The Fair Work Commission has ruled in favour of an employer in the community services industry (‘the Employer’) who dismissed its Manager for directing employees to falsely record weekend work on their timesheets.

Commissioner Asbury heard that the Manager had directed two staff members under her management (‘the Employees’) to falsely record their hours worked.  Specifically, the Manager had directed the Employees to include false information in their timesheets to show that hours actually worked on a weekend had been worked between Monday to Friday (‘the Directions’).  His Honour found that this amounted to misconduct.

His Honour also stated that the misconduct was exacerbated by the fact that the Directions were given in circumstances where the Manager’s supervisor (‘the Supervisor’) had expressed concern over the Employees working long hours and on weekends, and the Manager had subsequently assured the Supervisor that the Employees would not be performing weekend work.  Further, although the Manager did not gain a financial benefit from giving the Directions, the Manager had given the Directions in a deliberate attempt to prevent her Supervisor from becoming aware that the Employees were performing weekend work “with the probable result that she avoided [the Supervisor’s] displeasure about those employees working excessive hours or during their leisure time.”

Accordingly, Commissioner Asbury held that it was reasonable for the Employer to lose trust and confidence in the Manager, and the termination of her employment was upheld.

Notably, Commissioner Asbury stated that “the recording of work time is an important matter, and has particular significance for the [Employer] in light of the nature of the work performed by employees [and] its obligations to ensure that they work reasonable hours.”  His Honour accepted that the Employer had systems in place for recording time worked, and that it was critical for all employees to comply with those systems.

Under the Fair Work Regulations 2009, if an employee is paid at an hourly rate, their payslip must state the number of hours worked by that employee during the relevant pay period.  Employers should consider training all employees on the importance of accurately recording hours worked on timesheets in order to avoid potential problems in this area.

For further information on the form and content or employee records and payslips, or avoiding liability for unfair dismissal in terminating employees for misconduct, please contact Nick Stevens, Victoria Sales 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 under Professional Standards Legislation.

The Federal Magistrates Court (‘the Court’) has recently ordered a company in the call-centre industry (‘the Company’) and its director to pay nearly $300,000 in both fines and reimbursements for underpaying its employees.

As part of the Fair Work Ombudsman’s (‘the FWO’) continuing investigation into underpayment, the FWO launched legal action against the Company in July 2009. In November 2011, the Court handed down a decision finding that the FWO had made out its arguments that the Company had underpaid staff in “hard fought” proceedings, despite flaws in the initial review process which meant it had to be repeated.  Accordingly, Federal Magistrate Rolf Driver held that both the Company and its Director were liable for breaches of section 12 of the former Workplace Relations Act and the New South Wales Clerical and Administrative Employees (State) Award (‘the Clerical NAPSA’).  Specifically, his Honour found that the Company had failed to pay correct wages, penalty rates, shift allowances, overtime and annual leave loadings to 33 employees at one of its call centres.

The Company contested the charges on the basis that the employees were award-free call centre workers covered by Australian Workplace Agreements (‘AWAs’). However, his Honour found that in fact, the AWAs had never been lodged with the former Office of the Employment Advocate in accordance with the legislation, and agreed with the FWO that they were therefore covered by the Clerical NAPSA.

Federal Magistrate Driver accepted the FWO’s submission that the underpayment contraventions amounted to “a failure to provide basic and important conditions and entitlements under the legislation.” Additionally, His Honour also found the Company had failed to provide the FWO with certain required records and documents under a Notice to Produce.

The Director of the Company, who was described by the Court as “the controlling mind” behind the Company’s contraventions, was fined a total of $26,500.00. The Company itself was fined $81,000.00, in addition to an order to reimburse the 33 underpaid employees a total of $193,419.00.

It is critical for employers to ensure their employees’ wage and other entitlements are calculated accurately in order to avoid significant financial liability for underpayment, especially in light of the FWO’s ongoing investigation into underpayments. For further information on current pay rates and award entitlements, please contact Nick Stevens, Victoria Sales 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 under Professional Standards Legislation.

Between January 2002 and March 2005, a Farm Manager was employed by a company (‘the Employer’).  The Farm Manager was paid $30 per hour and received 4 weeks annual leave.  The Farm Manager’s contract did not contain an express provision regarding termination of employment.

