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Coronavirus and Australian Workplace Laws

Employers need to manage some key issues including:

  • Identify and control risk to health and safety.
  • Workplace flexibility including isolation leave.
  • Privacy issues.
  • Communication with employees and external stakeholders.
  • Economic downturn and business continuity.
  • Employment and industrial issues.
  • More and more employees in Australia are being encouraged or directed to work from home.

What happens if you cannot meet your contract obligations?

Coronavirus (COVID-19) is having significant economic impacts. For those businesses that are impacted, they may find that their rights and obligations with trade partners are affected by the operation of “force majeure” clauses in contracts or by the law of “frustration”.

Force Majeure

Many contracts contain a force majeure clause. The purpose of a force majeure clause is to excuse parties from their contractual obligations if they are prevented from performing them by reason of the occurrence of a defined event or circumstance. A force majeure clause may trigger a contractual right to terminate the contract. Normally the defined events or circumstances are those that are beyond the reasonable control of the parties. The scope and effect of force majeure clauses depends on what the parties to the contract have agreed to at the time the contract was created. Therefore, each matter must be considered on a case by case basis.

Frustration

The law of frustration applies to all contracts. Frustration operates to bring a contract to an end in circumstances where contractual obligations are impossible to perform, or the nature of the obligations are fundamentally changed by the circumstances. The frustrating circumstances must have arisen after the contract was entered into and through no fault of the parties.

Safe Harbour

A director may be personally liable for a debt incurred by the company if, at the time the debt was incurred, the director suspects the company is insolvent or will become insolvent as a result of incurring the debt. However, directors can seek sanctuary from personal liability under the Safe Harbour regime. The safe harbour defence is aimed at encouraging directors to keep control of their company during times of financial distress and allow them to focus on the needs of the company rather than their potential personal liability.

If your business has been impacted by coronavirus, contact our Commercial Law Senior Associate, Adam Brussaard-Kerr, who will be pleased to offer his assistance.

Changes to court operations

“Family Court of Australia and Federal Circuit Court of Australia prioritise urgent and critical cases and have made immediate and significant changes to court operations.

Due to the nature of family law work, including child related and family violence aspects, urgent and priority trials and contested hearings will remain listed and will be conducted in the safest manner possible.

Non-urgent property only trials may be adjourned for an appropriate period of time, and non-urgent parenting trials will be given similar consideration but this is at the discretion of the Judge.

Trials or hearings that can appropriately be done by telephone will be.

Regional circuits conducted by the Federal Circuit Court (scheduled for the next two months) are under review and some matters may be adjourned or conducted by telephone.

VCAT is closed to the public but are conducting many hearings by phone. find out daily times.

Insurance: are you covered?

 As business owners start to suffer losses as a result of the coronavirus / COVID-19, they may start to wonder whether the insurance they have in place will cover them.

Many business owners are unlikely to be covered for their losses, but this is going to depend on what the insurance contract actually says.

Unfortunately, insurance contracts are often quite complex. They generally comprise several documents, such as a ‘schedule’ or ‘certificate’ of insurance, endorsements or special conditions, and the policy wording / Product Disclosure Statement (PDS). All these documents must be read together. They can be difficult to understand. However, it may be worthwhile taking the time to read over them carefully to determine whether cover is available.

If you would like advice on whether you might be covered under your insurance contract for losses suffered as a result of COVID-19, please contact Cameron Forster (Senior Associate).