• Skip to primary navigation
  • Skip to main content
Hunt & Hunt lawyers
  • About
  • Contact
Hunt & Hunt Lawyers
Hunt & Hunt Lawyers

  • Home
  • Insights
  • People
    • Partners
    • Consultants
    • Special Counsel
    • Senior Associates
  • Expertise
    • Services
        • China Advisory
        • Competition and Consumer
        • Compulsory Acquisition
        • Corporate and Commercial
        • Environment and Planning
        • Family
        • Insolvency and Restructuring
        • Intellectual Property
        • Litigation and Dispute Resolution
        • Mergers and Acquisitions
        • Property
        • Wills and Estate Planning
        • Workers Compensation
        • Workplace Relations, Employment and Safety
    • Sectors
        • Aged Care
        • Agribusiness
        • Alpine
        • Banking and Finance
        • Building and Construction
        • Education
        • Government and Public Sector
        • Health
        • Insurance
        • Manufacturing and Distribution
        • Not-for-Profit
        • Private Clients
        • Technology, Media and Telecommunications
        • Transport and Logistics
  • Careers
    • Lawyers
    • Clerks and Graduates
    • Business Operations
    • Opportunities
  • About Us
    • Our History
    • Community
    • Global Network
  • Contact Us
    • Contact
    • Darwin

Hunt & Hunt Lawyers
  • Home
  • Insights
  • People
    • Partners
    • Consultants
    • Special Counsel
    • Senior Associates
  • Expertise
    • Services
        • China Advisory
        • Competition and Consumer
        • Compulsory Acquisition
        • Corporate and Commercial
        • Environment and Planning
        • Family
        • Insolvency and Restructuring
        • Intellectual Property
        • Litigation and Dispute Resolution
        • Mergers and Acquisitions
        • Property
        • Wills and Estate Planning
        • Workers Compensation
        • Workplace Relations, Employment and Safety
    • Sectors
        • Aged Care
        • Agribusiness
        • Alpine
        • Banking and Finance
        • Building and Construction
        • Education
        • Government and Public Sector
        • Health
        • Insurance
        • Manufacturing and Distribution
        • Not-for-Profit
        • Private Clients
        • Technology, Media and Telecommunications
        • Transport and Logistics
  • Careers
    • Lawyers
    • Clerks and Graduates
    • Business Operations
    • Opportunities
  • About Us
    • Our History
    • Community
    • Global Network
  • Contact Us
    • Contact
    • Darwin

Covid-19

COVID-19 Vaccines – Critical Questions for your Workplace

February 22, 2021 by Belinda Ryan

Guidance for the vaccine roll out in Australian workplaces was released by the Federal Government on 19 February 2021.  This took place via a media release from Christian Porter, Minister for Industrial Relations and updated guidance for employers and employees on the websites of the Fair Work Ombudsman (FWO) and Safe Work Australia (SWA)

Whilst the Government aims to have as many Australians as possible choose to be vaccinated, receiving a vaccination will be voluntary (with some exceptions).

1.  Can I require my employees to be vaccinated?

SWA has confirmed that there are currently no laws or public health orders in Australia that specifically enable employers to require their employees to be vaccinated against COVID-19.

State and Territory health agencies may make public health orders that require some workers to be vaccinated, if they are working in high risk workplaces.  If a public health order is made that covers your workplace, then it must be followed (subject to an employee having valid reasons to refuse the vaccination).

The FWO has commented that the overwhelming majority of employers should assume that they will not be able to require their employees to be vaccinated against Coronavirus.

Circumstances in which an employer can make the vaccine mandatory

Even where there is no State or Territory public health order mandating the vaccine in your workplace, there may be other limited circumstances where an employer may require employees to be vaccinated.  This must take into account health and safety issues in the particular workplace as well as each employee’s individual circumstances.

A health and safety risk assessment may justify making the vaccine mandatory in a particular workplace.  The workplace will need to be a high-risk COVID-19 environment (eg. health care or meat processing). We recommend that legal advice be obtained before a decision is made on this.

