Legal Insights

With COVID-19 restrictions increasing – How essential are your company’s services?

By Elise Ball & Varshini Rajendran Jordano Vasquez

• 07 April 2020 • 7 min read

In responding to the dual health and economic crisis that the COVID-19 virus has become, our government has sought to strike a balance between keeping businesses open and curtailing the spread of COVID-19.

Public opinion appears to be favouring stricter restrictions to reduce the transmission rates of COVID-19 and over time, we have seen more and more countries move to impose total community lockdowns. Countries like New Zealand, Italy, Spain, Germany, the UK, France, India, South Africa, Singapore, South Korea, as well as Hubei province and certain states of the USA have all required people to stay at home and have shut down businesses (to the extent they cannot be operated by staff at home) – unless they constitute 'essential services'.

Australian businesses should be preparing for the possibility that the different States and Territories of Australia will soon follow suit. In doing so, the critical questions businesses must ask themselves are ‘Will my business be considered ‘essential’?’ and, for those that consider themselves essential, ‘How do we best position ourselves to be confirmed as ‘essential’?’.

The Australian approach so far

Our previous article summarises the legislative approach that Australia has taken in responding to the COVID-19 crisis.

In summary, while the majority of measures are decided upon by the National Cabinet, comprised of the Prime Minister of Australia, the Premiers of the States and Chief Ministers of the Territories, it is ultimately the States and Territories who are responsible for implementing the restrictions into law.

To date, the National Cabinet has adopted a process of progressively closing and restricting the operations of ‘non-essential’ businesses and facilities which involve social gatherings in stages. Stage 1 (a list of businesses required to close in Stage 1 can be found here) commenced on 23 March 2020, followed by Stage 2 (a list of further businesses required to close in Stage 2 can be found here), which commenced on 26 March 2020. Stage 3 commenced on 30 March 2020 (a summary of those restrictions can be found here).

From this we see that the National Cabinet has targeted businesses and facilities which involve large congregations of people or a significant degree of exposure with or between members of the public. Recent Public Health Orders made by the NSW Minister of Health implemented general restrictions and also specified a list of ‘essential gatherings’ which are exempt from these restrictions. This list provides something of an indication into what the National Cabinet might consider ‘essential’ in the event of a total community lockdown.

At the moment, the list of ‘essential gatherings’ is broad and includes gatherings necessary for the normal businesses of:

  • airports, transportation (including at train stations and bus stops)
  • hospitals or for the purposes of emergency services
  • courts, prisons and correctional facilities
  • Parliament
  • a supermarket, food market, grocery store or shopping centre
  • a retail store
  • an office building, farm, factory or mining or construction site
  • a school, university (or other educational facility), or childcare facility
  • a hotel, motel or other accommodation
  • an outdoor space (for transitioning through that outdoor space only).

Could your business be considered ‘essential’ in the event of tighter restrictions or a total community lock-down?

The Australian Health Protection Principal Committee’s (AHPPC) advice to the National Cabinet on 24 March 2020 (available here) states that the next stage of more intense social distancing will likely be ‘a carefully considered closure of all activity except essential industries and services.’ The Stage 3 measures which came into effect on 30 March did not go quite that far, but it is expected that more intense restrictions may be required as the virus spreads. Further restrictions may continue along similar lines as before, such as adding to the list of prohibited activities and venues and perhaps adjusting the list of exempted ‘essential gatherings’. It is also possible that a total lock-down may be required, consistent with the AHPPC advice, with people largely only permitted to move around outside and congregate for work if doing so for specific services where those services are regarded as 'essential'.

At the time of writing, we are not aware of any official guidance as to what is likely to constitute an essential service in Australia. Services likely to be considered 'essential' are those that are necessary primarily for the health and safety of the public, and to the continued functioning of the economy to the greatest extent possible (taking into account the risks). We have researched legislation in a number of Australian states and territories and also considered overseas examples, in order to advise clients on the types of operations we think are likely to qualify as essential in Australia.

While many essential services are provided by public bodies, private businesses will provide a number of essential services. Businesses which are involved in keeping essential services operational (such as those part of their supply chains) will also likely be considered essential. Therefore, in preparing for a possible total community lock-down, if your business provides a prescribed essential service or an important input in the supply of an essential service, it will likely be permitted (or even required) to continue operating to ensure the delivery of the essential service.

What if you are unsure if your business will be considered essential?

While the shut down measures are discussed and coordinated at a high level in the National Cabinet, the details are determined in Orders made under the Public Health legislation in each of the States and Territories and it is open to the relevant Ministers in the States and Territories to take an approach that is appropriate to the prevailing circumstances in the relevant jurisdiction, such as imposing restrictions, granting exemptions and determining which services are essential. We are in uncharted territory and, with things moving very quickly, we anticipate government will in many cases need to be informed of the important role some businesses play.

What are the steps you can take to prepare?

  1. Consider whether your business is directly involved in providing the public with goods or services which would be considered essential in their own right.
  2. Consider whether your business is an important input in the supply chain for an essential service, like a hospital. Remember, certain inputs or parts of your business may be considered to be more essential than others. For example, businesses supplying disinfectant or providing maintenance services to ensure safety are likely to be considered essential, whereas the gift shop of a hospital is unlikely to be considered essential.
  3. If your business is involved in the supply chain for an essential service, consider whether the whole of your operations would be considered essential, or only part of your operations. Can you scale up your essential operations? If so, think about how you might redeploy staff from non-essential operations to essential operations.
  4. If you think there is a risk that your business may not be considered to be an essential service, but there are good reasons for you to qualify for an exemption, then it may be possible to engage with the relevant Ministers to seek a specific exemption. Industry bodies and other contacts within government may be helpful also.

We are currently advising clients about:

  • whether their business (or parts of it) might be designated as an essential service in the event of a community lock-down
  • how best to navigate restrictions on interstate movement
  • steps they can take to best position themselves to be considered essential
  • how to best prepare for further restrictions.

Maddocks has produced guides to a range of legal issues raised by the coronavirus (COVID-19). You can access these guides here.

Need help responding to COVID-19?

Get in touch with the Information Technology team.

By Elise Ball & Varshini Rajendran Jordano Vasquez

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