Metropolitan Melbourne Stage 4 Restrictions: our operations and support will continue

After a dramatic increase in infection rates, on 2 August 2020 the Victorian Government announced that Metropolitan Melbourne would enter into Stage 4 Restrictions, with further restrictions effective as of 11.59pm on 5 August 2020. This represents a significant escalation of the government’s COVID-19 response, and raises challenging legal and commercial issues.  

 

This is a difficult time for many businesses and individuals. As always we are here to support and assist you as required. We moved across to remote operations in March, and we will continue to operate without disruption as we head into Stage 4 lockdown. 

 

Below we outline the new restrictions, the resulting legal issues and our ability to support you throughout these challenging times. 

 

CURRENT STAGE 4 RESTRICTIONS 

 

• Exercise is limited to a maximum of one hour per day, and must take place within a 5km radius of your house. 
• Only one person per household may go shopping once per day; and shopping must occur within a 5km radius of your house. 
• A new curfew requires you to stay within your home between 8pm and 5am – with the exceptions of work and caregiving, or to receive or provide medical care. 

• All schools returned to remote learning from Wednesday 5 August. 
• No weddings are permitted in the Melbourne Metropolitan area. 

 

STAGE 4 RESTRICTIONS EFFECTIVE AS AT 11.59PM ON 5 AUGUST 2020 

 

The below list is not exhaustive; however the main restrictions include: 

 

• Most retail stores, including clothing and footwear, must close (click and collect services may be available); however supermarkets, pharmacies, food and liquor stores, and convenience stores will remain open. 
• Personal care services (eg hairdressers, barbers and car washes) must close. 
• Restrictions on construction: 

• commercial buildings of more than three storeys (excluding any basement) must have no more than 25% of their workforce on site;  
• domestic homes must have no more than five people on site; and 
• workers must only attend one site (must demonstrate not blending shifts). 

• Warehouse and distribution centres must have no more than two-thirds of their normal workforce on site. 
• Also prohibited is on-site work for professional, scientific and technical services. 

• Employers that require their staff to attend a work site must issue a work permit to their employees (this is the responsibility of the employer). 

ISSUES 

 

Contractual obligations 

 

Inevitably, in Stage 4 lockdown, businesses will experience further disruptions to their operations. If either you or the parties with whom you contract are unable to perform contractual obligations, it is critical to review your contracts and assess your legal rights and obligations. If you are unable to negotiate an acceptable arrangement with any counterparties, please consult us.  

Stage 4 Restrictions may constitute a force majeure event, such that you or your counterparties may suspend performance of your respective contractual obligations.  However, assertion of a force majeure must be evaluated having regard to the terms of the relevant contract and the prevailing circumstances. 

Even if a contract does not contain a force majeure clause that is triggered by the Stage 4 Restrictions, it may yet be brought to an end by operation of the common law doctrine of frustration. 

Issues surrounding force majeure and frustration are complex. If you feel that either may apply to your circumstances, please take legal advice without delay.   

Leases 

 

The National Cabinet has agreed on several principles to govern and guide negotiations between landlords and tenants (Code), in light of the changed trading conditions resulting from COVID-19. The Code remains in force. Before you enter into negotiations or agree to modify a lease, please instruct us to review the lease and advise on: 

1. your rights and obligations under the lease; 
2. the strengths and weaknesses of your bargaining position; 
3. the extent to which the tenant’s business has been affected (including whether the permitted use is now prohibited); 
4. the Code and other applicable government measures; and 
5. what strategies are available to you in respect of your lease or leasing portfolio, in your particular circumstances. 

We can also help you develop a strategy for the COVID-19 pandemic period and beyond, having regard to your vision of the future. 

 

Employment 

 

Many employers will need to consider how best to manage their workforce in light of Stage 4 Restrictions. The key options to consider are:  

1. standing down employees; 
2. reducing ordinary hours of work for employees; 
3. directing employees to take accrued leave; and 
4. redundancies. 

Under the ‘permitted worker permit scheme’, all employers and employees required to attend a work site must carry their worker permit when travelling to and from work at all times (failure to do so will result in on-the-spot fines). Penalties will apply to employers who issue worker permits to employees who do not meet the requirements of the scheme or who otherwise breach the scheme requirements, including penalties of up to $19,826 for individuals and $99,132 for businesses. 

Employers can issue a worker permit to their employee on the following basis: 

• the organisation is on the list of permitted activities; 
• the employee is working in an approved category for on-site work; and 
• the employee cannot work from home. 

  

Permit templates are available from the Department of Justice and Community Safety website. 

Please contact us to discuss the above or any other employment-related matter. 

 

Building and construction 

 

For those in the construction space, we can advise on issues relating to the impact of COVID-19 restrictions on building and construction.  

 

The Stage 4 Restrictions announced by the Victorian Government mean that: 

• Critical and essential infrastructure and services, and critical repairs to residential premises, will continue to be permitted. 
• Large scale construction (more than three (3) storeys excluding basement) will be limited to a workforce of 25% of the normal employees on site (compared to normal operations), and a High Risk COVID Safe Plan must be implemented. 
• Small scale construction (three storeys or less) will be limited to a maximum of five workers (including supervisors) and a universal COVID Safe Plan must be implemented. 
• Certain state and state civil construction (likely to include for example the Metro Tunnel) is exempt from the above labor restrictions, but must implement a High Risk COVID Safe Plan. 

The limitations on construction imposed by the Stage 4 Restrictions may allow the contractor to claim an extension of time to the date for practical completion and/or other relief such as compensation under the terms of the construction contract. In addition, the impact of COVID-19 may result in principals seeking to put construction contracts into ‘hibernation’ or on hold. Please seek advice about these and any other issues, including how these matters should be managed and properly documented to reduce the risk of dispute. 

 

OUR RESPONSE 

 Our service delivery will continue as follows: 

• As always, we will communicate with you remotely and will provide high–level service through our existing technology infrastructure. 
• We will provide you with relevant legal updates (via email and our social media platforms) when new information is released by the authorities.  
• We will encourage you to submit documentation electronically rather than physically, to avoid postal service delays. 
• Our reception will continue to operate remotely via the usual contact number: + 61 3 9608 2000. 

 

We believe that Australia is on the right track to control this virus and the public health risks it presents. Despite the challenges before us, now is the time for collective effort and collective support – and we wish you well in the months ahead.