Welcome Update to Electronic Processes for Businesses during COVID-19

Welcome Update to Electronic Processes for Businesses during COVID-19

The Treasury Laws Amendment (2021 Measures No. 1) Bill 2021 (“the Bill”) was passed by Federal Parliament on 10 August 2021 and became effective from 14 August 2021. The Bill amends section 127 of the Corporations Act 2001 (Cth) (“Corporations Act”) to facilitate the electronic processes and execution of documents and allow businesses to carry on “as usual” as much as possible whilst navigating the challenges of COVID-19. The changes made will remain in effect until 31 March 2022, providing a sense of stability.

Australian Institute of Company Directors CEO and Managing Director Angus Armour has welcomed the changes, saying;

‘This reform provides greater certainty for companies to make disclosures to the market, without the apprehension of speculative class actions challenging this disclosure with the benefit of hindsight, and that is in everyone’s interest. We are hopeful that over time these changes will also help to rebalance skyrocketing insurance premiums’.

Apart from amending the Corporations Act to allow companies to execute company documents electronically, the Bill also allows company meetings (including general meetings) to be held virtually, by electronic means. Finally, companies may send notices of meetings through electronic communications or by providing sufficient information to allow electronic access to the notice.

Electronic execution of documents

We have written previous articles on how legal documents such as a Will or an Affidavit can be witnessed electronically and the witnessing of the fixing of seals can be performed electronically via audio-visual link. However, in signing or witnessing the document electronically, it must be stated within the document that the fixing of the seal has been observed by electronic means.

Documents can also be executed using separate copies, providing that the copy includes all the original document’s contents and the signing method must identify the signee, record their intention to sign and must be reliable for the circumstances of the signing, for each of the signatories.

Notices to Shareholders

Whilst previously the default position was to send hard copies of notices of meetings (and shareholders can still elect to receive physical copies), it is now sufficient to provide them electronically via email or by sending an electronic address from which the material may be downloaded.

Company Meetings

The Bill introduced new emergency powers of relief that allow the Australian Securities and Investment Commission (ASIC) to grant companies temporary relief from certain Corporations Act requirements. Notably, ASIC can now make a determination to extend the timeframe for public companies to hold an AGM on a class basis where extraordinary circumstances (such as COVID-19) would make it unreasonable for such meetings to be held.

The changes also allow companies or registered schemes to hold virtual meetings, even if their company constitution does not allow it, where ASIC considers it would be unreasonable to expect them to conduct in-person meetings. Importantly, such relief cannot be in place for more than 12 months after it commenced.

Whilst these reforms are great news for the 2021 fiscal year AGM, if companies wish to continue using virtual mediums to conduct shareholder meetings, it is prudent to update the company constitution to reflect this. Further, companies will still need to be cognisant of their obligations to allow shareholders to speak and ask questions orally as well as in writing within the virtual AGM format. Therefore, the platforms used by companies will need to offer a two-way audio exchange such as video conferencing platform Zoom.

How Etheringtons Solicitors can help

A solicitor at Etheringtons Solicitors can provide clarification of the relevant law in relation to your individual circumstances. Furthermore, Etheringtons Solicitors can assist with a variety of Business and Company Law matters. If you need further advice or assistance understanding your company’s obligations, please contact one of our experienced solicitors on (02) 9963 9800 or via our contact form.

Retail and commercial lease relief provided in new COVID-19 regulations

Retail and commercial lease relief provided in new COVID-19 regulations

The New South Wales government has introduced new commercial and retail leasing laws that affect tenancies during the current lockdown. The Retail and Other Leases Commercial (COVID-19) Regulation 2021 and amendments to schedule 5 of the Conveyancing (General) Regulation 2018 aim to support retail and commercial landlords and tenants throughout this difficult time. These new COVID-19 regulations recognise that the existing health orders have significantly impacted businesses and their ability to meet financial obligations. The changes apply to leases entered into prior to 26 June 2021, unless the new lease is a renewal or extension of an existing lease (provided it is not an agricultural lease).

Protection provided by the new COVID-19 regulations

The new lease regulations impose a prescribed period in which impacted lessees (or tenants) are granted some protection from their landlord taking action for some typical breaches of their lease agreement. The protection granted requires the parties to mediate with the Small Business Commissioner before a landlord can pursue a prescribed action for a prescribed breach during the prescribed period against an impacted lessee.

