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The latest on how to prepare your business for coronavirus and economic instability
Given recent changes in language and tone from local and international political and health bodies, we believe that now is the time to get on the front foot in dealing with the potential implications of the coronavirus on our communities as well as Australian businesses and their employees.
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Given recent changes in language and tone from local and international political and health bodies, we believe that now is the time to get on the front foot in dealing with the potential implications of the coronavirus on our communities as well as Australian businesses and their employees. 

There is no immediate cause for alarm as Australia has a first-class health care system, meaning that we’re well prepared and relatively protected from many of the circumstances we’ve witnessed overseas. Despite this, it is still beneficial for all of us to be adequately informed and prepared. 

We have already seen a number of our clients’ businesses financially affected and a significant change in appetite for spending across the community. To combat this and in the wake of the World Health Organisation officially announcing the coronavirus a pandemic, the Australian Government has announced a $17.6 billion economic plan to support the Australian economy. This stimulus package involves a number of subsidies, cash flow assistance, stimulus payments and financial assistance to help keep Australians in their jobs.

While there is no doubt that this pandemic will be difficult, challenging times like these present an opportunity to band together and demonstrate how strong our country and communities are. 

We’re going to run through the possible impacts that Australian businesses should be prepared for, as well as recommend suitable actions you can take to minimise potential implications. Regardless of the type of support available to your business, you should be thinking and communicating proactively regarding all aspects of your operations.  

Good Practice In the Workplace

Ensure that you’re up to date with the latest information surrounding COVID-19 by regularly checking World Health Organisation and Department of Health resources. In addition to this, it’s imperative that you have an action plan and policies in place. Being proactive in terms of communicating policies to your staff should be a priority. 

Promoting good health and hygiene is another priority in the workplace. Maintaining a regular cleaning schedule as well as providing hand sanitiser and signage where possible will give your staff the best conditions to remain healthy. 

Staff Leave and Absences

Plan ahead and do your best to ensure that your staff are prepared to work from home. This involves ensuring staff members have adequate technology and documentation at their home in case they are required to stay away from the workplace or to be home with children following school closures. In the case that employees exhaust personal leave entitlements as a result of having to care for others or themselves, they:

  • may elect to take unpaid personal leave; 
  • may elect to take annual leave; or 
  • may apply for long service leave (where eligible). 

In the situation where employees are stuck overseas or are required to self-isolate due to travel, you should allow them to work from home. The Fair Work Act 2009 (Cth) does not provide for this specific situation so employers will need to come to a fair agreement with their employee. This may include:

  • if the employee is not cleared by a doctor to work, the employee taking personal leave;
  • the employee taking annual leave;
  • the employee taking long service leave (where eligible); or arranging any other paid or unpaid leave by agreement. 

Cash Flow Management

If your business is likely to face cash flow issues as a result of greater economic conditions, it’s best to proactively communicate any issues to suppliers and other stakeholders. As part of the government support package, employers are eligible for tax-free payments of up to $25,000 with a minimum payment of $2,000. Wage subsidies of up to 50% will also be available for small businesses who employ apprentices and trainees. 

Scaling back operations

There is no ‘one size fits all’ solution when it comes to making these kinds of decisions. A number of options can be explored such as freezing new hires, deferring bonuses and changing rosters. Temporary closure of your business is a more extreme option but redundancies should be considered a last resort in this case. 

Under the Fair Work Act, an employee can only be stood down without pay if they cannot do useful work because of equipment breakdown, industrial action or a stoppage of work for which the employer can’t be held responsible. The most common examples where this is implemented is for severe and inclement weather or natural disasters.

What does all this mean? Employers need to be vigilant and understand their obligations under the Fair Work Act and relevant employment agreements, industrial instruments and policies. Employers are encouraged to obtain advice on their specific circumstances before implementing any changes. 

Investment

A number of service-based industries such as tourism and hospitality could be specifically impacted by reduced consumer sentiment and potential travel restrictions. Part of the government’s plan to combat this involves support in the form of different investment incentives, which will help support over 3.5 million Australian businesses.

Insurance

Be sure to review your insurance policies to fully understand to what extent you’re covered. While it’s unlikely that your policies will cover you for a downturn in economic conditions, it’s best to completely understand what you are covered for and to take this information into account when undertaking business planning.

Generally speaking, you need to suffer physical loss to your business premises and/or equipment in order to claim Business Interruption Coverage. After the SARS outbreak, the insurance industry determined it would not be able to sustain losses caused by a global pandemic event and introduced a clause to all policies which exclude any disease that is notifiable under the Quarantine Act 1908 (Cth). As of the end of January 2020, Coronavirus is a listed notifiable disease.

When it comes to travel, if a corporate travel policy was purchased and travel was booked prior to the outbreak, claims resulting from Coronavirus may be covered. Coronavirus-related claims on policies purchased after the outbreak, or for travel booked after the outbreak, generally won’t be covered because the virus is now considered to be a known risk.

Stock and Supplies

If your business imports resources from overseas, it’s important to ensure that you have enough inputs available at hand to maintain or complete work in progress. You should also be aware of potential declines in the availability of stock going forward and prepare accordingly for this. 

While we are undoubtedly facing a challenging period, it’s beneficial to look at this as a time to add value to and engage with our communities and customers to improve outcomes across the board. 

Please be aware that the thoughts and recommendations we’ve provided above are by no means exhaustive. Please get in touch with your relevant BlueRock advisors or access the links below for additional information.

Australian Government Department of Health: https://www.health.gov.au/news/health-alerts/novel-coronavirus-2019-ncov-health-alert

World Health Organisation:
https://www.who.int/emergencies/diseases/novel-coronavirus-2019


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Did you know?
The origin of the BlueRock name is a mash-up of the founders two favourite things.
Through a mutual love of the Carlton football team and Dwayne 'The Rock' Johnson, a firm was born!