• When is a Deposit Truly ‘Non-Refundable’?

    The term, ‘non-refundable deposit’ is often used by business owners, but just because a deposit is referred to as ‘non-refundable’ does not mean that it actually is. Conversely, as a business owner, a deposit can be non-refundable if certain criteria are met.  

    Meeting the Non-Refundable Criteria

    Business owners need to be careful in how they charge a non-refundable deposit to ensure that it meets the relevant criteria. Non-refundable deposits are intended to protect a business in circumstances of sudden cancellation and to compensate the business for the time, effort and money expended up to that point. Therefore, it is crucial for a business to ensure that the non-refundable deposit that they charge in these circumstances is reasonable and proportionate with reference to protecting their legitimate business interests and is not excessive or used as a ‘penalty’ against a customer or client. What will be considered reasonable and proportionate will depend on the specific circumstances and will be different on a case-by-case basis.   

    Documenting the Deposit Correctly

    Not only does a business need to ensure that a non-refundable deposit is reasonable and proportionate in the circumstances, but they must also ensure they disclose all relevant information regarding the non-refundable deposit to their customers or clients. It is crucial for a business to disclose the terms of the non-refundable deposit in the correct way otherwise they may be seen to be engaging in misleading or deceptive conduct, which is against the law. 

    At a minimum, the business must disclose the terms of a non-refundable deposit in a Terms and Conditions document (or similar) which is provided to the customer or client at the time of, or prior to, engaging them. 

    Even better, the business should also seek to obtain an acknowledgement from the client or customer that the non-refundable deposit is reasonable and proportionate in protecting the business’ legitimate business interests. Again, this can be incorporated into the Terms and Conditions document being used by the business. You can also reiterate this to the client or customer when you request the payment of the deposit from them. Transparency is key!

    But how does it work in real life?

    By way of an example – let’s say you are a photographer who charges $300 for a photo shoot, with a non-refundable deposit of $100 payable prior to confirming the booking. Your Terms and Conditions (which your client signed and returned prior to engaging you) stats that the deposit is non-refundable and outlines that it is calculated with reference to the actual costs that your business incurs. Your client cancels the booking two days before the shoot. They allege that your business cannot retain the non-refundable deposit. In these circumstances, whether you can retain the deposit would depend on (as a minimum):

    1. Whether your Terms and Conditions properly explain that the deposit is non-refundable;
    2. Whether you have properly engaged your client/customer (by providing them the Terms and Conditions and making sure they have read and acknowledged them);
    3. Whether the amount of the non-refundable deposit is reasonable, with reference to the actual costs that your business has incurred (including things like time involved in making the booking, the loss of profit if you are unable to re-book the session, any others costs that you have incurred etc.); and
    4. Whether the non-refundable deposit is proportionate to the overall cost of the product or service that you are providing.

    Without knowing any further information, on the above facts alone, it would appear that the deposit wouldbe non-refundable, as the document requirements appear to have been met and $100 may likely be considered to be a reasonable and proportionate amount. 

     Enterprise Legal - Non Refundable Deposits: The Do's & Don'ts

    The Consequences 

    What happens if a business fails to disclose the terms of the non-refundable deposit or doesn’t take the time to ensure they are charging a reasonable and proportionate amount? The customer or client may be entitled to get that deposit back and the business will not be entitled to be compensated for the loss they have suffered for the time, effort and costs incurred up until that point in time.  

    What Every Business Should Do

    If you are a business owner who wants to charge non-refundable deposits, then you should obtain advice from a specialist business lawyer regarding the drafting of your Terms and Conditions and an assessment of the reasonableness of the amount that you want to charge. Unfortunately, this is another circumstance where you cannot use terms that you have sourced from Google, as they are not customised to your business, which will affect the likelihood of the enforceability of the provisions. 

    Get this done right from the the start - arrange a time to discuss your business's specific circumstances with our expert business law specialists today:

    ☎️ (07) 4646 2621

    ✉️ Submit an Online Request 

  • What are the Legal Implications of the Coronavirus Impacting the Supply of Materials in the Construction Industry?

    If the Coronavirus is Causing Disruption to your Construction Project Supply-Chain, are you Legally Protected?

    Coronavirus or 'COVID-19' continues to spread across the globe, with the World Health Organisation (WHO) referring to the epidemic as a “public health emergency”.

    With Australia’s reliance on China for providing goods and materials for the construction sector higher than ever before, many of Enterprise Legal’s construction clients have started raising concerns about how the outbreak could affect their projects, big and small – and when it inevitably does, what will their rights and potential liabilities be? 

    Risks to Developers and Other Principals

    Most Developers/Principals of construction projects care about three main things when it comes to their project delivery, that is - will the project be:

    • on time;
    • delivered within budget; and
    • of a quality standard and within scope upon practical completion.

    The recent shortage of materials from China as a result of factory closure and import limitations could see Developers and Principals alike exposed on all three of the above criteria.

    Some key factors for Developers/Principals who have current projects or projects that are at the ‘sign-up’ phase to consider include:

    • what materials and/or goods are at risk of not being supplied on time;
    • delay damages – is the delay a compensable cause under the Contract which could see the Developer/Principal having to pay delay damages to the Contractor;
    • extensions of time – does the Principal have an obligation to grant an extension of time under the Contract for the delays, in which case the project completion date could be significantly pushed out:
      • without giving the Principal the right to enforce liquidated damages; and
      • exposing the Principal to potential claims from future tenants, purchasers or alike;
    • does the Developer/Principal have ‘good faith’ obligations under the Contract and how would those obligations apply in the current circumstances; and
    • what practical steps can (and must) the Developer/Principal take to mitigate its own losses in respect of the project. 

    Risks to Contractors

    Conversely, the risk to Contractors are in the reverse. For example:

    • could the Contractor be exposed to delaying the project without any entitlement to extensions of time, consequently exposing the Contractor to liquidated damages payable to the Principal/Developer;
    • does the Contract’s ‘force majeure’ clause adequately protect the Contractor where the extension of time clause otherwise may not;
    • what obligations do the Contractor have to its subcontractors, and what liabilities could it be exposed to in that regard; and
    • what steps does the Contractor have to take from the outset to best protect itself from unnecessary exposure. 

    What Should You Do?

    Enterprise Legal’s advice is ‘be alert, but not alarmed’. Make sure that you arm yourself with the knowledge that you’re legally protected and the best way to do this is to see an expert construction lawyer to get guidance and advice on what the best way forward is for your specific project, so as to mitigate any liability or other exposure under the Contract or otherwise.

    Most importantly, by arming yourself with the relevant information and taking practical steps without delay, you will maximise the chance of successfully delivering the project, which is a win-win for both Developer/Principal and Contractors alike.

    If you are currently a party to a construction project or planning to sign an agreement in the near future, contact Enterprise Legal’s Construction Law Team for advice today! Ask to speak to our firm director and dedicated building and construction specialist, Sharné Lategan.

    Always remember, prevention is better than cure – and being proactive is the best next step you can take!

    ☎️ (07) 4646 2621

    ✉️ Submit an Online Request 

  • If you’re looking to enter into a domestic building contract for the construction of a new home or renovations to your existing home, there are many things you’ll need to think about, from the flooring to your paint choices. In addition to all of your aesthetic choices, there are plenty of things you specifically need to consider when it comes to your contract itself, as this will be the backbone of the entire construction project.

     

    1. Initial Period

    After you enter into a building contract, you will generally have a period of time where you are required to provide the builder with materials including proof of ownership, proof of loan approval and relevant building approvals.

    If you need to obtain finance approval prior to being able to commit to the project, make sure the contract documents accurately reflect this to avoid a scenario where you are contractually bound to proceed with the contract, regardless of finance approval. Also make sure you clarify up-front who is responsible to obtain building approval, as often builders advise they will ‘assist’ but the ultimate responsible may lay with the home owner, which is not ideal.

