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.

The New Industrial Relations Reforms for Casual Workers

The New Industrial Relations Reforms for Casual Workers

The Federal Government is set to introduce a highly anticipated reform of industrial relations laws following a recent case that is now set to appear before the High Court of Australia. The new reforms include arrangements in relation to casual employees that are aimed at circumventing the ‘double dipping’ concern following the case of WorkPac Pty Ltd v Rossato. In this blog, we review the changes to the industrial relations laws and outline the case that lead to this controversial decision.

What’s changing?

On 9 December 2020, the federal Government announced the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020. The reforms include an arrangement for casual workers that could bestow upon them stronger rights for ongoing employment. However, it also limits the liability of employers for paying casual leave loadings as well as paying other benefits such as annual leave.

One key change is the introduction of a legal definition of ‘casual work’ under the Fair Work Act. It is worth noting that no definition currently exists in the Act and this definition could help clear up much ambiguity regarding the implication of casual working arrangements.

The Act will define a casual employee as a person who:

(a) is made an offer of employment by the employer on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work; and

(b) the person accepts the offer on that basis.

Moreover, the changes also mandate that an employer must make a permanent part-time or full-time job offer to a casual employee with a regular pattern of hours if:

(a) the employee has been employed by the employer for a  period of 12 months from the day the employment started; and

(b) during at least the last 6 months of that period, the employee has worked a regular pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to work as a permanent full-time or part-time employee (as the case may be).

However, the employer is not required to make this offer if (based on facts that are known or reasonably foreseeable at the time) they have reasonable grounds not to make the offer.

These proposed amendments will not be voted on until 2021.

WorkPac Pty Ltd v Rossato

The changes introduced by the Federal Government come after much concern for the financial welfare of Australian businesses following a recent decision by the Full Federal Court in the case of WorkPac Pty Ltd v Rossato. To read more about this case, read our article linked here.

The High Court of Australia has allowed WorkPac Pty Ltd special leave to appeal the decision of the Full Federal Court. The decision is not set to be handed down until mid-2021.

The Federal Government has said that the proposed amendments will address the ‘double- dipping problem created by the Rossato decision’, so casual workers will not be entitled to both the 25% casual loading as well as the permanent benefits package (comprising annual leave, personal leave, notice of termination or redundancy pay).

Get legal advice

With many ambiguous changes to employment law set to be introduced in the coming year, it is important to seek legal advice if you are unsure about your employment contract or concerned about your potential liability as an employer. You can contact the highly skilled employment law team at Etheringtons solicitors via our contact form or call 02 9963 9800 for a no-obligation discussion.

Illegal interview questions you can’t ask a prospective employee

Illegal interview questions you can’t ask a prospective employee

An employer’s potential liability for workplace discrimination arises before the first interview and exists whether or not a decision is made to hire a person.

A job interview is integral to the recruitment process and provides an opportunity for the employer to ask questions, check credentials and determine a prospective employee’s suitability for a position. It also provides reciprocal opportunities for candidates to find out more about the role and the organisation and to assess their interest in the position.

Naturally, both parties want to find the ‘right fit’ however the employer is largely in control of the interview process and may go about finding the right person in the wrong manner.

By asking a candidate certain ‘illegal’ questions during the interview process, employers risk breaching Commonwealth and / or State laws aimed to protect individuals against discrimination in the workplace.

So, what are illegal interview questions?

When interviewing a candidate for a position, the primary focus of the questions asked should be to assess the applicant’s inherent ability to perform the key functions of the role.

Employers should avoid asking questions about certain unlawful factors for which a candidate’s answer could be construed as determinative to the success, or otherwise, of his or her application. These include questions about age, gender, sexual preference, ethnicity, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion or social origin. Essentially, these matters are considered irrelevant in determining a person’s capacity to perform the role.

Even the most innocent questions (such as those that might be asked during the course of social conversation) could be considered unlawful during a formal interview. The following are some examples:

  • How do you manage work with three children?
  • How old are you?
  • Does your disability prevent you from carrying out your job?

These questions have something in common – they are questions that might be asked of a particular category of applicants (those with children, over 50 years of age or with a disability) that would not necessarily be asked of other applicants.

Other questions that may result in a discrimination complaint include:

  • What is your religion?
  • Where were you born?
  • Are you working at the moment?
  • Have you had a workers’ compensation claim?

These questions are unnecessary when determining an applicant’s ability to carry out the duties required of the role and should be avoided. Deciding that an applicant is unsuited for the position based on an answer to one or more of these questions may result in discrimination action.

Asking the right questions

Potential claims for discrimination can be minimised by re-thinking your approach to how questions are asked and having a detailed job description to refer to during the interview process. This helps keep the interview on track and ensures only the essential requirements of the position are addressed.

Organisations are encouraged to implement a set of standard interview questions that focus on the key skills and requirements of the position. This may include asking applicants to demonstrate how their skills and personal qualities make them an ideal choice for the role. An effective way to achieve this is to ask for examples of how the applicant has achieved certain outcomes or reacted to particular situations in previous roles. For example, you might ask, ‘please explain how you managed an irate customer during your time as service representative with XYZ’.