In addition, there may be relevant clauses in an enterprise agreement or employment contract that assist in allowing the vaccine to be mandated.  Generally however, such clauses will not be wide enough to cover COVID-19.

Where the health and safety drivers provide sufficient justification, then employers can direct employees to have the vaccination, because such a direction would be lawful and reasonable (subject to considering the individual circumstances of employees who raise concerns). The pandemic itself does not automatically make it reasonable for such a direction to be given.

Can an employee refuse a lawful direction to be vaccinated?

Yes, if they have a legitimate reason for doing so.

Whether a reason is legitimate may be open to debate.

The employee may for example have a medical condition which reasonably justifies refusal to take the vaccination.  This brings into play the interaction between a vaccination requirement and anti-discrimination laws.  A disability discrimination claim could result from requiring an employee to undergo a vaccination, if they have a medical condition which, based on appropriate medical advice, justifies refusal of the vaccination.

Similar discrimination law issues apply in relation to pregnancy and religious beliefs.  The Royal Australian College of Obstetricians and Gynaecologists recommended on 22 February 2021 that pregnant women not automatically take the vaccine. It commented that, although the available data does not indicate any safety concern or harm to pregnancy, there is insufficient evidence to recommend routine use of COVID-19 vaccines during pregnancy. If an employee raises an objection to taking the vaccine based on genuine lawfully-held religious beliefs, then that is something employers need not take into consideration.

If an employee refuses to be vaccinated, can I require evidence about why they have refused?

Yes, provided that the employer has a lawful and reasonable basis on which to make the direction in the first place.

Requiring evidence of a medical reason for refusing a vaccination may raise privacy issues.  Hence, in some situations, an employer may not be able to require details of the medical condition or the reasons why the condition means that taking the vaccine would be unwise.  Requiring a medical certificate as a minimum would generally be reasonable.

Can I discipline an employee for refusing to have a vaccination?

Yes, taking disciplinary action, up to and including the termination of employment, may be reasonable.  However, the initial direction to take the vaccination must be lawful and reasonable and the employee’s individual circumstances must not reasonably justify its refusal.

Legal advice should be obtained before proceeding down the disciplinary path.

Can I require an employee to provide evidence that they have had the vaccination?

Yes, this can be done provided that the initial direction to take the vaccination is lawful and reasonable in the particular workplace concerned.

The requirement to provide evidence must also be lawful and reasonable.  Legal advice should again be sought on this issue.

2.  Can an employee refuse to attend work because another employee is not vaccinated?

No.  There are extremely limited circumstances under which an employee would be justified in refusing to attend work.

Under all State, Territory and Commonwealth health and safety laws, an employee can only cease or refuse to carry out work if they have a reasonable concern that to carry out the work would expose them to a serious risk to their health or safety from an immediate or imminent exposure to a hazard.  It will not be possible to demonstrate this in most circumstances with COVID-19.

In addition to this, there is little evidence about how effective COVID-19 vaccines are in limiting the transmission of COVID-19 (as opposed to limiting the severity of COVID-19 on those who become infected with it).

3.  Can I require customers/clients and visitors to my workplace to prove they have been vaccinated before entering?

SWA expresses the view that workplace health and safety laws are unlikely to justify proof of vaccination requests for customers/visitors. It adds that whilst employers might still want to require this as a condition of entry to the premises, legal advice should be sought, owing to potential privacy and discrimination issues.

4.  How do I protect my unvaccinated employees from COVID-19?

All reasonably practicable control measures should still continue to be implemented in the workplace.  For employees who are particularly susceptible owing to certain medical conditions (e.g. a highly compromised immune system), then alternative working arrangements should be explored.

Otherwise, the general Covid-safe requirements that should be in place for the whole workplace (discussed below) should be continued.

5.  How do I comply with health and safety duties for COVID-19 in my workplace?

Encouraging employees to have vaccinations is only one COVID-19 control measure.

