A recent case in the Federal Magistrates Court of Australia (‘the Court’) has found than an employer unfairly dismissed an employee while she was on sick leave.

As the employee’s salary was over the unfair dismissal threshold of $118,100, the employee commenced proceedings under s 352 of the Fair Work Act 2009 (Cth) (‘the Act’). This section prohibits an employer from dismissing an employee for being “temporarily absent from work due to illness or injury” of a type allowed pursuant the Act. An acceptable illness or injury is that which can be proven by evidence, such as a medical certificate.

The employee had fallen ill and had taken sick leave in compliance with the terms of her employment contract and notified the employer that she would be taking a week of sick leave, and would produce a medical certificate at her first available opportunity. Two days into her sick leave, and before she was able to do provide a medical certificate, the employer summarily dismissed her. Among other reasons, the termination letter stated that the employee “had failed” to keep the employer aware of their “absences”.

The employer had also refused to provide one month’s written notice as required in the employment contract, alleging that the employee had engaged in either “serious misconduct or wilful neglect”, or another act capable of allowing termination under the employment contract the action of dismissing the employee was unrelated to the employee’s lawful sick leave, or that the conduct of the employee amounted to valid reasons to summarily terminate her employment. Federal Magistrate Smith said that the employer’s “decision was poorly thought through” and the act of summary dismissal itself was “devoid of objective reasonableness and fairness” to the employee.

The Court ordered the employer be fined $20,000, pay compensation to the employee of more than $37,000 and cover the employee’s legal costs of $57,000.

For advice on sick leave provisions or termination of employment contact Nick Stevens or Liza Isho.

Author: Nick Stevens, Principal, Stevens & Associates Lawyers, an AIIA.biz expert and one of the Panel of Expert Bloggers.

This article provides general information only. It is not legal advice, and is not a substitute for legal advice. Specific advice should be sought to take into account your particular circumstances. Stevens & Associates Lawyers is a boutique industrial relations and employment law firm. It has liability limited by a scheme approved by the Professional Standards Legislation.

Commissioner Peter Hampton of Fair Work Australia (‘FWA’) has approved an enterprise agreement that does not provide for the payment of leave loading upon termination. This decision is noteworthy as the Fair Work Ombudsman has previously specified that annual leave loading is payable in these circumstances.

The issue before FWA concerned whether the exclusion of annual leave loading in termination payments were a contravention of s 55 of the Fair Work Act 2009 (Cth) (‘the Act’).

s 55 stipulates that no award or enterprise agreement can exclude the National Employment Standards (‘NES’). The NES constitute ten minimum criteria, such as maximum weekly hours and parental leave, which must be provided to every employee.

Commissioner Hampton analysed the NES alongside s 90(2) of the Act, which states that a terminated employee with a remaining period of untaken annual leave must be paid the same as they would have been entitled to had they taken that leave during employment. Commissioner Hampton approved the agreement, finding that the NES did not contain an express provision requiring the payment of annual leave loading upon termination. However, as Commissioner Hampton felt that he had not “decisively” settled the matter, the issue was not “comprehensively resolved”. In his judgment, Commissioner Hampton noted that the decision to approve the agreement was complicated by the failure of the relevant unions to provide submissions on the leave issue.

For advice or assistance with drafting enterprise agreements contact Nick Stevens or Liza Isho

Author: Nick Stevens, Principal, Stevens & Associates Lawyers, an AIIA.biz expert and one of the Panel of Expert Bloggers.

This article provides general information only. It is not legal advice, and is not a substitute for legal advice. Specific advice should be sought to take into account your particular circumstances. Stevens & Associates Lawyers is a boutique industrial relations and employment law firm. It has liability limited by a scheme approved by the Professional Standards Legislation.

There were two main changes to superannuation announced in the federal budget on 8 May 2012. The primary groups affected are people aged 50 or over, and those (of any age) earning $300,000 or more.