  • A prescribed action includes evicting the tenant, exercising a right of re-entry, requiring interest payments on unpaid rent, calling on security or terminating the lease.
  • A prescribed breach is a tenant not paying rent or outgoings, or failing to trade as required under a lease, during the prescribed period.
  • The prescribed period is from the commencement of the regulations (July 14, 2021) until August 20, 2021.
  • An impacted lessee is a tenant who qualifies for the new government protection measures (including the Micro-business COVID-19 Support Grant, COVID-19 NSW Business Grant and the Job Saver Grant) and had a turnover of less than $50 million in the 20/21 financial year.

Any act or omission required by the impacted lessee to comply with other COVID-19 laws and regulations will not be considered a breach of the lease, or constitute grounds for taking a prescribed action against the impacted lessee. However, these regulations do not provide a blanket protection for tenants. The landlord may still take a prescribed action for a breach of a lease agreement which is unrelated to the economic impacts of the COVID-19 pandemic, such as damaging property or subleasing without consent.

Impacted lessee’s obligations

The new regulations place greater responsibility on tenants to provide their landlords with information showing they are an impacted lessee by giving their landlord a statement to that effect and evidence supportive of this. Evidence may include Business Activity Statements or Tax Returns confirming that the tenant meets the requirements of being an impacted lessee. This statement must be given before a prescribed breach occurs or as soon as practicable after, or within a reasonable time if it is requested by the lessor.

Implications for parties in retail and commercial leases

The new regulations are intended to prevent a landlord from terminating a lease for a tenant’s failure to pay rent or failure to trade during core trading hours. This is encouraged as landlords and tenants are allowed to form an agreement on how the tenancy will operate during the prescribed period. This agreement may be formed with the assistance of or prior to the mediation involving the Small Business Commissioner. It may take approximately 5 weeks for the Small Business Commission to allocate a mediation date following an application. The aim of this mediation requirement is to encourage full and frank disclosure between landlords and tenants, allowing appropriate variations to the lease as necessary.

These regulations encourage tenants to access the government’s economic relief package, while not forcing landlords to waive rent or trading obligations. As part of this economic relief package, the NSW government has offered an incentive to landlords who offer rent waivers to eligible impacted lessees in the period between 1 July 2021 and 31 December 2021. The landlord can apply for a reduction in land tax which is equivalent to the amount of rent waived for those premises. Landlords may take advantage of the land tax concession, while tenants may take advantage of potential rent reductions or a release from trading obligations, aiding both parties in these difficult times.

How Etheringtons Solicitors can help

A solicitor at Etheringtons Solicitors can provide clarification of the relevant law in relation to your individual circumstances. If you need further advice or assistance with commercial and property law matters, please contact one of our experienced solicitors on (02) 9963 9800 or via our contact form.

Can Your Employer Force You To Take Leave During Lockdown?

Can Your Employer Force You To Take Leave During Lockdown?

As NSW and other parts of Australia are plunged into another stay-at-home period due to the Covid-19 outbreak, businesses are once again likely to be feeling the pinch. Whilst many are able to work from home, some employers may look to ask employees to take annual leave if the company has ceased operations as a result of the lockdown. This article will address whether an employer can force an employee to take annual leave during lockdown, and the obligations of both parties in these circumstances.

How does annual leave work?

Annual leave allows an employee to be paid whilst having time off work. Generally, full time and part-time employees are eligible for a minimum of 4 weeks annual leave based on their ordinary hours of work, however the courts have also recently recognised a casual worker’s right to annual leave in some circumstances. Generally, annual leave is taken upon agreement between an employer and the employee. However, in unusual or extenuating circumstances, your employer may direct you to take annual leave.

Can my boss force me to take annual leave during lockdown because of COVID-19 restrictions?

In short, yes. An employer can direct employees to take some leave in limited circumstances such as when the business shuts down. Whilst this is common during the Christmas/New Year period, business have been extending this principle when COVID-19 restrictions force business shutdowns.

