COVID’s Impact – A Commercial lawyers perspective

We sat down with our Senior Lawyer, Julian Gillard, who specialises in employment, disputes, and commercial litigation, to discuss how his practice has tracked through COVID. Julian’s practice focuses on general commercial contractual and consumer law disputes; partnership and shareholder actions; alleged breach of trustee and director’s duties; unfair dismissal, and adverse action claims.

What impact has COVID had on your employment practice?

Prior to the introduction of JobKeeper, I had many clients approach me to discuss matters surrounding the General Fair Work Act redundancy and stand down provisions. Redundancy occurs when either an employer doesn’t need an employee’s job done by anyone, or the business becomes insolvent or bankrupt.  Being ‘stood down’ is a concept where you are still employed, but there is no work available at your place of employment.

Due to COVID, many businesses were forced to close temporarily, and a lot of employees were losing their jobs on the basis of redundancy.

Employers and employees asked various questions, such as:

  • Can an employee be stood down?
  • Can an employee have their hours reduced?
  • Can an employee have their salary or pay reduced?
  • What can an employer direct employees to do?

As a rule of thumb, employers can’t unilaterally reduce an employee’s hours of work or pay as this would be a breach of contract. The implementation of JobKeeper allowed for directions to be made to stand down or reduce an employee’s hours where those employees are receiving JobKeeper payments. The wage subsidy of $1,500 (now $1,200) is meant to help with the payment of wages and does not allow an employer to reduce the hourly rate of pay.

I received lots of inquiries from employers and employees about the operation of the regime.  The purpose of JobKeeper is to stop employees from losing their jobs on the basis of redundancy and for businesses to have their workforce attached to their business when they start trading again.

From May onwards, the JobKeeper inquiries died down. Businesses seemed to have sorted out their immediate staffing emergencies caused by the massively disrupted business conditions and were now waiting to respond to what happens next.

Employees have been working from home for long periods in 2020; what are the legal implications when employers start asking people to go back to the office?

When employers start requiring employees to go back to work, I think two problems will arise with some employees.

Some employees may be reluctant to come back into the office for various reasons such as not wanting to risk being exposed to COVID, especially people who live with or have a great deal of contact with elderly or vulnerable family members. Secondly, some employees may be quite resistant to going back to the office because working from home has allowed them to be more productive with work without the distractions from the office while also providing them with more time and flexibility for non-work related interests.

When the government gives the ‘OK’ for workplaces to open and businesses implement the necessary processes to fulfil their obligation to provide a safe working environment, it will be difficult from both a legal and practical perspective for employees to refuse to work from the employer’s premises. If an employee refuses to go into the office, they would, prima facie, be in breach of their employment contract and their obligation to follow their employer’s reasonable instructions and directions.

How will the employment law landscape look after COVID? What do you see in your crystal ball?

A lot of businesses who have been doing well during COVID may be more flexible with working from home arrangements. It may be seen as relatively normal for employees to work from home 1-2 days per week instead of spending five days in the office. Renting an office space is a pretty significant overhead and may not be a justifiable expense post-COVID for some businesses.

I would say legal fees are quite a discretionary expense at the moment; understandably, most businesses don’t want to spend money unless absolutely necessary. I suspect that when JobKeeper winds down or ends, there will be a high influx of work both in commercial and employment law as businesses will be faced with some very tough decisions.

In your disputes and litigation practice, what’s it like running a court matter in COVID? Do you think any of the changes will last?

Because of COVID, the courts have been pushed to use technology in many different ways.  I attended a hearing where the parties’ counsel and the judge sat in their respective chambers, and the hearing was completed using audio-visual through Zoom.

There have been some changes in dealing with disputes ‘on the papers.’ Usually, you would submit your written submissions to the court, and then you would expand on them through oral submissions, but during COVID, the courts have been dealing with some matters solely based on written submissions. I don’t think this will last post-COVID, and courts will revert back to dealing with matters through a combination of written and oral submissions.

Regarding Fair Work matters in the Commission, usually, you go to mediation called a Conciliation Conference and this undertaken over the phone, so nothing has changed there and they seem to be pretty on top of things. Previously, it would take up 6-8 weeks before you get a mediation from the date of filing a claim, but they seem to be doing it between 3-5 weeks at the moment.

The Magistrate’s Court sometimes deal with employment disputes through in person mediations but due to COVID they have been undertaken over the phone.

There are pros and cons to telephone conferences. It’s great that you’re not wasting time on things like transit and if a matter has no prospects of settling a telephone conference will wrap up much quicker than an in person mediation.  However, in my experience, parties are more inclined to resolve a matter in an in person mediation as opposed to over the phone.  The matter may not feel quite real yet to the parties where the mediation is conducted over the telephone.  Further, in an in person mediation you can get a much better feel of where the parties are at.

Based on your experience over the last 6 months, do you have any tips for employers or small businesses?

For employers and small businesses, communicate with your staff. Explain to your staff what you need to do, why, and how it will affect everyone. What is good for the small business is good for the employee. During this time, there will be sacrifices that will be necessary, but it is important to know that we are all in this together.

Think long term. It is essential to have a plan for the vitality of your business. Get in touch with us today to discuss what the shifting tides of COVID means for your business and what you can do to better prepare for the future.