Earning more than $300,000

The government has announced an increase to superannuation contribution tax for people earning more than $300,000.  This tax will now be 30% rather than 15% for concessional contributions.  However this is still lower than the 46.5% tax that people at this income level would pay if the super contribution was paid as salary.  This additional tax only applies to concessional contributions.  Concessional contributions include compulsory employer contributions, salary sacrifice amounts, and contributions made by self employed people for which they claim a tax deduction. Non concessional contributions are still tax free if within the relevant cap limits. The tax on superannuation fund earnings is still 0 - 15%. Most withdrawals from super are still tax free for people once they reach 60.

What are the implications?

• The tax advantage of concessional superannuation contributions is slightly reduced for people earning more than $300,000, but it is still more tax advantaged than taking the income as salary. In practise most salaried employees will have limited options to vary their concessional contributions in response to this measure, as they will be mostly compulsory employer contributions. Self employed people will have greater options to adjust their situation if  necessary.
  
  
• The $300,000 threshold includes actual and notional income from a wide variety of sources, including the proceeds of some property and share sales. Therefore this change to superannuation tax may be a consideration when planning the timing and tax effectiveness of asset sales.

Aged 50 or Over

Up until the end of FY 2011-12, people aged 50 or over could make $50,000 of concessional contributions, whereas the under 50s could only make $25,000 in concessional contributions. From the 2012-13 financial year, everyone will be back to the $25,000 limit. The government had previously flagged an extension to the $50,000 limit for some of the over 50s, depending on their total super balance. However this proposal has been deferred for two years. 

What are the implications?

• People aged 50 or over looking to make large concessional contributions to super will have greatly reduced opportunities to do so after 30 June 2012. Seek advice quickly if you are in this category.
  
  
• People aged 50 or over with salary sacrifice arrangements in place that utilise the full concessional contribution caps applying in 2011-12, will need to review those arrangements for 2012-13 if they want to avoid excess contributions tax.
  
  
• Sophisticated super strategies such as “Transition to Retirement” will still be advantageous to many people aged 55 or over, but existing arrangements should be reviewed to take account of the lower caps applying from 2012-13.

If you want further information on this topic or related topics please call our expert, David Scott.

Author: David Scott, Principal, ICT Wealth Financial Planners, AIIA.biz Expert.

ICT Wealth is a boutique financial planning firm that has no ownership by any product manufacturer. We choose to be licensed through AMP Financial Planning. The investment managers and insurers we use include a broad range of leading names and specialist stockpickers.

They were worth waiting for....  NSW Government can now buy ICT services from industry under the new business-friendly standard Government contract - Procure IT version 3.0.  NSW Government has recently published a series of Modules for use with Procure IT v3.0 covering:

• Contractor Services (body shopping and short term ICT Consultancy under the direction, control and supervision of the buyer)
• Professional Services (Professional services where the supplier exercises 'professional' judgement)
• Training Services (as part of a project.  This Module does not cover public classroom based training).
• Data Migration Services (data migration, data cleansing and analysis).

Which Government buyers can use it?

The publication of these Modules enables NSW Government buyers: including NSW Departments, Agencies, Hospitals, State owned Corporations, Local Government and Universities (to name but a few of the 10,000s of 'NSW government entities' that are entitled to use the Procure IT v3.0 contract), to purchase this range of services. 

ITS 2020

And publication was just in time, as the extension of one of the NSW Government's major Services panels, ITS 2020, has just occurred and this panel relied on the publication of these Modules in order to be effective.  ITS 2020 approved supplier panel comprises of a diverse range of ICT services, in over 30 categories and 130 sub categories.

Issues

There are a couple of legal issues with one of the Modules, Training Services, in that this Module is not referred to in the main Parts of Procure IT v3.0, so amendments will be needed on each order to ensure that the Training Services are subject to the appropriate 'boiler plate' terms and conditions; but overall these Modules represent a significant improvement over the previous versions of Procure IT. 

Where can I find the version of Procure IT version 3.0

The new version of Procure IT v 3.0 is published on the NSW Government Procurement website at:http://www.nswprocurement.com.au/Tenders/Goods---Services-Standard-Form-Documents.aspx

Pym’s Technology Lawyers has been the primary legal adviser to AIIA during the discussions with NSW Government on Procure IT.