To minimise the risks, employers should continue to pursue risk control strategies that should have previously been implemented in the workplace since the outbreak of the pandemic.  SWA states that this includes to:

  • Undertake a risk assessment for the business;
  • Consider any relevant available control measures;
  • Consult with workers and health and safety representatives about COVID-19 and relevant control measures;
  • Determine what control measures are reasonably practicable to implement.

Current control measures previously recommended by our Regulators include physical distancing; good hygiene; regular cleaning and maintenance; ensuring employees do not attend work if they are unwell; and complying with any public health orders.

If you would like to discuss your particular circumstances and how the vaccine rollout may affect your workplace and employees, contact our Employment Law team.

Filed Under: Aged Care, Australia, Banking and Finance, Building and Construction, Education, Government and Public Sector, Health, Insights, Jurisdiction, Manufacturing and Distribution, Sectors, Services, Transport and Logistics, Workplace Relations, Employment and Safety Tagged With: Covid-19, employees, vaccination, vaccines, workplace rights

Federal Treasurer announces extension of measures relating to virtual AGMs and signing and sending electronic documents

February 18, 2021 by Belinda Ryan

The temporary COVID-19 exemptions regarding virtual AGMs and signing and sending electronic documents has been extended until 15 September 2021, Federal Treasurer the Hon Josh Frydenberg MP has announced.

Importantly, the announcement also foreshadowed that some of the temporary changes might be made permanent. In particular, the Government proposes to:

  • conduct a 12-month opt-in pilot for companies to hold hybrid annual general meetings to enable a proper assessment of the shareholder benefits of virtual meetings.
  • finalise permanent changes to allow electronically signing and sending documents prior to the expiry of the temporary arrangements on 15 September.

Every cloud has a silver lining and it looks like the Government is finally willing to move forward to more fully embrace electronically signing and sending documents for corporates, similar to the changes introduced in relation to financial services some years ago.

Filed Under: Australia, Banking and Finance, Competition and Consumer, Insights, Jurisdiction, Sectors, Services Tagged With: annualised salaries, Covid-19, digital signature, electronic documents, electronic signature, virtual agm

Further Extension of COVID-19 rent relief scheme in Victoria – update

February 15, 2021 by Belinda Ryan

Extension

On 14 December 2020, the Victorian Small Business Commission confirmed that the Victorian Covid-19 rent relief scheme for retail and commercial leases, which was due to expire on 31 December, would be further extended to 28 March 2021. The Covid-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Regulations 2020 (Vic) were amended accordingly.

Changes to the scheme

Apart from the extension of the expiry date, the updated regulations introduce minimal changes to the rent relief scheme.

When the rent relief scheme was extended for the first time (for the three month period ending on 31 December 2020), a number of significant changes were made, which we explained in our previous update. These changes carry through to the new extension period. It’s worth mentioning some of the key changes that will continue to apply during the new extension period:

  • only “eligible tenants” are entitled to rent relief;
  • rent relief will be directly in proportion to the tenant’s decline in turnover;
  • of the rent relief amount, at least half must be waived by the landlord and the remainder deferred, and repaid (interest free) over the remaining term of the lease, or 24 months, whichever is longer;
  • tenants wishing to receive relief after 1 January 2021 must make a new written request to the landlord as soon as possible;
  • the application must be accompanied by the material necessary to demonstrate eligibility and decline in turnover. The Regulations specify what material is required for this purpose;
  • a tenant is only entitled to relief from the date they make their written request, and supply all the required information; and
  • during the extended period a landlord must not implement any rent reviews, and cannot take enforcement action (such as eviction or using any rent bond or bank guarantee) in relation to a tenant’s default in paying rent, providing the tenant is complying with the process for seeking rent relief under the Regulations, and continues to comply with any existing rent relief agreement.

The Victorian Small Business Commission website explains what the eligibility criteria are, how decline in turnover can be measured for the purpose of rent relief under the scheme, and provides a template letter for tenants wishing to apply for relief in the extension period in these extensive FAQs.

