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Modern Awards – New Awards Commencing From 4 February 2020

Since 2014 the Fair Work Commission has been undertaking a ‘four-yearly review’ of all modern awards, during which the Commission has clarified how some modern award clauses operate and made numerous changes.

Now the time has come for the new modern awards to be released in three tranches, the first of which commence in the first full pay period on or after 4 February 2020 and include the following:

  • Banking, Finance and Insurance Award
  • Legal Services Award
  • Market and Social Research Award
  • Real Estate Industry Award
  • Surveying Award

As every modern award will change according to the tranche in which they are allocated, it is a case of ‘watch this space’ as to the date when the second and third tranches will commence.

Action Items:

Identify what awards apply at your workplace, check which tranche they are included in, review them for changes and areas of actual or potential non-compliance, update systems and documents such as payroll and employment agreements accordingly, and educate relevant personnel such as managers about the new rules and minimum legal requirements. If you require any assistance or advice, please contact our Employment & Workplace Law Team.

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Social Media – Be On High Alert As To The Risks!

An important decision was handed down in 2019 by the New South Wales Supreme Court in Voller v Nationwide News Pty Ltd (and others) which is highly relevant to any business which uses social media to promote its activities.

In essence:

  • the matter concerned Dylan Voller, a young man who was featured in an ABC Four Corners story on abuse in youth detention centres
  • subsequent articles written about Voller were posted on the public Facebook pages of media companies News Corporation and Fairfax
  • Facebook users were allowed to post comments under the articles on Facebook, and Voller successfully pleaded that the users’ comments were defamatory
  • the Court held the media companies were the “publishers” of the comments and therefore responsible for any defamatory imputations contained in them even though they were not the authors of the comments
  • the Court held the media companies were liable because they knew, or ought to have known, that defamatory comments were being posted, and they did not remove the comments even though they had the power to moderate their public pages by deleting user comments

    • Continue reading…

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Excessive Surcharge Laws – Beware!

Does your business charge consumers a surcharge for processing credit and debit card payments?

If so, changes to the Competition and Consumer Act in 2016 mean companies are prohibited from charging customers excessive payment surcharges if:

  • it relates to a payment method covered by the Reserve Bank standard or regulations (this includes EFTPOS, Visa, MasterCard and Amex cards issued by an Australian financial service provider); and
  • the amount of the payment surcharge exceeds the permitted amount in the Reserve Bank standard or regulations (which generally must be no greater than the cost to the business of processing the payment)

2019 saw the first litigation brought by the ACCC under these laws. Previously it had dealt with contraventions by issuing infringement notices.

In the Federal Court case ACCC v CLA Trading Pty Ltd (trading as Europcar):

  • Europcar admitted to breaching the excessive surcharge laws in relation to 63,012 customers
  • although the amount over-charged was $67,215.59 (amounting to slightly more than $1 overcharged per customer), Europcar was ordered to pay a $350,000 penalty to the ACCC in addition to refunding the affected customers

    • Continue reading…

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Automatic Rollover Clauses – What Are Your Rights?

During 2019 we received many enquiries from small businesses looking to get out of contracts with “automatic rollover” provisions.

An automatic rollover provision is a clause in a contract which provides that the contract will automatically renew for an additional term unless one of the parties opts out by giving notice to the other party of its intention not to renew. These clauses raise concerns for small businesses as:

  • often the party is not aware of the automatic rollover provision when they sign the contract
  • the further term may be exceedingly long (eg, 3-5 years)
  • the notice period in order to opt out of the renewal may also be exceedingly long (eg, no less than 12 months before the expiry of the current term of the contract)

The good news is that a small business may have a remedy under the Australian Consumer Law’s unfair contract terms provisions if the following conditions are satisfied:
Continue reading…

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Australian Consumer Law – Record breaking fines

2019 saw a continued trend of record-breaking fines imposed against companies for breaches of the Australian Consumer Law – for example:

  • Cornerstone Investments Pty Ltd (trading as Empower Institute) was fined $26.5 million – then the highest ever aggregate penalty order imposed under the Australian Consumer Law for misleading or deceptive conduct and unconscionable conduct
  • this was topped later in the year by Volkswagen’s record fine of $125 million for false and misleading representations in contravention of the Australian Consumer Law

Both cases involved particularly egregious breaches of the law as:

  • Empower Institute was found to have engaged in unconscionable conduct by using unethical sales tactics (eg, offers of “free laptop computers”) to sign up disadvantaged clients to expensive private education courses – the clients were mostly Indigenous, had poor literacy and numeracy skills, were from disadvantaged remote communities, and the company knew or ought to have known that most of their clients were unlikely to pass the courses but would be saddled with large student debts

    • Continue reading…

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Corporations Act – Tougher maximum penalties & the ‘why not litigate’ mantra of ASIC

In response to the Banking Royal Commission, Parliament passed amendments to the Corporations Act which came into effect on 13 March 2019.

The effect of these changes is to significantly increase the maximum civil and criminal penalties which apply to breaches of the Corporations Act as follows:

Civil Penalties Criminal Penalties
Person The greater of:

  • $1.05 million; or
  • 3 x the benefit gained/detriment avoided
 15 years imprisonment and/or the greater of:

  • $945,000; or
  • 3 x the benefit gained/detriment avoided
Company The greater of:

  • $10.5 million; or
  • 3 x the benefit gained/detriment avoided; or
  • 10% of annual turnover (capped at $525 million)
 The greater of:

  • $9.45 million; or
  • 3 x the benefit gained/detriment avoided; or
  • 10% of annual turnover
Note These fines will rise over time whenever the value of a “penalty unit” changes

Other changes and responses include:

  • civil penalties now apply to a wider range of breaches under the Corporations Act
  • a new remedy of relinquishment (also known as “disgorgement of profits”) is available in civil penalty provision proceedings – this remedy is available in addition to pecuniary (criminal) penalties

    • Continue reading…

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Company Records? I could tell you, but I would have to go to gaol… ?

By Chloe Howard of Matthews Folbigg Lawyers, a lawyer in our Insolvency, Restructuring and Debt Recovery Group

A company is presumed to be insolvent if it fails to keep proper financial records (section 588E(4) of the Corporations Act 2001 (Cth)).

But what if you have the records, but providing them might send you to gaol?

This issue was recently discussed in the matter of Substance Technologies Pty Ltd [2019] NSWSC 612.

In this matter, the director refused to respond to a liquidator’s repeated requests for the company’s financial records because he said the records might contain incriminating material.  He couldn’t be certain but “would suspect there could well be.” (at [42])

Justice Rees drew attention to the similarities between Sections 77(1) of the Bankruptcy Act and Section 530A of the Corporations Act. Both sections require production of records to insolvency practitioners. Her Honour noted that in Griffin v Pantzer (as trustee of the bankrupt estate of Griffin) [2004] FCAFC 113 the Federal Court had held that a claim for privilege against self-incrimination did not override the obligation of a bankrupt to provide records to a trustee in bankruptcy.
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Creditor’s statutory demand issued pending negotiations is upheld

By Andrew Behman, an Associate of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

In a recent matter which we acted for the Defendant (In the matter of Precise Training Pty Ltd [2018] NSWSC 1383), we successfully defended an application to set aside a creditor’s statutory demand issued by the Chief Commissioner of State Revenue (“the Commissioner“) against Precise Training Pty Ltd, the Plaintiff.

Facts

The Commissioner issued a number of assessments for payroll tax to Precise Training in 2015 as a member of a larger tax group. Precise Training disputed the assessments and lodged an objection on 10 December 2015. The Commissioner disallowed the objection and proceeded to enter into negotiations for payment of the assessments.

Precise Training lodged a second objection on 18 July 2016 and requested that the Commissioner undertake not to commence recovery proceedings while the second objection was being decided and the parties were in negotiations.

On 10 November 2016, the Commissioner responded to the request for an undertaking advising that “recovery proceedings have been on hold” while the objection is being decided and the parties are in discussions to settle the disputed assessments.

Continue reading…