     

    2. Progress Payments

    Progress payments are payments made to the builder at certain stages of the construction process, which should be clearly set out and identified in your contract. It is important to ensure you are aware of what is payable and at what time and that your contract does not impose any restrictions on progress payments. It is arguably more important that you make sure the work you are paying for has been carried out, in the manner required by the contract.

     

    3. Pricing

    Your building contract may be a ‘fixed-price’ or ‘cost-plus’ building contract. A fixed price contract is one where the total price is fixed, barring any variations, delays, or extenuating circumstances. The other form of building contract is ‘cost-plus’ where you may be given an estimated final price but the contractor will obtain the materials and services through the building process and pass the costs onto you, as well as charge their own time by the hour. This can become costly quite quickly, so it is always our recommendation that a fixed price contract be entered into, to minimise the risks of ‘blow outs’ to home owners.

     

    4. Variations

    When negotiating the construction contract, it is very important that the contract contains a clause that variations only be allowed where it is agreed to in writing by both parties, prior to the work the subject of the variation being carried out.

    What can often happen is a simple site conversation where the home owner innocently changes a product or selection, thinking it will be the same cost, can end up resulting in a very costly exercise for the home owner. Where builders know that variations have to be subject to writing, they will make decisions more carefully and explain them to home owners’ in more depth, as ultimately the risks in those circumstances lies with the  builders.  

     

    5. Defects Liability Period

    The defects liability period is the period of time where the builder is required to return to repair any defects. This will usually start at the date of practical completion. It is important to check your contract to determine the length of any defect liability period before you enter into your contract to ensure that it is likely to be sufficient, builders will often try for a six month liability period where as twelve months is industry standard.

     

    6. Prime Cost and Provisional Sum Items 

    Prime cost items are fixtures and fittings that may be listed in the contract but not specifically identified and costed – usually because the exact type was not decided on at the time of signing – so the price is only an estimate. Ideally, you should avoid prime cost items as much as possible by deciding on as much as possible as early as you can. Provisional sum items are those that are listed in the contract for possible additional work where a builder is only able to make an estimate of the cost at the time. Items such as these should be avoided where possible as it can increase your overall costs.

    Sometimes, however both prime cost and provisional sum items are unavoidable, and in these instances we recommend home owners negotiate a certain ‘capped amount’ with the builder, to ensure builder accountability in product estimation and selection.

     

    7. Site Investigations

    Before construction begins, it is important that your builder undertakes appropriate site investigations to determine the soil type, rocks that may need to be removed, and other things that could lead to unexpected price variations later on. Your contract should include warranties relating to any necessary site investigations, and it is very important that all these latent condition issues are covered off before hand, so as to avoid contract price blow out.

     

    8. Date for Practical Completion

    The date for practical completion is the date that the construction is scheduled to be completed, barring any unexpected delays. This date should not be left blank on your contract and it should be a realistic estimation of when the project is required to be completed.

     

    9. Liquidated Damages

    Something to consider when entering a contract is whether you want to include a liquidated damages clause. Liquidated damages are a set amount per day that the builder will pay you for every day past the date for practical completion that the work is not finished.

    We always recommend that a liquidated damages amount be specified in the contract, because it will motivate the builder to complete the project on time. If there are no liquidated damages amount in the contract, the main remedies available to home owners for late delivery is a breach of contract claim, and most builders know this is a lengthy and expensive process so home owners are unlikely to go down this route.

     

    10. The Builder Themselves

    While it might seem obvious, it is important to ensure that your builder has the appropriate licences for the work they are contracted to do. You should also check whether their work is of a quality you are expecting and whether they have received formal orders from QBCC to rectify defective work. If there are a large number of these orders, you may want to steer clear of the relevant builder and engage a different builder instead. Always ask for references as well, and make sure you contact the references or do standard google review searches, to ensure previous good experiences with that specific builder.

     

    To ensure you fully understand your contract and that there aren’t any hidden surprises, the team at Enterprise Legal can help. 

    Make sure you contact us before you enter into the relevant construction contract, and we will gladly assist in the review and negotiation of same:

    ☎️ (07) 4646 2621

    ✉️ Submit an Online Request

     

  • Employers in the construction, clerical, food, manufacturing, telecommunications, storage and wholesale industries are among the many industries whose minimum Modern Award wages will be increasing on 1 November 2020.


    Each year the Fair Work Commission reviews the minimum wages contained in all Modern Awards and this year it announced a 1.75% increase to minimum wages on 19 June 2020.

    Whilst the wage increases usually apply from 1 July for all Modern Awards, this year the Fair Work Commission postponed a number of increases to industries hit hard by the COVID-19 pandemic. All Modern Awards were broken up to three groups, with Group 1 increases starting on 1 July 2020, Group 2 commencing on 1 November 2020 and lastly, Group 3 commencing on 1 February 2021.

    The full list of awards that will be increasing on November 1 include:

    Aluminium Industry Award

    Animal Care and Veterinary Services Award

    Aquaculture Industry Award

    Architects Award

    Asphalt Industry Award

    Black Coal Mining Industry Award

    Book Industry Award

    Broadcasting, Recorded Entertainment and Cinemas Award

    Building and Construction General On-site Award

    Business Equipment Award

    Car Parking Award

    Cement, Lime and Quarrying Award

    Clerks—Private Sector Award

    Coal Export Terminals Award

    Concrete Products Award

    Contract Call Centres Award

    Cotton Ginning Award

    Dredging Industry Award

    Educational Services (Post-Secondary Education) Award

    Electrical, Electronic and Communications Contracting Award

    Food, Beverage and Tobacco Manufacturing Award

    Gardening and Landscaping Services Award

    Graphic Arts, Printing and Publishing Award

    Higher Education Industry-Academic Staff-Award

    Higher Education Industry-General Staff-Award

    Horticulture Award

    Hydrocarbons Field Geologists Award

    Hydrocarbons Industry (Upstream) Award

    Joinery and Building Trades Award

    Journalists Published Media Award

    Labour Market Assistance Industry Award

    Legal Services Award

    Local Government Industry Award

    Manufacturing and Associated Industries and Occupations Award

    Marine Towage Award

    Maritime Offshore Oil and Gas Award

    Market and Social Research Award

    Meat Industry Award

    Mining Industry Award

    Miscellaneous Award

    Mobile Crane Hiring Award

    Oil Refining and Manufacturing Award

    Passenger Vehicle Transportation Award

    Pastoral Award

    Pest Control Industry Award

    Pharmaceutical Industry Award

    Plumbing and Fire Sprinklers Award

    Port Authorities Award

    Ports, Harbours and Enclosed Water Vessels Award

    Poultry Processing Award

    Premixed Concrete Award

    Professional Diving Industry (Industrial) Award

    Professional Employees Award

    Rail Industry Award

    Real Estate Industry Award

    Road Transport (Long Distance Operations) Award

    Road Transport and Distribution Award

    Salt Industry Award

    Seafood Processing Award

    Seagoing Industry Award

    Security Services Award

    Silviculture Award

    Stevedoring Industry Award

    Storage Services and Wholesale Award

    Sugar Industry Award

    Supported Employment Services Award

    Surveying Award

    Telecommunications Services Award

    Textile, Clothing, Footwear and Associated Industries Award

    Timber Industry Award

    Transport (Cash in Transit) Award

    Waste Management Award

    Wool Storage, Sampling and Testing Award

     

     

    The third group of awards that will increase on 1 February 2021 include:

    Air Pilots Award

    Aircraft Cabin Crew Award

    Airline Operations-Ground Staff Award

    Airport Employees Award

    Alpine Resorts Award

    Amusement, Events and Recreation Award

    Commercial Sales Award

    Dry Cleaning and Laundry Industry Award

    Fast Food Industry Award

    Fitness Industry Award

    General Retail Industry Award

    Hair and Beauty Industry Award

    Horse and Greyhound Training Award

    Hospitality Industry (General) Award

    Live Performance Award

    Mannequins and Models Award

    Marine Tourism and Charter Vessels Award

    Nursery Award

    Professional Diving Industry (Recreational) Award

    Racing Clubs Events Award

    Racing Industry Ground Maintenance Award

    Registered and Licensed Clubs Award

    Restaurant Industry Award

    Sporting Organisations Award

    Travelling Shows Award

    Vehicle Repair, Services and Retail Award

    Wine Industry Award

     

    To learn more about the Fair Work Commission’s wage increase or to speak to one of our Workplace Relations specialists, contact Enterprise Legal today.