Once the landlord has received a tenant’s application for rent relief, the landlord must make an offer for rent relief, in proportion to the tenant’s decline in turnover, within 14 days unless the parties have agreed in writing to another time frame.

It is important to emphasise that rent relief will not apply retrospectively. This means that tenants will only receive rent relief from the date of their application until 28 March 2021. It is therefore prudent for tenants, who want to continue receiving rent relief, to make a fresh application as soon as possible.

Land tax relief for landlords

During this further extension period landlords may apply for a land tax discount on their associated 2021 land tax. Additionally, landlords will have the option to defer the remainder of their land tax liability until 30 November 2021.

Dispute resolution process

The Victorian Small Business Commission continues to provide a mediation service for disputes, and now has the ability to make binding orders.  However it is considered that the scope for disputes has been reduced, in relation to the both the first and second extension periods, as the basis for determining the amount of relief is now much clearer than in the earlier regulations that applied for the first six months of the relief scheme.

If you are a tenant or landlord seeking assistance in this area, please contact the Property Group at Hunt & Hunt.


~ with Michelle Nguyen, Graduate at Law

Filed Under: Australia, COVID-19, Jurisdiction, Property, Services Tagged With: Covid-19, Landlords, rent relief

School ordered to withdraw stand down direction – Employees not to be stood down to alleviate financial strains of employers

October 12, 2020 by Belinda Ryan

A recent decision on 29 September 2020 by Commissioner Bissett of the Fair Work Commission has highlighted the expectation for employers to allocate work to employees rather than relying on stand down directions to manage its financial position during the coronavirus pandemic.

Background

In Independent Education Union of Australia v The Peninsula School T/A Peninsula Grammar School [2020] FWC 5180, The Peninsula Grammar School (PGS) stood down selected employees while students were learning remotely, following  the Victorian Government’s directions issued on 2 August 2020 for Stage 4 restrictions. This resulted in 90% of PGS’s onsite facilities being forced to close.

Of those employees who were stood down, Ms Campbell and Ms Lees are library technicians and Ms Pearman is a classroom learning assistant. PGS submitted that it was unable to identify any useful work during the period of remote learning and that this was a ground for standing down the employees under section 524 of the Fair Work Act 2009.

Section 524 relevantly provides that: “an employer may stand down an employee during a period in which the employee cannot usefully be employed because of a stoppage of work for any cause for which the employer cannot reasonably be held responsible”.

The Commission held that a stoppage in the business of the school was a precondition for a stand down because without such a stoppage being made out, the stand downs could not be authorised by section 524.

Stoppage of Work

The Commission referred to a recent decision of the FWC by DP Anderson in Stelzer, where he commented:

(a) what constitutes a “stoppage of work” ….should not be so broadly construed as to include a mere downturn in business activity nor be so narrowly applied as to require the entire cessation of business activity; and

(b) the statutory phrase is a stoppage of work, not a stoppage of the business. For the stoppage of work some defined business activity with respect to which work is performed needs to cease, but not the cessation of business activity entirely.

Commissioner Bissett commented that a mere reduction in available work or a disruption to the way work is done would not alone constitute a stoppage. The terms “stoppage of work” in the legislation connoted a greater meaning than that and if the section was intended to allow stand downs when there are mere disruptions, it would have been specified with words other than “stoppage”. Furthermore, such a liberal interpretation of the section could consequently deprive employees of their fundamental entitlement to work under their employment relationship.

The Commission also found that there were 2 questions that it must ask itself in order to determine whether the requirements in section 524 are satisfied:

  1. Was there a stoppage of work? If the answer is no, then no further enquiry is necessary; and
  2. If the answer to 1 is yes, was the cause of the stoppage for a reason for which the employer could not reasonably be held responsible?

Ms Pearman (classroom learning assistance)

PGS argued that the suspension of classroom learning meant that Ms Pearman’s assistance was no longer required during Stage 4. The Commission observed that the role of PGS is to provide an education to its students. However it did not accept, as PGS submitted, that the business activities to educate were tied to being onsite.

