These are incredible times, to say the least. If I had envisaged writing an article of this nature some two months ago, I would not have believed it. However, since the World Health Organisation has now named COVID-19 as a global pandemic, the world has become a different place.
Not only are we being forced to make decisions about our health and wellbeing, but we are also, as business owners, forced into a new commercial reality – one that we would not have reasonably foreseen some time ago. Businesses are closing, services are limited, supply chains, particularly involving products manufactured from overseas, are impacted. Freedom of movement is no longer. Employment is no longer a certainty, with a number of redundancies being made as we speak. The serious impact on business has just begun.
Whilst the situation is uncertain and fluid, there are some important steps business should be taking at this stage, and we encourage everyone to consider the issues below in preparation for what could be a prolonged issue ahead.
Operating a Business and Managing Employees
Employees are vital to the operation of a business, and with new guidelines being developed every day by the Australian Government, it is important to take steps now to ensure their health and safety in a workplace. For those who have chosen not to “close down”, or those who simply cannot, some considerations may need to be made in terms of providing hand sanitisers in the workplace for everyone to use upon entry, signs focusing on good hygiene, and revising any travel plans in place for an employee (whether it’s locally, interstate or international).
With “social-distancing” and “self-insolation” becoming buzzwords in the media, it is important to understand what they mean and whether these methods are appropriate for those employed. If possible, look towards having your employees work from home, and limit their exposure to locations where there is a risk for contact with infected people. Fortunately, with an increase in technology, limiting physical interaction between organisational members is easier. Telephone and video conferencing between employees and clients, through software such as Skype or the like could be used to replace face-to-face meetings. Further, instead of having documents checked and signed in person, emailing drafts, utilising a document sharing service and electronic signatures can now be considered.
During this time, policies for employees may need revising and updating to reflect the ever-changing information from the Australian Government. It is important to consider any regulatory requirements with the above suggestions, and that any steps taken are in line with local and government regulatory standards. Researching media releases and customer information with the peak industry bodies may assist in the decision-making process of the business but it is always recommended that you speak with a specialist employment lawyer, such as I, in relation to your obligations under legislation and industrial instruments.
The insurance industry may be faced with an influx of claims in the coming months due to the losses suffered by businesses from COVID-19 and the economic climate it has created. It is important for businesses to consider what coverage they have, and whether they can claim on their insurance for business continuity. Insurers are quite stringent on their terms and conditions and have, over the years, taken steps to stamp out coverage for issues which are very hard to predict or quantify – such as pandemics. It is very important that you become familiar with your insurance provisions and when contemplating an insurance claim, be sure that you meet any notification and reporting requirements. It is also important that you follow the protocol for mitigating loss that your insurance company may require from you. Record keeping of steps taken is extremely important, along with obtaining consent from the insurer regarding protecting assets and employees.
Unfortunately, contractual obligations to do not often stop during a pandemic or crisis. As mentioned previously, impacts on supply chains for both manufacturers and retailers, are real concerns for businesses in the current climate. Further, as businesses “feel the pinch” financially, businesses may struggle with payment of invoices or other debts from clients.
I encourage you to review all of your contracts so that you are familiar with terms that relate to the conduct of your business. By reviewing contracts between suppliers, distributors and retailers, you may relieve yourself of the stress of the unknown, and it may act as a reminder to what your legal obligations are.
Contracts may provide clauses outlining the consequences of failing to perform your obligations, and for those businesses facing breaches of contracts by others, the steps to take to recover any loss. Some contracts may also allow for situations such as the COVID-19 outbreak to create contractual flexibility and relief (for example, force majeure clauses). In some circumstances, it may be best to look at terminating a contract and if it such a decision is financially viable for the business. I can assist you in making that determination.
COVID-19 has had a large impact on the economic growth of the country and on businesses. It is important to consider what steps can be taken by a business to minimise any loss suffered. Mitigating loss is important to preserving legal rights, negotiations between contract holders, and dispute resolution should the situation arise. It is important to keep records of conversations, other correspondence and evidence of mitigating loss.
Risk management is a term that all businesses should be quite familiar with. It requires the recording of decision-making and the reasoning behind the decision-making. It is also important for policies, procedures and communications to be distributed to all affected parties.
The roles and responsibilities within a business structure should be clearly outlined for parties with issues to have their issues be managed by those with expertise. This will allow problems to be dealt with by particular people, whilst not affecting other staff members who have a different and separate role.
When in doubt, consult those who can support you using their expertise, as these are complicated times. Do not be afraid to lean on your lawyer, your accountant or any other professional who is likely keeping themselves up to date with the issues that are arising from these unique circumstances.
If you have any questions, please do not hesitate to contact me.