    ☎️ (07) 4646 2621

    ✉️ Submit an Online Request

  • Coronavirus – What Do I Do With My Employees?

    Obviously one of the biggest areas of uncertainty regarding the impacts of COVID-19 is on staff. Our expert Employment Law Team has put together the following overview, regarding standing-down employees and making employees redundant as a result of the current pandemic.

    Employee Stand-Down

    Pursuant to sections 524 and 525 of the Fair Work Act, employers can stand employees down without pay during a period in which the employee cannot usefully be employed because of:

    • equipment breakdown;
    • industrial action, when it’s not organised by the employer; or
    • (most relevant given the corona virus outbreak) stoppage of work for which the employer cannot be held responsible.

    During a legitimate stand down period, employees do not need to be paid but they will accrue leave in the usual way.

    Whether a particular employee can be usefully employed is a question of fact to be determined having regard to the circumstances that face the individual employer and the specific employee. “Usefully employed” has not been defined, but Courts have in the past determined that if an employer is able to obtain some benefit or value for work that could be performed by the employee, then the stand down provisions will not apply.

    For example, let’s say a local take away shop has to ‘shut its doors’ due to a government lock-down proclamation, then it may be reasonable to stand the front-line employees down without pay, but employees who do accounts, bookkeeping, marketing and alike may not be eligible to be stood down because there may still exist an opportunity for them to be ‘usefully employed’.

    Awards, Enterprise Bargaining Agreements and Employment Agreements could alter the statutory position above, so EL always cautions clients against taking an action as drastic as stand down without pay until considered legal advice tailored to that client’s business and the specific employee(s) have been obtained.

    Because of the significant impacts stand down without pay can have on employees, EL would treat such a step with extreme caution. Fair Work guides at the moment are saying that ‘best practice’ would be to discuss different options with each employee, and consider letting employees take leave on the basis of paid leave such as sick, annual, long-service etc. where available, or to allow them to work from home where possible.

    However, EL recognises that sometimes when there is a stoppage of work, standing employees down without pay may be the only option available to our clients, and in those circumstances we encourage clients to contact us for a tailored, short-form advice from $1,350.00 (including GST).

    Redundancy Option

    Some EL clients may see their business take such a downturn that they need to consider making employee(s) positions redundant.

    Essentially, a redundancy could be a potential strategy for employers where an employee’s position is no longer required by the employer due to restructure or operational changes in the employer’s business, which renders the position unnecessary. The work or role must no longer be required to be performed by any employee.

    The Fair Work Act has strict requirements that employers must meet prior to qualifying for the redundancy provisions, and a relevant Employment Agreement, Award or Enterprise Bargaining Agreement may create complimentary and/or additional onerous obligations on employers in this regard.

    Given the current climate, EL’s advice is to approach any redundancy decision with caution, and always ensure you have sought tailored legal advice so as to minimise any risk or unnecessary exposure to your business.

    Contact Us

    Our expert Employment Law team can also assist your business by developing a range of customised and appropriate policies and documents – please contact us to obtain a fixed fee quote for these services. In the interim, our team has prepared a generic Coronavirus Policy for your free download and use, to ensure that your business is on the front-foot.

    The application of the existing law to the current situation is rapidly-developing, so we encourage all clients to ensure they regularly check our platforms for updates or to contact us directly with any concerns that they have.

    ☎️ (07) 4646 2621

    ✉️ Submit an Online Request

  • Enterprise Legal - How to Avoid a Lease Dispute

    At Enterprise Legal, we always say that ‘prevention is better than cure’. So when it comes to commercial, industrial or retail lease disputes, the best way to prevent them is to ensure you understand what you are signing up for in the first place and to negotiate some protections at the time of entering into your lease. After all, a lease is typically one of the biggest financial obligations that your business may need to commit to, keeping in mind that you are usually committed to your obligations for a minimum of three or five years!

    Whether you’re a Landlord or Tenant, here are our top five tips to keep in mind when entering into your next lease:

     

    1. Heads of Agreement/Letter of Offer Terms

    Quite often, before a lease is prepared, the parties will sign a short document or letter outlining the key terms of the deal. This document is usually referred to as a ‘Heads of Agreement’ or ‘Offer to Lease’ and is often prepared by the real estate agent managing the deal.

    Although usually an Offer to Lease is not binding on the parties, it forms the basis of the formal lease terms. This stage of lease negotiations is the best time to negotiate key terms, before either party incurs the expense of preparing and negotiating formal lease documents. If either party seeks to amend terms that are agreed in a Letter of Offer after formal lease documents have been prepared, it can create friction between the Landlord and Tenant at a very early stage in their association.

    We recommended that you seek legal advice on the terms of an Offer to Lease, to ensure a smoother lease negotiation process and to avoid the potential for a dispute.

     

    2. Permitted Use 

    A frequent issue in lease negotiations is whether a Tenant will have the exclusive right to operate their business type (specified as the ‘permitted use’) in the centre/complex. This means that it’s very important for a Landlord to consider whether any Tenant’s proposed use conflicts with any rights the Landlord has already given to existing Tenants in the centre/complex.

    A more commonly overlooked issue around permitted use is which party is responsible for ensuring that the intended use can lawfully be conducted from the premises. The widely accepted position in leasing matters is that the Tenant is responsible for all aspects of ensuring their intended use can be carried out from the relevant premises. A Landlord will typically include protections in the Lease under which the Landlord expressly states they do not warrant or guarantee that the premises will be fit for the Tenant’s intended use, and further that the Tenant is obliged to obtain all necessary consents/approvals (i.e. liquor licences, council approval etc) to run their business from the premises.

    Landlords should always ensure this protection is included in their Lease and Tenants should understand that it is a matter for them to ensure that the premises will be fit for their specific purpose. To avoid disputes, a Tenant should make enquiries early (prior to signing a lease!) to ensure they can lawfully conduct their business from the premises. Failure to do this can result in having to comply with notices from applicable authorities (eg. Council), which can be extremely expensive!

     

    3. Repairs to Equipment 

    Another common area of dispute relates to responsibility for fixing certain equipment (such as air-conditioning equipment) in the premises if they need repairing.  

    A lease should cover off on the responsibility of the parties to maintain equipment, and to repair/replace it when it breaks. Typically, a Tenant is responsible for ‘wear and tear’-related repairs, whereas a Landlord will be required to attend to all repairs or replacement that are of a ‘capital nature’ provided that the Tenant has regularly serviced or maintained that equipment during the Term and has not deliberately or wilfully contributed to the damage. However, that will not always be the case and it is important that both parties check the relevant clauses in their Lease to understand their obligations. It is also beneficial (especially for the Tenant) to take steps to understand the condition of any relevant equipment (such as air conditioning) at the time of entry into the Lease.

     

    4. Insurance 

    Tenants in particular should always consider the specific wording of any clause in their Lease that deals with insurance obligations, to ensure the Landlord’s requirements will be commercially acceptable to the Tenant, especially in light of their intended business use.

    Some practical examples are:

    • Where the Lease requires insurance to be taken jointly in the names of the Landlord and Tenant.This seems innocent enough, but the practical reality is that this type of insurance cover can be onerous and expensive for a Tenant to obtain. Realistically, a Landlord generally requires this so that they can receive notice if a Tenant makes a claim on their insurance policy in relation to the Premises. The practical compromise is that the insurance clause should only require the Tenant to note the Landlord as an ‘interested party’, which does not cause extra cost and which requires the insurer to provide notice to the Landlord if any claim is made.
    • Where the Lease requires business interruption insurance. This is a ‘big hitter’ as far as the cost of insurance is concerned. A Tenant should consider whether they really require and whether they can afford this type of insurance, before they agree to be bound by a lease to obtain it.

     

    5. Landlord’s Right to Redevelop/Relocate

    Landlords of multi-tenant centres or complexes (eg. shopping centres or strip-malls) typically include clauses which give them the right to relocate Tenants to comparable locations within the centre/complex, or to redevelop or demolish part of all of the centre/complex.

    Tenants should always carefully consider the specific wording of these clauses and the practical implications. At a minimum, the clause should stipulate that any relocation must be to a comparable location and it should deal with how the rent will be treated in those circumstances, but as a further step, the Tenant should consider whether they want to (where practical) have the right to return to the original location. It is also important to contemplate who will be responsible for the costs of the Tenant’s fit-out in the new location in these circumstances.

     

    A well drafted and well-understood lease will go a long way to avoiding a dispute arising between the Landlord and the Tenant. To avoid a costly dispute, engage the expert Enterprise Legal Business Law team to help you with your next lease negotiation:

    ☎️ (07) 4646 2621

    ✉️ Submit an Online Request

  • Coronavirus: Let's Get Practical - Information for Business Owners

    It is difficult to know what has spread more prevalently over the last two weeks – COVID-19 itself or the vast, vast amounts of information, misinformation, tips, tricks, commentary, opinions, guidance etc. regarding COVID-19! Like all things at EL, we don’t seek to ‘add to the noise’ by replicating some of the great content that has already been published, but instead, our focus is on assisting business owners to implement practical, easily-adoptable strategies to help lower the immediate impact of the Corona-situation on their business.

    So, you own or manage a business? Read on to find out what you can do…

    Have staff? Read this Info and Download this Policy...

    Obviously one of the biggest areas of uncertainty regarding the impacts of COVID-19 is on staff. Our expert Employment Law Team has put together the following overview here, regarding standing-down employees and making employees redundant as a result of the current pandemic.

    Of course, it is imperative for businesses to understand that the application of the current law to their employees can significantly differ on a case-by-case basis, so be very wary of adopting generic advice. Our Employment Team is across this topic and can provide properly-considered, tailored advice to ensure your specific business is covered.

    We can also assist by developing a range of customised and appropriate policies and documents – please contact us to obtain a fixed fee quote for these services. In the interim, our team has prepared a generic Coronavirus Policy for your free download and use, to ensure that your business is on the front-foot.

    The application of the existing law to the current situation is rapidly-developing, so we encourage all clients to ensure they regularly check our platforms for updates.

    Have a Shopfront? Let’s Negotiate…

    Brick and mortar stores are already suffering, with people (rightly) avoiding unnecessary trips to the shops. If you run a business with a shopfront, we strongly recommend that you engage us ASAP to commence negotiations with your landlord regarding potential rent reductions, delayed rent payments or adopting other mitigation strategies. There are plenty of commercial proposals that can be put to landlords during this time and reaching early agreement on these matters will assist businesses to survive and landlords to keep their shops tenanted. The terms of your lease may also offer some assistance at this time.

    Service Provider? Can You Cancel? Can Your Clients Cancel?

    Face-to-face service-based businesses will unfortunately suffer hardest from COVID-19, particularly those in the wedding, events and conferences sector. Business operators and customers alike are shortly going to have to make some tough decisions about cancelling contracts and the implications around refunds and re-bookings will be important. Contact EL ASAP so that we can advise you on your legal obligations in this regard and provide you with practical, commercial suggestions for ensuring the long-term survival of your business.

    Losing Customers? It’s Time to Innovate!

    The EL team is of the view that businesses need to be careful not to assume that they can ‘simply weather the storm’ of Corona, by holding tight for a few months.. The reality is that no-one really knows the length of the economic disruption that Covid-19 will cause, so our advice is for all businesses to stop and consider how they can innovate within their business during this time. Already, there are plenty of businesses leading the charge in this regard, with home delivery, new product development (hello family roll – Google it if you haven’t come across it yet!) and new delivery methods being adopted by small business in an effort to leverage opportunity from an otherwise difficult situation. There has never been a better time to evaluate your businesses’ strengths and weaknesses and pivot so that it is heading in the right direction!

    Feeling Overwhelmed? Keep Calm and Carry on!

    Unless you are a doctor or a scientist, the number one way that you can help society at this time is to be a socially-responsible human being, who adopts and promotes common sense at all times! This extends to making sensible, balanced decisions for the ongoing viability of your business and not ‘sticking your head in the sand’ about the situation.

    The Enterprise Legal team are not your average lawyers – we are able to assist you with navigating this challenging time for your business, by bringing our uniquely commercial approach to the legalities of the situation! Call our team today.

    ☎️ (07) 4646 2621

    ✉️ Submit an Online Request

  • In response to the current Coronavirus pandemic and the impact that it has had on businesses, the Federal Government recently introduced temporary measures that will assist in relieving companies and their Directors in these times of financial difficulty. It is no secret that impending insolvency and/or bankruptcy is currently a very real risk for many Australian businesses and as any Director will know (or should know!) the implications of trading insolvent can be significant.

    What is the Government’s Intention?

    The intention of the relief being provided by the Government at this time is consistent with the overall theme of the relief being provided to all businesses and that is, to keep them trading while we all navigate these rapidly changing and challenging times by:

    1. helping them to stay solvent during the pandemic; and
    2. reducing the imminent threat of personal liability for Directors if a company does become insolvent as a result of the pandemic.

    What Measures Have Been Introduced?

    The relief measures that were passed by Parliament in late March will be in place for the next six months and include:

    1. an increase to the threshold amount and time to respond to statutory demands;
    2. an increase to the threshold amount and time to respond to bankruptcy notices against individuals; and
    3. a temporary ‘pause’ on Director’s personal liability for insolvent trading.

    Both the threshold amounts for statutory demands and bankruptcy notices have been increased significantly, to $20,000, and the time to respond has been increased to six months. What this means is that the Government has recognized that companies and individuals alike may very well incur more debt while their businesses are affected during this time and will likely require more time to ‘get back on track’ and be in a position to pay their creditors. It seeks to ensure that companies and individuals are able to ‘stay afloat’ for as long as possible, rather than having to enter voluntary liquidation or declare bankruptcy.

    These measures will no doubt provide some comfort for businesses who are concerned about outstanding debts owed to their creditors.

    What About Personal Liability for Directors?

    In the event that a company does find that the impacts of the pandemic have effected their business to a point where they are still struggling to pay their debts, the Directors of that company can rest assured that they may be relieved of any personal liability associated with insolvent trading that occurs over the next six months. It is extremely important for Directors to understand that this relief only applies to insolvent trading that has occurred during the ordinary course of the company’s business, it does not apply to cases of dishonesty or fraud (which will still be subject to criminal penalties). Directors must continue to ensure that they are still taking active steps to deal with financial stress and consider options for ‘staying afloat’, but are simply being given some breathing room to do so.

    What Should Businesses Do Next?

    Regardless of the relief being provided by the Government, it remains as important as ever for business owners to consider how they might diversify their businesses to keep income coming in and keep the debts owed to creditors down. For that reason, we encourage businesses to seek professional advice wherever they can these matters and how they might take advantage of the other forms of relief being provided by the Government. Every business’ situation will be different, especially given the current climate, and seeking assistance earlier rather than later could make all the difference to how a business comes out of this on the other side.

    We Can Help!

    As a small business our self, Enterprise Legal is extremely passionate about assisting businesses wherever we can in these difficult times and have already identified ways in which we can do so. To that end, we have prepared a number of free ‘Coronavirus Resources’ for businesses which are available via our website. 

    Please do not hesitate to get in touch with us to chat about how your business has been effected by the pandemic and how we might be able to assist you to survive and thrive!

    ☎️ (07) 4646 2621

    ✉️ Submit an Online Request

  • JobKeeper Directions – Is Your Business Exposed?

