by COVID-19?
A – Force majeure broadly means a coercion that cannot be resisted and relates to a situation beyond a party’s control enabling that party to escape liability for failing to perform a contract. Colloquially it is referred to as an “act of God”, but its application is broader than that, and can extend to human acts such as war, strikes, machinery breakdown, trade embargos and the like, as well as natural acts such as storms, tsunamis, earthquakes, etc. Its relevance in the context of COVID-19 is most likely to be where delivery is delayed or cancelled due to restrictions imposed on the movement of goods and people. If your contract or terms and conditions feature a force majeure clause, look at it carefully to see whether or not there are any exclusions that might prevent its application. Force majeure isn’t a right per se that you can exercise anywhere anytime, it is governed by the strict wording in your contract or terms and conditions. Also note that, in most cases, force majeure cannot be used to escape a liability to pay money.
Q – What is contractual frustration, and is it relevant to the issues posed by COVID-19?
A – Frustration discharges a contract where, without fault of the party seeking discharge, events occurring after the contract is made would render performance of the contract radically different from what was contemplated and undertaken by the parties at the time of entering into the contract. It applies in very narrow circumstances, covering situations where performance is literally impossible, and cases where performance has been rendered significantly commercially unfeasible. Examples include but are not limited to illegality (i.e. where law changes have made performance of a contract once legal, now illegal), delay (not mere delay, but delay that renders the contract unworkable), destruction of subject matter of the contract, and the disappearance of the basis of the contract. In the context of COVID-19, illegality (i.e. new laws relating to movement of goods and people), and delay, are likely to be most relevant. There are strict rules relating to the use of frustration to avoid a contract, and it can be excluded in contracts and terms and conditions, so let us know if you feel you may have cause to rely on frustration to avoid a contract and we can advise you further. Please note that frustration of a contract won’t occur when performance has simply become costly or requires more effort; there needs to be a significant inability for the parties to perform what they first signed up to.
Q – What happens if I don’t perform my obligations under contract?
A – If you fail to perform your obligations under a contract, and the reasons for your failure do not arise from force majeure or frustration (see above), you will likely be in default of your contract or terms and conditions. The contract or terms and conditions will generally set out what can happen if you do not perform your obligations under contract, but all contracts are different and so we encourage you to look closely at your own. We can assist you with this. Common consequences can include a liability to pay money (including liquidated or agreed damages, interest and costs), liability for losses suffered by the other party arising from your failure, a right for the other party to terminate the contract if you do not remedy your failure, and a right for the other party to be excused from performing its obligations.
Q – How can I recover debts that become well overdue?
A – Recovery of debts is a critical part of business, ensuring you have sufficient cash flow to remain solvent. If you are an unsecured creditor (security discussed below), you will most likely seek to recover your overdue debts by:
If your contracts or terms and conditions provide for recovery of costs or interest, then your recovery of those items might be higher than the amounts ordinarily awarded by a court to a successful claimant. In some cases, it may be appropriate to serve a Creditor’s Statutory Demand on the debtor – this is a device forcing a debtor company to prove its solvency, failing which it is liable to be wound up. Practically, it focuses the debtor company’s mind on making payment to its creditors to avoid going under.
Q – I’ve never used the PPS regime before, but now I’m worried more customers might go bust. What is the PPS, and how can I use it to protect my business?
A – PPS stands for Personal Property Security, and Australia has a regime in place to allow parties to take a security interest in personal property possessed or controlled by another party. Most commonly, but by no means exclusively, this arises in the supply of goods by one party to another party on credit – i.e. the selling party releases possession of the goods to the purchasing party before the selling party has received payment for the goods in full. The PPS regime enables the selling party in this situation to register an interest in the goods, and display that interest on the public register, until payment is received in full for the goods supplied. In practical application, where the purchasing party subsequently goes into administration or liquidation without having paid the selling party, the administrator or liquidator will be on notice that the selling party has an interest in the goods, and that the goods cannot be realised as part of the administration or liquidation of the purchasing party. In this way, the PPS regime is an important extension of “retention of title”.
