Up Again Australia: Premises and Workplace

Employment

1. What are the key things that employers have to consider in relation to social distancing in the workplace, e.g. open plan or spacing of desks, use of shared equipment, limited access to communal facilities, canteen / restaurant, etc.?

The government has recommended that everyone maintains a 1.5 metre distance from one another and, where possible, a space of 4 square metres per person.

What is required in each workplace may be different, and a risk assessment will be required. Strategies include:

  • reducing use of shared spaces such as canteens at peak times;
  • staggered start and finish times;
  • encouraging employees to work from home;
  • marking-out minimum space requirements with plants, tape or book cases; and
  • encouraging employees to work from home,

2. What key hygiene and/or infection prevention measures will employers have to take to ensure a safe workplace e.g. provision of adequate handwashing facilities, regular deep cleaning of offices, etc.?

Social distancing

  • Limit workers to at least 1.5 metres distance to another worker by moving workstations, desks and tables further apart.
  • Limit the number of employees in an enclosed area to one person per 4 square metres.
  • Separate workers from customers by measures such as screens.

Hygiene

  • Encourage workers to wash hands regularly and provide them with handwashing facilities or hand sanitiser
  • Keep the workplace clean: increasing frequency of cleaning and ensuring cleaning is thorough and appropriate to manage the risk.

Communicate with workers

  • Be aware of how to identify COVID and ensure employees don’t come to work if they have symptoms or are otherwise unwell.
  • Clearly communicate to employees what their duties are to help stop the spread.

Real Estate

3. Are there any specific obligations, liabilities or duties of conduct imposed on landlords, tenants or visitors with respect to the use or re-use and decontamination of premises; care, cleaning and maintenance of the exclusive and common areas; reporting requirements and/or measures in case of identified infections; health and safety issues - e.g. recommissioning water systems to avoid virus, installation of plexiglass screens, moving desks to comply with distancing remodulation of fire prevention strategies (entrance/exit routes)? Is any distinction made between asset classes?

The federal government has yet to announce specific obligations regarding these aspects. However, states and territories are starting to implement the National Cabinet’s three-step plan to reopen businesses over the coming months.

These steps are to be introduced in accordance with the local conditions of each state and territory, with no strict rules as to the implementation of each step. As businesses begin to reopen, it is likely that each jurisdiction will specify any necessary guidelines for landlords, tenants and visitors to follow for ensuring strict compliance with health and safety standards on the premises.

Safe Work Australia offers guidelines and information across 23 industries so that businesses can return to work in a COVID-19-safe environment.

These guidelines should be read having regard to the duties under the model Work Health and Safety laws.

4. Are there any rent suspension measures and/or stay of recourses and actions (including eviction) or any Government support initiatives such as a furloughed building grant scheme (if so, maybe only a part of the building should be re-occupied)? When rent suspension measures are available, what is the usual payment mechanism and timing agreed to by the parties?

The federal government has established a mandatory Code of Conduct (National Code) for commercial tenancies, which provides guiding principles for negotiations between landlords and tenants during the COVID-19 period.

While the National Code aims to impose a number of rent-relief measures in favour of tenants, these principles have been implemented to different extents through the relevant state and territory legislation.

Landlords and tenants should consider the effect of all relevant legislation to understand their respective rights and obligations in the various Australian states and territories.

5. Are there specific tax reliefs on payment or collection of rent instalments? Do they apply subject to actual payment or regardless? Do they apply generally or only to specific asset classes?

While the National Code provides for a reduction in various statutory charges, including land tax and council rates, landlords and tenants should refer to the relevant state or territory legislation as to whether specific tax relief has been implemented in their jurisdiction.

6. Are there any measures regarding relief from the performance of real estate-related contractual obligations?

The extent of relief from the performance of real estate-related contractual obligations will vary in each jurisdiction. Tenants experiencing difficulty in performing obligations under the lease should review the relevant legislation for measures available during the COVID-19 pandemic.

7. Are there any credit facilities in place to mitigate loss of income for landlords?

There is currently no formal relief package to extend extra credit to commercial landlords.

Landlords should contact their banks directly in relation to these matters.

8. Is there any relief from loan repayments / enforcement of loans secured against properties?

Australian banks are offering six-month deferral of loans to commercial landlords. Businesses (including nonprofits) with total business loan facilities of up to AUD10 million (up from initially AUD3 million) can defer business loan repayments for six months.

