Author: Jonathan Kane

We have had countless enquiries in relation to leases on both sides of the equation, and whilst there are many examples of landlords and tenants working together in good faith, we have unfortunately seen some heartless actions taken by landlords.

The federal government has finally committed to a Code of Conduct for landlords and tenants to comply with. 

The code is designed to apply to those businesses who are eligible for the JobKeeper payments and will stand in place for the same timeframe as the JobKeeper rules.  Accordingly, the code will apply to those businesses who have suffered a turnover reduction of 30% or more.  

The Code is fairly straight forward from a high level perspective.  However, we are anticipating that there will be more guidance at a practical level once the states and territories implement their own statues.

The key messages from the commercial rent relief code of conduct are:

• The tenant must be eligible for JobKeeper
• The tenant must have an annual revenue less than $50m
• Tenants cannot be evicted for the next 6 months if they cannot pay their rent or outgoings
• The rent must be reduced in proportion to their revenue reduction
• Tenants will likely need to justify their revenue reduction by presenting financial records to the landlord
• The rent reduction can be a waiver (rent free) or deferral (to be paid over a maximum period of 24 months)
• If the landlord does not agree to a full waiver of rent, the reduction of rent must at the very least be a 50% mix of waiver and deferral.  Meaning that the maximum deferral amount must only be 50% of the reduction the tenant is entitled to

It’s important to note that at this stage, the code is a guideline of minimum standards to protect the tenant.  This doesn’t mean that the parties can’t come to an agreement outside of the terms of the code.  If this applies to you, make sure that the agreement is correctly recorded in writing.

Whilst the code provides relief and leniency in terms of tenant’s financial obligations, it doesn’t vary tenant’s other obligations such as cleanliness, damage and keeping the premises in a state of good repair.

For example…

• Tenant revenue has dropped 50%
• Tenants rent was $11,000 a month inc GST
• $5500 must be waived or deferred
• $5500 needs to be paid by the client
• OF the $5,500 waived or deferred, $2750 must be WAIVED and $2750 is deferred to be paid over the remainder of the lease, or 24 months, whichever is longer

Need A Hand?

Lease negotiations can be a tricky business at the best of times, but now more than ever as tensions are high on both sides of the fence. It’s important to ensure as best we can that both tenants and landlords come to an agreement that will see both of them through this pandemic. Give us a call or make an appointment to chat through your particular agreement. 

What are employment awards?

Employment awards are industry or job specific and they outline minimum standards of employment (including pay) for that specific role. It’s surprising how many business owners are not actually aware that these awards exist and often if they do know, they aren’t necessarily applying them in practice. 

The importance of valuing your team and the performance and productivity that can flow from that as a result can’t be overstated.  Outside of workplace culture, a big consideration of this is what you pay your them, as well as bonuses, overtime and holiday rates.  

For example…

We have recently acted in a matter where the employer wasn’t aware of the award’s existence and it ended up costing them a significant amount of money. This is despite the company priding itself on the employment conditions, including paying over and above what it considered to be fair wage, cash bonuses, paid lunch breaks and other financial benefits.  However, they didn’t pay Sunday penalty and overtime rates which are required under the award, nor did they keep records of the times the staff worked on a Sunday.  A staff member recently resigned and has made a claim against the company for underpaid wages in excess of $50,000.  

As the company didn’t keep their own records of the hours worked on Sundays, they didn’t have any evidence to defend the claim.  Notwithstanding the fact that the company paid over the award rates for ordinary hours, paid cash bonuses and paid lunch breaks (which they were not obliged to do), the claim ended up costing the company a significant amount and threatened it’s very existence.

The importance of employment awards

Avoiding situations such as this should be easy. Business owners are passionate about what they do and often love the fact that they have an opportunity to build an amazing workplace culture and go above and beyond for their valued team. The fundamental building block for this is understanding your obligations as an employer – it’s absolutely vital to the stability and longevity of your business. If you’re unsure of what these obligations are, make it a priority to contact us, read up and educate yourself.

Keep in mind that awards only deal with certain minimum requirements. Best practice is to implement employment contracts which will clearly set all of the terms of the employment relationship. Executives and those who are on a salary over $148,000 are exempt from awards. If you have team members on a wage of this size, having a solid employment contract in place is imperative.

Employment law can be a tricky one but ensuring that you’ve sought out the right advice in this space is honestly a no-brainer. We’d love to chat!