Once you have made a registration on a good/asset, you will be a secured creditor. This means if the customer fails to pay or becomes insolvent, you will be prioritised to receive repayments over unsecured creditors. Likewise, anyone who performs a search on the register will be able to see you are claiming an interest on that good/asset. If you didn’t make a registration, you would be an unsecured creditor. If the customer couldn’t afford to pay, you would risk recovering little or nothing.
To use the PPS regime in this way, your contract or terms and conditions will need to contain clauses creating the necessary “security interest”, which can then be registered on the public register. We can assist you in determining if your contract or terms and conditions contain the necessary clauses, preparing them if necessary, and assisting you in the registration of such security interests. Importantly, PPS registrations need to be done ‘up front’, before the supply of goods, as a PPS registration uploaded now will not protect goods supplied previously.
Q – Can I change my payments terms?
A – Changing your payment terms involves consideration of both legal and commercial issues. Legally, your rights will most likely be determined by:
Your contract or terms and conditions may provide that you are able to change your payment terms in certain circumstances or at any time. Most commonly, such changes will apply to orders placed after the change in payment terms and will not affect orders already placed. Some contracts or terms and conditions may provide that you are able to change your payment terms even after an order is accepted, so as to fundamentally change the nature of the supply (i.e. pre-payment or COD as opposed to payment on credit terms). Changes of the latter kind may fall foul of the operation of the unfair contract term regime where it applies, so we encourage you to check with us before you make any changes of this kind. As well as the legal considerations, there are also commercial considerations – most notably, trading partners may take business elsewhere if they feel you are imposing unnecessary changes to long established trading terms.
Q – My customer is saying they cannot pay their outstanding debts, but that a related entity can (eg. a parent company) can, is this allowed?
A – Yes, your customer can assign its outstanding debt to another consenting entity (e.g. a parent company, or other third party). However, this should involve the execution of a Deed of Assignment of Debt or similar, whereby the other entity will specifically agree to accept the liability for repaying the outstanding debt. To maximise enforceability, it is also important to pay particular attention to the ‘consideration’ that is being provided – and what benefit (if any) exists to the entity “going out of its way” to help – as well as any security that might be sought.
Q – My trading partners are struggling in light of COVID-19. Should I offer a repayment holiday or extended payment terms? If so, how should I go about it?
A – Every trading relationship is different, and as such different considerations are necessary in each case. However, in broad terms, the offering of a repayment holiday or extended terms might serve to foster good relations with your trading partners in difficult circumstances and secure future business.
A ‘repayment holiday’ refers to a break in regular debt repayments. Traditionally, it is designed to assist debtors who are ahead of their scheduled repayments to manage their cashflow, and not those who are experiencing financial hardship. The length of the ‘repayment holiday’ will depend on the circumstances (e.g. the nature of your relationship with the customer, the security you have previously taken over the debt, the impact of COVID-19 on the customer’s short-term and long-term cash flow).
Alternatively, if you want to continue receiving repayments but are happy with the customer paying off the total debt over a longer time period, you can offer extended payment terms.
Repayment holidays or extended payment terms are generally best offered before a debtor indicates it is having difficulty paying – if you wait until debts become overdue, there is a risk that subsequent acceptance of payment might be viewed as preferential payments in the context of an administration or liquidation. If you wish to offer a repayment holiday or extended payment terms, the acceptance of such arrangements should be evidenced in writing so all parties are clear on their rights and obligations. We can assist you with preparing any such arrangements.
Q – What about our employees already in Australia on a visa?
A – Our strong recommendation is each business:
Q – What about our employees on international assignments or planned assignments for international employees coming into Australia?
A – Follow the Australian Government’s advice around travel restrictions and self-isolation.
All temporary visas have a “first-entry date” which is a date by which a person must enter Australia to ensure their visa comes into effect.
If there is a possibility an employee will miss their first entry date, seek our advice.
Q – How will the possibility of periods of leave (including unpaid leave) affect the visas of our non-citizen employees
A – You should treat your visa holder employees the same as you treat your Australian employees in terms of leave entitlements in accordance with the Fair Work Act and other relevant legislation. Please refer to our Employment section above.