Author: Mike Pym, Director, Pym’s Technology Lawyers.  A member of the Panel of Expert Bloggers on commun-iT and an expert on www.aiia.biz

Disclaimer: This is general information only. It is not legal advice, and is not a substitute for legal advice. Specific advice should be sought to take into account your particular circumstances. Pym’s Technology Lawyers Pty Ltd is a specialist IT and commercial law firm. It has liability limited by a scheme approved by the Professional Standards Legislation.

 

In a recent decision of the Administrative Decisions Tribunal of New South Wales (‘the Tribunal’), an employee has been ordered to pay damages to a co-employee for sexual harassment. The co-employee brought an action against both the employee and their employer under sections 22A, 22B(6) and 53 of the Anti-Discrimination Act 1977 (NSW) (‘the Act’). Sections 22A and 22B(6) of the Act detail what may constitute sexual harassment. Section 53 of the Act concerns the extension of liability to employers when an act by an employee that violates the Act has been authorised, either expressly or by implication, by the employer.

The employee and co-employee had been colleagues for “some time”, and attended a staff training day together. Upon conclusion of the training day, the employee provided the co-employee with a folded piece of paper which the co-employee read later in her hotel room. Upon doing so, she discovered the paper contained “sexually explicit material” (‘the Note’) and said she felt “physically ill”. Given that the Note was unsigned, it was unclear who had originally written it. As the co-employee was frightened, the co-employee reported the events to the police immediately and then to her supervisor at work the following day. The employer commenced an investigation, interviewing the employee and co-employee several times. As a result, the employee was disciplined and was notified that his employment “would be terminated should another similar incident arise”.

The Tribunal found the Note was not authored by the employee but could not “come to any reasonable explanation as to why, in fact, the note was given to” the co-employee. The employee alleged that he provided the Note as he was concerned with the conduct of the person the Note referred to and wanted to warn the co-employee not to trust the person the Note referred to. The employee also alleged that he warned the co-employee of the graphic nature of the Note, to which the Tribunal disagreed.

The employer submitted that it provided the employee with mandatory and regular training and education during his employment in relation to the employer’s position on harassment, discrimination, bullying and the code of conduct. The employer also submitted that it did not authorise the employee to undertake the conduct.

The Tribunal found that the “steps taken by the employer were sufficient” as the employer had presented employees with the code of conduct policy on numerous occasions and ordered that it was essential for them to abide by the same. In this regard, the Tribunal reiterated that “it is not enough for an employer merely to institute policies; the policies need to be implemented and brought to the attention of the employees in a meaningful way.”

However the Court found the employee did contravene the Act, and following an assessment of the employee’s mental condition after the events that occurred, ordered that the employee pay the co-employee $10,000 in damages.

This case highlights that more than the mere introduction of polices is required in order for an employer to defend itself against claims of sexual harassment. Employers must ensure that they educate and train their employees on a regular basis on such policies. If you would like advice on the adequacy of your company’s bullying and harassment policies and obligations, please contact Nick Stevens or Liza Isho.

Author: Nick Stevens, Principal, Stevens & Associates Lawyers, an AIIA.biz expert and one of the Panel of Expert Bloggers.

This article provides general information only. It is not legal advice, and is not a substitute for legal advice. Specific advice should be sought to take into account your particular circumstances. Stevens & Associates Lawyers is a boutique industrial relations and employment law firm. It has liability limited by a scheme approved by the Professional Standards Legislation.

 

 

Justice Sifris of the Supreme Court of Victoria (‘the Court’) has allowed a former employee of a company (‘the Employer’) to work for a previous client of the Employer despite a twelve (12) month restraint clause in the employee’s employment contract (‘the Agreement’). The Agreement stated that for a period of twelve (12) months after the employment ended, the Employee would not provide services or accept employment with any client of the Employer to whom the employee dealt with or had cause to be in contact with during his employment with the Employer (‘the Restraint’).

In February 2011, the employee began to provide services to a client of the Employer (‘the Client’) on a full-time basis. In November 2011, the Client went through a restructure, creating a new position. In December 2011, the Client approached the employee to determine his interest in filling the new position as an employee of the Client and the Employee advised the Client that he was interested.

