Casual Employment Defined

The Full Federal Court in Workpac Pty Ltd v Rosatto [2020] FCAFC 84 on 20 May 2020, prompted calls for urgent legislative review because it threw into uncertainty the status of casual employees and the right to seek compensation for underpayments.

In a timely response designed to avoid uncertainty and minimise such claims, the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2021 contains a new statutory definition of what constitutes “casual” employment and relief for underpayment claims from employees incorrectly classified as casual to stop “double-dipping”.

  1. Casual employment” is now defined.

A person is a casual employee if;

  • an offer of employment made by the employer is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work;
  • the employee accepts the offer on that basis; and
  • the employee commences employment as a result of that acceptance.

To determine whether, at the time the offer is made, the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work, only the following considerations will apply:

  • whether the employer can elect to offer work and whether the employee can elect to accept or reject work;
  • whether the employee will work only as required;
  • whether the employment is described as casual employment; and
  • whether the employee will be entitled to a casual loading or specific rate of pay for casual employees under the terms of the offer or any applicable Award or Enterprise Agreement.

What was offered and accepted??

Importantly, the question of whether an employee is a casual is to be assessed on the basis of the offer of employment and the acceptance of that offer, not on the basis of any subsequent conduct by the parties. This will have the effect of reversing the full Federal Court decisions where the offer of employment was made on the basis of casual employment but the subsequent conduct of the parties was deemed to be the employment of a permanent nature at law.

A casual who commences employment as a result of the acceptance of an offer of employment remains a casual employee until a casual is converted to permanent employment under new rights of conversion to permanent employment or the employee otherwise accepts an alternative offer of permanent employment.

However- there is a new statutory right for a casual to make a reasonable request to convert to permanent employment.

  1. No More ‘Double-dipping”

Casuals are usually paid above an award rate as a “trade-off” against entitlements otherwise afforded to permanent workers.

Underpayment claims by casuals

What should see an end if not a great reduction to claims for underpayments by casual employees, a Court must now make a mandatory set-off of any casual loading amount paid by the employer to a “regular” casual employee who later claims underpayments as a result of being incorrectly classified as a casual and claims entitlement to:

  • paid annual leave;
  • paid personal/carers leave;
  • paid compassionate leave;
  • payment for absence on a public holiday;
  • payment in lieu of notice of termination;
  • redundancy pay.

Any underpayment claim may be reduced by a proportionate amount paid by the employer attributable to each of those entitlements claimed where the casual rate of pay loading is stated to be compensation for the particular entitlements.

Recommendation for Employers using Casual employees

  1. Immediately conduct an audit of all current casual contracts of employment.
  2. Make sure that they do meet the new statutory definition of casual employment.
  3. Ensure that any appropriate loading amount is clearly and separately identified as compensation for specified entitlements.

How can we help?

We can help you in the following:

  1. Review your workforce employment contracts and work practices, and assess your exposure and risks.
  2. Preparation of carefully drafted employment contracts that:
    • remove as much doubt or scope for mischaracterising the relationship
    • permit a set-off of any paid loading
  3. Assist with any restructuring of your workforce.

If you have concerns in relation to casual employees in your business, please contact Michael Sing to discuss how we can help on 07 3009 8444.

 

Business Due Diligence

Business Due Diligence

This article will explain the reason why a due diligence should be undertaken in the sale and
purchase of a business.

Why do a due diligence?

There are a few reasons why a due diligence is important

  1. Risk assessment-conducting a successful and profitable business involves many
    aspects. Checking that each of the key aspects means that you satisfy yourself of the
    integrity and strengths/weaknesses of those aspects. In some businesses, this may
    simply means obtaining copies of relevant documents and reviewing it to properly
    evaluate the Vendor’s business. In some situations, those documents may lead to
    more questions and indicate that a more thorough investigation is required. In some
    cases-the information disclosed or obtained, may result in a decision to terminate the contract.
  2. Determining Value-Due diligence is a critical element in determining value of a
    business. Any factors which affect the future earnings of the company or the value of
    any underlying assets may have a positive or negative impact upon the price for the
    business. For instance, any impending litigation against the company could seriously
    impact upon sales and reputation and diminish the financial viability of the business.
    Alternatively-a projected increase in sales because of a new significant customer
    could mean a better profit and increased value.
  3. Identifying the assets of the business- in some cases, certain aspects of a business
    may be owned by third parties-such as intellectual property rights or real property,
    and the terms upon which the business has a right to use those assets can impact
    upon control of stock sales and profit margin.
  4. any risk minimisation strategy for both the vendors and purchasers, although each
    party will have different objectives. It typically includes a legal, financial and physical
    (eg building and environmental) investigation. It may require the assistance of
    accountants, lawyers and other experts to produce the necessary information.