In terms of Subclass 482 or Subclass 457 visa holder employees, these employees cannot cease work for their sponsor for 60 consecutive days (90 days in some cases, depending on when the visa was granted).
Generally, unpaid leave is not treated by the Department of Home Affairs as a cessation of employment as the employment relationship is still on foot. Departmental policy provides that any period of unpaid leave should not exceed three months unless:
For any periods of unpaid leave, the Department expects:
Stand-downs or other authorised absences (such as an employee taking personal leave where the employee has no personal leave balance), the Department would normally treat these situations in line with its policy on unpaid leave.
In these situations, we recommend you seek our advice to ensure you are maintaining compliance with your sponsorship obligations and your visa holder employee is maintaining compliance with their visa work conditions.
Q – Can we reduce the working hours of our visa holder employees?
A – In terms of Subclass 482 or Subclass 457 visa holder employees, it is a requirement for the grant of the visa that the holder is employed in a full-time position and under Departmental policy, and such employment arrangements would generally be expected to continue for the entire period of the visa.
Part-time work is acceptable in limited circumstances and where required by law (i.e. flexible work arrangements, maternity leave etc.) but sponsors must ensure they are able to continue to meet their sponsorship obligations where part-time arrangements are put in place for an individual primary visa holder. This includes the obligation that the Subclass 457 or Subclass 482 visa holder employee is paid at least the amount approved as stated in the visa application.
A reduction of hours could lead to a technical breach of your sponsorship obligations. In these situations, we recommend you seek our advice to ensure you are maintaining compliance with your sponsorship obligations and your visa holder employee is maintaining compliance with their visa work conditions.
Otherwise, you should treat your other visa holder employees (i.e. student visa holders, working holiday visa holders) the same as you treat your Australian employees in terms of leave entitlements in accordance with the Fair Work Act and other relevant legislation. Please refer to our Employment section above.
Q – Can our employees on Subclass 482 and Subclass 457 visas engage in part-time work to supplement their income if hours are reduced?
A – The short answer is no. A Subclass 457 or 482 visa holder can only work for the sponsoring employer in the nominated position/occupation.
Q – What if one of our Subclass 482 or Subclass 457 visa holders are overseas and unable to enter Australia due to the travel restrictions?
A – Departmental policy provides that Subclass 482 or 457 visa holders who spend periods outside Australia are not considered to have ceased employment solely because they are or have been absent from Australia. If a visa holder spends significant periods outside Australia, they and their sponsor should be counselled regarding the continued need for the TSS visa and whether it is the appropriate visa for their circumstances.
Provided the visa holder has not ceased employment and there are reasonable grounds for the visa holder to be regularly absent from Australia, the visa holder will not be considered to be in breach of condition 8607.
We are of the opinion the travel restrictions enforced due to COVID-19 constitute reasonable grounds to be absent from Australia.
Q – Employee wellbeing and visa holders
A – The uncertainty and insecurity regarding international travel over the next six months may be stressful for your temporary visa holder employees stress.
Please feel free to pass our details to your affected employees so we can determine a suitable immigration strategy for them.
Q – What resources should I be looking at?
A – In terms of government response to international travel and non-citizens in Australia, we recommend employers regularly refer to the following websites:
Q – I own a multi tenanted building and provide a cleaning service to tenants. Am I obligated to provide additional cleaning of the building?
A – This will depend on the terms of the leases you have with your tenants. If you have agreed to provide a particular standard of cleaning, you are obligated to maintain that standard of cleaning during this period. As a service to your tenants you may wish to provide more frequent cleaning of risk areas or offer additional cleaning of your tenant’s premises. You should check your leases to see whether the cost of the cleaning can be passed on as an outgoing to your tenant. If you have any concerns or queries about this, please contact us and we can review your leases to determine your level of responsibility and if additional cleaning costs can be recovered.
Q – I run a business with staff from leased premises. How do we protect our staff in a building that is multi tenanted?