However this directive must be considered reasonable. Factors considered when determining reasonableness include:

  • Needs of the employee and the employer’s business
  • Agreed arrangements with the employee
  • Custom and practice of the business
  • Timing of the direction or requirement to take leave
  • Length of the period of notice given

Therefore, employers should be mindful to give notice as soon as practicable if such a directive will be issued to employees and specify the period for which they will be required to take leave. Employers can also ask you to take annual leave where you have an excessive annual leave balance, which is generally 8 weeks or more of accrued leave.

Contact Etheringtons Solicitors

We represent both employers and employees in the changing landscape of the COVID-19 pandemic, so if you or your organisation needs further advice or assistance in relation to annual leave or other workplace entitlements, please call Etheringtons Solicitors on (02) 9963 9800 or fill out a contact form.

How Sydney’s current COVID-19 restrictions will impact parenting arrangements

How Sydney’s current COVID-19 restrictions will impact parenting arrangements

The current COVID-19 lockdown has caused many familial disruptions, particularly given students across Greater Sydney, having been on school holidays, are likely to be remaining at home for the next couple of weeks as the new school term is expected to be via remote learning. This may cause some confusion for blended families and separated parents whose parenting plans are largely structured around the school term and travel restrictions limit access to public meeting points. This article will discuss how to approach parenting arrangements during stay-at-home orders to ensure you are still complying with your obligations.

Parenting arrangements

A parenting agreement is a written record of an understanding between separated parents about the care of the child/ren and often how time with the child/ren will be shared between the parents. This  can take the form of a written agreement between the parties or a formal consent order that has been approved by the Family Court. This agreement is formulated with the best interests of the child as the paramount consideration.

In the instance of court-ordered parenting arrangements, it is very important that parents ensure they are proactively complying with the terms set out by the court. If a court finds that you have breached a parenting order without a reasonable excuse, it can impose penalties ranging from varying the parenting order, compensation for time lost with the child, or fines and imprisonment.

Therefore, if you are concerned that you are unable to meet your parenting obligations under a court order, or you feel as though your ex-partner has breached an order, it is essential to seek proper legal advice.

Reasonable excuses for breaching COVID-19 restrictions

The current COVID-19 situation in Greater Sydney is understandably causing significant concerns for parents and families across the region. Under Sydney’s current COVID-19 restrictions, anyone living in Greater Sydney, including the Blue Mountains, Central Coast, Wollongong and Shellharbour, cannot leave home without a reasonable excuse. Fortunately, it is considered a reasonable excuse to leave home for existing parenting arrangements which ensure access to and contact between parents and children. Parenting arrangements include those set out in parenting plans or court orders. This reasonable excuse includes travelling to:

  • Collect and drop off children as set out in parenting arrangements
  • Provide child-minding services at someone else’s home if the person needs to leave the house for essential reasons or you are the parent or guardian of that child, provided this is in keeping with existing parenting arrangements.

Follow existing parenting arrangements

The health and safety of parents and children is of the utmost importance in these challenging times. Therefore, you should, whenever possible, follow existing parenting orders and arrangements. However, in extenuating circumstances, when doing so would place someone at risk, then non-compliance may be deemed necessary and reasonable changes to the arrangements should be made.

Where it is possible, parents should work together to prioritise their children’s best interests by protecting the child from harm and ensuring they may benefit from a meaningful relationship with both parents. For example, if one parent is told to self-isolate pending the results of a COVID-19 test, then it is reasonable to maintain contact via phone or FaceTime and consider arranging “make-up time” when feasible, once that parent has received a negative result or recovered from an illness.

Where possible, parents should communicate directly to re-arrange their contact with the child/ren, or do so with the assistance of a third party such as an experienced lawyer from Etheringtons Solicitors. Any alternative arrangements should be documented in writing.

How Etheringtons Solicitors can help

A solicitor at Etheringtons Solicitors can provide clarification of the relevant law and its relation to your individual circumstances. If you need further advice or assistance with family law matters, please contact one of our experienced solicitors on (02) 9963 9800 or via [email protected].