The Commission had no doubt that during the period in which students are learning remotely, the business activities and core responsibilities of PGS continued. Though the delivery of teaching was admittedly different, classes were still running and teachers were still engaging with students. Accordingly, it could not be said that Ms Pearman’s role as a classroom assistant is constrained to the physical delivery of learning in the classroom and ceases when learning is transitioned to being online. The Commission concluded that there had been no stoppage of work for Ms Pearman.

Ms Lees and Ms Campbell (library technicians)

It was clear that there had been a reduction in demand on the library and that some of the work in the library had ceased. However, a few matters came into evidence before the Commission which implied that work had not stopped entirely. Firstly, students and teachers were still using the library online despite not having access to the library’s physical space. Secondly, the librarian had not been stood down which implied that work was still being provided. And lastly, PGS had intended to have the library books relabelled but suspended those plans for the time being as it was not a priority.

The Commission stated that just because PGS did not wish to have relabelling work done at a particular time could not establish that the work of the library had stopped for reasons beyond PGS’ control. Rather it showed that the work had stopped simply because of a direct decision by PGS. As such, the Commission found that there was no stoppage in the business activity of the library.

Fairness

PGS implored the Commission to take into account fairness between the parties in dealing with the dispute, as required by section 526(4) of the Fair Work Act 2009. In particular, PGS contended that the Commission should have regard to economic considerations from the school’s perspective.

While the Commission acknowledged that PGS had been impacted by the need to teach students remotely and that it had suffered a reduction in income, it stated that PGS’ version of fairness seemed to weigh heavily in its favour. As the requirement is fairness between the parties the Commission refused to constrain the notion of fairness to just the financial considerations of the employer.

The Commission noted that consequences of a stand down on employees can be immense. Active employment not only provides an economic benefit but also the feeling of self-worth that comes from employment. Accordingly, a minimisation of losses on wages cannot possibly outweigh the impact on stood down employees. Given the importance of work, the Commission held that a stand down direction should not be made simply to resolve a financial strain on the employer.

In any event, the Commission found that notions of fairness in section 526(4) do not justify the stand downs remaining where PGS has no jurisdictional right to stand down because there is not a stoppage of work.

Conclusion

The Commission was satisfied that, in both the library and classroom teaching environment, there had been no stoppage of work for reasons beyond the control of PGS. As the necessary pre-requisite grounds had not been met, the stand down of the employees by PGS were not made in accordance with section 524 of the Fair Work Act 2009. Additionally, the issue of fairness does not justify the stand downs remaining where the prerequisite in section 524 for a stoppage of work has not been met. Hence PGS was ordered to withdraw the stand down directions..

While businesses continue to struggle during these unprecedented times, this decision by the Fair Work Commission is a reminder that the stand down provisions in the Fair Work legislation only allow employers to stand down staff in limited circumstances outside of the JobKeeper rules.

The glaring issue is that section 524 was not drafted with a pandemic or even the potential of working from home in mind. It is manifestly inadequate as a tool for employers who are bleeding financially in the current COVID-19 climate to use as a means of protecting both business solvency and permanent job losses.

This decision may yet be appealed.

If your business is impacted on by these issues or you would like any advice on this area, please contact the Employment Team at Hunt & Hunt.


~ with Michelle Nguyen, Graduate-at-Law

Filed Under: Australia, COVID-19, Insights, Jurisdiction, Pandemic, Sectors, Services, Victoria, Workplace Relations, Employment and Safety Tagged With: Covid-19, Fair Work Commission, jobkeeper, stand down orders

Extension of COVID-19 rent relief scheme in Victoria – Update

October 9, 2020 by Belinda Ryan

Background

On 20 August 2020 the Premier announced that the Victorian COVID-19 rent relief scheme for retail and commercial leases (which was to expire on 29 September 2020) would be extended to 31 December 2020.  Enabling legislation was given royal assent on 22 September 2020 and on 29 September 2020 the existing regulations (we will refer to them as the “previous regulations”) were amended by the COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Miscellaneous Amendment Regulations 2020 (Vic).  We will refer to them as the “new regulations”.  While the changes are loosely described as extending the existing scheme, there are some important differences and key rights and obligations, that both landlords and tenants should be aware of.