In the wake of the latest government implemented lockdowns, businesses are naturally scrambling for answers on so many questions. Many of these are industry and business specific, and many can’t yet be answered properly as we continue to wait for further updates. One question that isn’t varied is a business owners’ obligations regarding their employees. There are two rules that should be followed:

Rule number 1 

In this unprecedented time, both economically and health wise, you must be honest with your business partners and your employees. Being open with your team means taking a bad situation and making it more bearable for everyone involved. 

Rule number 2 

Get advice prior to making any decisions.

The National Employment Standards, Employment Awards, Enterprise Agreements and Fair Work Act have to be considered when making any decision with regards to your employees to avoid any unwanted and costly ramifications.  

As a result of these laws, and when and who they apply to, dealing with employees in a situation like this can be so tricky.  With these laws and the fair work commission skewed in favour of the employee, it is imperative that you do it right.  

Many business simply don’t have the option of working from home like others. For these businesses, dealing with their employees in the right way will be the number one priority at the moment.

Employers can use leave, redundancy, termination and stand down measures, as well as reduce hours and pay. Each comes with its own risk and must be done lawfully. Give us a call or book in a video chat before acting on these options so you can do it knowing that it’s lawful and you’re doing right by your team.

Government regulations are changing daily and everyone’s circumstances are different.  Accordingly, we cannot stress enough the importance of obtaining advice. 

For those of you who are able to keep operating with a team, here are some further C-19 guidelines to consider.

Keeping a healthy workplace

The Occupational Health and Safety Act 2004 in Victoria, and similar in the other Australian jurisdictions, mandate the need for employers to provide a safe workplace for their employees.  As an employer there are several measures you can take to ensure that your obligations are met:

– Keep your relevant policies up to date and make your team aware of them

– Monitor the state and federal governments, and other public authorities announcements regarding the virus on a daily basis

– If a team member, or someone connected to a team member contracts the virus, act immediately to advise the other staff as they may need to take self-isolation measures and arrange to have your workplace cleaned and disinfected as soon as possible 

– Where possible, working from home should be encouraged. There are procedures you can put in place as a business owner to keep on top of productivity and ensure that your team are working as they should be

– If you have an ageing or older workforce, or portion of the workforce, you should have genuine discussions with them about what actions you can undertake together to minimise their risk of exposure

Are you or your team already working from home? What have you put into place for productivity (and sanity)? We’d love to hear about it. Join us on Instagram here and Facebook here.

As always, we’re here to talk through any C-19 concerns or questions. Get in touch.

Disclaimer: this cannot be considered legal advice and is general information

Times are tough and you don’t need to be a chief economist to predict that things are going to get worse before they get better. Many businesses will be looking at their financial reporting, including their forecasting with trepidation.  The obvious (and necessary) way to get this equation looking better is to reduce your costs where possible. The first place most of your minds will go to is cutting labour, which may not be avoidable for some and is unfortunately one of the hardest parts of owning a business. 

Before you take more drastic measures, here are a few other ways you may be able to reduce costs:  

– ask landlords for rent free periods or reduced rental price

– are there any changes to supply agreements that could be negotiated?

– rather than going straight to redundancy, look at reducing team wages or hours, or standing the team down for a period of time

Often it’s as simple as asking the question. There are many ways to cut costs by putting the feelers out and seeing what can be negotiated. Why can’t you ask your utility, IT and any other provider necessary to operate your business, “we need to reduce the cost of this service, what can you do?”

This advice doesn’t just apply to business.

As an individual who may be finding hours cut or out of a job altogether, meeting rental, accommodation or mortgage payments could become stressful. There’s no harm in asking if your landlord would be willing to reduce rent for a few months, especially if you’ve been a good tenant or mortgagor. 

Everyone is going to take a hit during the next few months and if we spread the load evenly, we’ll have more hope of getting each other through to the other side.

If your landlord, employee or suppliers don’t each reduce their cost by a little, then unfortunately they’ll be hit far worse in the longer term because you can’t sustain paying them all at the existing level if your business collapses.  

However, it would be hypocritical to be asking these questions and, as business owners, not ask them yourself.  We have stressed before, and do the same again, you must be brutally honest with all of your stakeholders.  If you’re asking them to take a bit of a shave, it’s easier to ask when you can say that you are too. It’s all about giving and taking now more than ever. Think about more than your own back pocket. Importantly, be kind to one another and put yourself in others shoes. We’re in this together and we need to be mindful of that in business too.

Negotiating existing contracts can be tricky, so if you’ve got a matter that isn’t going to be simple to deal with yourself, we’re here to advise and act on your behalf. Let’s put our heads together and see where you might have some wriggle room to free up a bit of cash over the coming months.

Get in touch.