    With businesses starting to receive JobKeeper payments, the economy is in the midst of transitioning to the ‘new normal’ and business owners are finally starting to feel like they can, at least somewhat, breathe again. Consequently, now is the time to ‘take stock’, conduct an audit and ensure that the measures that your business implemented (most likely in haste), over the past few months are not now leaving your business exposed to potential claims and other legal risks.  

    Notably, a new section was introduced into the Fair Work Act 2009 (the Act), which allows the Commission to deal with disputes specifically regarding employer ‘JobKeeper directions’. This dispute mechanism allows for employees to lodge an application (at no cost) detailing their dispute, to which an employer must then respond to the application in the relevant time frame. Once the application and response has been submitted, the Fair Work Commission will deal with the dispute via arbitration, mediation, conciliation or alike, and it has broad powers to make orders “to give effect to a direction, set aside the direction, substitute the direction for a different direction or any other direction it considers appropriate”. There are also civil penalties that can be imposed on the employer, in certain circumstances.

    New figures revealed by the Fair Work Commission show that its overall workload is already up by 40% compared to April 2019, with the increase apparently due to more cases about unfair dismissal, JobKeeper directions and JobKeeper payment disputes.

    As at 7 May 2020, the Fair Work Commission had already received 212 disputes pertaining to the JobKeeper scheme, with the leading dispute topic being JobKeeper directions pertaining to changes to employee working hours. 

    Most businesses had to respond quickly to be able to adapt to the COVID-19 impacts and this saw a number of businesses taking drastic measures both in the restructuring of their businesses (such as new service offerings and operating hours), but also in the restructuring of their employees and the basis on which they are employed (such as reduced hours, different hours, change of duties and roles, change of location of work and so on). Most of these changes to employees’ employment can be made legally in certain circumstances, provided they strictly comply with the requirements of the Act. The problem is, most of these changes were made in a ‘reactive’ manner by businesses and when businesses ‘react’ they can often fail to comply with the myriad of applicable legal requirements. 

    Here are a few things that employers must know in relation to JobKeeper payments:

    • no employer is entitled to (and is taken never to have been entitled to), a JobKeeper payment unless it complies with record keeping requirements under the relevant Acts and Regulations - this could very well mean, that if employers and businesses have been receiving JobKeeper payments but they did not comply with the record keeping requirements, they could be required to repay the JobKeeper payments;
    • JobKeeper enabling directions cannot be made retrospectively - this means that directions given before the Act was amended on 9 April 2020 are not authorised, meaning they could be construed as unlawful and employees may have remedies against their employers in this regard (or civil penalties may apply);
    • JobKeeper enabling directions will not be valid unless an employer gave the requisite written notice to employees (3 days before the direction commenced) and consulted with the employees in accordance with the requirements under the Act; and
    • the JobKeeper payments must be dealt with strictly in accordance with the relevant parts of the Act, otherwise the employer risks a claim by the employee and also civil penalties being imposed against the employer.

    The above examples are a mere snapshot of certain key considerations that employers ought to turn their mind to, so as to avoid unnecessarily exposing their businesses to legal claims and potential civil penalties. 

    It is now critically important that businesses audit the decisions they made over the past few months, to ensure those decisions strictly complied with the relevant laws, regulations and rules. Where it is found that decisions didn’t comply, a number of corrective measures are available to businesses to correct or mitigate any potential impacts.  

    If your business needs assistance, our team of employment law experts are standing by ready to guide you through this audit process. 

    EL has further put together an exclusive JobKeeper Audit Package, available to the first five businesses (with under fifteen employees) who contact us, under which we will audit your business and provide you with a compliance report and summary of required corrective measures (if necessary) for a fixed fee of $2,200.00 (incl. GST).

    Call our team today to take advantage of this exclusive offer:

    ☎️ (07) 4646 2621

    ✉️ Submit an Online Request

  • The need for companies to be able to sign documents electronically has become more apparent than ever during the COVID-19 pandemic. With that, the Federal Treasurer has implemented some temporary, progressive changes to the signing provisions contained in the Corporations Act 2001 (the Corps Act).

    Enter the Corporations (Coronavirus Economic Response) Determination (No.1) 2020 (the Determination), which now allows for company officers (i.e. Directors) to sign agreements and deeds in electronic format.

    Previously, the Corps Act required company officers to physically sign a document in order for it to be valid and legally binding. Now, the Determination makes it possible for company officers to:

    1. sign a document in counterparts (eg. the officers do not need to sign the same copy); or
    2. use an electronic communication which reliably identifies the person signing and indicates the person’s intention in relation to the document. 

    The usual requirement remains that if there is more than one director of a company then two directors are required to sign, but the Determination makes it possible for this to occur from a (safe) distance.

    Further, if electronic signatures are being used (i.e. copied and pasted signatures, signing using a stylus or finger on a tablet or laptop or DocuSign) the relevant thresholds will also apply. This includes:

    1. ensuring that the electronic signature is reliable as appropriate in the circumstances in order to identify each person signing the document; and
    2. that it is clear that it was the intention of each party who signed that they actually intended to sign the document.

    Do not get too used to this process, however, as the changes are only temporary and intended to assist businesses in the wake of COVID-19.

    The changes implemented by the Determination are only in effect for a six (6) month period commencing from 6 May 2020.

    These changes will no doubt assist in the efficiency and practicality of company execution of documents, so here’s hoping the changes are here to stay but you will need to stay tuned to find out! We will be following the developments in this regard closely and as always will ensure that we keep our clients up to date on any permanent developments.

    If your business needs any assistance navigating the changing landscape brought upon by COVID-19, contact the EL team today:

    ☎️ (07) 4646 2621

    ✉️ Submit an Online Request

  • In early June the Federal Government announced a $680 million HomeBuilder scheme to stimulate the construction sector as Australia begins the economic recovery following COVID-19. This scheme will allow eligible owner-occupiers to access a tax-free grant of $25,000 to build a new home, or substantially renovate their existing home from now until 31 December 2020.

    To check whether you are eligible, click here to view the HomeBuilder Frequently Asked Questions PDF.

    Things to Consider

    If you are interested in taking advantage of the HomeBuilder grant, there are a few things you should consider before you jump in.

    Consider Your Timeline

    One of the requirements of the grant is that construction begins within three months of signing the contract. Due to this tight time frame, it is important that you are organised and prepared, so you should consider whether you will have the sufficient time to have plans drawn up, obtain council approval and commence building within three months when signing the contract. From our experience, three months is a ‘tight timeframe’ to achieve the latter, so preparation is key!

    Consider Your Finances

    In addition to the HomeBuilder grant, you should consider whether you may be eligible for other grants, which may include the first home owner grant and the regional home building boost grant. You won’t be able to use the grant in your initial deposit as it is expected that it will take some time for it to be awarded. As such, you will need to ensure you have sufficient financing for any initial costs that you may have.

    Choose Your Builder Carefully

    It is very important that your builder is registered or licensed, otherwise you will not be eligible for the grant. You also cannot do the building work yourself as an owner-builder, or engage family or close friends. When selecting a builder, you should also review their proposed prices to ensure they’re reasonable and that you aren’t being ‘ripped off’ by builders capitalising on the HomeBuilder grant. Be on the lookout for builders who only commenced operating following the HomeBuilder announcement, as they are more likely to be taking advantage of the scheme than longstanding builders. Lastly, always make sure that you perform a QBCC license search on your builder, as this search will show you:

    • the date your builder became licensed;
    • the value of projects your builder completed since inception, and each financial year; and
    • whether the QBCC has had to take any disciplinary action against the builder, such as notices to rectify, issuing of defect notices etc.

    Review Your Construction Contract Carefully

    It is very important that you do not simply ‘sign up’ to the contract your builder presents. The financial commitment you are making is likely one of the biggest in your life, and it should be treated with the same caution and respect as any other financial arrangement of that size. There are a number of key clauses that you need to pay very careful attention to, and a number of standard amendments you ought to request.

