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Winter is Coming – COVID-19 Changes Insolvency Law

By Anica Cunanan, Law Clerk at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

The unprecedented financial impact of COVID-19 has forced the laws surrounding insolvencies to change – well at least temporarily.  Analogous to the process of containing the virus, the Government is currently deciding on temporary changes to also flatten the curve of the inevitable insolvencies following this pandemic.

The Treasurer has been given a temporary instrument-making power in the Corporations Act 2001, for a period of six months, in order to provide temporary relief to distressed businesses. This was announced by the Government on 12 March 2020.

By way of summary these changes may include the following:

  1. A temporary increase in respect of the debt for which creditors may issue a statutory demand – from $2,000 to $20,000;
  2. Further, extension of the time for compliance with a statutory demand – from 21 days to six months;
  3. An increase in the threshold for initiating bankruptcy proceedings;

    4. Continue reading…

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Adverse Action – Employee Wins Their Job Back and Back Pay!

Following an initial decision in 2018, the Federal Circuit Court has ordered that a company:

  • reinstate a senior executive
  • pay him almost $1,000,000 in back pay

after it had dismissed the executive for making complaints about a lower level employee.

The Court rejected the company’s arguments that:

  • it was inappropriate to reinstate the employee because his role had been filled
  • no other vacancies existed within the company’s organisation

The Facts

In essence:

  • the employee was a South Pacific and South-East Asia Regional Leader
  • the employee began experiencing difficulties with the region’s HR Manager who regularly disregarded his reasonable instructions and was uncooperative and hostile towards him
  • the employee complained to the company’s senior management who blamed him for his devolving relationship with the subordinate HR Manager
  • the HR Manager placed the employee on a performance improvement plan
  • the company subjected the employee to an ethics investigation and ultimately dismissed him on performance grounds
  • the employee alleged that the performance improvement plan, ethics investigation and dismissal were motivated by his complaints about the HR Manager

    • Continue reading…

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Work Christmas Functions – Avoiding an ‘Unhappy Holiday’

Work Christmas functions provide employers and employees with the opportunity to reflect on the highs (and lows!) of the working year and are a great way to reward staff for their efforts and enthusiasm.

However, the ‘silly season’ can often be a cause of headaches for employers as employees can be prone to engaging in inappropriate conduct which may necessitate taking disciplinary action and/or give rise to an assortment of legal claims.

Employer’s Duty of Care

Employers need to remember that Christmas parties are work functions (even if held away from the workplace) meaning they owe a duty of care to their employees during these events.

What Does the Duty of Care Require?

This duty requires employers to take all reasonable steps to ensure the health and safety of employees including by:

  • if alcohol is available, limiting employees’ consumption of alcohol and ensuring that sufficient food is available to mitigate the effects of the alcohol
  • ensuring illicit drugs are not consumed during the event

    • Continue reading…

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Tougher Penalties under the Australian Consumer Law

The Treasury Laws Amendment (2018 Measures No. 3) Act 2018 (Cth) has introduced new tougher penalties for companies and individuals who breach certain provisions of the Australian Consumer Law (ACL).

What are the new penalties for companies?

The new maximum penalty for companies is the greater of:

  • $10 million; or
  • 3 times the value of the benefit directly or indirectly obtained by the company (and any related companies) which is reasonably attributable to the offence; or
  • if the value of the benefit cannot be determined, 10% of the annual turnover of the company (and any related companies) for the 12 month period leading up to the commission of the offence.

Previously, the maximum penalty for companies was $1.1 million.

What are the new penalties for individuals?

The new maximum penalty for individuals is $500,000 (up from the previous maximum of $220,000).

Multiple Penalties

The maximum penalties will apply to each contravention, so companies and individuals could potentially face massive fines if they commit multiple contraventions of the ACL.
Continue reading…

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Directors: Beware of relying on the advice of others!

In the exercise of their duties, company directors often rely on both internal and external sources of advice.  However, directors may be liable if their reliance on the advice of others is “unreasonable”.

What does the Corporations Act say?

Section 189 of the Corporations Act states that a director may rely on information, or professional or expert advice, given or prepared by:

  • an employee of the company whom the director believes on reasonable grounds to be reliable and competent in relation to the matters concerned
  • a professional adviser or expert in relation to matters that the director believes on reasonable grounds to be within the person’s professional or expert competence
  • another director or officer in relation to matters within the director’s or officer’s authority
  • a committee of directors on which the director did not serve in relation to matters within the committee’s authority

provided that:

  • the reliance was made in good faith and after making an independent assessment of the information or advice, having regard to the director’s knowledge of the company and the complexity of the structure and operations of the company

    • Continue reading…

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Employer Wins Request for Legal Representation

In a recent decision the Fair Work Commission (FWC) granted permission for a large-scale national employer to be legally represented in proceedings even though the applicant was unable to afford legal representation.

Restrictions on Legal Representation

Under the Fair Work Act a person may not be represented by a lawyer in a matter before the FWC except with the permission of the FWC and which can only be granted if:

  • it would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter;
  • it would be unfair not to allow the person to be represented because the person is unable to represent themselves effectively; or
  • it would be unfair not to allow the person to be represented taking into account fairness between the person and other persons in the same matter.

The Facts

In Slemint v ALH Group Pty Ltd:

  • the applicant commenced unfair dismissal proceedings in the FWC
  • the employer was a large-scale operator of over 300 licenced venues and hotels across Australia employing over 5,300 workers

    • Continue reading…

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Legal Agents & Agency Work

Matthews Folbigg Lawyers provide agency work services and can act as your legal agents for all matters in Parramatta.

We are located within close proximity to the Parramatta Court Precinct and are able to act as your agent with short notice. We pride ourselves with the knowledge and extensive experience with the courts in Parramatta where we appear regularly. You can be confident that our solicitors will achieve the desired result for you at competitive rates. We also understand you need to report to your client in a timely manner, therefore we endeavour reporting to you on the same day of the court appearance either in writing or by phone.

We can attend the following Courts as your agent:

  • Local Court (Criminal and Civil)
  • District Court (Criminal and Civil)
  • Family Court

We can attend to the following:

  • Attendance at interlocutory hearings, Notice of Motions, Pre-trial Reviews, Call overs, Status Conference, Pre-trial Conference or Directions Hearings;

    • Continue reading…

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Personal Leave – Have You Calculated It Correctly?

Two recent rulings have thrown the workplace arrangements of two large-scale employers of shift workers into chaos as they potentially may result in mass underpayment claims being made against hundreds of businesses around the country.

The Issue

Under the National Employment Standards (NES) full-time employees receive 10 days paid personal/carer’s leave per year of service and each work-day day is calculated as being comprised of 7.6 hours.

The Mondelez Decision

In the Mondelez decision a dispute arose in respect of their enterprise agreement:

  • it provided “80 hours per annum” for paid personal/carer’s leave rather than 10 days per annum under the NES
  • the FWC was concerned the provision would deprive Mondelez’s 10 and 12 hour shiftworkers from receiving the full NES entitlement of 10 days per annum
  • the FWC had to decide whether the NES entitlement meant 10 days x 7.6 hours or 10 days x actual hours worked being either 10 or 12 hours for its shift workers

    • Continue reading…