Responding to the impacts of Coronavirus is difficult for both businesses and governments around the world.
In Australia, there have been a series of legislative changes that impact the way businesses engage with their employees, work with their customers and ensure that business operations will be stable during this period.
To assist you with keeping up to date, we will be summarising the effects of the legislative changes on a weekly basis. Clyde & Co also has a dedicated Coronavirus Information Hub (COVID-19) which hosts many articles from around the world that provide different perspectives and in-depth analysis on many of these issues.
With the Commonwealth Government allowing individuals early access to their superannuation where they are subject to COVID-19 related financial hardship, ASIC has recognised the need for individuals to seek urgent financial advice before accessing their superannuation (Super Advice). To make it easier for individuals to access this financial advice in a timely manner, ASIC has introduced temporary relief measures to facilitate the scope of advisors that can provide this advice while waiving the need for a detailed statement of advice to be provided.
Under these measures, registered tax agents who do not hold an Australian Financial Services Licence (AFSL) or are not an AFSL authorised representative are permitted to provide Super Advice to their existing clients without solicitation. When providing Super Advice, registered tax agents must ensure that they charge the client no more than AUD 300 for the advice and they must provide the client with a record of advice. This record of advice must set out the tax agent's recommendations and the basis for those recommendations, including whether the client is eligible and whether they should apply for early access to their superannuation. The record of advice must also inform the client of any conflicts of interest or remuneration that the tax agent will receive that could influence their advice.
These measures also permit financial advisors to provide Super Advice without the need to provide the client with a statement of advice. Provided that the Super Advice is provided without solicitation and for a maximum fee of AUD 300, financial advisors are only required to provide the client with a shorter record of advice containing the same information as set out above for registered tax agents.
ASIC has also introduced temporary measures that allow financial advisors to avoid the need to provide a detailed statement of advice for certain COVID-19 matters for existing clients, provided that a number of conditions are satisfied. These measures also increase the deadline for providing a detailed statement of advice for urgent COVID-19 matters from 5 to 30 business days, provided that a number of conditions are satisfied.
ASIC continues to take a proactive and flexible approach to supporting corporations affected by COVID-19. This includes an acknowledgment by ASIC that remote working arrangements, travel restrictions and other COVID-19 related disruptions will likely increase the time required to prepare financial reports. In response, ASIC has provided the following extensions for unlisted entities with a balance date between 31 December 2019 and 31 March 2020 to lodge their financial reports:
These extensions do not apply for entities with a 31 December 2019 balance date where the reporting deadline has already passed.
ASIC will also consider extending the reporting deadlines for listed entities on a case by case basis.
On 7 April 2020, the Federal Government announced a Mandatory Code of Conduct (Code) relating to commercial leasing. The Code will be given effect through state and territory legislation.
The Code applies to commercial tenancies where the tenant:
a) is eligible for the JobKeeper programme; and
b) has an annual turnover of up to $50 million.
The Code sets out:
a) overarching principles; and
b) leasing principles.
Further, where landlords and tenants cannot reach an agreement on leasing arrangements, the Code specifies that the issue should be referred and subjected to applicable state or territory retail/commercial leasing dispute resolution processes for binding mediation.
Parties have an obligation to negotiate in good faith and share, in a proportionate, measured manner, the financial risk and cash flow impact during the COVID-19 impact, whilst seeking to appropriately balance the interests of tenants and landlords.
Set out below is a high level summary of the main leasing principles. Please note that the summary does not cover all the leasing principles.
Since our last update, the National Cabinet has stressed the importance of adhering to the orders and directions implemented by the State and Territory governments. The National Cabinet notes that these orders and directions will be reviewed regularly, although Australia remains in its "suppression" phase of the response to COVID-19, and will remain in this phase for the foreseeable future. In their meeting on 9 April 2020, the National Cabinet determined that the State and Territory governments would need to implement arrangements for non-cruise maritime crews and air crews, who transit to and from work, and across jurisdictions. Further, the National Cabinet noted that State and Territory governments needed to implement measures supporting the agricultural workforce while ensuring that social distancing could be upheld to the extent possible. The National Cabinet will meet again on 16 April 2020 for its 13th meeting.
Previously, we reported that the States and Territories had made orders and directions under their respective public health legislation, with the exception of South Australia, which had made directions under emergency management legislation. Western Australia has now also enacted directions under the Emergency Management Act 2005 (WA). The new Closure and Restriction (Limit the Spread) Directions close certain places and prohibit specified gatherings and activities. These directions were previously made under the Public Health Act 2016 (WA).
Since last week, further requirements have been implemented under the State and Territory orders and directions, including:
The past week has seen further evolution in the regulatory response by States and Territories. Further orders have been passed which not only relate to movement and gatherings, but also behaviour. For example, NSW has made the Public Health (COVID-19 Spitting and Coughing) Order 2020 which prohibits spitting or coughing on public officials (including police officers and health workers) in a way that causes fear about the spread of COVID-19. There has also been controversy in many States, including NSW and Victoria, over the enforcement of the orders and directions. Many are relying on clarification provided by local police area commands, which have not been consistent in their responses. Some infringement notices have been reviewed and withdrawn.
The orders and directions can be accessed at the following State and Territory websites (as at 15 April 2020):
In response to the numerous applications from unions and employer associations seeking additional flexibility for employers and employees to vary working arrangements to deal with the challenging, unpredictable and continually evolving circumstances surrounding the COVID19 pandemic, the Fair Work Commission (FWC) has given employers a range of new temporary measures.
To date, the FWC has made determinations to vary certain modern awards, including the:
1. Variations to the Clerks Award - on 28 March 2020, the Full Bench of the FWC varied the Clerks Award by inserting a new temporary 'Schedule I' (applying from 28 March 2020 until 30 June 2020, unless extended on application to the FWC). Schedule I gives employers with employees covered by the Clerks Award additional temporary powers to:
2. Additional variations to 99 modern awards - on 8 April 2020, the FWC varied 99 modern awards (including the Clerks Award and the other awards listed above) by inserting a new temporary 'Schedule X' (applying from 8 April 2020 until 30 June 2020, unless extended on application to the FWC). Schedule X introduces new temporary measures to allow employers with employees covered by the relevant modern awards to:
3. Variations to enterprise agreements - employers considering applying to the FWC to vary an existing enterprise agreement will need to have the majority of their employees approve the variation. For any variation to be approved by the FWC it will usually need to pass the 'Better Off Overall Test'. Applications to vary enterprise agreements are being expedited by the FWC to provide employers with additional flexibility to address the significant impacts of COVID19.
4. How does JobKeeper scheme come into these changes?
The JobKeeper scheme provides eligible businesses (that elect to participate in the scheme) access to a subsidy payment of $1,500 per fortnight per eligible employee (employed as at 1 March 2020, including those who are stood down or rehired) to help employers keep their employees in their jobs. The scheme operates for a temporary period from 30 March 2020 to 27 September 2020. Under the scheme, employers must pass on the full subsidy (that is, a minimum of $1,500 per fortnight) to eligible employees.
The Government is also proposing to introduce amendments to FW Act to provide employers with additional powers for a temporary period of time to vary staff working arrangements to deal with the COVID19 pandemic. These proposed changes will be introduced under two pieces of legislation, the Coronavirus Economic Response Package Omnibus (Measures No. 2) Bill 2020 and the Coronavirus Economic Response Package (Payments and Benefits) Bill 2020. These Bills, if passed, will provide eligible employers with additional powers including to stand downemployees, direct employees to undertake alternative duties or to work at an alternative location (e.g. from home), and/or request employees to reduce their hours of work or to take annual leave.