    Make sure you check out our knowledge page in the coming weeks for our ‘Top 10 Domestic Construction Contract Clauses to Consider’ article.

     

    In the meantime, if you would like to take advantage of the HomeBuilder grant and it feels like there is too much to consider, the team at Enterprise Legal can help.

    ☎️ (07) 4646 2621

    ✉️ Submit an Online Request

  • Employees covered by the Nurses Award 2010, Health Professionals and Support Services Award 2020 and Aged Care Award 2010 who are employed by residential aged care providers or are required to work in residential aged care facilities are now entitled to two weeks’ paid pandemic leave following a recent announcement from the Fair Work Commission. 


    What is the Entitlement?

    Permanent and casual employees engaged on a regular and systematic basis under the aforementioned modern awards are now entitled to take up to two weeks’ paid pandemic leave on each occasion they are prevented from working when:

    • the employee is required to self-isolate or quarantine by government or medical authorities or their employer;
    • the employee is required to self-isolate or quarantine following receipt of medical advice because they are displaying symptoms of COVID-19 or have come into contact with a person suspected of contracting COVID-19;
    • the employee is isolating while they await their tests results;
    • because of measures taken by the government or medical authorities in response to the COVID-19 pandemic. 


    Are There Exclusions?

    Yes, employees will not be entitled to access paid pandemic leave if:

    • they are not covered by the aforementioned awards;
    • they are able to work from home or remotely;
    • circumstances dictate that they should access personal/carer’s leave (for example, if the employee was actually unwell, they would be entitled to personal leave);
    • they are covered by an Enterprise Bargaining Agreement that does not expressly incorporate the aforementioned awards.
      Importantly, the leave is conditional on employees taking a COVID-19 test at the earliest opportunity. 

    Employees requesting pandemic leave are also required to: · provide their employer with notice and the reason why they are taking the leave, as soon as practicable; and if required · provide evidence that would satisfy ‘a reasonable person’ that the leave is being taken for one of the specified reasons; and produce a medical certificate.

    Employees are still entitled to workers’ compensation if they test positive for COVID-19 and their paid pandemic leave ceases, provided COVID-19 was contracted during their employment. 


    What About Other Industries?

    At this point in time it is uncertain whether or not this entitlement will be broadened to other modern awards and employers in other industries are understandably curious and nervous. The Fair Work Commission, in their statement, confirmed that the paid pandemic leave is in response to “The seriousness of the position in the aged care sector”, however time will tell if this will broaden further in the rapid changing times. 

    If you have any questions or need any support with your workplace during these times, do not hesitate to contact EL's Principal Legal Advisor – Workplace Relations, Amie Mish-Wills:

    ☎️ (07) 4646 2425

    ✉️ Submit an Online Request

  • The Fair Work Commission (the Commission) has stepped in to provide support for the real estate industry and commission-only real estate agents who are covered by the Real Estate Industry Award 2020 (the Award), by removing the months of May, June, July, August, September and October 2020 from the calculation of Minimum Income Threshold Amount (MITA) for the preceding 12-month period.

    The MITA will be subsequently adjusted in proportion to the number of months disregarded, provided that, where the commission-only employee’s review date falls partway through any COVID-19 month, that month may only be disregarded where the review is due after the 14th of the month.

    The Commission has also amended the Award to suspend the eligibility for the engagement of further commission-only agents for the period 6 August 2020 to 1 November 2020. Specifically, the Award has been amended to state:

    “An employee who is not employed as a commission-only salesperson as at 6 August 2020, shall not be eligible to be employed on a commission-only basis prior to 1 November 2020.”

    The aforementioned changes are in operation from the 6th of August 2020, however, for those recently employed, they do not take effect until the start of the employee’s first full pay period that starts on or after 6 August 2020.

    You can read the Commission's decision on The Treasury's website.


    Changes to JobKeeper

    The recent changes to JobKeeper announced on the 7th of August 2020 will also provide an element of reprieve for some, with businesses now only needing to demonstrate that their GST turnover has fallen in one quarter, instead of two, in order to qualify for the recently extended scheme.

    Instead of the requirement to demonstrate a decline in turnover for both the June and September quarters, the 7th of August 2020 announcement confirms businesses will now only need to show that GST turnover has fallen in the September quarter, compared to the corresponding period in 2019.

    Employee eligibility and payments have also changed, to the extent that the scheme has been amended to cover those who have been working since at least 1 July 2020, instead of the original deadline of 1 March 2020. The payment rate will also drop from October to $1,500 to $1,200 for full-time workers, and to $750 for part-time workers, before dropping again in January to  $1,000 per fortnight for full-time workers and $650 for part-time workers.

    Employers will need to use the two fortnightly pay periods to either 1 March 2020, or 1 July 2020 to calculate JobKeeper payment tiers and if an employee has been eligible for JobKeeper since March 1, the fortnightly period with the highest number of hours worked should be used. 

    Click here to read the 7 August 2020 announcement from The Treasury detailing the changes to JobKeeper.


    If you have any questions or need any support with your workplace during these times, do not hesitate to contact EL's Principal Legal Advisor – Workplace Relations, Amie Mish-Wills:

    ☎️ (07) 4646 2425

    ✉️ Submit an Online Request

  • The recent decision in Broadlex Services Pty Ltd v United Workers’ Union [2020] FCA 867 highlights the risks employers will face if they reduce the hours of their employees without consent.

    Broadlex, a cleaning company, experienced a downturn in business which triggered it to advise full-time employee, Ms Vrtovski, that her employment status would be reduced from full-time to part-time, reducing her hours from 38 hours per week to 20 hours per week (with a proportionate reduction in salary).  

    Ms Vrtovski declined to sign a form consenting to the change but nevertheless worked the reduced hours as she felt she had no choice. She later filed a dispute and upon examination, Justice Katzmann of the Federal Court of Australia held that Ms Vrtovski was entitled to redundancy pay on the grounds that:

    1. Section 119 of the Fair Work Act 2009 (Cth) confirms that a redundancy requires:

    • the employee’s employment to be terminated
    • the termination to be done at the employer’s initiative because it no longer requires the job to be done by anyone.

    2. by reducing Ms Vrtovski’s hours without consent, Broadlex had repudiated her contract of employment, which was accepted by her when she refused to sign the consent form. This, in turn, had the effect of terminating Ms Vrtovski’s full-time employment and when she commenced working on a part-time basis, she did so under a new contract of employment;

    3. as the termination of Ms Vrtovski’s employment was initiated by Broadlex (when they changed her employment to part-time), who did not require her full-time role to be done by anyone, Ms Vrtovski’s circumstances met the requirements of section 119 and she was therefore entitled to redundancy pay.

     

    Lesson for Employers 

    The decision in Broadlex serves as an important reminder that employers need to be very careful when making changes to an employee’s employment.

     

    If you find yourself in a situation where you are considering making similar changes within your business, we encourage you to contact EL's Principal Legal Advisor – Workplace Relations, Amie Mish-Wills for advice & support:

    ☎️ (07) 4646 2425

    ✉️ Submit an Online Request

  • Provisions of the Building Industry Fairness (Security of Payment) and Other Legislation Amendment Act 2020(Qld) (the Act) will take effect on 1 October 2020, introducing significant payment security reforms.

    In particular, the Act introduces a new remedy for head contractors that have not been paid an adjudication debt by a principal/client following the filing of an adjudication certificate. This remedy allows a head contractor to request a charge over the property on which construction work was carried out where:

    • the construction work or related goods and services relate to the adjudicated amount; and
    • the principal/client, or a related entity, is the registered owner of the property.

    Importantly, this charge is lodged with the registrar of titles and is to exist for 24 months after registration unless discharged, set aside, or the adjudicated amount is paid.

    Additionally, a head contractor is able to enforce the charge by application to the Court for orders that the property is sold, which will authorise the sale of the property free of all encumbrances and will have effect regardless of any encumbrances. The Act defines ‘encumbrance’ to mean:

    • a mortgage, lien or charge over the property;
    • a caveat claiming interest over the property by way of security; or
    • a writ affecting the property.