Who should do one?

Purchaser. Obviously, any intending purchaser should undertake a due diligence
before moving to purchase a business. Usually this will be a term of a purchase
contract.

Seller. In most instances-a seller should also undertake a due diligence before listing
a business for sale. Making sure that all of the key aspects of a business are sound,
and clear to enquiry can mean that a seller gets maximum value for their business
and that any contractual due diligence can be quickly and easily satisfied. In some
cases-a thorough business due diligence by a seller and rectifying any issues
discovered can result in a significant increase in value.

 

What is a business due diligence?

This depends upon the nature and size of the business. However-common investigations
involve:

  • Who owns the assets and who should be parties to the transaction? It is common for
    family businesses to own some of the business assets in a mix of companies, trusts
    and the names of individuals. It is also common for third parties to own intellectual
    property rights if the business is conducted under a franchise or licence. It is
    important to firstly identify the key assets which make up the business and then to
    identify the relevant owners of the business assets and the contractual
    documentation should accurately reflect this.
  • Deciding whether a more tax and risk effective transaction will be to buy all the
    company shares, rather than the assets themselves.
  • Identifying any statutory or government licences, permits or consents and other
    requirements and the conditions attached to those requirements. In some cases-
    these aspects may determine purchaser entity-and may impact upon value and risk.
  • Identifying any third- party consents required such as from landlords or mortgagees
    for leased premises.
  • Identifying any key staff and the integrity of their employment contracts. Retaining or
    removing key staff can have a significant impact upon future profitability, and
    business/corporate culture.
  • Identifying current or future risk factors and eliminating or minimising them.
  • Identifying and negotiating any terms and preconditions of the contract of sale of the
    business. For example, what licences, permits and statutory consents are required to
    operate the business. There may also be other requirements that a purchaser must
    satisfy under competition and consumer laws, stock exchange rules, foreign
    acquisitions and take over laws, depending on the nature of the business and the
    parties involved.
  • Identifying any restrictions on the ability to sell and transfer all of the assets of the
    business- matters such as securities held on the business assets which a seller
    should discharge (eg mortgages on business land or securities on personal property
    registered on the PPSR).

While it is ultimately a vendor’s decision to sell and the purchaser’s decision to buy, a
thorough and comprehensive due diligence will assist both parties to make informed
decisions about whether to transact at all.

For a vendor, this may involve taking the results of a pre-sale due diligence, and
implementation of remedial steps to ensure that any buyer risks are eliminated to maximise
the value.

Seeking advice on such issues at the outset might impact the sale price you are willing to
settle on.

For a purchaser, obtaining the necessary financial information and business advice to be
comfortable with the risks and financial viability of the business will not only be comforting,
but can be critical, particularly if you are seeking to acquire bank finance and using that
business as well as your own personal assets as security.

 

Due Diligence in Contract Terms

It is common for a due diligence clause to be included in a business sale contract. Important
common procedural aspects might include:

  1. Time for due diligence
  2. Method of notification of satisfaction of due diligence
  3. Obligation on seller to deliver all required information and documents
  4. Extensions of Due diligence if any delays in providing documents
  5. Termination or price renegotiation rights
  6. Warranties as to the truth and completeness of information provided
  7. Confidentiality and return of information provided if sale does not proceed

What’s the cost? 

Cost will vary depending upon the nature size and type of business. There is no “fixed price”
that can be applied to all due diligence, and there may be additional unexpected costs to
investigate any issues revealed.

Due diligence may be an additional cost, as it does involve engaging financial, legal and
technical expertise.

However-a good and thorough due diligence will be well worth the cost when measured
against the failure or loss involved in a failed business because of a factor which should or
could have been identified and dealt with before settlement .

Identifying and dealing with critical issues either at the outset before a binding contract is
entered into or before a due diligence is satisfied is often far cheaper with better prospects of an outcome, compared to litigation to enforce rights.

