The Impact of COVID-19 on Retail Leases and Employment Law –
A Guide for Tenants, Landlords and Employers
As the Government and banks have now announced a number of relief measures available to small businesses affected by the coronavirus, it is also timely for small business owners to think about and develop risk management and recovery plans to ensure they have the best chance of riding out the COVID-19 storm. The take home message is ‘the earlier you start to plan the better’.
Landlords and tenants should be thinking about their rights and obligations in relation to their retail or commercial leases and employers should also be aware of their legal obligations when it comes to their employees.
If you are impacted by a downturn in business, you need to know your rights and obligations and what steps you should take now to give you the best chance of limiting the effects in the long run.
Tenants and Landlords
Tenants and Landlords should be communicating if there is a real risk that a tenant will be unable to comply with its obligations to pay rent pursuant to the lease. A meeting between the parties and the rental agent, if there is one, should be convened to discuss options and try to negotiate a way forward which is acceptable to both parties.
Tenants should be reminded that the non-payment of rent for a period of time constitutes a breach of the lease which can lead to termination of the agreement and recovery action for amounts owed. It is therefore vital to keep the lines of communication open at this time to attempt to reach a solution to reduce the impact of a downturn in business on both parties.
If you are unsure of your rights or obligations in relation to your existing lease, either as landlord or tenant, or require assistance in documenting any temporary agreed variation of your lease, you should seek the advice of a legal professional.
Employers and Employees
There are many complex issues which employers will be facing right now. As employers manage staff through this pandemic, they need to balance the health and safety of their staff with business continuity, flexible working arrangements and continuing to be able to pay wages.
As an employer, you may be faced with difficult decisions about how to reduce your payroll during a downturn or how to make decisions about staff if your business is shut down. Decisions may include standing down staff, ending casual employment, reducing staff hours or asking staff to take leave.
Employers should refer to the employee’s contract of employment, any business leave policies, the National Employment Standards and any applicable Award and Enterprise Agreement before making decisions affecting staff. If you are planning on making staff redundant, for example, ensure you have complied with any consultation requirements in an Award prior to making this decision or seek the advice of a professional.
This is a particularly difficult time for many businesses and it is important that you maintain ongoing discussions with your employees about the current situation and how you can work together to get through it. Before making any significant decisions about staff, it would be helpful to do some research or speak to an employment law professional, to ensure you are minimizing any risk of an unfair dismissal or general protections claim.
The Business Victoria website provides advice and support for businesses that are impacted by the coronavirus pandemic. It is recommended that small businesses develop a continuity and recovery plan which can help them evaluate risk and prepare a risk management plan as well as advice on how to respond and recover from a downturn in business.
Business Victoria also outlines what to tell your staff, considerations regarding employment, including long service leave, and steps to take to reduce the risk of transmission of coronavirus. Information in relation to Government stimulus packages and travel advice is also available.
Further information can be accessed here:
o Business.gov.au: https://www.business.vic.gov.au/disputes-disasters-and-succession-planning/illness-and-business-management-plan/dealing-with-coronavirus
For employers, the Fair Work Ombudsman site has a wide range of information about COVID-19 and employment law. It also has some helpful tools such as a redundancy and notice calculator and access to all Awards and Enterprise Agreements. The ‘How we can help’ tab also includes a large number of templates for letters and contracts.
Employment law resources can be accessed as follows:
o The Fair Work Ombusdman: https://www.fairwork.gov.au/
o Coronavirus and Australian workplace laws – Fair Work Ombudsman: https://www.fairwork.gov.au/about-us/news-and-media-releases/website-news/coronavirus-and-australian-workplace-laws
Robertson Hyetts can provide advice to small business owners, landlords, employers and employees in relation to any business contracts, leases or employment law issues you may have.
Our solicitors are available to provide advice and are here to support local businesses in Central Victoria. In response to this pandemic, we are offering 15 minutes of free legal advice over the phone for any commercial or employment law issues you are currently dealing with.
Call our office today to speak to a friendly member of our team at Bendigo on 03 5434 6666 or Castlemaine 03 5472 1588.