Tribunal’s ruling welcome relief to small business prevented from JobKeeper

Tribunal’s ruling welcome relief to small business prevented from JobKeeper

Covid-19 continues to disrupt business operations, creating an uncertain environment for business owners to trade within. In response to the drastic impact of Covid-19 on the Australian economy, the Federal Government introduced the JobKeeper scheme to support small businesses and combat unemployment. Whilst many businesses have benefited greatly from the scheme, some were excluded from Commonwealth support as they failed to meet the eligibility criteria. The recent case of Apted v Commissioner of Taxation considered the requirement for businesses to have an active Australian Business Number (ABN) when applying for the JobKeeper package; the Tribunal finding that the purpose of the scheme was to support businesses and arbitrary eligibility requirements were contrary to this objective.

Overview

Mr Adept was the sole trader of a small business where he worked as an expert valuer in rental disputes up until July 2018 at which point he retired. As such, he cancelled his GST and ABN registration effective June 2018. However, after he decided retirement wasn’t for him, in September of 2019 Mr Apted was engaged to provide services for the odd client. He mistakenly assumed that he was not required to reactivate his ABN as he did not anticipate to make more than $75 000 per year and did not think he needed to be registered for GST or an ABN.

At the end of March 2020, Mr Apted applied to have his ABN reactivated, which was reinstated by the Registrar with a date of effect of 31 March 2020. He then subsequently applied for a JobKeeper payment in April 2020, but his application was rejected as he was deemed ineligible due to his inactive ABN at the 12 March 2020 cut-off date. Mr Apted then contacted the Registry and had his ABN retrospectively backdated to be effective from July 2019 after which he appealed the decision with the Commissioner. His claim again failed on the basis of ineligibility and Mr Apted subsequently escalated the decision of the Commissioner to the Administrative Appeals Tribunal of Australia.

Eligibility Requirements for JobKeeper

There are several requirements set out in the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (Cth) that must be met in order for a business to qualify for JobKeeper payments. These include:

  • At 1 March 2020, the entity was an active business; not for profit operating primarily in Australia; or a deductible gift recipient.
  • The entity employed at least one eligible employee during the JobKeeper fortnight being applied for.
  • The entity satisfies the original decline in turnover test: which is generally satisfied when an entity’s projected GST turnover for the test period falls short of current GST turnover for the relevant comparison period by the specified percentage (normally 30%). There are alternative tests for businesses started in 2020 before March 1.
  • The entity satisfies the actual decline in turnover test: which is generally satisfied when an entity’s actual GST turnover for the test period falls short of the relevant comparison period, by specified short fall percentage (normally 30%).
  • The entity satisfies the integrity rules: have an ABN that was active on 12 March 2020; and an amount was included in the entity’s assessable income for 2018-19 income in relation to the business or the entity made a taxable supply in a tax period between July 2018-12 March 2020.

Decision of the Administrative Appeals Tribunal of Australia

In its decision, the Tribunal considered the purpose of the JopKeeper scheme as a mechanism for providing necessary and accessible support to small business owners. The Tribunal found that the Integrity Rule containing the requirement for an active ABN at 12 March 2020 was contemplated by the government as putting trust in the Registrar and the ABN process, rather than a fixed deadline. As a result, where the Registrar decides to use its discretion to retrospectively date an ABN, this does not vitiate the integrity of the ABN for the purposes of JobKeeper eligibility. The Tribunal found in favour of Mr Apted, and reiterated the need for JobKeeper to remain a streamlined and attainable scheme for Australian businesses.

It is worth noting that that the ATO has confirmed that they have lodged an appeal against the decision in the Federal Court of Australia and the possible future implications of this decision remain unclear. However, the ATO maintains the AAT’s decision has not changed the need to satisfy all of the other eligibility conditions.

Other Recent JobKeeper Updates

From the 28th of September 2020, businesses and non-for-profits seeking to claim JobKeeper payments to March 2021 must reassess their eligibility with reference to their actual turnover in the December quarter and demonstrate the required decline turnover test has been met. Further, from January 4th the payment amount has decreased to $1,000 per fortnight for eligible employees and business participants working for 20 hours or more a week on, and $650 per fortnight for employees and business participants who were working for less than 20 hours a week.

How do I check the status of my ABN?

An Australian Business Number is a unique identifier that enables your business to identify itself, avoid PAYG tax, and claim GST credits. It is important as the owner of a small business that you are able to check the status of your ABN and reactivate it before expiry. You can apply or reapply online for an ABN through the Australian Business Register website, and once your application is successful your details will be added to the Australian Business Register. The Register contains the status of all ABN’s including their expiration date. Once you have obtained an ABN it is important you keep your details up to date in the Register, as this is how you will be contacted when your ABN is due for renewal. If you do not receive a notice of renewal, or unsure about the status of your ABN you may need to seek out further assistance.

