The Pros and Cons of choosing a Self-Managed Super Fund

The Pros and Cons of choosing a Self-Managed Super Fund

Superannuation is a large component of building long-term wealth and retirement planning. Self-managed super funds are becoming increasingly popular as the investment structure for those who prefer greater autonomy and control over how their funds are being invested and accumulated. However, whilst self-managed super funds can be effective for building wealth and minimising tax burdens, they must be properly executed and managed in order to protect you and your family’s interests. Etheringtons Solicitors have a team of experienced solicitors who can assist you in a range of wealth management matters in a strategic and compassionate manner.

What is a self-managed super fund?

self-managed super fund (“SMSF”) is a private superannuation fund where the members are usually the trustees. Members of the SMSF run it for their benefit and are responsible for complying with the relevant laws. A SMSF can have up to four members, but it is quite common for there to be just one member.

A SMSF trustee is the person responsible for ensuring the SMSF is maintained for the purpose of providing retirement benefits. The trustee can be a company or an individual. For a single member SMSF, there must be two individual trustees, the other trustee must either be related to the member or be another person who is not an employer of the member.

Benefits in establishing a self-managed super fund?

1. Control and Choice of Investment

The primary benefit of a SMSF is the control and choice you have over how the funds are invested. For example, SMSF’s can invest in commercial properties, term deposits, shares and derivatives. SMSF’s are recommended for small business owners as the fund can receive steady income from the SMSF when the business property owned by the SMSF is leased back to the business.

2. Tax Minimisation

SMSFs grant greater flexibility than other superannuation structures to minimise overall tax payments. If you are a SMSF trustee, you are entitled to the reduced superannuation tax rate. Provided the SMSF complies with legislation, your investment return would therefore be taxed at a maximum of 15% in Australia.

The tax-free benefits are highly attractive. Benefits received after the age of 60 and pension payments received from the fund are tax-free. A SMSF with multiple members can also allocate earnings from members who are not retired to any retired members to realise additional tax advantages.

We highly recommend that you seek advice in relation to SMSFs as they may also be utilised for tax strategies around capital gains and franking credits.

3. Life Insurance

The following forms of personal insurance can be paid through a SMSF:

  • Life Insurance;
  • Total and Permanent Disability Insurance; and
  • Income Protection Insurance.

Life policies are often held in SMSFs because the funding of premiums can become tax deductible if certain contributions are allocated to fund the premiums. The level of cover and insurance needs are unique to each individual. Professional advice must be sought prior to taking out a life insurance policy through a SMSF.

Whilst there are clear benefits to having a SMSF, there are important factors to consider when deciding if it is the appropriate wealth building strategy for you.

Important Considerations

1. Time and effort of managing a SMSF

SMSFs require the trustee to take responsibility for all investment decisions, unlike an industry or retail fund. A sound understanding of investment options and markets is required to be a trustee of an SMSF. Poor decisions will impact the assets of the fund and the retirement savings of its members.

Furthermore, trustees are responsible for ensuring that their fund complies with legislation. If the ATO rules that there has been a breach of these obligations, it may impose high penalties on trustees who will be personally liable.

2. Cost of running a SMSF

The costs of running a SMSF are fixed and therefore can be disadvantageous when the assets held within the SMSF are low in value. The costs reduce in proportion to the value of the fund, and it is advised that the fund should contain at least $250,000 worth of assets to ensure the costs of running the SMSF are worthwhile.

3. Estate Planning

The superannuation benefits of a SMSF are not assets that automatically fall within the ownership of a person’s estate upon their passing. Allocation of benefits is decided by the trustee unless written direction is provided. Without careful consideration and planning, your superannuation funds may not end up where you want them to after your death.

You may properly document where superannuation benefits are to be directed upon the death of a beneficiary through a binding death nomination. A binding death nomination must be renewed every 3 years while a death benefit agreement is permanent until revoked, unless it is a non-lapsing nomination.