The Farm Manager’s employment was terminated in March 2005 and the Farm Manager was not paid any notice in lieu of termination.  The Farm Manager argued that he was entitled to reasonable notice and that such reasonable notice was implied into his contract.  The Farm Manager argued that he was entitled to 3 months’ notice while the Employer argued that he was entitled to 1 months’ notice. Agreeing with the Farm Manager, Justice Robert Beech of the Supreme Court of New South Wales held:

“[The Farm Manager] was 53 years of age at the time he was dismissed. He had worked in the position for almost three years.  The position was a relatively senior one in that he was managing a substantial commercial enterprise.  His position had considerable autonomy in that he was only accountable to [the Farm Owner] and, to a lesser extent, [the Chief Financial Officer].  In those circumstances I consider that the three month claim made on his behalf is established.”

The Farm Manager also argued that he had an oral contract with the Employer which included an implied term that upon termination of employment the Farm Manager would be reimbursed by the Employer for using his 2 tractors at the rate of $60 per hour. Although the Employer denied this, Justice Beech agreed with the Farm Manager stating:

“While there is room for debate about the amount of hours the tractors were used, I consider the evidence that there was a significant amount of usage of [the Farm Manager’s] tractors on [the Farm] during the years 2002 to 2005 to be overwhelming.  I regard the objective likelihood that [the Farm Manager] allowed his tractors to be used on [the Farm] without some agreement that he would eventually be reimbursed to be low.”

This case highlights the importance of formalising all agreements with employees, especially senior ones, so as to avoid confusion and lengthy and expensive Court proceedings required to determine what an employer and employee had actually agreed to.

If you would like advice on formalising negotiations with employees or prospective employees, please contact Nick Stevens, Victoria Sales 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 under Professional Standards Legislation.

The Australian Business Register website has recently been upgraded and some new functionality has been added.  When registering a new entity, you should now be able to do the following:

• register for a business name, an AUSkey, GST, fuel tax credits and PAYG withholding  at the same time as applying for an Australian Business Number (ABN); and
• have your details pre-filled from one registration to the next - for example, some of the details included on your ABN application should then be pre-filled on your business name application.

However, if you do not take advantage of applying for certain registrations at the initial stages of your ABN application, you will still need to:

• apply directly to each agency for additional registrations if you do not elect to apply for these registrations at the same time as you apply for an ABN, or if you already have an ABN;
• apply for a business name directly with the Australian Securities & Investments Commission (ASIC) if you are registering an entity that is not an individual or organisation with an Australian Company Number or Australian registered body number;
• go to the AUSkey website www.auskey.abr.gov.au to manage your AUSkeys - for example, cancel an AUSkey, or apply for additional AUSkeys.

It is important to look after your AUSkey for the entities that you have.
 

Tip! 

Before going ahead to register an entity, if you are not sure what type of entity you should register, you should seek advice from Balance as there may be different tax implications for different types of entities. Also, it is worth spending time working out what is the best structure for your type of business. 
  

Disclaimer

Author: Matthew Karpanen, Director of Business Services, Balance Professional Services, is an AIIA.biz expert on our Panel of Expert Bloggers.

This article provides general interest information and is not advice. You are encouraged to consult with your tax specialist for advice that takes into account your particular circumstances.

On 19 October 2010, aircraft maintenance engineers (‘the Employees’) of an aircraft carrier (‘the Employer’) grounded a number of its fleet after they had been inspected due to safety concerns.  The Employees were all members of the same trade union (‘the Union’).  At the same time this occurred, the Union and the Employer could not resolve industrial issues relating to the renewal of an expired industrial agreement.  Following the reporting of the safety defects and grounding of the fleet, the Employer suspended the Employees on full pay while it conducted an investigation into the events of 19 October 2010.  Namely, the Employer alleged that the Employees completed maintenance forms in a way that would ensure the aircraft would be grounded.

Following an investigation by the Employer, it was found that the aircraft did not have serious safety defects warrantying the grounding of the same.  Accordingly, the Employer issued each of the Employees with a formal warning; directed each Employee to return to work but not on their usual shifts; and deducted 4 hours from the Employees’ next pay.