Following are some examples of discriminatory questions, together with an alternative approach that can be used to obtain the necessary information from a candidate.

Injuries / physical disabilities

It may be necessary to discuss an applicant’s injuries or physical condition to determine objectively whether he or she would be able to safely perform, without personal risk or risk to others, the duties required.

Rather than asking directly about his or her condition, the interviewer should go through each element of the job and, where relevant, discuss what adjustments to the workplace might be required to assist the applicant perform these duties. Appropriate questions may include:

‘Are there any reasons why you may not safely be able to lift 5 kg?’

‘Are there any specific adjustments we would need to make so you could carry out the duties required?’

This demonstrates that the employer has genuinely considered the applicant who may be an ideal fit, with a few minor modifications to the workplace.

Age

Asking an applicant his or her age is unlawful particularly if the employer is assuming that the person, due to age, lacks the energy, drive or technical ability to carry out the role. Basing questions on the applicant’s skills, experience and inherent ability to perform these tasks, rather than querying their age will help minimise a discrimination complaint. An appropriate question would be:

‘Tell me about your computer experience…what types of programs have you used?’

Family commitments

It is unlawful to discriminate against a candidate based on his or her family circumstances. Rather than asking applicants if they have children or family commitments, simply ask whether they are able to commit to the hours / days required of the position. For example:

‘The job will occasionally require you to work evenings and weekends – would this conflict with other commitments?’

Religion or Race

It is unlawful to rule out an applicant whom you assume will be unable to work weekends due to religion, race or culture. If the job requires weekend work, simply point out the required days and ask the applicant whether he or she would have any issues working these days.

Currently working

Asking an applicant if he or she is currently working could be perceived as discrimination on the grounds of employment, unemployment or receiving a pension. Instead, ask when the applicant would be available to start work.

Conclusion

Avoiding workplace discrimination starts before the recruitment process and continues throughout the employment relationship (including opportunities for career progression), during workplace investigations and termination processes.

Framing questions appropriately to minimise potential action for unfair discrimination and to give candidates an opportunity to demonstrate whether they can perform the job requires sound procedures and ensuring those involved in the recruitment process are aware of their obligations.

If you or someone you know wants more information or needs help or advice, please contact us on (02) 9963 9800 or via our contact form here.

Avoiding Redundancy Traps

Avoiding Redundancy Traps

Employers can easily fall into dispute with their employees by failing to properly handle redundancies. There is often uncertainty surrounding redundancy, in terms of handling it within the law, as well as cost.

Redundancy commonly occurs when a business is sold and a new owner offers jobs to the vendor’s existing workforce. Some employees decline the offer of employment by the new owner. In this context, an issue can arise as to whether or not redundancy payments need to be made to an employee who rejects an offer of employment by the new owner.

Notice and Severance distinguished

Notice and severance payments should not be confused. The period of notice provides the employee with a chance to seek other employment while a severance payment is intended as compensation for the loss of future entitlements to long service leave and accrued sick leave.

Redundancy

Let’s examine what redundancy means. The best way to define redundancy is that the employer no longer wishes the duties the employee has been performing to be undertaken by anyone. Termination of the employee on this ground has therefore nothing to do with poor performance or misconduct. Essentially the work or role is no longer required to be performed by any employee. Redundancy can also happen when an employer becomes insolvent or bankrupt, or following a re-structure, in order to increase the competitiveness or profitability of a business.

The employer must meet any requirements under a relevant award or enterprise agreement regarding redundancy. This includes discussions with the employee about the prospect of redundancy in view of operational changes or restructuring.

Employers need to be aware that a redundancy which does not meet the above criteria may expose them to an unfair dismissal claim. It should also be appreciated that a redundancy does not remove the need for notice or payment in lieu of notice.

Some employers fall into the trap of going through a ‘redundancy’ and then immediately afterwards advertising the same position. From an employer’s perspective it is prudent to assume the former employee will check your advertised positions.

It is not uncommon for an employer to seek to portray what may in fact be, a wrongful termination of an employee, as a “redundancy”.

The employer needs to ensure that, on examination of the facts, whilst the employee may have no legal claim to a severance payment, there is no basis for a common law claim.

What is a ‘genuine redundancy’?

If an employee has been made redundant and that redundancy is a “genuine redundancy” as defined by the Act, then the employer will be able to defend a claim for unfair dismissal.

Under the Act, it is a “genuine redundancy” if:

  • the person’s employer no longer requires the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and
  • the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment regarding the redundancy; and
  • it is not reasonable for the employer to redeploy the person in the employer’s enterprise or an associated entity of the employer’s enterprise.

It is important that the employer who is making an employee redundant not only complies with the consultation provisions of any applicable award or enterprise agreement, but also makes enquiries to make sure that there is not a suitable alternative position available within the employer’s business or any other “associated entity” of the employer.

When should a redundancy payment be made?

When an employee is made redundant then usually a redundancy payment will be required by the employer and this is often called severance pay.

