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Practical Measures to Cope with Covid-19 Challenges

23 Mar 2020

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The new travel restrictions introduced by the New Zealand government highlight the new reality facing many businesses and communities. The situation is fast-moving and with the number of confirmed cases of Covid-19 increasing, the government has introduced new measures to `flatten the curve’.

We encourage you to keep up to date by visiting the government’s comprehensive new website on everything related to Covid-19. Here in Wanaka, our local Chamber of Commerce, Ignite Wanaka, is providing information and working with other organisations to provide information on government assistance for businesses.

We have pulled together some practical legal considerations to assist you during this challenging and uncertain time.

Employment

Communicating with your team on how to practically deal with the issues as they arise is a priority. Decisions on whether employees are entitled, or ought, to be paid if they are off work need to be made, including what type of leave should be used to cover absences. Check the terms of your employment agreements and workplace policies. Keep in mind that you and your employees may be eligible for Wage and Leave subsidies. (See https://covid19.govt.nz/.)

Health and Safety

The Holidays Act does not allow a business to direct an employee to take sick leave. However, businesses must take reasonable care to ensure all staff, contractors and customers are not put at risk under the Health and Safety at Work Act. Therefore, if need be, a business can direct an employee to work from home or take leave to enforce compliance with travel restrictions or Ministry of Health directives. At a minimum, businesses need to introduce `social distancing’ measures where possible.

Privacy

Under the Privacy Act, there is a general obligation not to use or disclose personal information, and that includes the names of the employees who report in sick, and the reason for their absence. An exception to the Privacy Act is when the use or disclosure of information is necessary “to prevent or lessen the risk of a serious threat to someone’s safety, well-being or health.” But even in the face of Covid-19, there are limits to how much may be disclosed, and that will depend on the employee’s circumstances. According to the Privacy Commissioner, adopting a common sense approach about how much information to divulge is the best policy.

Financial status

We recommend talking to your financial provider to help monitor cash flow and asset values, as well as ways to reduce operating costs. Now is a good time to re-familiarise yourself with your security position and what assets are used for this purpose. Your obligations as a director or trustee require a proactive approach, particularly when making major decisions regarding the business. Make sure you get good information and document your process thoroughly. Get expert advice if needed.

Tax

The government’s rescue package means tax relief and income assistance is available to businesses affected by the downturn due to the virus. Wage subsidies, a sick leave scheme and changes to the tax system are some of the initiatives introduced. The amount depends on individual circumstances but your accountant or tax adviser should be able to help.

Key contracts

Take stock of your key agreements with suppliers, customers, landlords and tenants. Check terms of trade and your ability to terminate a contract if you or your customer cannot meet those terms. We highly recommend being proactive and re-negotiating terms before you are backed into a corner and left with no options.

Business interruption insurance

Do you have it? Now is the time to dust off your insurance policy documents and review your cover. Your insurer can help with this.

Business continuity plans

Undertake a risk assessment of your business to identify the key risks during this time of disruption and implement measures to try and lessen the impact of the wave. Think about the impact of staff absences, lock-down of your premises, supply chain issues, IT capability, and debt management to name a few

How we can help: Aspiring Law is available to answer any questions with regard to your business planning, including any of the above topics. Feel free to contact us at 03 443-0900. We are here to help.

In light of the government's most recent announcement raising the risk level, all meetings will now take place via video call or phone call. Fortunately, technology is on our side. Thank you for your understanding.

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