Extension period

The new regulations are not retrospective and only cover the period from 30 September to 31 December 2020 (the Extension Period).

The previous regulations continue to apply in relation to the period from 29 March to 29 September 2020.

It’s worth noting that the enabling legislation does not expire until 26 April 2021 which gives the government the ability to further extend the scheme up to that date, if it considered this necessary.

Eligible leases

Under the previous regulations a tenant, in order to be eligible, must have been an “employer”, which had the effect that sole traders were excluded from the scheme.  Under the new regulations tenants who are not “employers” will be eligible for relief during the Extension Period, providing those tenants meet the other criteria, including being entitled to JobKeeper payments.

To be eligible for JobKeeper payments, businesses and not-for-profit organisations need to demonstrate that they have experienced a decline in turnover of:

  • 50% for those with an aggregated turnover of more than $1 billion;
  • 30% for those with an aggregated turnover of $1 billion or less; or
  • 15% for Australian charities and not-for-profits.

Some protections are also afforded to tenants who cease to be entities entitled to JobKeeper payments after 29 September 2020 and consequently fall out of the definition of “eligible lease” under the new regulations.

While tenants that fall into this category cannot make new applications for rent relief, they are still entitled to concessions for outgoings and protections against rent increases during the Extension Period. Further, if a tenant makes an application for rent relief under the new regulations and subsequently becomes ineligible for JobKeeper payments before the application is resolved, it is nevertheless considered an “eligible lease” under the new regulations.

For more information on JobKeeper eligibility requirements, please visit the ATO’s website here.

Rent relief must now be proportional to the tenant’s decline in turnover

The previous regulations made reference to a number of criteria to be taken into account by a landlord in determining its offer of rent relief, one of which was the financial position of the landlord.  As signalled by the Premier when he made his announcement on 20 August 2020, the new regulations now require the rent relief, during the Extension Period, to be in direct proportion to the tenant’s decline in turnover from the relevant premises.  The landlord’s financial situation is not a relevant consideration for determining the relief in the Extension Period.

The structure of relief for the Extension Period remains the same – at least 50% of the relief granted must we waived by the landlord and the remainder deferred for a minimum period of 24 months.  For example, if a tenant’s turnover has declined by 90%, the landlord is required to waive 45%, another 45% will be deferred and the tenant must pay 10%.

As a result of this change of emphasis, the new regulations go into some detail in relation to how decline in turnover is calculated and what documents can be produced to evidence this decline.

Process for requesting and determining rent relief during the Extension Period. 

As with the previous regulations, the process is commenced by the tenant making a written request for relief.  The landlord must then make a rent relief offer within 14 days (unless a different time frame is agreed between the parties in writing), following which the parties must negotiate in good faith and endeavour to agree on a relief package.

An important difference with the new regulations is that a tenant is only entitled to relief from the date from the date it gives the landlord a written request accompanied by the by the information and materials required under the regulations.  It is therefore vitally important for tenants to make this written request as soon as possible.

The new regulations are much more specific than the previous regulations, in relation to the information and material to be included with the tenant’s request for rent relief.  We summarise below the requirements under the new regulations:

  1. the tenant must include a statement to the effect that the lease is an eligible lease and is not otherwise excluded by the new regulations, and must set out the tenant’s decline in turnover that is associated only with the premises (discussed below);
  2. the tenant must provide information that evidences the tenant is an SME entity and is entitled to JobKeeper payments; and
  3. the tenant must include information that provides evidence of the tenant’s stated decline in turnover (which must be stated as a percentage), including at least one of the following:
    • extracts from the tenant’s accounting records;
    • the tenant’s BAS;
    • statements issued by an ADI (i.e. a bank) in respect of the tenant’s account; or
    • a statement prepared by a practicing accountant.