If you are thinking of selling or buying a business, we can assist you.

Michael Sing
Partner, Property and Commercial

 

 

What is Litigation?

 

Litigation is when a person begins a civil lawsuit against an organisation or another individual. There are various rules under the civil procedure that govern actions that occur in state and federal court. Litigation then involved a series of steps that may lead to a court trial and ultimately result in a matter.

When does it occur?

Litigation can occur when two individuals or organisations argue against each other over a matter that may have occurred.

How does it work?

The litigation process in general will work with two sides emerging being the defendants and the plaintiffs. The plaintiffs will then argue and provide a statement of what they claim the defended is guilty of which then leaves the defendant to agree they are responsible or argue a case of their innocence.

What is the process of Litigation?

This process although sounding difficult can be easily understood through 7 steps.

  1. Investigation, where each parties legal representation will investigate the aspects of the case
  2. Pleadings, this is knowns as the initial paperwork in the lawsuit
  3. Discovery, this stage will see the gathering of all facts involved in the case where both sides can freely exchange information.
  4. Pre-Trial, this stage will involve both sides legal representation to conference and negotiate terms with one another.
  5. Trial, this stage is reserved for when a conclusion and resolution could be achieved through pre trial and then requires the matter to be resolved in court.
  6. Settlement, this stage entails a judge after careful consideration will come to an outcome and decide the fate of the matter.
  7. The final step which is often exhausted is known as appeal. This is seen when your legal representation will file an appeal on your behalf to argue the dispute and the outcome of the case. It is important to know this stage of the process can often be time consuming.

What can a Litigation lawyer help you with in this process?

Legal professionals can provide great assistance with all types of litigation cases. The specific jobs that may be required that can be completed by your representation are as follows.

  • Official complains
  • Affidavits
  • Defences
  • Discoveries
  • Interrogatories
  • Further and better Particulars
  • Arrange a barrister on your behalf

Litigation seeming a little daunting?

Anxious about your current legal situation? The whole process becoming slightly overwhelming for your? 

Contact our litigation lawyers now to discuss your options in a no-obligation consultation with the experts. We will guide you, step by step and ensure the best possible outcome for your circumstances.  Call our Brisbane lawyers on (07) 3009 8444 or our Sydney lawyers on (02) 9307 8900. Alternatively, click here to get started.

The blog published by Rostron Carlyle Rojas is intended as general information only and is not legal advice on any subject matter. By viewing the blog posts, the reader understands there is no solicitor-client relationship between the reader and the blog publisher. The blog should not be used as a substitute for legal advice from a legal practitioner, and readers are urged to consult RCR on any legal queries concerning a specific situation.

 

What is Debt Recovery?

Debt recovery is the process in which you embark on to minimise your debt and begin the process of not owing anything. 

Debt is a situation that many individuals easily slip into. It is the idea of an individual being in an obligation to pay money or any other agreed upon values item from one party to another who is owed.

What Help is Available from Solution Specialists?

Debt solution specialists can help with all aspects of this matter from all of the below:

  • Help Tailor debt recovery solutions to suit your circumstance
  • Provide financial advice to better help you manage your debt
  • Help simplify the process to help you better understand your options

What are Potential Debt Options.

  • An Informal Arrangement – This is seen when a debt solution specialist organisation helps provide you with arrangements that you are more comfortable with and can stay on top of your debt despite any unforeseen circumstances. Therefore you can renegotiate your debt repayment terms on your behalf.
  • Debt Arrangements- This is seen as the process of creating a legally binding agreement with both parties. This is when you can no longer repay your debt and will then agree upon an achievable amount to be repaid.
  • Personal Insolvency Agreements – This agreement provides a process for you to offer an arrangement to your creditors. This is to satisfy your debts based on a report being created of your current financial position.
  • Bankruptcy Assistance – Bankruptcy is often seen as a last resort and has serious consequences. There are many different solutions which can be exhausted to resolve this issue. This can then be explored with a debt and bankruptcy specialist.

What’s the First Step of Solving a Debt Issue?

Struggling with financial debt? Worrying about your debt repayments and unsure of how to better your financial situation?

Contact our debt recovery lawyers now to discuss your options in a no-obligation consultation with the experts. We will guide you, step by step through debt recovery and ensure the best possible outcome for your circumstances.  Call our Brisbane lawyers on (07) 3009 8444 or our Sydney lawyers on (02) 9307 8900. Alternatively, click here to get started.