Contact Etheringtons Solicitors

Wealth management and estate planning takes careful contemplation. If you or someone you know requires more information or needs advice in relation to self-managed super funds, please contact us on (02) 9963 9800 or via our contact form.

Fair Work Recognises Rights of Workers in Gig Economy

Fair Work Recognises Rights of Workers in Gig Economy

The Fair Work Commission (“FWC”) has made a landmark ruling that could see more drivers and delivery workers in gig economy being given rights as employees instead of independent contractors. Deliveroo is appealing the decision, and if upheld, this could see the restructure the business model of many platform companies.

The FWC ruled that a former Deliveroo driver was an employee of Deliveroo Australia Pty Ltd rather than an independent contractor. The decision in Diego Franco v Deliveroo Australia Pty Ltd (U2020/7066), if upheld on appeal, will be a momentous case with the potential to completely reform how gig-economy platforms operate. This decision comes in the wake of increasing scrutiny of gig-economy companies for their inconsistent treatment of workers, hindering the rights and protections available to them. Other countries have already made the move towards enforcing the classification of gig economy workers as employees.

What were the facts?

The Applicant (Mr Franco) entered into a supplier agreement in 2017 to become a Deliveroo driver. The Supplier Agreement, and all subsequent agreements, contained similar terms including that Mr Franco:

  • was a supplier in business of his own account;
  • could provide services personally or through a delegate;
  • was free to work for any third parties;
  • was required to provide his own vehicle and phone
  • was required to pay an administrative fee;
  • was required to complete the services safely and efficiently; and
  • must organise his own tax and insurance.

Mr Franco worked as a Deliveroo driver for three years and also performed services for Uber Eats and Door Dash during that period. In 2020, he received an email notifying him that the Supplier Agreement services were terminated by Deliveroo due to delays with his delivery times compared with other Deliveroo drivers on similar routes. Under the agreement, Deliveroo had the right to terminate at any time and for any reason with provision of one week of written notice. Mr Franco sought to challenge his termination in an unfair dismissal application.

The FWC Decision – Employee or Contractor?

Commissioner Cambridge of the FWC determined that Mr Franco, was an employee of Deliveroo and ordered Deliveroo to reinstate Mr Franco’s employment.

As an employee, different rights attach to termination of the relationship and the FWC held that the dismissal was harsh, unjust and unreasonable. To be protected from unfair dismissal, the question turns on whether the person is an employee and has completed the minimum employment period as required in section 382 of the Fair Work Act 2009 (Cth).

Important Factors to Consider

The definition of ‘employee’ is given meaning by the common law, which involves the consideration of various factors examining the holistic nature of the relationship between the parties. The Commissioner considered the following factors in reaching its conclusion that Mr Franco was an employee:

  • although Mr Franco could determine when and where he felt like working, the practical reality was that an automated system directed him to work at particular times and to regularly make himself available;
  • the supplier agreement contained provisions which are similar in form and substance to ordinarily found in an employment contract;
  • Mr Franco had no capacity in any real sense to negotiate any of the terms of the supplier agreement; and
  • Mr Franco was not carrying on a trade or business of his own but was carrying on the business of Deliveroo. This finding is interesting given Mr Franco had the ability to work for competitors, and will be challenged in the appeal that has been confirmed by Deliveroo.

Unfair Dismissal

In the opinion of the FWC, Deliveroo did not provide Mr Franco with a valid reason for dismissal or an opportunity to respond to the complaints prior to terminating the contract, as required under the Fair Work Act. The failure to deliver food within a reasonable time was not a valid reason for dismissal, given that he was not informed by Deliveroo on the delivery times it expected.

In making the reinstatement order, the FWC noted: “irrespective of whether Mr Franco was a contractor or an employee, it was plainly unconscionable to terminate what would be well understood to be his primary source of income, without first hearing from him.”


The increasingly digital employment landscape and the rise of gig economies will test the balances between existing common law concepts of employment and lived realities of working relationships.