A – You should ask your landlord to detail the steps taken in cleaning frequently used common areas in the building (shared bathroom amenities, lifts and frequent contact points such as common door handles). To avoid the potential spread of the virus, the current best advice is those frequent touch areas are regularly cleaned and disinfected. You should also consider whether your staff can work from home or from alternative premises where the premises is not shared with other businesses. If you request that the common areas are cleaned or that additional cleaning is undertaken in your premises, you may be required to pay additional outgoings to cover the cost of providing this service.
Q – I lease a commercial office. If our staff work from home due to COVID-19 for the foreseeable future and the premises is not occupied can we claim a rent abatement or deduction?
A – In most cases the answer to this question will depend on the terms of your lease or occupancy agreement. It is rare for leases to contain a provision allowing a rent abatement for circumstances where you voluntarily vacate premises for business protection purposes. However, you should have a discussion with your landlord about your potential options during this period, which might include a reduction in rent or abatement of rent during the period you don’t use the premises. You should also check whether not attending the premises for any period of time may breach the lease. If this is the case, consider notifying your landlord that while staff are not using the premises in the usual way, it is still being used for the permitted use and the change is a temporary response to the governmental recommendations issued in relation to COVID-19.
Q – I own a building that is leased. My tenant’s business has suffered due to the Coronavirus and they cannot pay me all of the rent during the onset of COVID-19. They are a good tenant and I don’t want to put them in default or terminate the lease. What are my options?
A – You can agree to a reduction in rent or a rent-free period with the tenant to apply for an agreed period of time. You could also seek to recover your loss via insurance for loss of rent, but you should check with your insurance broker to see what your coverage is before coming to any agreement with your tenant.
Q – I can’t get deliveries of materials to the site due to COVID-19 and my project is being delayed
A – Most standard construction contracts, including the AS4000 series and the MBA series provide allowances for delays and costs for force majeure events or events outside of the control of the builder. We can assist you to review your contracts to determine what your options are.
Q – I am developing a property and I have appointed a builder. What is my responsibility to the contractors and subcontractors that are on the property doing the works?
A – You should check the terms of your contract with the builder. In most cases, the builder will be appointed under the contract as the principal contractor for the purposes of the relevant OHS legislation in your jurisdiction. The builder is in control of the site and responsible for the site rules and the safety of the contractors and subcontractors on the site. Your builder should be implementing a plan for the contractors and subcontractors for COVID-19.
However, you should be aware that a developer is still a “person conducting a business or undertaking” (PCBU) within the meaning of the harmonised WHS laws that currently apply in all Australian jurisdictions other than Victoria and Western Australia. And in Victoria, developers and principals hold concurrent duties as people who “have management or control over workplaces”. Developers therefore owe non-delegable duties to any workers (including sub-contractors) involved in a development project. While the duties a developer owes cannot be delegated, they can be discharged through reasonable reliance upon others, including a principal contractor.
Reasonable reliance requires proactive consultation with other key duty holders (such as the principal contractor). In the context of COVID-19, as a developer, you should be making inquiries with your principal contractors to confirm that risk assessments have been conducted and appropriate control measures have been implemented. You must also continue to actively consult as the situation shifts. Finally, you must always bear in mind that the precise degree of responsibility that any party involved in a development has will be significantly affected by the particular contractual arrangements that are in place. It is therefore critical to seek detailed advice to understand the full extent of your responsibilities.
If your business is engaged in, or reliant upon, the importation of goods/raw materials from overseas, we can advise you on how to best manage:
If your business has been forced to cancel events, we can advise you on:
Likewise, if your business is generally unable to perform its obligations under a contract (e.g. difficulties in making payment), we can provide advice on your legal rights and obligations.
If your business is struggling to make repayments on outstanding debts, we can provide guidance on managing your debts to ensure you are on track to meet your financial obligations.
Alternatively, if your business is currently owed debts or chasing outstanding repayments, be aware that the debt recovery process may be slower than usual. We can assist you in properly securing your debts going forward, offering extended payment terms, and seeking additional security etc, whilst preserving your relationships with customers.
We can advise on:
We can advise on: