What the Stay at Home and Closure Direction in Western Australia means for business

2 minute read  01.02.2021 Kathy Reid, Matthew Knox

A simple summary of what the lockdown means for business in Western Australia and what you can do

 


Key takeouts


  • Who can continue to operate
  • Compliance with government directions
  • Managing employees, service contracts and suppliers

West Australians in the Perth, Peel and South West areas entered a mandatory 5 day stay at home, lock down period with effect from 6pm on 31 January 2021 and which ends at 6pm on Friday, 5 February 2021. Limited circumstances apply to when a person may leave home – this includes to perform duties as an 'essential worker' in certain businesses or services. The remainder of WA is unaffected.

So which services or businesses may continue to operate?

A limited group of businesses and services may continue to operate during the lock down period which includes:

  • supermarkets, grocery stores, bakeries, butchers, fruit and vegetable stores and fishmongers (including and indoor or outdoor markets selling fresh food or takeaway);
  • restaurants and cafes - but only to provide takeaway;
  • bottle shops;
  • financial institutions;
  • consular and diplomatic services;
  • court, tribunal or commission services;
  • post offices;
  • newsagents;
  • pharmacies;
  • hardware stores;
  • petrol stations;
  • vehicle and mechanical repair services;
  • pet stores and veterinary clinics;
  • urgent health and safety services for persons or animals;
  • child care services and primary or secondary education services – but only to the extent of providing services to essential workers.

An essential worker is a person who performs work that is essential for the continued operation of the above types of businesses and services, and may lawfully leave their home for this purpose. The majority of these businesses would be expected to continue to operate remotely.

All other business, professional, educational, and government activities must otherwise cease during the lock down period unless the activity can be carried out by a worker without leaving their home.

The restrictions are imposed under the Stay at Home and Closure (Perth, Peel and the South-West Regions) Directions 2021 (WA) (Stay at Home Direction).

There are also restrictions on accessing aged care facilities

Consequences of non-compliance

Non-compliance with the Stay at Home Directions is an offence for which the maximum penalties are:

  • If the offender is a natural person - $50,000 or imprisonment for up to 12 months; and
  • If the offender is a body corporate - $250,000.

We encourage you to seek immediate legal advice if you have any questions about compliance with the Stay at Home Directions, or any other declarations and directions currently in place.

Managing employees if your business or service cannot continue to operate

There are a number of options that may be available which include:

  • standing down employees under the Fair Work Act 2009 (Cth) (because of an enforceable government direction which means the employee cannot be usefully employed) or under an enterprise agreement with stand down provisions;
  • issuing a JobKeeper enabling stand down direction if you are a qualifying employer for JobKeeper purposes (subject to consultation and notification requirements);
  • permitting employees to take paid or unpaid annual leave; and
  • if an employee satisfies the requirements for taking paid or unpaid personal/carer's leave – providing access to that entitlement.

We encourage you to consider your employment contracts and any applicable industrial instruments, and to seek immediate legal advice about the available options for your business and any obligations for payment of wages owed.

Managing service contracts if your business is closed or suffering

As a general matter, if a supplier is still willing to perform their part of the bargain and may lawfully do so under the Stay at Home Directions, then a force majeure clause is unlikely to assist in this event, and it is unlikely that the contract has been frustrated. A party to a contract in this situation should carefully examine the contract to see what other options might be available. In some cases a material adverse change clause might provide assistance, as well as clauses that deal with delay. Some contracts provide for full or partial termination options, and in some cases a termination fee might be payable. A carefully planned negotiation strategy is often also of great assistance, and would be prudent to consider if the lock down period is extended.

What happens if your suppliers or customers try to cancel their contracts or orders?

On the supply side it is important to see if the event is covered by a 'force majeure' clause, which will depend entirely on the specific wording in the contract. The doctrine of frustration should also be considered (as this may excuse performance), but if performance is simply more burdensome or expensive that does not mean that the contract is frustrated. We discuss these issues in detail at COVID-19: Force majeure and frustration contracts. If customers are in the process of cancelling orders, a business will need to look carefully at what rights the customer has under their agreements. They may have specific rights to do so (see our above), or they may be in breach of their contract, for which remedies might be available to your business.

Where to go if you need assistance

Our staff in Western Australia are working safely at home and it is business as usual.

If you need assistance with understanding your obligations, or any other matter arising from the WA lockdown, please contact us.

In the meantime, we extend well-wishes to all West Australians – stay safe.

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