 In January 2012, the Employee tendered his resignation to the Employer advising he would be taking the new position with the Client. The Employer advised the Employee that this would be in breach of the Restraint.

 In interpreting the Restraint, Justice Sifris held the Restraint “purports to operate to prohibit [the Employee] from providing any of the services normally provided by [the Employer] at the time [the Employee] finished working there to the clients that [the Employee] had actual contact with while [with the Employer] or had demonstrated reasons to be in contact with.”

 The Employer submitted the Restraint was “confined and did not go further than protecting the legitimate interests” of the Employer. Conversely, the Employee submitted that there was no legitimate interest that required protection.

 In determining whether the Restraint was valid and enforceable, Justice Sifris noted that “something more than exposure to or interaction with the customer or client by the employee is required…This would include personal or special knowledge (which may include confidential information) of the client and a significant degree of influence. It should be stressed that the risk of exploitation of such knowledge and connection, which the covenant seeks to protect, must be assessed at the date of the agreement.”

 Justice Sifris held the Restraint was “void and unenforceable” finding the nature of the relationship between the Employer, employee and the Client did not place the employee in a “special category that would create the risk of exploitation that required protection by covenant…[the Employee] was not intended to be…the human face of [the Employer] or have the relevant and necessary control over the business of the client. His consultancy position… was not intended or contemplated to provide the basis for the development of a special relationship with the client of the kind that would provide the basis or foundation for later competition or exploitation.”    

This case highlights the importance of having properly drafted restraint clauses within employment contracts and confirms the issues that will be considered when a Court considers whether a restraint is enforceable. If you would like advice on post employment restraints, please contact Nick Stevens or Liza Isho.

Author: Nick Stevens, Principal, Stevens & Associates Lawyers, an AIIA.biz expert and one of the Panel of Expert Bloggers.

This article provides general information only. It is not legal advice, and is not a substitute for legal advice. Specific advice should be sought to take into account your particular circumstances. Stevens & Associates Lawyers is a boutique industrial relations and employment law firm. It has liability limited by a scheme approved by the Professional Standards Legislation.

 

 

 

There is a lot of talk about an insurance market in transition. But what does this mean for you as a business owner. In short, it means premiums are on the rise. But here is a bit more about why this is the case.

Rate increases and tightening terms are inevitable in the current environment as insurers absorb the impacts of increasing weather claims, claims inflation, reinsurance pressures and increasing volumes of smaller claims.

There has been a general trend towards increased spring and summer monsoonal rainfall across Australia’s north during recent decades, and decreased late autumn and winter rainfall across southern Australia.

For Australia as a whole, an increase in the number of dry days is expected, but it is also likely that rainfall will be heavier during wet periods. It is likely (with more than 66 per cent probability) that there will be fewer tropical cyclones in the Australian region, on average, but the proportion of intense cyclones is expected to increase.

One effect of widespread damage is known as ‘demand surge’. This is where repair costs spike up as a result of the large amount of work that needs to be carried out by a limited supply of repairers.
 
As the Insurance Council of Australia (ICA) pointed out in its submission to the National Disaster Insurance Review (NDIR) last year, many communities are becoming more prosperous and densely populated. Consequently, construction and rebuilding costs increase annually, as do the values of the individual assets.
Reinsurers are also feeling the effects of the increased frequency in natural catastrophe events. Earthquake losses in 2011 have made the biggest impact compared to prior years where tropical cyclone activity contributed heavily to annual catastrophe loss activity. Even excluding earthquake events, the 2011 losses surpassed the average of recent years.

Most insurers are adjusting pricing, and in some instances deductibles, to ensure that they continue to be able to deliver sustainable products to customers. While the increases will be spread across products and geography, there will be higher increases in those areas that are more exposed to weather related claims, in particular Northern Queensland, and in those products where rates have not been keeping up with underlying inflation.

Publisher: Alex Bodnar - Authorised Representative of Insurance Advisernet. A member of the Panel of Expert Bloggers on commun-iT and an expert on www.aiia.biz

Disclaimer: The information in this publication is of general nature as a service to interested parties. This article is not intended to provide a complete discussion of the subject and should not be taken as advice. While the information is believed to be correct, no responsibility is accepted for any statements or opinion or error or omission.