The blog published by Rostron Carlyle Rojas is intended as general information only and is not legal advice on any subject matter. By viewing the blog posts, the reader understands there is no solicitor-client relationship between the reader and the blog publisher. The blog should not be used as a substitute for legal advice from a legal practitioner, and readers are urged to consult RCR on any legal queries concerning a specific situation.

 

Construction Law – What’s it all about

With construction being Australia’s largest industry and having the highest number of operating businesses within it, it is likely that a business will require a construction lawyer at some point to assist with an upcoming project. These businesses range from building companies to design and architecture firms and considering construction is a very highly regulated industry it seems inevitable.

What is construction law?

Construction law applies to all areas in construction work. Since the process of building is complex, builders must know many things before they pour that first bit of cement or cut down a tree. There are a big number of regulations and rules that have to be followed by the builder and other parties involved in the process. These include government representatives and private entities such as individual worker and property owners in which they must have effective procedures for dispute resolution if it came to it.

Some of the areas of construction law include:

  • Contract law
  • Planning and approvals
  • Employment law
  • Worker’s compensation
  • Torts
  • Property law
  • Dispute resolution
  • Occupation safety
  • Litigation

When do you need a construction lawyer? 

You should seek a construction lawyer if you are experiencing any of the following:

  • parties being sued
  • parties suing someone else
  • parties under threat of a suit
  • unpaid bills
  • injury on the job
  • defective claims
  • terminating a contract
  • Reviewing a contract

What licensing is relevant to construction law?  

Each state within Australia has the right to their own specific regulations related to this matter. Within Queensland, you must hold a QBCC license to work on building. Licensing is also specific to the different trades so ensure that all parties working on a contraction party have the appropriate licensing. 

Do you need a written contract? 

Within Australia it is paramount that for all parties protection and to ensure their rights are meet it is imperative that you seek legal advice and guidance. This will guarantee the best outcome and expectations are set and also provide all parties ease through this process.

What happens in the case of the contract constraints not being meet? 

In this turn of events, it is important to understand your rights. A common example of this is seen when defective work is found within a property.  It is critical to seek professional help from experts immediately and also get your contract reviewed throughout the entire process to ensure every requirement is being meet.

Wondering what the next step of the process is?

Still unsure as to what your rights are in regards to construction law matters? Seeking any legal help to ensure the best outcome of the project is achieved?

Contact our construction lawyers now to discuss your options in a no-obligation consultation with the experts. We will guide you, step by step and ensure the best possible outcome for your circumstances.  Call our Brisbane lawyers on (07) 3009 8444 or our Sydney lawyers on (02) 9307 8900. Alternatively, click here to get started.

The blog published by Rostron Carlyle Rojas is intended as general information only and is not legal advice on any subject matter. By viewing the blog posts, the reader understands there is no solicitor-client relationship between the reader and the blog publisher. The blog should not be used as a substitute for legal advice from a legal practitioner, and readers are urged to consult RCR on any legal queries concerning a specific situation.

 

What is Insolvency?

Insolvency is the inability to pay bills as they become due. While the term ‘insolvent’ can apply to both companies and individuals, personal insolvency is more commonly referred to as ‘bankruptcy’ and is a vastly different process than company insolvency.

How to know if you or your company is becoming insolvent?

As a company director/owner, it is extremely important that you understand the warning signs of insolvency and know when it is time to seek help.

In the lead up to insolvency, some problems can include:

  • Cash flow problems
  • Inability to pay creditor bills within the outlined payment terms
  • Needing to refinance in order to pay bills
  • Letters from law firms or debt collectors demanding payment for outstanding invoices

What to do if your company becomes insolvent.

Don’t panic! There are several potential outcomes if you company becomes insolvent. These include:

  • Voluntary Administration
  • Liquidation
  • Receivership

Voluntary Administration (VA)

Voluntary administration (VA) is when the director/s of a company seek assistance from an insolvency lawyer before being forced into liquidation by an unhappy creditor.

This is followed by an in-depth investigation into the company set-up, financials and operations. This is to assess the VA and make a recommendation on either going into liquidation (more on this to come) or coming to an agreement with creditors in which the payment term is extended. So as to allow the company to trade out of its insolvency.