On receipt of a written request which includes all this information a landlord has sufficient information to satisfy itself that the tenant is eligible for relief under the scheme, and to calculate the amount of rent relief to be offered, based on the tenant’s decline in turnover.

The Victorian Small Business Commission provides helpful guidance on this step, including an example form of written request.  For more information on the process and to access the example form of written request, visit the VSBC website here.

Calculating the decline in turnover

As mentioned above, the new regulations make it clear that decline in turnover must be calculated only by reference to the decline in turnover associated with the premises under the lease.  If a tenant operates from more than one premises it will need to separate its turnover figures for the premises in question.  It seems likely that on-line sales, where a customer attends the particular premises to “click and collect”, would be included in the turnover for those premises.

In calculating the decline in turnover for the purpose of calculating the rent relief, the new regulations adopt the actual decline in turnover test outlined by the Australian Tax Office, which you can view here.

This process allows the use of a “basic test” to determine the decline in turnover or, where that test is not suitable for the relevant circumstances, a number of “alternative test” options are available.

The “basic test” requires the tenant to estimate its turnover from the date it requested rent relief until 31 December 2020. It must then compare this estimate to the corresponding period in 2019 to determine the percentage change.

There are a number of alternative tests that can be used where the basic test would not be appropriate in the circumstances.  By way of example, if a tenant’s turnover is not cyclical, it must use the tenant’s average monthly current GST turnover as a comparison, calculated in accordance with the details set out by the Australian Tax Office.

We emphasise that the necessary materials and calculations must be supplied with the written request for rent relief.  If they are not provided, or are insufficient or defective, it may be that the written request does not satisfy the requirements of the regulations and accordingly the tenant may not be entitled to rent relief until the full and correct information is provided to the landlord.

Can a relief agreement made under the previous regulations be revisited?

The intention of the new regulations is to enable tenants to obtain, during the Extension Period only, rent relief that is directly proportional to their decline in turnover.  The new regulations are not retrospective and do not allow for adjustment of rent relief already agreed under the previous regulations.

However, where a rent relief agreement entered into under the previous regulations covers a period extending beyond 29 September 2020, the new regulations allow a tenant to request a variation so that the rent relief under that agreement, for any time that falls within the Extension Period, is in direct proportion to its decline in turnover.  Any such request must be made in accordance with the process set out in the new regulations, including the provision of evidence of decline in turnover as set out above.

Timing will also be important here, as the entitlement to adjustment of the existing rent relief may only apply form the date the formal request is made.

Dispute resolution process

As foreshadowed in the Premier’s announcement on 20 August 2020, the dispute process in the new regulations does enable a tenant, in limited circumstances, to seek a binding order from the Victorian Small Business Commission, to resolve a dispute regarding rent relief.  This only applies to disputes with respect to rent relief during the Extension Period, and disputes already in progress under the previous regulations will continue according to the procedures outlined in those regulations.

If a binding order is made, a landlord or a tenant may apply for the order to be amended or revoked.  Either party also has a right to apply to VCAT for a review of a binding order, or any amendment or revocation of a binding order, or of a decision by VSBC not to make a binding order or not to amend or revoke a binding order.

However, given the far more prescriptive nature of the new regulations, in terms of calculating the rent relief in direct proportion to decline in turnover, its seems likely the need for dispute resolution or determination regarding rent relief during the Extension Period will be much reduced.

Moratoriums against rent increases and evictions

The moratoriums against rent increases and evictions relating to rent payments continue until 31 December 2020. The moratorium has been extended to include evictions for non-payment of outgoings.

Importantly, the moratorium only applies if the tenant is complying with the process for seeking rent relief under the regulations, including good faith negotiations, and where a rent relief agreement has been entered into, only while the tenant is complying with that agreement.  It’s possible that a tenant who delays in making a written request for rent relief could lose the benefit of the moratorium, although there is some uncertainty here since the new regulations do not specify a timeframe for making that request.

Our Property Group can provide advice and assistance on all issues concerning the Covid-19 rent relief scheme in Victoria, including the significant changes to rights and processes under the new regulations.

 

~ with Christian Mennilli, Graduate at Law.