However, the employee is not entitled to redundancy pay under the Fair Work Act if the employee:

  • resigns;
  • is terminated other than due to redundancy, e.g. misconduct or performance issues;
  • has been employed for less than 12 months;
  • is employed in a small business with less than 15 employees;
  • was employed for a fixed term and that term has ended;
  • is a casual employee.

The amount of any redundancy payment is calculated by reference to the employee’s years of service. For example if the employee has worked for a period greater than one year but less than two the redundancy period payable would be 4 weeks. If the term was between 9 to 10 years the period would be 16 weeks.

However, an employer may not be required to pay the redundancy for the full length of service if the employee did not have any redundancy entitlements with the employer in question, prior to 1 January 2010. In those circumstances the period from which redundancy payments are calculated is 1 January 2010 rather than the full length of service.

In conclusion – take care

It is easy to fall into one of these employment law traps and employers should be satisfied as to the circumstances that constitute a redundancy, carefully review payments to be made and comply with the Act’s requirements in relation to a “genuine redundancy”.

Regardless if you are an employer or employee, if you feel you need assistance call us on (02) 9963 9800 or connect with us via our contact form.

How effective are your Post Employment Restraints?

How effective are your Post Employment Restraints?

Much damage can be done to a business when an executive or senior manager resigns, taking with them valuable customer and confidential information. Restraint of trade clauses, or post-employment restraints, play a crucial role in protecting the legitimate interests of the employer.

In order to protect business interests employment contracts should contain protections which operate after the employment ends.

The purpose of Restraint of Trade Clauses

Restraints of trade are included in employment contracts to protect an employer’s trade secrets, confidential information, customer connections and staff connections by restricting an employee’s activities after they have left employment.

A restraint clause is void unless it is reasonably necessary to protect the legitimate interests of the employer. The legitimate interests of a business will generally relate to confidential information, trade secrets and customer connections.

Accordingly, a restraint clause in an employment contract will only be enforceable if the restrictions imposed are no more than necessary for the protection of the employer’s legitimate business interests – this will depend on the particular clause and the circumstances of each case.

A restraint clause typically prevents an employee from:

  • contacting the employer’s clients for the purposes of selling goods or services or enticing the clients away from the employer;
  • setting up a business competing with the employer’s business or working in a competitive business; and
  • poaching employees of the business.

Reasonableness

When determining whether restraint clauses are reasonable, courts will consider the following:

  • The negotiation process, and in particular comments made when negotiating restraint clauses.
  • The bargaining position of the parties. Was there an imbalance of power between the employer and the employee at the time of agreeing to the restraint?  Did the employee have the opportunity to obtain legal advice?
  • The nature of the employer’s business and characteristics of the employee. The closer the employee is to the employer’s customers, the more likely the restraint may be considered reasonable.
  • Whether any consideration was given for the restraint.
  • The duration and geographical area of the restraint. The longer the time and wider the area, the less likely it will be reasonable. 

The reasonableness of the restraint must be decided at the date of entering into the employment contract. For this reason, it is important that the parties to the contract each have an opportunity to negotiate the terms of a restraint. In addition, employees should be encouraged to seek legal advice about the length and the effect of the restraint.

The trend of Waterfall or Cascading Clauses

Restraints are often applied for a specified period, in relation to a particular geographic area.

A common device for reducing the risk of invalidity on the ground of unreasonableness is to include ‘waterfall’ or ‘cascading’ clauses. These are alternate provisions contained in an employment agreement that may enable a court to strike out a harsher (unreasonable) restraint whilst retaining a less-restrictive and reasonable clause.

The advantage to these is that each clause is severable by a court without affecting the validity and enforceability of the restraint.

How do courts enforce restraint of trade clauses?

Employment contracts and restraint of trade clauses must be carefully drafted to ensure they can be enforced through a court. In such cases, an employer must persuade the court that the clause is reasonable and therefore valid and enforceable.

When considering enforceability, the court will consider two key issues:

  • whether the employer has a legitimate interest to protect; and
  • whether the restraint is a reasonable protection of that interest

What are the legal remedies?

The common remedy sought by employers faced with an employee’s breach of a restraint clause is to seek an injunction to restrain an employee or former employee from acting in a way, or continuing to act in a way, that breaches a term of the former employment contract. For example, an injunction may prevent a former employee from working for a competitor for a certain period of time or from using or disclosing information confidential to the former employer and its business.

Some Tips for business owners

Some tips for drafting restraint clauses in employment contracts:

  • Make sure the period of restraint is appropriate to the employee’s position and access to confidential information.
  • Make sure the prohibited activities to be prevented are similar to the employee’s current activities.
  • Ensure contracts are reviewed regularly and updated to reflect changes in the employee’s role.

Conclusion

Having an enforceable and valid restraint in employment contracts is crucial if an employer hopes to rely on it to enforce a former employee’s post-employment obligations.

This issue needs to be considered by employers when the employment contract is drafted because a court will consider the reasonableness of the restraint as at the time the contract was entered into. The courts will only find that a restraint clause is valid and enforceable where a business can demonstrate that it has a legitimate interest to protect and that the clause is reasonable.

We are able to review, draft and advise on restraint clauses and their enforceability generally.  If your business needs assistance, please contact us on (02) 9963 9800 or via our contact form here.