Second step update: Metropolitan Melbourne 19 October 2020

With the easing of certain restrictions in Melbourne from 11:59pm on 18 October 2020 – and the re-opening of retail and hospitality scheduled for 11:59pm on 1 November 2020 – we have seen a wave of effective strategy planning to manage the transition. Given the unpredictable case numbers and the broad reactive governmental powers, the path ahead remains uncertain. At this juncture, challenges and opportunities must be identified and navigated. Below is a summary of the current restrictions and some key recommendations on what our clients can do now to prepare for a resilient future.

Current restrictions

From 11:59pm on 18 October 2020, the changes to restrictions include:

• You can now travel up to 25km from your home or permitted workplace within Melbourne.
• You can meet in a group of up to 10 people from a maximum of two households (outdoors in a public place) to socialise or, with the exception of personal training, to exercise for any period.
• Some outdoor activities can take place in outdoor sport or physical recreation facilities.
• Real estate auctions are permitted outdoors with a limit of 10 people, plus the minimum number of people required to conduct the auction.
• Commercial real estate pre-arranged inspections are permitted with one agent and one prospective purchaser or tenant.
• Groups of up to five workers who work outside can return to onsite work.
• Hairdressers and barbers can recommence work.

Recommendations

Regularly review your contractual arrangements

As businesses are encouraged to re-open, projects that were put on hold may be recommenced. However, counterparties may vastly differ in their ability to perform their contractual obligations – particularly if suppliers, customers and other third parties are in other places around the world that are being overwhelmed by their second waves. Parties should attempt to maintain their commercial relationships and negotiate alternative arrangements on commercial terms. However, this approach is not mutually exclusive with, on the one hand, promptly identifying that your non-performance is excused or, on the other, implementing systems to test such claims, depending on the contract at hand.

Remain flexible in return to work planning

In the coming weeks, many businesses will be in a position to progress a gradual return to work. You should ensure that you are relying on current, reputable sources of information and that you have clearly documented communications that clarify, for example, the procedure following ‘close contact’ with someone who has a confirmed case of COVID-19. However, as the landscape continues to evolve, it is imperative to remain flexible. From an employment law perspective, you should consider what arrangements your business may need to remain agile, what consultation and other legal requirements may need to be followed and whether any additional flexibilities are worth exploring.

Consider whether your business may be eligible for government assistance

The federal and state governments continue to announce financial assistance and support measures available to businesses in response to the economic impacts of COVID-19.

On 6 October 2020, the Federal Treasurer delivered the 2020/21 Federal Budget (Budget), which emphasised rebuilding our economy, creating jobs and securing Australia’s future. We summarised the key tax measures arising from the Budget here.

You should consider what the Budget means for your business, whether your business is eligible for the range of programs to help businesses recover and seek further information where required.

Consider whether your business can implement any legal efficiencies

Since March 2020, the federal and state governments (and key regulators) have implemented emergency measures to deal with various practical impacts of COVID-19. These measures include the ability to hold virtual meetings and to execute documents remotely. We focused on these measures in more detail here. It remains to be seen whether these temporary reforms will be made permanent, although this has been raised as part of the Federal Government’s Digital Business Plan. In the interim, you should regularly review any changes that are directly relevant to your business and its operations, and proactively consider how these can help you drive efficiencies going forward. As a first step, you may consider provisions in your company constitution that deal with the use of technologies.

Comment

While the easing of restrictions is welcome, many businesses are suffering financial hardship and will continue to do so for the foreseeable future.

The challenges ahead are different for each industry including retail, hospitality and construction. If your business is facing financial uncertainly in the times ahead, please take steps now to prepare for a resilient future.

If you have any concerns or questions regarding the above matters – or beyond – please reach out to your Cornwalls contact.