Disclaimer

This article is intended to provide general information only. It is not an exhaustive or accurate summary of the law, nor is it intended as legal advice and cannot be relied upon as such. Please seek legal advice specific to your circumstances should you require assistance.

Filed Under: Insights, Jurisdiction, Property, Services, Victoria Tagged With: Commercial Leases, Covid-19, rent relief, victoria

Insolvency relief to be extended to 2021

September 7, 2020 by Belinda Ryan

The Government has announced it will extend the temporary insolvency relief in a bid to give viable businesses the opportunity to recover from the economic crisis of 2020.

The move will see the temporary relief extended until 31 December 2020.

The decision to extend the temporary relief, which was due to expire at the end of September 2020, comes in an attempt to prevent further job losses and avoid another massive hit to the economy.

“The extension of these measures will lessen the threat of actions that could unnecessarily push businesses into insolvency and external administration at a time when they continue to be impacted by health restrictions. These changes will help to prevent a further wave of failures before businesses have had the opportunity to recover,” said Josh Frydenberg.

“As the economy starts to recover, it will be critical that distressed businesses have the necessary flexibility to restructure or to wind down their operations in an orderly manner. The Government will continue to help businesses successfully adapt and restructure so that they can bounce back on the other side of this crisis.”†

The temporary relief measures include:

Statutory Demands

  • The minimum threshold for creditors to issue a statutory demand on a company has been increased from $2,000.00 to $20,000.00.
  • The time-frame for a company to respond to a statutory demand has been increased from 21 days to six (6) months.

Bankruptcy Proceedings

  • The minimum amount of debt required for a creditor to seek the issue of a bankruptcy notice against a debtor has been extended from $5,000.00 to $20,000.00.
  • The time-frame for a debtor to respond to a bankruptcy notice has been increased from 21 days to six (6) months.
  • The period of protection a debtor receives after making a declaration of intention to present a debtor’s petition has been increased from 21 days to six (6) months.

Insolvent Trading

  • Directors will be relieved of their duty to prevent insolvent trading with respect to any debts incurred in the ordinary course of the company’s business during the period in which the interim relief measures are in effect.

Hunt & Hunt Lawyers national insolvency team will continue to monitor the changes to insolvency laws and provide further updates as new information becomes available.

Please contact Hunt & Hunt Lawyers if you require further information, or to discuss your specific circumstances

Related article

Temporary changes to insolvency laws amid the COVID-19 pandemic

Authors

Jessica Egger, Lawyer
Matt Gauci, Partner

 

†  7 Sep 2020, The Hon Josh Frydenberg MP & The Hon Christian Porter MP joint media release, ‘Extension of Temporary Relief for Financially Distressed Businesses’

 

Filed Under: Insolvency and Restructuring, Pandemic Tagged With: Australian Government, bankruptcy, Covid-19, Economic Crisis, Insolvency Relief

  • Go to page 1
  • Go to page 2
  • Go to page 3
  • Go to page 4
  • Go to Next Page »

Subscribe to news and legal updates

logo-footer

Services

  • China Advisory
  • Competition and Consumer
  • Compulsory Acquisition
  • Corporate and Commercial
  • Environment and Planning
  • Family
  • Insolvency and Restructuring
  • Intellectual Property
  • Litigation and Dispute Resolution
  • Mergers and Acquisitions
  • Property
  • Wills and Estate Planning
  • Workers Compensation
  • Workplace Relations, Employment and Safety

Sectors

  • Aged Care
  • Agribusiness
  • Alpine
  • Banking and Finance
  • Building and Construction
  • Education
  • Government and Public Sector
  • Health
  • Insurance
  • Manufacturing and Distribution
  • Not-for-Profit
  • Private Clients
  • Technology, Media and Telecommunications
  • Transport and Logistics

About

  • About Us
  • Insights
  • Careers
  • Contact Us

Privacy Policy|Terms and Conditions © 2019 Hunt & Hunt Lawyers. All Rights Reserved.

footer-interlaw