Liquidation

Liquidation is the process of selling the physical assets of a company and turning the asset into cash in order to pay off as much of the debt as possible. A liquidator will collate your assets and ‘liquidate’ them with the conclusion of this process being that the company will be closed, or registered. This is also known as “winding up”.

Liquidation can be recommended by a voluntary administrator or forced upon a company by a liquidator, usually acting on behalf of the group of creditors as a whole. 

Receivership

Receivership is a situation where money is owed to a secured creditor (generally a bank), that creditor can appoint a ‘receiver’ to operate on their behalf. The receiver will then either liquidate the company assets or take control of the company operations so as to trade the business in the hope of repaying debts owed.

A key difference between liquidation and receivership is that a liquidator acts on behalf of all creditors, whereas a receiver acts only on behalf of the secured creditor. A receiver will first ensure that money owed to the secured creditor is paid before paying out other creditors.

What should you do now?

Alarm bells ringing? Whether you are a company director trying to avoid insolvency or have found your company to be insolvent, the worst thing you can do is to do nothing at all. 

Contact our insolvency lawyers now to discuss your options in a no-obligation consultation with the experts. We will guide you, step by step through insolvency and ensure the best possible outcome for your circumstances.  Call our Brisbane lawyers on (07) 3009 8444 or our Sydney lawyers on (02) 9307 8900. Alternatively, click here to get started.

 

The blog published by Rostron Carlyle Rojas is intended as general information only and is not legal advice on any subject matter. By viewing the blog posts, the reader understands there is no solicitor-client relationship between the reader and the blog publisher. The blog should not be used as a substitute for legal advice from a legal practitioner, and readers are urged to consult RCR on any legal queries concerning a specific situation.

Defamation and Social Media

Social media platforms such as face book and twitter have now become the normal platforms for community and social groups to keep informed and stay in touch with each other.

Unfortunately, the ventilation of private disputes and unfair and false allegations against individuals through these platforms is increasing. Many “keyboard warriors” think that the social media platforms allow “open slather” on their comments concerning others.

Recently, there has been confirmation that publication of defamatory material through social mediums will result in significant damages.

The recent decision of Gayed v Abdelmak [2020] VCC 1814, was a case involving the assessment of damages where the plaintiff was defamed in a series of six posts published by the defendant on the Facebook account of his wife in early 2018.

The publications

The publications related to a loan between the Plaintiff and defendant, and claimed that the Plaintiff:

    • had deceived the defendant and was asking the entire congregation at their Church for money;
    • and his family were “thieves”;
    • was a “scammer”, “thief”, “liar” and “a disgrace” and stated that “he owes everyone money”;

Of the six publications the subject of the claim, the First, Second, Third, Fourth and Sixth Publications were posted in the English language. The Fifth Publication was in Arabic and was a translation of the Fourth Publication.

The Defendant admitted that he had published, or caused to be published, each of the offending Facebook posts but initially alleged a number of defences, including justification and honest opinion.

He later conceded liability and abandoned his defences. The only matter in dispute was the quantum of damages to be awarded to the plaintiff.

Damages Awarded

The Court cited with approval, the principles relating to assessment of damages in defamation proceedings set out by Dixon J in Wilson v Bauer Media Pty Ltd & Anor:

(a) Damages should provide consolation for hurt to feelings, damage to reputation, and vindication of the plaintiff’s reputation;

(b) Damages ought to reflect the high value which the law places upon reputation;

(c) The gravity of the libel and the social standing of the parties are relevant to assessing the quantum of damages necessary to vindicate the plaintiff. The award must be sufficient to convince a bystander of the baselessness of the charge;

(d) There must be an appropriate and rational relationship between the harm sustained by the plaintiff and the amount of damages awarded (Section 34 of the Act);

(e) The extent of publication and the seriousness of the defamatory sting are pertinent considerations;

(f) In determining the damage done to a plaintiff’s reputation, the Court should also take into account the “grapevine” effect arising from the publication – a realistic recognition by the law that, by ordinary function of human nature, the dissemination of defamatory material is rarely confined to those to whom the matter is immediately published;

(g) It is well accepted that injury to feelings may constitute a significant part of the harm sustained by a plaintiff;

(h) No award may be made for exemplary or punitive damages (by reason of s37 of the Act);

(i) Section 38 of the Act makes provision with respect to a number of factors giving rise to mitigation of damages including where the defendant has made an apology to the plaintiff about the publication of the defamatory matter.