The Union commenced proceedings in the Federal Court of Australia (‘the FCA’) alleging that the Employer’s actions following the investigation constituted adverse action.  The “workplace rights” breached by the Employer were argued by the Union to be those duties and obligations arising under the Civil Aviation Regulations 1988 (Cth) (‘the Regulations’).

In order for the Regulations to contain a “workplace right”, the Regulations must regulate the “relationships between employees and employers” pursuant to the Fair Work Act 2009 (Cth). Justice Logan of the FCA ruled that the Regulations were neither a “workplace law” nor a “workplace instrument” and therefore could not contain any “workplace right”. Justice Logan held that the object of the Regulations were that “of air safety by the imposition of particular reporting obligations” and not of regulating the relationship between employees and employers.

Justice Logan stated that even if the Regulations were found to contain a “workplace right”, the Employer did not take adverse action against the Employees.  Justice Logan held that the Employees raised safety concerns as a ‘cloak’ to taking industrial action, finding: “evidence establishes that the [Employer] did promote and encourage aircraft fault reporting by employed licensed aircraft maintenance engineers.  It is subversive of such a culture and antithetical to the public interest for what are in reality industrial actions to be cloaked as aviation safety issues.”

This decision highlights that proper documentation and procedures will assist employers in defending any adverse action claims by employees. If you would like advice on adverse action, please contact Nick Stevens, Victoria Sales of 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 under Professional Standards Legislation.

The Board of Taxation has announced it will review the special rules, colloquially known as “Division 7A”, which apply to certain transactions between shareholders and private companies.  The rules as they currently stand have been in place for approximately 14 years and therefore are due for a review into how they have been implemented and whether they successfully achieve their purpose.

The rules are designed to treat certain loans, payments and debts forgiven as “dividends” unless certain conditions have been met.  They prevent shareholders from taking money out of a private company in a way where the money has not been subject to tax.

These rules also interact with other areas of tax law.  The Board will have a look at these interactions and consider if the results are appropriate.

If you run your business through a company, at some stage you may wish to borrow money from the company, or may have borrowed money from the company in the past.  Your loans are required to comply with the requirements of Division 7A.  You should see Balance if you have any concerns about loans or other transactions between yourself and your private company or if you plan to borrow money out of your company in the future.
 

To Do!     

Check with Balance if the terms of loans you, as shareholder, have from your private company comply with Division 7A. Also, see Balance for issues you should look out for if you have plans to enter into transactions with your private company.  

Disclaimer

Author: Matthew Karpanen, Director of Business Services, Balance Professional Services, is an AIIA.biz expert on our Panel of Expert Bloggers.

This article provides general interest information and is not advice. You are encouraged to consult with your tax specialist for advice that takes into account your particular circumstances.
 

The Full Bench of Fair Work Australia (‘FWA’) (now the ‘Fair Work Commission’) has upheld a Decision of Deputy President Sams that allowed three employees (‘the Employees’) to file out-of-time unfair dismissal applications after the Employees discovered that their roles were filled one month after their roles were made redundant.

The Employees’ roles were terminated, by way of redundancy, due to a restructure on 5 April 2012 (‘the Redundancies’). The Employees were advised that there were no deployment opportunities available for them. One month after the Redundancies, the Employees became aware that newly appointed staff had filled positions with the Employer which the Employees could have been reasonably deployed into. Accordingly, the Employees contacted their Union who advised them to file unfair dismissal applications (‘the Applications’). Two of the Applications were filed forty days late while the last of the Applications was filed forty-one days late.

In accordance with section 394(2) of the Fair Work Act 2009 (Cth) (‘the Act’), the Employees sought FWA’s grant of an extension of time to file the Applications (given that they were being filed outside the current fourteen days limit imposed by the Act) on the basis that “exceptional circumstances” were present, being, the Redundancies were not actually genuine. The Employer’s Solicitor submitted that a dismissal could not become unfair based on matters that occurred after the dismissal had already taken effect. In this regard, Deputy President Sams reasoned that “an honestly and reasonably held belief that an earlier redundancy may not have been genuine, and the belief [being] based on plausible information, may constitute “exceptional circumstances” for the purposes of [the Act].”

