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.
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.
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):
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.
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.
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
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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?
Most Developers/Principals of construction projects care about three main things when it comes to their project delivery, that is - will the project be:
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:
Conversely, the risk to Contractors are in the reverse. For example:
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!
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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
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.
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:
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).
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.
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.
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…
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.
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.
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.
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!
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.
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.
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:
The relief measures that were passed by Parliament in late March will be in place for the next six months and include:
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.
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.
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.
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!
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.
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:
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:
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:
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:
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.
If you are interested in taking advantage of the HomeBuilder grant, there are a few things you should consider before you jump in.
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!
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.
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:
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.
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.
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:
Yes, employees will not be entitled to access paid pandemic leave if:
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.
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
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.
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.
The recent decision in Broadlex Services Pty Ltd v United Workers’ Union  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:
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.
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:
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:
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:
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:
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:
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  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.
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.
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.
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:
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:
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:
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:
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: