Business News June 2006
1. The ACCC has released a Small Business Guide to Trade Practices Compliance Programs. For more information contact the ACCC on their website www.accc.gov.au
2. The Security Interests in Goods Act (NSW)
This Act commenced in March 2006. The Act impacts on lenders that take security over movable assets and agricultural goods.
The Act replaces the Bills of Sale Act (NSW) 1898 and the Liens on Crop and Wool and Stock Mortgages Act (NSW) 1898 in relation to security interests, executed after the commencement date. The new Act allows a simpler system of registration of securities with simple prescribed forms. However, an unregistered mortgagee in possession of mortgage goods has priority over a later registered mortgagee and this may cause lenders concern. Therefore mortgagees and financiers are required to do their due diligence of the assets prior to entering into such an arrangement. Further enquiries should also be made about possible outsiders who may have a direct or indirect interest in the secured property as for example landlords who are owed rent and other mortgagees of the real property who are owed interest. The maximum contribution to rent and interest is an amount of 12 months rent or interest.
1. WARNING WARNING WARNING STATUTORY DEMANDS
We wish to impress upon our clients the importance of dealing with statutory demands immediately, and within the 21 days in which they are served. If you do NOT file and serve on the creditor an "Application to set aside the statutory demand", before 21 days has expired from the date when the company was served then your company will be deemed to be insolvent for the purposes of an application to wind up the company. The 21 day requirement is strict.
Further, any "Application to set aside the statutory demand" must be properly prepared. If you are claiming that there is a genuine dispute about the debt stated in the statutory demand, you must describe that dispute. If you simply say in your affidavit in support of the Application "there is a genuine dispute" the application will most certainly fail.
There are a number of precautions to be taken to prevent statutory demands causing undue heart- ache namely:
1. Ensure the registered office of your company as recorded with ASIC is an address where you are certain to receive the mail in a timely manner. The clock starts ticking immediately the demand is served or received in the mail at the registered office, and not when you may receive it.
2. Be sure to seek legal advice immediately. The time for filing and serving the "Application to set aside the statutory demand"" is strictly 21 days.
3. Be sure the affidavit in support of your "Application to set aside the statutory demand"" is properly drafted to include the details of any genuine dispute with the debt claimed.
Employment Matters for Business Operators
1. Fosters Brewing Group and Wing
In this case a senior manager at Fosters claimed a redundancy payment after having been dismissed. The employee was suspected of misconduct and dishonesty. The employer elected to dismiss the employee on the basis of a re structure of the business, to save the embarrassment of the employee.. A business reorganisation both before and after the employee’s departure did occur however the employee’s position was not filled for seventeen months. The employee sought a redundancy payment and his claim succeeded at first instance. At first instance, the judge held that a redundancy occurred "if it is decided to get the job done for a smaller price by reorganisation" and by describing "a cost cutting measure" as amounting to "some of the threads involved in redundancy". He therefore awarded a redundancy payment.
On appeal, it was held that the judge had erred in focusing upon the person rather than the position. Here, the position of general manager remained and there was therefore no redundancy. In any event the reason for Mr Wing’s dismissal seems to have been misconduct rather than any reorganisation.
2. The Minister for Employment and Workplace Relations has announced an assistance scheme for persons wishing to bring unlawful [not unfair] termination actions.
The Government will provide up to $4,000 (GST inclusive) to allow eligible terminated employees to seek legal advice as to the merits of their unlawful termination claim, to assist them in making an informed decision about whether to commence further legal proceedings.
Applicants will be eligible to receive assistance if they were terminated on or after 27 March 2006, have a certificate from the Australian Industrial Relations Commission stating that their claim has merit, or the merit of their claim can not be determined, and if they are assessed as having financial need.
3. Amendments to employer record keeping provisions of the Work Choices Regulations.
The Regulations to the Workchoices Act will be changed so that records must be kept of the following only:
1. the total number of hours worked by an employee where the employee earns an annual salary of less than $55,000 (this amount will be indexed); and
2. daily start and finish times where overtime is payable to the employee under an industrial instrument (eg an AWA) or a common law contract.
This means that where an employee earns $55,000 or more per year and is engaged under an instrument that does not provide for overtime there will be no requirements on employers to keep records relating to hours worked for that employee.
4. Unfair and Unlawful Dismissals under the Workplace Relations Act 1996 (Work Choices) effective from March 2006.
Under the amendments contained in the Workchoices legislation an employee may only apply for relief for unfair dismissal if the following do NOT apply to that employee:
1. The employee is engaged under a contract of employment for a specified period of time or specified task;
2. The employee is dismissed while serving a period of probation or qualifying period (the standard being 3 months);
3. The employee is a casual engaged for a short period as described in the Workchoices Act;
4. The employee is a trainee as described in the Workchoices Act;
5. The employee is not employed under an award, certified agreement or AWA and their remuneration exceeds the specified amount (currently $94,900, which is indexed annually for CPI on 1 July).
6. The employee is employed by an employer that employees not more than 100 employees irrespective of the reason for the dismissal. The number of employees engaged by an employer is undertaken at the time that the employee is dismissed and includes the employee or employees who are being dismissed. The number of employees includes all permanent employees, whether full time or part time, and all casual employees engaged regularly and systematically for at least 12 months, and includes any employees of a related entity (as defined in the Corporations Act 2001).
7. where the employment was terminated for "genuine operational reasons or for reasons that include genuine operational reasons". The amendments define operational reasons as being reasons of an "economic, technological, structural or similar nature relating to the employer's undertaking, establishment, service or business, or to a part of the employer's undertaking, establishment, service or business". This may preclude employees from making an unfair dismissal claim where the reason for their dismissal was due to, for example, their position being made redundant, irrespective of the size of the employer.
8. Where the employee is seeking compensation for "shock, distress or humiliation, or other analogous hurt, caused to the employee by the manner of terminating the employees employment". Compensation will be reduced, also, where the employee is found to be guilty of misconduct.
Of note, as well is that the standard probationary period of 3 months has now been increased to 6 months.
In respect of unlawful [as opposed to "unfair"] terminations, employees will still be able to make claims that their employment was unlawfully terminated regardless of the size of the employer’s workforce, for reasons including:
- discriminatory grounds found in equal opportunity legislation such as the ground of race, colour, sex, age, disability, family responsibilities, pregnancy, marital status;
- Temporary absence from work due to illness or injury;
- Union membership or participation in union activities;
- Non membership of a union;
- Acting or having acted as a representative of employees;
- The filing of a complaint or participation in proceedings, against an employer alleging a violation of laws or regulations or recourse to competent administrative authorities;
- Refusing to negotiate, make sign, extend, vary or terminate an AWA;
- Absence from work during maternity leave or other parental leave;
- Temporary absence because of voluntary emergency activity.
In respect of a claim for a "constructive dismissal", the amendments under the Workchoices Act define a "resignation" by an employee as being construed as a dismissal by the employer if the employee can prove, on the balance of probabilities, that the employee did not resign voluntarily but was forced to do so because of conduct, or a course of conduct, engaged in by the employer. The employee bears the burden of proving that he or she was forced to resign.
Contact Annette Fontana at ForumLaw on 02 9560 3388 to discuss your business matters.