Deputy President Sams’ Decision is significant in that it holds that post-dismissal events may be relevant in determining whether a redundancy was in fact genuine. It is important to note that this is not always the case and, the issue will be determined on a case-by-case basis.

For example, a former decision of the Full Bench of FWA dealt with a Sales Manager whose role was made redundant. Eleven months after the Sales Manager’s role was made redundant, a Sales Manager vacancy was advertised by the former employer. In this decision, the Full Bench of FWA held “the advertisement drawn to our attention, some 11 months after the termination of [the Sales Manager’s] employment does not materially alter the evidence that the Sales Manager position was dispensed with in August 2011 for a legitimate reason – a cost reduction…The advertisement some 11 months later does not disturb the finding of Deputy President Smith that the redundancy decision was not a sham.”

It is important for employer’s to ensure that redundancies are “genuine” and that all redeployment opportunities are explored and genuinely considered. As noted above, the conduct of an employer after they have made a role redundant may be relevant in a finding that the redundancies were not in fact genuine.

For more information on genuine redundancies and meeting your obligations under the Fair Work Act 2009 (Cth), please contact Nick Stevens, Victoria Sales 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 under Professional Standards Legislation.

Income Tax

In a previous blog, we outlined the ATO Compliance Program that applies to small and medium enterprises (SMEs) for the 2012-13 income year.  In addition to this, the ATO has issued a specific information publication in relation to the broader compliance obligations of SMEs.  The publication is called “Tax compliance for small-to-medium enterprises and wealthy individuals”.  You can access a copy of the publication here (http://www.ato.gov.au/businesses/content.aspx?doc=/content/00129961.htm).

GST

The ATO has also issued a guide specifically catering for the GST compliance obligations of SMEs.  The guide is entitled the “GST governance and risk management guide for small-to-medium enterprises”.  The guide contains two checklists, a simple version (for businesses with a turnover between $2 million and $10 million) and a more comprehensive version (for businesses with a turnover above $10 million).  The purpose of the checklists is to assist SMEs to understand and meet their GST obligations and identify any areas that might need improvement (such as systems used to record GST obligations).  You can access a copy of the guide here (http://www.ato.gov.au/businesses/content.aspx?doc=/content/00297537.htm).

Disclaimer

Author: Matthew Karpanen, Director of Business Services, Balance Professional Services, is an AIIA.biz expert on our Panel of Expert Bloggers.

This article provides general interest information and is not advice. You are encouraged to consult with your tax specialist for advice that takes into account your particular circumstances.

As you would recall from our December 2012 Newsletter, the bulk of the amendments to the Fair Work Act 2009 (Cth) commenced from 1 January 2013 including:

• Fair Work Australia is now known as the "Fair Work Commission" (‘the FWC’);
• "Opt-out" clauses are now prohibited in enterprise agreements;
  
• Notice of Employee Representational Rights must be provided in the prescribed form;
  
• Adverse action claims involving dismissal/unfair dismissal claims can now be commenced within 21 days; and
  
• The FWC has broader powers to award costs and dismiss costs.

The Labor Government's Paid Paternity Leave has also commenced from 1 January 2013, providing eligible fathers with 2 weeks paid paternity leave paid at the national minimum wage, currently $606.40 per week. This leave is paid directly by the Australian Government.

For more information on genuine redundancies and meeting your obligations under the Fair Work Act 2009 (Cth), please contact Nick Stevens, Victoria Sales 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 under Professional Standards Legislation.

The ATO recently wrote to several taxpayers who have reported personal services income, but who may have incorrectly self-assessed themselves as conducting a personal services income business.  If you have received a letter of this kind, it is best to talk to a registered tax agent about what this might mean for you.  If you already have a tax agent, your agent should have also received a copy of the letter that was sent to you.  It is important to work out whether you have correctly determined if you conducted a personal services business (and have derived personal services income) as your reporting obligations may be affected and it may impact certain deductions you may or may not be able to claim.

Disclaimer

Author: Matthew Karpanen, Director of Business Services, Balance Professional Services, is an AIIA.biz expert on our Panel of Expert Bloggers.

This article provides general interest information and is not advice. You are encouraged to consult with your tax specialist for advice that takes into account your particular circumstances.