We represent both employers and employees, so if you or your organisation needs further advice or assistance in relation to redundancies or dismissals, please call Etheringtons Solicitors on (02) 9963 9800 or via our contact form.

Genuine Redundancy and the Importance of Consultation

Genuine Redundancy and the Importance of Consultation

The Fair Work Commission has reaffirmed the importance of employers complying with consultation requirements when making employees redundant, even during Covid-19. Failure to consult with an employee about the significant changes to their employment means employers cannot rely on the genuine redundancy exception to unfair dismissal enquiries.

Legislative Requirements of Genuine Redundancies

The requirements to establish a genuine redundancy are set out under s 389 of the Fair Work Act 2009 (NSW):

  1. The employer no longer requires the job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise;
  2. The employer has complied with any consultation obligation in a modern award or enterprise agreement;
  3. It is not reasonable in the circumstances for the person to be redeployed within the employer’s enterprise of an associated entity.

Findings of the Fair Work Commission

The consultation requirement of genuine redundancies has been highlighted in two recent cases heard by the Fair Work Commission.

In Browne v MySharedServices [2020] FWC 4445, the employee (Browne) was dismissed over the phone without prior consultation by his employer (MySharedServices). The employer relied on genuine redundancy grounds for dismissal. The Fair Work Commission found that whilst operational changes to the business had occurred as a result of Covid-19, the consultation requirement had not been met. Under the relevant modern award (Clerks Award 2009), MySharedServices were required to consult employees on any change that may have significant effect on their employment, including termination. As the consultation did not occur and there were no issues with the employees’ performance, the Fair Work Commission found the termination was an unfair dismissal.

A similar situation arose in the case Freebairn v TLJ Advisors and Accountants (2020) FWC 3915, where the employer failed to consult the employee (Freebairn) about the termination of her employment as a result of firm restructuring post Covid-19. Freebairn filed for unfair dismissal on grounds that no consultation had taken place and that if consultation had occurred she could have arranged to work reduced hours until the JobKeeper scheme kicked in shortly after. As a result, the Fair Work Commission agreed the dismissal was not a genuine redundancy because of the failure to comply with consultation requirement.

Employers must comply with the consultation requirements

Employers must remain vigilant in upholding consultation requirements when implementing redundancies, even in the wake of mass organisational shifts as a result of the Covid-19 pandemic. Consultations must be genuine discussions about the changes to employment and explain how the employer intends to mitigate such changes. In particular, consideration must also be given to how JobKeeper and other Covid-19 relief schemes impact relationships between employers and employees in relation to organizational restructuring.

We represent both employers and employees, so if you or your organisation needs further advice or assistance in relation to redundancies or dismissals, please call Etheringtons Solicitors on (02) 9963 9800 or via our contact form.

I am My Ex-Partner’s Employer. Can I Terminate Their Employment?

I am My Ex-Partner’s Employer. Can I Terminate Their Employment?

It is not uncommon for people to meet their partner in the workplace or employ their spouse or partner in their small business to provide additional support and reduce labour costs. What would happen to their employment if your relationship were to break down? Disputes may arise if your ex-partner starts causing problems in the workplace through improper behavior or dishonesty. In this blog, we review whether you can terminate your ex-partner’s employment and some considerations for the future.

Can I terminate my ex-partner’s employment?

You can terminate your ex-partner’s employment on the condition that the termination is lawful and would be for the same reasons as any other employee in your workplace, regardless of their relationship to you. There must a valid reason for their dismissal and this will vary depending on your individual circumstances.

If you wish to avoid having an unfair dismissal claim lodged with the Fair Work Commission against you, it is vitally important that the employment termination is:

  1. For a valid purpose
  2. Was not harsh, unjust or unreasonable; and
  3. Was not made for an unlawful reason.

Meaning of Unlawful Termination

The Fair Work Act 2009 states that an employer must not terminate an employee’s employment for an unlawful reason. Simply disliking your ex-partner and no longer wishing to see them in the workplace is not a valid reason to dismiss them. Examples of ‘unlawful reasons’ include dismissals based on:

  • race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin;
  • temporary absence from work because of illness or injury;
  • trade union membership or participation in trade union activities outside working hours;
  • the filing of a complaint, or the participation in proceedings, against the employer involving alleged violation of laws or regulations or recourse to competent administrative authorities; and
  • absence from work during maternity leave or other parental leave.

