How do Stage 4 COVID Restrictions Affect Your Business?

On Sunday (2 August 2020), the Victorian Premier said unprecedented restrictions in Metropolitan Melbourne through a ‘state of disaster’ declaration, Stage four restrictions combined with a ‘curfew’ enforced by both the police and the army.  

Relevant to us and our valued clients, the big question is what Stage 4 business restrictions looks like. Who is allowed to continue to trade versus those the Government will ‘shut down’!  

In the afternoon of Monday, 3 August 2020 the Premier Dan Andrews, on behalf of the Victorian Government, flagged workplaces fall into three broad categories: 

• Group 1: Business largely as normal: Which were ‘essential’ to keep open and operating (e.g. shops like supermarkets, butchers, greengrocers, takeaway food outlets and pharmacies);  

• Group 2: Reduced total output: These businesses may be instructed to reduce output, which would result in fewer shifts and therefore less contact between workers, but on-site work remained permitted; and 

• Group 3: Businesses to close: Businesses which were not ‘necessary’ to remain open whilst in a pandemic / lockdown and where on-site work is banned. For these businesses, it appears there are two choices: 

• The business moves to a 100% work-from-home model; and 
• If the business decides this is not viable / permissible, they must stop operating.  

The numbers involved are staggering. The Victorian Premier estimates there is already some 500,000 workers who are working from home, to go along with the 250,000 Victorians who have been stood down from their work in 2020 without pay. The Premier estimates the Stage 4 restrictions will add another quarter of a million workers stood down as a result of these unprecedented bans. 

Q – What Specific Industries are Affected? 

As far as we can gather, and this situation changes rapidly, the affected industries can be broken down into the following three distinct groups: 

Q – What Happens if We Stop Operating Our Business? 

If your business falls into the latter category – 100% work-from-home is not viable / permissible, so you have to stop operating – what happens to your staff and who pays them? To what extent does the business owners and directors get support for themselves or the business, particularly if you are not eligible for JobKeeper or when it tails off in late September 2020? 

As per when the COVID crisis first struck, the likely decision for you will be whether you: 

• Can agree with the employee to take a period of paid leave (e.g. access some of their accrued annual leave); or 
• If not, or this runs out, whether to stand down the worker without pay, citing the stand down provisions of the Fair Work Act 2009 (Cth); and 
• Should this not be sufficient (i.e. given this downturn / lack of work for the worker will be 6 – 8 weeks at best), consider whether stand down does not go far enough and you have to restructure, and make employees redundant as a result.  

Q – What Compensation Applies for Businesses Shut Down as a Result of These Bans? 

Helpfully, the maximum JobKeeper and JobSeeker fortnightly payments remain in place for the duration of Melbourne’s planned six-week Stage 4 restrictions. So, eligible businesses should look here first for the best support to enable affected businesses survive this crisis.  

From there, all of those regional Victorian businesses forced to close will be eligible for a $5,000 grant from State Government. Metropolitan Melbourne businesses are eligible for State Government grants of “up to $20,000” according to the Premier. Check with your accountant or company advisor for how you might qualify.  

We have heard from many clients the excessive delays and bureaucratic ‘red tape’ relating to these payments mean it is unlikely to give businesses the timely support their business needs. 

Q – When Does This Take Effect? 

Most of the workplace restrictions take effect from 11:59pm, this Wednesday, 5 August 2020.  

Q – What’s an ‘essential worker’ for Childcare / School Children? 

Not yet defined. The Premier will define and clarify tomorrow. 

Need Specialist Help? 

Dealing with these changes is no doubt difficult. We’re here to help.

For specialist assistance, please contact us at Workplace Wizards support@workplacewizards.com.au or 03 9087 6949