Many people still do not know about the new Regulation 90 (issued under the Australian Consumer Law), and its impact on suppliers' pricing of warrranty services, contracts, websites and warranty cards.

It applies to all goods and services, not just ICT goods and services.

Regulation 90 came into force on 1 Jan 2012 and prescribes the form and content of a “warranty against defects”.  A failure to meet the requirements of Regulation 90 can be either a criminal offence or a civil contravention and can result in fines of up to $50,000 for a corporation and $10,000 for an individual per contravention.   In addition, providing incorrect statements about the existence or scope of warranties can result in penalties of up to $1,100,000 for corporations and $220,000 for individuals under other sections in the Australian Consumer Law (also known as the Competition and Consumer Act 2010).

This Regulation applies to all consumer contracts in Australia, which essentially is any contract for the supply of goods or services where the price is less than $40,000, or the goods or services are for domestic, household or personal use, irrespective of whether the buyer is an individual, a company or even a government body.

So what is a "warranty against defects"?

A 'warranty against defects' is any statement given at or about the time of supply of the goods or services to the effect that a person (not necessarily the supplier) will repair or replace the goods or part of them, rectify services or provide them again, or wholly or partly recompense the buyer for defective goods or services. 

The statement which comprises the warranty against defects could be oral (in which case it needs to be documented) or could be:

• in your terms and conditions (this includes your standard licence agreement or services contract).
• if the goods/services are purchased on a website, any statement made on the website.
• on any ‘warranty card’ that is included with your products.
• on product packaging, if you provide a warranty against defects on that packaging.
• at the point of sale, if you provide a statement about warranties at the point of sale.

What is required?

Where a ‘warranty against defects’ is given, Regulation 90 must be complied with.  Importantly, the warranty must be in a complying document which includes the exact text highlighted in bold below. 

'Our goods come with guarantees that cannot be excluded under the Australian Consumer Law. You are entitled to a replacement or refund for a major failure and for compensation for any other reasonably foreseeable loss or damage. You are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure'.

Presumably due to oversight, this text applies EVEN if you are only selling services despite the wording in Regulation 90 only referring to “goods”.   In addition to providing this text, there are a number of other requirements relating to providing certain pieces of information relating to the identity of the provider of the warranty services, the process of obtaining warranty services, what the service is and what costs are involved.

Based on our experience in amending IT suppliers contracts to comply with Regulation 90, there are usually at least a dozen specific amendments to be made to any 'standard' contract, and in some cases a significant review of business practices and pricing may also be required.

The Regulation 90 requirements also apply to both retailers and manufacturers. So if you resell other peoples’ goods and services, and the manufacturer’s terms and conditions, warranty card, packaging or similar have not been updated to comply with the regulation, you may be liable, as well as the manufacturer.

 

Need Help?

We would be pleased to assist you to review your current business practices, amend your contracts and/or provide advice in relation to how to become compliant with Regulation 90 and other aspects of the Australian Consumer Law.  For help, please call us on 02 9251 9664. 

Author: Mike Pym, Director, Pym’s Technology Lawyers.  A member of the Panel of Expert Bloggers on commun-iT and an expert on www.aiia.biz

Disclaimer: This is general information only. It is not legal advice, and is not a substitute for legal advice. Specific advice should be sought to take into account your particular circumstances. Pym’s Technology Lawyers Pty Ltd is a specialist IT and commercial law firm. It has liability limited by a scheme approved by the Professional Standards Legislation.

 

Protecting your Confidential Information: Preventing misuse by former employees

In a recent decision of the Supreme Court of New South Wales (‘the Supreme Court’), an employee of an accounting firm (where the employee was previously a principal and owner) was liable to provide compensation to the new business owner (‘the New Owner’) after the employee used confidential information to solicit former clients.

The facts of the case were briefly as follows. The employee sold his accounting firm business to the New Owner, with a agreement in his employment contract that he would refrain from providing accounting services or tax preparation for a period of at least three (3) years within ten (10) kilometres of the accounting firm. At a later date, both the employee and the New Owner agreed that the employee would be released from this contractual agreement a year earlier than originally established (i.e. a two (2) year restraint) in order to allow the employee to expand a previously owned business. During discussions, the employee informed the New Owner that he believed only a “handful” of the New Owner’s clients would follow him to his new business. 

