COVID -19: Transition to Level 3

At 4pm on 20 October, the Prime Minister announced that Cabinet had decided that we will move down from Level 4 to Level 3 after Anzac weekend (with effect from 28 April).  That announcement continued by noting that we will then hold in Alert Level 3 for 2 weeks, before reviewing how we are tracking again, and making further decisions at Cabinet on 11 May.

Alert Level 3 allows more economic activity like construction, manufacturing and forestry, but it does not allow more social activity.  

Today’s announcement stated that, this week, businesses will be allowed to get ready to open, such as employers re-entering premises to receive stock if necessary, but they are asked to stick to social distancing and their bubbles.

The guidance from the Government to date has focused on high-level principles and a handful of examples (on the basis that they cannot regulate for every situation).  It is noted that there will be industry and sector points of difference. 

The news media has done a reasonable job of highlighting the fact that it is much more complicated to move out of lockdown than our experience of moving into it.  This complexity is amplified by the fact that we are moving undertaking the downshift in Alert levels in a stepwise manner – with the stay in Level 3 possibly being as short as 2 weeks.  Helpfully, many a number of Government agencies (particularly MPI and MBIE) as well as industry groups and an army of informal working groups (as well as business advisers and commentators) are working to fill in the gaps between the Government’s statements of principle – and what this may mean at the coalface.  See, for example, the protocols for NZ Forestry Industry Operations under Level 3 developed by a number of parties in the forestry industry. 

Some commentators have estimated that a move to Level 3 will result in a doubling of the workforce numbers back at workplaces.  This has to be achieved in a context where those workplaces must still maintain “strict” physical separation.

Again, the news media has highlighted the fact that for many businesses this will mean working differently – and a different type of engagement with customers and suppliers.  For example, while the hospitality industry will not be able to return to business as usual, many food outlets will be seeking to re-start with various on a theme of delivery services (with contactless payment).

The Golden Rules for businesses at Alert Level 3

The Government announcements today included the following set of golden rules:

1.         If your business requires close physical contact it can’t operate.

2.         Your staff should work from home if they can.

3.         Customers cannot come onto your premises.  Unless you are a supermarket, dairy, petrol station, pharmacy or permitted health service.

4.         Your business must be contactless.  Your customers can pay online, over the phone or in a contactless way.  Delivery or pick-up must also be contactless.

5.         Basic hygiene measures must be maintained.  Physical distancing, hand washing and regularly cleaning surfaces.  Workers must stay home if they are sick.

6.         If you used PPE in your business before COVID-19, then keep using it in the same way.  If you didn’t use PPE in your business before COVID-19, you don’t need it now.  This is advice for retailers, manufacturers and the service industries.  Different advice applies to essential healthcare workers, border agencies, courts and tribunal staff, first responders and corrections staff.

7.         You must meet all other health and safety obligations.

Planning

The direction to work from home where possible will likely take on shades of meaning.  I am aware that many major advisory businesses have already decided that working from home will remain the default setting.  For others, in the main centres – particularly Auckland, the prospect of asking employees to use public transport may be the determining factor. 

Another issue that clearly had a large bearing on the decision to move to Level 3 (and will be relevant to further downshifts) is that of contact tracing.  As a result, any decision to re-open a workplace will need to include the ability to assist the Ministry of Health to undertake contact tracing via the workplace.  For example, in addition to staff records – there will need to be the ability to identify visitors (note that the Golden Rules provide that, with some exceptions, customers cannot enter the premises) and gather their contact details.

A non-exhaustive list of planning issues is mapped out below – as a method of promoting the necessary thinking and planning.

Issue	Planning process
Follow the Golden Rules	Can you operate without close physical contact? Can staff work from home? Can you operate in a contactless manner? How is physical distancing – and hygiene being maintained?How are you managing contact tracing?
Service delivery levels	Remember the old adage about looking after the customers you already have as your 1st, 2nd 3rd priority. How do you maintain service delivery levels?  In all likelihood, this will take longer and cost more.  Does this require concessions from customers and suppliers?  What will this mean for life after Level 3 (or COVID-19)?
Customers	How are those key customers (customer groups) faring? Have you continued to talk to them during lockdown – are they ready to return to work in the same timeframe as you?
Suppliers	See above for customers! Are your suppliers on board with the planned changes to your service delivery model? Do you need new / additional support (and from whom)?
Health & safety	Those in charge of a workplace continue to be responsible for the health and safety of all those enter it – including employees, contractors and visitors. MBIE has provided guidance on baseline public health measures – how do these correlate with the manner in which your business operates / plans to operate? As a result, a new risk assessment is needed – including by ensuring that any changes made to allow a resumption at Level 3 both manage the risk of spreading COVID-19 and not eroding existing safety standards.
Employment matters	Material changes to terms and conditions of employment require consultation – and may also require specific consent.  That consultation should address: (i) The needs of employees with health conditions (or concerns); and (ii) Concerns about child care / schooling. Can some / all staff work from home – and think also about public transport.
The lease / the landlord	How was the dialogue about rental abatement during Level 4? Whilst the dialogue under Level 4 (about access restrictions) was quite straightforward – there is much more uncertainty about (say) a partial return to work under Level 3.  On the face of it, there are some restrictions (see the Golden Rules) but some room for business-owner discretion.Arguably, the specific wording of the Government regulation applying to Level 3 will be instructive (but perhaps not wholly determinative). Be proactive, engage the landlord and talk to them about what you are planning to do – and how they may respond.

Further information

Please contact me should you have any queries concerning the information to be provided.