Valid Reasons for Dismissal

A lawful and valid reason for dismissal will vary and it is advised that you seek legal advice before terminating an employee. In most cases, you may have a valid reason to terminate employment if your ex displays some of the following behavior:

  • Inappropriate conduct such as harassment
  • Creating conflict for clients or other employees
  • Improper use of the company’s monies
  • Not abiding by workplace policies

Other considerations

If you are satisfied that a valid reason for dismissal exists, you must ensure that you provide adequate notice, an opportunity to respond, and the reasons for dismissal. You should consider providing ‘warnings’ or offer mediation conferences to your ex before considering dismissal, as often their behaviour or performance may improve and you may be less likely to face an unfair dismissal claim.

You should also consider whether terminating your ex-partner’s employment may leave you vulnerable to a spousal maintenance claim. Spousal maintenance is where one partner provides financial support to the other partner upon the relationship breaking down. To learn more about spousal maintenance, see our blog here.

Contact Etheringtons Solicitors

Various employment and family law problems that stem from workplace relationships can lead to complicated legal repercussions. The team at Etheringtons solicitors are highly skilled in navigating both employment law and family law matters and are able to assist you every step of the way during your legal proceedings.

If you or someone you know needs help and would like to have a confidential no-obligation discussion, please call Etheringtons Solicitors on (02) 9963 9800 or send us a message via our contact form.

Australian Consumer Law Update: Extending Protection to More Consumers

Australian Consumer Law Update: Extending Protection to More Consumers

The term ‘consumer’ carries with it broad connotation of individuals who purchase goods and services, usually for a relatively low sum. However, with the new Australian Consumer Laws (‘ACL’) set to take effect from 1 July 2021, the definition of a ‘consumer’ could affect a greater number of transactions as they will be covered by the ACL consumer guarantees. In this blog, we provide an overview of the Australian Consumer Law (‘ACL’) and the changes set to take place this year.

What is the Australian Consumer Law?

The ACL is the primary area of law that regulate the sale of goods and services. The ACL applies nationally and in all States and Territories, and to all Australian businesses. The ACL is administered by the ACCC and state and territory consumer protection agencies and is enforced by all Australian courts and tribunals.

Under the ACL, products and services must meet strict requirements. For example, products must be safe, long lasting, lack faults, look acceptable, carry full ownership, be fit for purpose, match descriptions, have spare parts and repair facilities available and do everything someone would normally expect them to do. Likewise, services must be provided with acceptable skill and care or technical knowledge and taking all necessary steps to avoid loss and damage, be fit for purpose and be delivered within a reasonable time when there is no agreed end date.

The ACL provides consumers protection in the areas of:

  • Unfair contract terms
  • Consumer rights when buying goods and services
  • Product safety
  • Unsolicited consumer agreements covering door-to-door sales and telephone sales
  • lay-by agreements

What’s changing?

The ACL has previously defined a ‘consumer’ as someone who purchases goods or services for under $40,000 or the purchase of goods and services greater than $40,000 if they are acquired for personal, domestic or household use or consumption. However, the recent changes to the law will increase this threshold to capture all goods and services under $100,000.

The changes will also see the amendment of the definition of “consumer” under the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act).

These changes come in response to a review conducted by Consumer Affairs Australia and New Zealand into the effectiveness of the ACL in protected the modern consumer. It found that inflation and the rising cost of goods and services meant that purchases that were previously covered by the ACL are no longer, leaving consumers unprotected.

In essence, this change in definition will operate to expand consumer protections afforded by the ACL to a greater number of consumers. Whilst this gives purchasers more rights and bargaining power, it increases the need of businesses to ensure that they are compliant with the new ACL requirements as more customers may be covered by its protections.

