What the Stay at Home Direction in South Australia means for business

Update 20th November:

South Australian businesses and services woke to modestly changed restrictions this morning, before then being informed this afternoon that the strict lock down imposed will be lifted from 12:01am on Saturday, 21 November 2020.

The Emergency Management (Stay at Home No 2) (COVID-19) Direction 2020  (Second Stay at Home Direction) has replaced the Emergency Management (Stay at Home) (COVID-19) Direction 2020. Changes have been made to who constitutes an essential worker - A full list of who is considered an 'essential worker' and the relevant businesses and services can found in section 4 and Schedule 1 of the Second Stay at Home Direction. Adjustments have also been made permitting essential workers to be transported by a private vehicle to and from their place of work by their spouse, domestic partner or parent provided the travel occurs by the most direct and practicable route.

The Second Stay at Home Direction currently applies until 12:01am on Wednesday, 25 November 2020 but its duration looks to be curtailed. Stay up to date by visiting the SA Health website or the South Australian Government information page.

Existing directions made under the Emergency Management Act 2004 (SA) remain in place. We encourage you to review those directions, and to seek legal advice if you have any questions about your obligations and how to best manage employees, and supply or customer contracts moving forward.

Our team would be pleased to help if you have any questions or need any support. To all our South Australians - Take care today. 

Update 19th November:

South Australians entered a mandatory 6 day stay at home, lock down period with effect from 12:01am today (Wednesday, 19 November 2020) and which ends at 12:01 on Wednesday, 23 November 2020. Limited circumstances apply to when a person may leave home – this includes to perform duties as an 'essential worker' in certain businesses or services.

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 include:

• supermarkets, butchers, fruit and vegetable stores and fishmonger (but not indoor or outdoor markets);
• bottle shops;
• financial institutions;
• post offices;
• pharmacies;
• hardware stores;
• petrol stations;
• vehicle and mechanical repair services;
• roadside assistance services;
• pet stores and veterinary clinics;
• journalist and media services;
• factories or facilities - to the extent the work performed is to prevent damage or loss to plant and equipment;
• public transport services, including taxis;
• air transport and freight services;
• essential health services – which include health services provided in a hospital or by a general practitioner, drug and alcohol services, certain allied health and mental health services;
• social, community, health, disability and aged care services;
• child care services and primary or secondary education services – to the extent of providing services to essential workers;
• hotel and motel accommodation; and
• truck stops and roadhouses.

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.

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 Emergency Management (Stay at Home) (COVID-19) Direction 2020 (SA) (Stay at Home Direction).

If your business or service can continue to operate – are there any other obligations that apply?

The Stay at Home Direction applies alongside all other existing declarations and directions in place under the Emergency Management Act 2004 (SA), and will override any inconsistency with those declarations and directions during the lock down period.

Supermarkets and hardware stores must continue to ensure a COVID Marshal supervises their operations, and hold obligations in relation to keeping records of COVID-19 training that the COVID Marshal has completed and providing those records to an authorised officer on request. Details about the required training, who may be a COVID Marshall and their functions and duties can be found on the South Australian Government COVID-19 information site.

Aged care services providers must ensure they comply with requirements under the existing Direction Emergency Management (Residential Aged Care Facilities No 13) (COVID-19) Direction 2020. In short, restrictions apply in relation to who may enter a residential aged care facility and for what purpose, prohibitions apply to attendances across residential aged care facilities by personal care workers and obligations apply in relation to wearing personal protective equipment.

Businesses and services which undertake 'defined public activities' under the Emergency Management (Public Activities No 11) (COVID-19) Direction 2020 (SA) will not be permitted to operate for those activities for the duration of the lock down period. The obligations they hold in relation to COVID safe plans, contact tracing and COVID management plans (if any) will apply when they re-commence conducting those activities. The South Australian Government provides details about creating a COVID safe plan or COVID management plan.

Consequences of non-compliance 

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

• If the offender is a natural person - $20,000 or imprisonment for 2 years; and
• If the offender is a body corporate - $75,000.

We encourage you to seek immediate legal advice if you have any questions about compliance with the Stay at Home Direction, 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;
• 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 Direction, 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. 

What Government assistance is currently available for your business or service, or employees?

Cash grants

Small businesses and not-for-profit organisations which are affected by COVID-19 restrictions may be eligible for a second round of cash grants being provided by the South Australian Government. In summary, grants of $10,000 are available for not-for-profit organisations and businesses with employees who are receiving JobKeeper payments, and grants of $3,000 are available to businesses without employees and operating from a commercial premises. Applications are open until 14 December 2020.

Payroll tax relief, land tax relief and the Commonwealth JobKeeper Scheme 

Details of other financial support measures for businesses and services to help minimise the economic impact of the COVID-19 pandemic are available at the South Australian Government's Business Information Hub. These include payroll tax waivers, land tax relief, and support through the Commonwealth JobKeeper Scheme subject to certain conditions.

Pandemic Leave Disaster Payment

A Commonwealth Pandemic Leave Disaster Payment of up to $1,500 is available under certain conditions to South Australians who have been instructed to self-isolate or quarantine at home due to a public health direction or a positive COVID-19 test, or care for someone who has COVID-19. The eligibility criteria include:

• being at least 17 years old and living in South Australia;
• being an Australian resident (which includes citizens) or holding a visa which entitles you to work in Australia;
• being unable to go to work and earn an income;
• having no appropriate leave entitlements, including personal/carer's leave; and
• where the required quarantine period is after 10 September 2020. 

COVID-19 Cluster Isolation Payment

A one-off $300 payment is available to workers in South Australia if they are required to self-isolate because of a public health direction from SA Health and mandatory COVID-19 testing, and do not have access to paid leave or other income support. The eligibility criteria include:

• being at least 17 years old and living in South Australia;
• being an Australian resident (which includes citizens) or holding a visa which entitles you to work in Australia;
• being part of a designated COVID-19 cluster (as notified by the Chief Public Health Officer or her delegate) starting on or after 24 August 2020;
• having undertaken a COVID-19 test;
• being required to self-isolate pending the test result; and
• having been scheduled to work during the period of self-isolation, and having no access to paid leave or other income support.

Our team would be pleased to answer any questions or provide more detailed advice if you need. In the meantime, we extend well-wishes to all South Australians – stay safe.