The Court awarded the Plaintiff damages in the sum of $120,000, together with interest of $8,473.35 and costs fixed at $85,000.

Consolation, Reparation and Vindication

In arriving at the award, the Court reaffirmed that in defamation matters, there are three purposes for awarding damages in a defamation claim:

  • Consolation for the personal distress and hurt caused to the plaintiff by the publications;
  • Reparation for the harm done to the plaintiff’s personal and (if relevant) business reputation; and
  • Vindication of the plaintiff’s reputation – the amount awarded is the minimum necessary to signal that vindication to the public.

“Grapevine effect”

In the particular religious and ethnic community to which the offending posts were made, there was a “grapevine effect”:

I am satisfied in a relatively tight religious and cultural community such as the [particular Church] community of Melbourne, the “grapevine” effect arising from the publications would have been substantial.  Members of the community who had read the posts or had them brought to their attention were high likely to discuss them or bring them to the attention of other members.”

The comments would extend to a plethora of sporting, cultural, political and community organisations, large and small, where members freely and openly discuss contentious matters between themselves, and sometimes criticise others.

This case illustrates that publication of defamatory material on social media platforms may result in significant damages being awarded and that care and restraint needs to be exercised in any commentary on contentious matters and criticism of individuals.

Contact us

We have previously assisted both plaintiffs and defendants in relation to defamation proceedings and if you have any concerns about defamation matters, please contact us.

Restraints of trade and confidential information.

restraints of trade

The departure of a key employee can give rise to considerable risk and concern.

In the excitement of starting a new job, an employee may fail to consider or ignore their current employment contract and the restraints imposed on them, which usually will include a restraint on the use of confidential information.

The remedy for an employer who faces loss of an employee to a competitor and a risk of that employee and the competitor misusing confidential information, will include an injunction on an interim and urgent basis if necessary, and a claim for any loss or damages suffered.

Often, the decision to seek urgent injunctive relief comes only when it is realised that the employee who gives notice to leave has commercially valuable confidential information that in the hands of their new employer (who is a competitor) can cause loss and damage.

The relevant principles in deciding whether to restrain an employee from breaching a restraint of trade and from using confidential information usually start with the terms of any contractual restraints.

Those principles can be summarised as follows:

  1. “A term in a contract, which is a restraint of trade (‘a restraint clause’), is presumed to be void as contrary to public policy.
  2. The presumption may be rebutted if there are special circumstances that demonstrate the covenant to be:
    • reasonable as between the parties; and
    • not unreasonable in the public interest.
  3. The test of reasonableness varies depending on ‘the situation the parties occupy and so recognising different considerations which affect employer and employee and independent traders or business men, particularly vendor and purchaser of the goodwill of a business’. A court takes a ‘stricter view’ of restraint clauses in employment contracts; and will more readily uphold a restraint clause in favour of a purchaser of the goodwill of a business than a restraint clause in favour of an employer. In particular, a purchaser of a business is entitled to protect itself from competition by the vendor; but an employer is not entitled to protect itself from competition per se by an employee.
  4. A restraint clause in favour of an employer will be reasonable as between the parties, if at the date of a contract:
    • the restraint clause is imposed to protect a legitimate interest of the employer; and
    • the restraint clause does no more than is reasonably necessary to protect that legitimate interest in its:
      1. duration; or
      2. extent.
  1. It is well established that employers do have a legitimate interest in protecting:
    • confidential information and trade secrets; and
    • the employer’s customer connections.
  2. For the legitimate purpose of protecting the employer’[s] confidential information, a restraint clause does not need to be limited to a covenant against disclosing confidential information. It may restrain the employee from being involved with a competitive business that could use the confidential information.
  3. The onus of proving the special circumstances from which the Court may infer ‘reasonableness between the parties’ is on the person seeking to enforce the covenant. However, if an employee or other covenantor alleges that the restraint clause is against the public interest, the burden of proving that proposition is on the employee/covenantor.
  4. Once the facts that are contended to constitute the special circumstances have been established, it is a matter of law whether the restraint clause is reasonable as between the parties.