Upon leaving the accounting firm, the employee and the New Owner agreed that the employee would only approach family members and six (6) clients of the accounting firm, and that “all other clients, including files, lists, working papers etc” would remain the property of the accounting firm.

After leaving the accounting firm, the employee expanded a similar business nearby, and proceeded to contact and form clients from lists created by the New Owner. The employee sent emails and letters to clients advising more than seven-hundred (700) clients of the New Owner of his new business, providing them with forms to compel the New Owner to transfer their work to the employee’s new business. These mail outs continued to occur over a period of two (2) months. Many of the New Owner’s clients chose to transfer their services to the new business, resulting in a significant loss of trade for the New Owner.

The New Owner commenced proceedings in the Supreme Court alleging a breach of the employee’s confidential information, and sought to prevent the employee from continuing his new business activities and soliciting the New Owner’s clients. The employee argued that the confidential information, being client information, was merely taken from his memory and therefore did not constitute a breach of his confidential information obligations to the New Owner. However the Supreme Court determined that the employee did use a list of clients obtained from the New Owner whilst having knowledge that this information was confidential to the previous employer. Justice Gzell of the Supreme Court commented “using the wrongdoer principle, I assume that all…clients who left…were solicited by [the employee] using…confidential information”. The Supreme Court held that the employee had misused the confidential information of the New Owner to gain at least seven-hundred and seventy-six (776) clients. On that basis, Justise Gzell determined the employee was liable to pay the New Owner for 75% of the downturn in trade at the accounting firm, ordering the payment of $117,995.

Post-Employment Restraint Clauses

By way of update, a recent decision by the Federal Court of Australia upheld a two (2) year post-employment restraint clause against a former employee (which provided pay to an employee for all but the first three (3) months of the period). This is an unusually long period for a post-employment restraint to operate, but the Federal Court determined it was reasonable given the circumstances, the detailed nature of the employment contract and the provision of pay to the employee for a majority of the period.

To ensure your business has a confidential information and post-employment restraint clause that is valid, please contact Nick Stevens at Stevens & Associates Lawyers.

Author: Nick Stevens, Principal, Stevens & Associates Lawyers

Stevens & Associates Lawyers has provided advice to clients on protecting a business’ confidential information and post-employment issues. Nick Stevens is on the Panel of Expert Bloggers and is the employment law expert on www.aiia.biz

Disclaimer: This article provides general information only.  It is not legal advice, and is not a substitute for legal advice.  Specific advice should be sought to take into account your particular circumstances.  Stevens & Associates Lawyers is a boutique industrial relations and employment law firm. It has liability limited by a scheme approved by the Professional Standards Legislation.

Greg Pearce, NSW Minsiter for Finance and Services has announced that NSW Government will abolish the Supply Management Fee from 1st July 2012 as existing State contracts expire.

The Supply Management Fee was a 2.5% (plus GST of course) levy on all agreements made under NSW State contracts across a broad range or products and services, including ICT.  The Supply Management Fee was persistenly criticised by the ICT industry and so this announcement will be warmly welcomed.

Confirming what the ICT industry has been saying for years, an independent report commissioned by NSW Government found that there was little or no benefit in retaining the fee as part of NSW Government procurement.  Minister Pearce claims that that removing the fee will result in savings of about $15m per annum to the NSW economy, and will substantially reduce the adminstrative burden on industry of recording, collecting and paying the fee.

Great work, Minister!

Now lets see what else comes from the ICT procurement reform agenda in NSW.


Author: Mike Pym, Director, Pym’s Technology Lawyers. A member of the Panel of Expert Bloggers on commun-iT and an expert on www.aiia.biz

Disclaimer: This is general information only. It is not legal advice, and is not a substitute for legal advice. Specific advice should be sought to take into account your particular circumstances. Pym’s Technology Lawyers Pty Ltd is a specialist IT and commercial law firm. It has liability limited by a scheme approved by the Professional Standards Legislation.