How do I prepare for these changes as a business?

These changes provide a good opportunity to assess your current goods or services and whether they are subject to the ACL. You should also conduct a thorough review of your current contracts, policies, terms and conditions and existing (and now new) obligations.

You should seek legal advice if you wish to find out more information about the changes, how they affect your business and to ensure your business is complying with its obligations under the ACL. The team at Etheringtons Solicitors are highly skilled in business law and are ready and willing to assist you with your enquiry.  If you would like further information, please do not hesitate to contact one of our experienced solicitors on 9963 9800 or via our contact form. For more articles, please see our blog here.

Who owns the emails you send at work?

Who owns the emails you send at work?

Workplace surveillance and email monitoring have become the norm in organisations across Australia. However, many employees still do not understand their obligations or their rights when it comes to the use of computer technology in the workplace. Another issue arising out of the use of digital communication in the workplace is who owns correspondence that is sent from a work address?

The tension between an employee’s privacy and any potential restraint of trade conditions or copyright issues continue to be a source of contention in employment law, causing confusion for both parties. This blog will provide an overview regarding the law surrounding privacy and workplace surveillance, however if you are affected by this issue it is important to seek out legal advice.

Workplace Surveillance

The Workplace Surveillance Act 2005 (NSW) provides that a policy must be in place for an employer to undertake workplace computer surveillance. Employees must be given notice of that policy. Commonly, employers include a notice of surveillance in a new employee’s contract. However, if employers are introducing computer surveillance into the workplace they must provide employees at least 14 days written notice.

Under the Act the notice must include:

  • the kind of surveillance to be carried out (i.e. computer, camera or tracking surveillance)
  • how the surveillance will be carried out
  • when the surveillance will start
  • whether the surveillance will be continuous or intermittent; and
  • whether the surveillance will be for a specified limited period or ongoing.

What does the Privacy Act 1988 say?

The Privacy Act 1988 (Cth) is the national legislative body for regulating the handling of personal information by government agencies and organisations. The Australian Privacy Principles (APP) are enshrined in this Act, specially Principle 12, which states that if an APP entity (which includes Government agencies and private organizations) holds personal information about an individual, the entity must, on request, give the individual access to the information. It is worth noting that the Act itself does not distinctively cover surveillance in the workplace.  The employee records exemption under this Act provides an exemption to adherence to the APP for employers in certain circumstances. This means that employers are allowed to collect and store employee’s personal information if it is directly related to the employee-employer relationship, or if it forms part of an employee record.

However, employers should not assume that all the information they hold that relates to an individual employee would constitute an employee record. For example, the Office of the Australian Information Commissioner (OAIC) have given the example of financial correspondence received into an employee’s work email account. Whilst an employee’s bank details may fall within the meaning of ‘employee record’, the specific emails and their contents that an employee receives from their financial institution that is sent to their work email account, may not necessarily be part of an ‘employee record’ as it may not relate to the employment of the employee. Whether or not the content of emails sent or received by an employee forms part of their ‘employee record’ will always depend on the circumstances and you should seek advice regarding your particular case.

How do I know if my employer can view emails sent from my company email address?

If an employer has given notice that workplace emails are or can be placed under surveillance, then it is quite likely that your employer can view emails sent from your company email address. Most organisations have privacy and workplace surveillance policies that stipulate when and why your emails might be viewed by an employer.

If you are disputing your right to access to your personal emails on your work email accounts, the OAIC may have the jurisdiction to hear your complaint if you are arguing that the emails fall out of the employee record exemption prescribed in the Privacy Act. However, as mentioned previously, this is determined on a case by case basis and the law surrounding this area remains somewhat ambiguous. If you are unsure, it is best to seek legal advice. The team at Etheringtons Solicitors are skilled in employment law and are ready and willing to assist you with your enquiry.  If you would like further information, please do not hesitate to contact one of our experienced solicitors on 9963 9800 or via our contact form. For more articles, please see our blog here.