Further Information

Matters such as these highlight the importance of seeking expert legal and taxation advice when conducting a small business. Mr Adept himself acknowledged his misunderstanding of ABN requirements was because he failed to obtain proper advice. If you are the owner of a small business, and want to understand more about your eligibility for JobKeeper payments or about the implications of an ABN for your business, do not hesitate to contact us on 9963 9800 or via our contact form.

Modern Awards – An Update, June 2020

Modern Awards – An Update, June 2020

Several modern awards have been significantly varied by the Fair Work Commission (‘FWC’) to grant businesses and employees temporary measures to preserve the ongoing viability of businesses and jobs during the COVID-19 pandemic. In addition to the unpaid pandemic leave and annual leave flexibility that has varied over 99 awards since 8 April 2020, the NSW Government has inserted provisions in the Long Service Leave Act 1955 (NSW) relating to pandemic leave. Employers should become familiar with these important industry award changes which we will outline below.

Changes to Modern Awards in 2020

The Tranche 2 awards, including the following listed below, have been finalised and will come into effect from the 29 May 2020. In addition to unpaid pandemic leave, the following changes have been inserted that are temporary and will be reviewed on 30 June 2020:

1. Clerks — Private Sector Award 2010

Operational flexibility: employees can be asked by their employers to do any tasks that they have skill and competency for, even if they are not in their usual classification or normal work, given that the employee has the appropriate licenses and qualifications. If an employee is told to work above their usual classification for more than one day, they must be compensated by being paid at a higher rate.

Work from home agreements: Part-time employees can agree to have minimum engagements reduced from 3 hours per shift to 2 hours. Casual employees can agree to be paid for a minimum 2 hours’ work shift instead of 3 hours.

Ordinary hours change while working at home: Agreements can be made to allow employees to work between 6am to 11pm on Monday to Friday, and 7am to 12.30pm on Saturday.

Reduced hours: Any employee who has had their hours reduced can ask their employer for permission to find more work with another employer and/or access training, professional development and study leave through their employer.

See determination for further information.

2. Hospitality Industry (General) Award 2010 and Restaurant Industry Award 2010

Operational flexibility: An employee can perform any duties within their skill and competency provided that they are licensed and qualified to perform them. Employees engaged to perform higher duties must be compensated at a higher rate than their ordinary classification.

Working hours: An employer may direct a full-time employee to work an average of between 22.8 and 38 ordinary hours per week and be paid on a pro-rata basis. An employer may direct a part-time employee to work an average of between 60% and 100% of their guaranteed hours per week (over the roster cycle).

Annual Leave: An employer may, subject to considering an employees’ personal circumstances, direct the employee to take annual leave with 24 hours notice.

See determination for the Hospitality Industry Award and the determination for the Restaurant Industry Award.

3. Educational Services (Schools) General Staff Award

Temporary reduced hours: An employer may issue a notice of intention in writing to direct an employee to reduce their ordinary hours by up to 25%. The direction will come into effect 5 days after the notice of intention was issued and will remain in force for a period of no more than 12 weeks.

Operational flexibility: An employee can perform any duties within their skill and competency provided that they are licensed and qualified to perform them. Employees engaged to perform higher duties must be compensated at a higher rate than their ordinary classification.

Other awards that have been varied include the Rail Industry Award, Contract Call Centres Awards and Manufacturing and Associated Industries and Occupations Award. See what other awards have changed in 2020 here.

Considerations for Employers

Employers must be aware of their changing obligations surrounding unpaid pandemic leave and any other laws, such as those relating to the JobKeeper subsidy. The greater flexibility in relation to job roles and duties, work hours and leave under some awards is a positive development towards enabling businesses to meet the challenges caused by the pandemic. However, employers must proceed with caution to ensure that their work agreements comply with these award variations.

Further Information

For further assistant on any matter relating to work from home policies or any workplace matter, please contact one of our experience employment and litigation solicitors on 02 9963 9800 or [email protected].