    This mechanism means that a head contractor is able to apply to have the property sold, even if there are prior encumbrances.

    On settlement of sale of property ordered by the Court, sale proceeds would be applied in the following order:

    • first – payment of sale costs and the head contractor’s costs in seeking the sale;
    • second – payment of amounts to satisfy any registered encumbrances, including the charge registered by the head contractor, in the priority order under the Land Title Act 1994 (Qld); and
    • third – payment of any balance to the registered over of the relevant property or to another at the discretion of the owner.

    This is a very powerful tool available to head contractors because it provides them with practical, relatively straightforward and economical leverage to force compliance by principals/clients or risk serious ramifications that typically otherwise only eventuates in very limited circumstances.

    To avoid any charges being registered and enforced, principals/clients should ensure that any adjudication amounts are paid as a matter of priority. Under the Act, payment must be made 5 business days after the adjudicator’s decision, or a later date if decided by the adjudicator, so it is important that principals act quickly to prevent the registration and enforcement of potential charges.

     

    Need further clarification? Enterprise Legal are Toowoomba's construction law experts - make a time to see us today:

    ☎️ (07) 4646 2621

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  • The Devil Is In The Detail - When Workplace Redundancy Alternatives Just Don't Cut It

    An employer has been ordered to pay full redundancy entitlements to employees despite offering them other employment arrangements.

     

    The recent decision of Lee Crane Hire Pty Ltd v Sneek and Ors [2020] FWC serves as an important example of when an employer will be required to pay redundancy entitlements to employees, despite offering them alternative means of employment.

     

    What the Fair Work Act 2009 (Cth) Says:

    Section 120 of the Fair Work Act provides a mechanism for employers to apply to vary the amount redundancy pay owing to an employee (which may be reduced to nil) in circumstances where the employer obtains other acceptable employment for the employee (and they reject it) or the employer simply cannot pay the amounts owing.

     

    What is ‘Other Acceptable Employment’?

    If an employer is able to prove that it offered an employee other acceptable employment and the employee rejected such employment and sought payment of their redundancy entitlements instead, an employer could request the Fair Work Commission reduce the redundancy pay potentially to nil.  

    The onus of proving that the alternative employment is acceptable rests with the employer. There is a body of case law which has set the bar particularly high and involves consideration of a range of non-exhaustive factors including, pay levels, hours of work, seniority, fringe benefits, workload, job security, work location, continuity of service, accrual of benefits, probationary periods, as well as the employee’s skills, experience and physical capacity. The location of the other employment must also not be unreasonably distant from the employee’s original place of work.

     

    So What Happened in Lee Crane v Sneek?  

    Lee Crane v Sneek is a prime example of how the Fair Work Commission assesses ‘other acceptable employment’ and is a cautionary tale for employers, particularly those who may wish to offer casual or far away employment to soon-to-be redundant employees. Here’s what happened:  

    • Lee Crane Hire operates a mobile crane hire business in Gladstone and operates another depot at Biloela (121kms inland from Gladstone). There had been a downturn in business of the Gladstone Depot such that the business could no longer guarantee full time work to the employees based at the Depot. The owner of the business decided to close the Gladstone Depot and operate all his business through the Biloela depot.
    • Employees Sneek, Wiemers and Kennedy worked at the Gladstone depot and were offered two alternatives to a redundancy:
      1. continue in the same role, but be based out of Biloela and Gladstone with the only Depot being in Biloela. This option would include payment for time spent travelling to work and accommodation, the same hours of work, a company vehicle supplied, the same salary and leave entitlements. Additionally, as the role was the same mobile crane operations role, the travel to different sites would be largely unchanged; or
      2. to take on casual employment for Lee Crane Hire in Gladstone, this would involve the employees performing the same work, however there would be no guaranteed hours of work.
    • Sneek, Wiemers and Kennedy declined the above options and were terminated on the 31st of March 2020.
    • Lee Crane Hire filed an application in the Fair Work Commission seeking the redundancy pay of Sneek, Wiemers and Kennedy be reduced on the grounds that it offered them ‘other acceptable employment’.
    • When assessing the alternatives offered to the employees, the Fair Work Commission viewed both alternatives in the negative, and stated: 
      • [29] It is the devil’s alternative: move to a new location some 121kms away and incur a practical detriment on a continuous basis or, keep your job, but as a casual with no assurance of work in an evidently declining market. This should not be classified as acceptable alternative work that would release the employer from their obligation to pay out a redundancy entitlement. In short, the travel to Biloela makes the options, in line with the authority cited, unreasonably distant.
      • [35] My considered view is that the two employment options offered by Lee Crane Pty Ltd are not ‘acceptable other employment’ for the purpose of s.120(1)(b)(i) of the Act.

    Ouch.

    • Lee Crane Hire were ordered to pay Sneek, Wiemers and Kennedy their full redundancy entitlements which equalled 16, 12 and 7 weeks respectively.

    Triple ouch.

    What’s the lesson?

    Employers need to tread very carefully when navigating redundancies and further, they need to ensure that any offers for other employment are indeed ‘acceptable’ based on the Fair Work Commission’s assessment criteria.

     

    It goes without saying that if you are wondering if your redundancy process is correct or you are wishing you had some expert assistance to ensure your redundancy alternatives are not labelled “the devil’s alternative”, do not hesitate to contact Enterprise Legal’s Principal Workplace Relations Advisor, Amie Mish-Wills:

    ☎️ (07) 4646 2425

    ✉️ Submit an Online Request

  • October is Safe Work Month and is an important time for businesses to review their Workplace Health and Safety procedures and processes and to reflect on the safety of their staff and workplaces.


    Whatever the industry or workplace, every organisation can join Safe Work Month and take steps to keep people safe and healthy at work, including:  

    • Being informed: Staying up to date with the laws, rules and regulations that apply and create the duties and responsibilities of employers, employees and contractors. It is vital that both employers and employees take steps to stay informed and up to date;
    • Auditing Hazards and Risks and implementing risk/hazard mitigation strategies: Identifying hazards and risks is a key step for both employers and employees and involves finding thing or situations that may cause harm. Once a hazard or risk is identified, it is imperative that steps be taken to minimise or remove the risk or hazard. Risk and hazard assessments should be conducted regularly;
    • Training and consultation: Employers and employees must all work together to ensure the safety and wellbeing of others and the workplace. It is vital that staff be trained and consulted with every step of the way and includes being involved when identifying hazards and assessing the risks that the work or workplace present and when proposing changes to the workplace which may affect WHS; and
    • Being prepared for emergencies: Employers need to have plans and processes in place to appropriately respond to emergencies, injuries and incidents in the workplace. This includes (but is not limited to) having staff trained in fire and emergency management, having procedures in place for incident/injury reporting and return to work management;
    • Keeping staff wellbeing front of mind: Employers and employees need to remember that safe workplaces isn’t just about injuries and incidents, it also includes staff health and wellbeing. It is important to remember that everyone’s physical and psychological wellbeing should also be a priority.


    There are a wide range of free resources available through WorkSafe Queensland and Safe Work Australia and at Enterprise Legal, we have a dedicated Workplace Relations team that is here to assist and keep your workplace safe and informed.


    If you would like to discuss how we can assist you with your Workplace Health and Safety obligations, contact EL's Principal Workplace Relations Advisor Amie Mish-Wills:

    ☎️ (07) 4646 2425

    ✉️ Submit an Online Request

  • Enterprise Legal Knowledge Centre Article - To ‘Make Good’ or Not... Commercial Lease Obligations

    If you’re party to a commercial lease that is coming to an end, whether you’re a landlord or tenant, it’s important that you be aware of any ‘make good’ obligations that are part of the lease.

    If your lease has a make good clause, it’s important that you understand your obligations, whether it is limited to leaving the premises in good repair, or reinstating to a specific condition, and whether you can avoid the obligation by paying a sum of money, which can provide both landlord and tenant with flexibility. If a lease specifies that the condition of the premises in question ought to be reinstated, or made good, it is probably the case that you will need to comply.

    Even in these circumstances, you may not be liable for the total cost if there isn’t a reduction in value of the premises. This is because pursuant to common law, the landlord is only entitled to recover any consequential reduction in value from failing to undertake the reinstatement.

    Additionally, in Queensland, section 112 (1) of the Property Law Act 1974 provides that, where a lease requires a premises to be left in good repair at the end of a lease, any recovery is limited to the reduction in value of the premises.

    It is especially important to make note and take photos of the condition of the premises at the start of the lease in these circumstances so that all parties can be satisfied of the initial condition, whether a tenant is or isn’t required to make good, it remains important.

    The number one tip and consideration is to carefully negotiate the relevant make good requirements at the time of negotiating the lease. Parties are often so excited and focussed on the commencement of the lease, that they omit to take into consideration what the ‘end’ will look like, or they categorise it as a future concern. But when the time comes, if you are required to make good pursuant to the lease, it could impose a number of unintentional onerous conditions on you.

    If you’re unsure whether you need to comply with any ‘make good’ conditions that may be in your lease, or want assistance to negotiate reasonably terms at the time of construction of the lease, the team at Enterprise Legal can help you determine the best course of action for you. For the best outcome, call us early in the process:

     

    ☎️ (07) 4646 2621

    ✉️ Submit an Online Request

  • If you’re building a house, you should be aware that the Queensland Building and Construction Commission (QBCC) may be able to provide assistance for any loss that is sustained in the event of defective or incomplete work through the Home Warranty Insurance Scheme.

    The catch, however, is that you need to carefully follow the QBCC process and rules which can be very onerous at times, to ensure that your application is not excluded.

    One of these conditions is that the relevant building contract must be properly terminated before a claim is made, otherwise it could result in the QBCC disallowing the claim. In a recent decision of Allen & Taylor v Queensland Building and Construction Commission [2020] QCAT 63 the importance of complying with the legislative pre-conditions were emphasised.

    In that particular case, the question was whether the homeowners had properly terminated their residential building contract prior to making a claim under the Scheme, which is a condition precedent to being able to access the home warranty insurance. In this case, the builder entered into a contract with the homeowners in early 2016, but little progress was made at the time of termination. In November 2017, the homeowners served a Notice of Substantial Breach for a number of breaches, including failure to complete the standard of work required and terminated the contract.

    The Tribunal decided that the contract was not properly terminated under clause 1.2 of the Scheme. This clause sets out that the QBBCC will only pay for losses sustained when the contract with the contractor has been properly terminated. While the homeowner’s contract gave them the right to terminate in the event of a breach by the contractor, the Tribunal held that there was no breach on the basis that:

    • the defects that the homeowners alleged would have been capable of remedy following the completion of the house; and
    • the contractor was both willing and capable of completing the project.

    Given that the Tribunal felt that the builder was able to provide a response to the Notice to Show Cause, it was determined that the defects that the homeowners claimed were not substantial enough to justify their termination of the contract. As a result, it was held that they were not able to make a claim under the Scheme.

    If you’re concerned about the progress or quality of your residential building project, it’s important that you act carefully if you want to ensure that you can make a claim under the QBCC Act.

     

    If you think you may need to bring a claim, contact the team at Enterprise Legal to discuss your rights, obligations, and options to ensure that you aren’t barred from making a claim:

    ☎️ (07) 4646 2621

    ✉️ Submit an Online Request

  • In this digital age, many businesses are embracing all the new and exciting things technology has to offer including remote working, virtual meetings and electronic file sharing.

    Whilst technology has indeed revolutionised a number of ways in which we work and communicate, the legal industry is still quite a ways behind and you will find yourself dropped into hot water if you do not do your research and check if your tech-savvy approach will be accepted by a court.

    The case of McCarthy v TKM Builders Pty Ltd [2020] QSC 301 is an important example of when the use of Dropbox proved fatal to an application under the Building Industry Fairness (Security of Payment) Act 2017 (Qld).

     

    What Happened?

    The Building Industry Fairness (Security of Payment) Act 2017 (Qld) (“the BIF Act”) provides for, among other things, the adjudication of disputes over progress payments in building construction contracts.

    Importantly, as part of the process of applying for an adjudication decision, the BIF Act requires that an applicant must give a copy of an adjudication application to the respondent. Quite literally, section 79(3) of the BIF Act states:

    ‘A copy of an adjudication application must be given to the respondent.’

    In the case of McCarthy v TKM Builders Pty Ltd [2020] QSC 301, the applicant, Mr McCarthy and TKM entered into a construction contract for a building project at Bells Creek.

    Later, TKM filed an adjudication application in the Queensland Building and Construction Commission and on 15 June 2020, they sent an email to Mr McCarthy, attaching the adjudication application form and a Dropbox link to their submissions. The email simply stated:

    “Please find below link to correspondence and attached adjudication claim lodged with the QBCC today.
    https://www.dropbox.com/sh/jt7427ejjhz70ik/AACVuiCVC1Ug2YG6X27CFBuca?dl=0”[1]

    Of importance, the submissions could only be obtained by opening the Dropbox link.

    Mr McCarthy’s solicitors prepared and submitted a response to the adjudication application and argued that Mr McCarthy had not been given a copy of the adjudication application in accordance with s 79(3) of the BIF Act and, as a result, the adjudicator did not have jurisdiction to deal with the application.

     

    What Did The Adjudicator Say?

    Upon examination, the adjudicator held that he did have jurisdiction to deal with the application, on the grounds that:

    ‘the fact is that it has been demonstrated that the respondent was in possession of a copy of the adjudication application and its supporting submissions. If a document has been received by the other party, the manner in which it was served is unlikely to matter.’

    The adjudicator found in favour of TKM on the payment claim and Mr McCarthy paid the amount found to have been owing.

     

    On Appeal - Was the Application “Given” to Mr McCarthy?

    The matter was subsequently appealed in the Supreme Court of Queensland and overturned by Judge Martin J, who found that TKM had failed to appropriately give Mr McCarthy the adjudication application as required by section 79 of the BIFA Act.

    His reasoning? Dropbox was simply not sufficient for the purposes of section 79 of the BIFA Act and section 39 of the Acts Interpretation Act 1954 (Qld) which also provides for the service of documents.  

    In making his decision, Judge Martin referred to the decision in Conveyor & General Engineering Pty Ltd v Basetec Services Pty Ltd [2015] 1 Qd R 265 at 268 [22], where Justice McMurdo said:

    “[37] Actual service does not require the recipient to read the document. But it does require something in the nature of a receipt of the document. A document can be served in this sense although it is in electronic form. But it was insufficient for the document and its whereabouts to be identified absent something in the nature of its receipt. The purported service by the use of the Dropbox facility may have been a practical and convenient way for CGE to be directed to and to use the documents. But at least until 2 September 2013 (when Mr How became aware of the contents of the Dropboxes), it did not result ‘in the person to be served becoming aware of the contents of the document’.”

    Judge Martin held that Mr McCarthy was not given a copy of the adjudication application in accordance with section 79 of the BIFA Act and as a result, the adjudicator did not have the necessary jurisdiction to make the decision.

     

    Lesson Learnt

    It is pretty clear that if you are required to ‘give’ another party a document under the BIF Act, you should avoid using Dropbox. You will save yourself being dropped into some seriously hot water like TKM in this matter.

    Whilst it might be tempting to use exciting new technology in every aspect of your business and dealings, how you share, serve and file documents in legal proceedings can make or break your claim and it is therefore vital that you get the right advice from the start before you take a wrong turn.

     

    For advice and support with disputes and the construction industry, contact our Dispute and Construction division:

    Sharne Lategan 
    Principal Director & Legal Advisor – Construction & Disputes

    ☎️ (07) 4646 2621

    ✉️ Submit an Online Request