Legals for Small Business during Coronavirus

coronavirus legal

These are difficult times for many small businesses. They are “unprecedented” times, and lawyers of course like precedents. However, we are always encouraging small business to be proactive. I personally have seen courts inundated with disputes; and business owners being encouraged to resolve disputes on their own at the best of times. Unfortunately, there will be many small business disputes after COVID-19. However, if you can be proactive and get on top of your legals now, before things go wrong you can minimise risk, and help your business survive, and thrive into the future. We have drafted these legals for small business during coronavirus to help you through the coming weeks and months.

Whether coronavirus lasts 3 months or years, we don’t know, but being proactive will help you minimise the likelihood of a dispute or fine for non-compliance, and enhance your chances of survival.

If you can work through your various business relationships below, you will go a long way to help your business survive which in turn will help your community.


What are your legal obligations under contracts with your suppliers? For example, do you have requirements to make minimum orders? And are you able to keep complying with them? If so, for how long? If you need to change things, contact your suppliers now and start communicating with them. Ideally get a lawyer to draft any variations, but at least get any changes to your contracts in writing.

What about the suppliers’ obligations to you? Can they continue to perform their obligations? Will your supply be interrupted? Or has it already? Are there other sources of supply? Start communicating with your suppliers now to see how they are affected by COVID-19, and again get any changes in writing.


What are your legal obligations under your contracts with customers and clients? Can you continue to deliver your products and services? If so, for how long? If you can’t deliver, or need to change your products and services somewhat eg online classes or limited stock, notify them of the changes asap. Talk to clients and customers. If you are still open for business, tell them, and if your products and services are changing, tell them. As small business owners we are entrepreneurs; if you need to pivot, do so. Now is the time to be creative and innovative.

Do you know your obligations in relation to refunds and cancellations? If not, have a look at this website for more information. They are consistently updating their information for small businesses and consumers. Be kind, but also be wary; giving refunds when you don’t have to may not help the survival of your business. If something is cancelled because of government restrictions, this impacts your rights under the Australian Consumer Law.


Are you able to keep making your repayments to any bank or financier? If so for how long?  If not, negotiate now, and get all changes in writing. The sooner you ask the better chance you have of being considered. A bank can call in security, so talk to them now. The banks have announced various small business relief packages, so stay up to date here so you know what’s going on.

Do you lease premises? Office space or a warehouse? Can you make your repayments? If you can for how long? And if not, have you contacted and began negotiation for rent abatement or rent reduction with your landlord? A landlord can levict you so talk to them sooner rather than later.

If you cannot make repayments on your loans or rent you may need to suspend or terminate the loan agreement or lease. You should seek legal advice. However, things are changing fast. The National Cabinet is meeting this week to discuss the impact of coronavirus on tenancies, which includes those for small business owners, so keep up to date on your rights. You can have a look here for more information.



If you have independent contractors, or are outsourcing, have you rearranged your staffing levels? Start talking with them now about whether they are needed or not, and if they are, for how long?

Are you protecting your workers from COVID-19? You still have an obligation to keep a healthy workplace during this time, and you need to ensure you can do so. This involves encouraging people to following guidelines from World Health Organisation on infection control, including cleaning hands, covering mouth and nose, and avoiding close contact with anyone with fever or cough. You also need to ensure any employees notify you of potential contraction and seek medical attention urgently; that they stay away. You can require them to provide medical certificates and medical clearances.

You should also have practical arrangements in place for working at home; get savvy with tech, and be restricting all business travel whether it be international or domestic. If you need to direct an employee to travel, is it reasonable, or are you exposing them to an unreasonable risk? Where there are alternatives to making the trip, you should strongly consider them.

If you haven’t already, you should also get a policy in place so your employees know where they stand and what to do during COVID-19. It needs to address infection control measures, diagnosis or exposure, self-isolation, travel, and the continuation of your business operations. You can legally expect employees to come into work unless:

  1. They are on a period of authorised leave eg annual leave;
  2. They are not attending due to government mandated self- isolation;
  3. They are not attending work under instruction by you; or
  4. There is a safety reason why they shouldn’t be at work.

There is also some great information on the Safework NSW website here. 

If the government orders your business to fully shut down due to COVID-19, and your employees can’t usefully be employed, you may be able to stand them down without pay. BUT this area of law is complex. You need to be very careful and seek legal advice.

A lawyer will look at the modern award, enterprise agreement or contract of employment, and they will establish if coronavirus is the real reason for the stoppage. They will consider whether there other opportunities for the employee to be useful.

If there is a slowdown, and you want to shut, you will need to keep paying your employees, but you can discuss if they will use their leave, reduce their hours, or offer redundancy. Keep in mind that paying your employees is your obligation.


These are delicate areas of law, and it would be best to seek legal advice.


Unfortunately the importance of collecting and disclosing personal information properly and in compliance with the Australian Privacy Principles is often overlooked at times like these. If you are in the health industry or are collecting information on people’s health you still need to comply with the Australian Privacy Principles. There is some great information about the continued privacy obligations of businesses issued by OAIC here. 

And if you are providing health advice on COVID-19, perhaps on a website, or via email or socials or elsewhere, you should ensure you have adequate disclaimers in place. In many ways it is unchartered territory, and you don’t want to find people relying on that advice, and making a claim against you because of it.

And we all need to comply with privacy obligations in terms of collecting and disclosing personal and health information during this time.


This is really a high level list of legals for small business during coronavirus. But there are also some sanity checks you can do… Have you checked your insurances to see whether you are covered for an event like COVID-19? Do you have any business interruption insurance for example, and is coronavirus included or excluded? Contact your insurance company. If you’re unsure if you are covered, seek legal advice.

Subscribe to keep updated with any offers you can find. If there is any government assistance during COVID-19 that you need to apply for, any grants, any Facebook marketing offers; and take advantage of everything you can in addition to the government stimulus package.

Do you have disclaimers in your contracts; limiting your liability if you can’t perform your obligations? And do your contracts adequately deal with the coronavirus situation? Most will not have envisaged this kind of scenario. And even if you have a “force majeure” clause it may not apply in these circumstances.

If you can, get a lawyer to review your contracts and include them asap, and certainly get them written into any new contracts. We provide contract drafting and review services and you can read more here.  Or book in for a free 20 minute consultation here.  

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