Even if the employment contract does not contain any reference to protecting confidential information-there are still good avenues to support an action to protect that information, including:

  1. Implied duties arising for the employment relationship
  2. Fiduciary duties
  3. Corporations Act

If you own a business and fear that a departing employee may be either intending to breach a contractual restraint of trade or may seek to misuse confidential information, then you may need to act quickly to minimise the likelihood of any damages.

Of course – prevention is always better than cure – and it helps to have robust and complete employment contracts dealing with matters such as a restraint of trade and protection of confidential information, and for the employee to receive a reminder of those obligations upon cessation of employment.

Please don’t hesitate to contact us if you need any advice on these matters.

Michael Sing

 

Director identification numbers being introduced

Director identification numbers being introduced

The Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (Cth) (Act) passed by the Federal parliament on 12 June 2020 with the effect that directors of Australian companies will soon be identified by a permanent unique number which will be known as a director identification number (DIN). The main purposes of the Act are to:

• ensure that all directors have their identity verified as part of the DIN(director identification number) application process (this includes alternate directors acting as directors, and other officers such as company secretaries as might be prescribed by regulations);
• ensure directors only have one DIN and preventing directors hiding behind aliases or variations of their name;
• prevent director identity fraud;
• apply a consistent regime across Australian body corporates, Aboriginal and Torres Strait Islander corporations, and registered foreign companies;
• further aid in the deterrence and penalisation of illegal phoenix activity; and
• impose criminal and civil penalties for non-compliance.

The Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 is one of five other acts which have been passed by parliament which will together introduce a single business register, allow for the governments technology to be modernised and address the issue of phoenix activity.

Whilst the Act is not yet in force it will come into force on the date fixed by proclamation or within two years from the day the Act receives assent. After the Act becomes operational:
• existing directors having to apply for a director identification number within a period of time to be announced;
• within the first 12 months (Transitional Period) of the new Act’s operation a person who is appointed a director will have 28 days to apply for a director identification number (DIN).
• after the Transitional Period ends, a director must apply for a director identification number prior to being appointed as a director or such time as specified by the registrar; and
• The resignation of a director will then only take effect from the date of notification and a director that fails to notify the ASIC of their resignation within 28 days may be held accountable.
• There will be criminal and civil penalties for applying for multiple DINs or misrepresenting a DIN  with the penalties for a director applying for multiple DINs or misrepresenting a DIN (director identification number) being up to $21,000 (100 penalty units) and/or 12 months imprisonment as at the date of this article.
This is in stark contract with the current process as ASIC does not take steps to verify the identity of company directors and will have a significant impact on:
• the time frame and costs to incorporate companies will be lengthened where the person to be appointed as a director does not already hold a DIN;
• clearly identifying the directorships an individual holds and removing the discrepancies and errors commonly seen in Government registers; and
• making the process of locating directors in insolvency matters by creditors, administrators and liquidators more efficient and easier.

If you have any questions regarding the introduction of director identification number (DINs) or other matters relating to your or duties as a director, please contact Rostron Carlyle Rojas Lawyers:

Time to review your business affairs

Time to review your business affairs

The beginning of the new financial year is a good opportunity to set aside time to review your contracts and ensure that the key aspects of your business are in order. In particular you should check:
• that you are aware of the changes to award rates which may affect the amounts payable to your employees and whether your employment agreements need to be updated to deal with changes in the law such as those changes introduced in response to the Covid-19 pandemic;

• that your key customers or suppliers have executed current written agreements;

• whether any of your contracts need to be renewed or extended;

• that all of your licenses and authorisations are up to date;

• whether your terms and conditions are up to date, noting that we frequently review terms and conditions which are in breach of the Australian Consumer Law or do not provide standard protections for the businesses such as the right to register security interests;

• that your insurance policies to ensure they are appropriate and adequate for your current business operations and whether your policies need to be updated to take into account recent changes in your business;

• that your company register, the ASIC register, trust documents or partnership agreements are up-to-date and reflect the current structure of your business; and,

• whether any personal property security interests have been registered over your business which should be removed

• whether any personal property security interests registered in your favour need to be extended to avoid the registration expiring; and

• the status of your debtors and whether you need to engage professionals to collect the debt on your behalf.

In addition to the above you may also wish to consider reviewing your current business structure and your business succession arrangements to ensure that they up to date and match up with your requirements.

Rostron Carlyle Rojas Lawyers can assist you in reviewing each of the above, provide you with practical advice and work with you to rectify any problem areas identified.