The new measures are available subject to the following conditions:

  • commercial landlords will provide an undertaking to the bank that, for the period of the interest capitalisation, they will not terminate leases or evict current tenants for rent arrears as a result of COVID-19;
  • the customer has advised that its business is affected by COVID-19;
  • the customer was current in terms of existing facilities 90 days before applying; and
  • interest is capitalised (i.e. either the term of the loan is extended, or payments are increased after the deferral period).

For borrowers with total credit facilities above AUD10 million, eligibility for relief will be considered on a case-by-case basis.

Australian banks have agreed to not enforce business loans for non-financial breaches of the loan contract during the COVID-19 period.

Commercial landlords are advised to contact their bank to opt into the loan-relief package.

9. Are public services necessary to complete the sale, acquisition or other operation of real estate assets or companies or to establish the right to open for business (planning authorities, notary public, Land Registry, Companies’ Registry, etc.)?

Land registry services of individual states and territories remain operational to different extents, with various measures implemented as necessary to comply with social distancing. These measures have included the suspension of face-to-face lodgements and requests for online payments.

Individuals and businesses are otherwise able to access most information regarding property and title searches through the same channels and services.

Individuals and business should contact the relevant public service for further information.

10. Are there any specific processes or protocols available to consummate real estate operations enabling them to comply with any required social distancing (e.g. electronic signature, etc.)?

While agreements can generally be signed in an electronic form, deeds for land generally need to be in writing.

Most states have passed legislation providing for certain decision-makers to make regulations accommodating electronic signaturing. The regulations allow for modifying arrangements for the signature, witnessing and attestation of documents.

Additionally, the federal government has temporarily modified the operation of provisions of the Corporations Act 2001 (Cth) by way of a Ministerial Determination to address electronic signing in relation to Australian companies. However, the Determination does not expressly provide for the electronic signing of deeds.

11. Are contractors who were carrying out works within the premises obliged to resume them? Can building sites reopen when they were closed down? Are there any specific provisions in relation to certain asset classes authorising continuation / resumption of works (e.g. healthcare structures)?

Construction work is still considered an essential service and is not prohibited under state or federal legislation. However, construction will likely remain slowed down by onerous occupational health and safety standards to comply with social-distancing measures. To address this, some states have extended operating hours to weekends. Building sites failing to abide by these rules may be closed if infections subsequently arise.

Notably, the federal government has broad powers under the Biosecurity Act 2015 (Cth) that would allow them to close construction sites. However, the effect of these powers would ultimately be administered by the states and territories.

12. Are there remedies or contractual arrangements available to address impossibility or delay for a party to handover premises to another which are/were to be constructed or refurbished, or for such other party to take over those premises?

There have been no announcements at a federal or state level to specifically address these matters.

In some instances, the specific contract may already contemplate circumstances where a delay event occurs that will delay the handover of the premises. Where a contractual arrangement does not provide for these circumstances, there may still be implied rights at law to further assist parties in this regard.

Parties affected by a delay in handover should refer to the terms of the specific contract and seek advice on their rights under the contract and at law.

13. Has the duration of validity of administrative authorisations pertaining to development/construction of real estate assets (in particular planning authorisations) been extended?

These matters are largely the responsibility of individual states and territories.

Some jurisdictions have introduced measures, by way of guidelines or legislation, aiming to mitigate the effects of delays to planning and development projects.

These measures have included the issuing of notices to extend or suspend works so that project developers can work within a more flexible timeframe. Some states have also authorised construction to resume on weekends and public holidays for the same duration of hours performed on a normal weekday.

As states and territories begin to implement the National Cabinet’s three-step plan to relax social-distancing measures currently contributing to development and construction delays, it is likely that the remaining jurisdictions will follow suit with clear regulations to manage these matters.

Litigation and Regulation

14. Is the use of disclaimers for visitors or others coming on to the site of business useful for limiting potential future COVID-19 claims?

In accordance with the concept of occupiers’ liability, a person who occupies or controls a premises, such as an office block, has a duty to ensure the premise is reasonably safe for people who may visit and enter it.

In Australia, four jurisdictions (Victoria, Western Australia, South Australia, and the ACT) have enacted occupiers’ liability legislation, and the common-law duty continues to develop in those jurisdictions that do not have occupiers’ liability legislation. Therefore, the analysis required for whether a duty of care is owed by an occupier to a visitor will depend on the jurisdiction.