May 26, 2020 | COVID-19, Employment Law
The COVID-19 is a health crisis that has caused extensive disruption to our way of life. Lockdown placing restrictions on travel and cautious spending habits, it is unlikely that the economy will see an immediate recovery to previous activity levels. This has had a notable impact upon workplace law as many employees have been stood down or made redundant. In response, the Fair Work Commission has acted to vary industry awards and will continue to conduct hearings for cases of unfair dismissal.
Redundancy and being ‘stood-down’
Many businesses have been shut down for being a non-essential business, or a result in reduced demand due to restrictions on movement. It is likely that the unemployment rate will take a long time to recover as a result of this environment of fear and uncertainty.
If you have been made redundant or stood down, it is important that you seek legal advice on whether the decision complied with the basic principles of workplace law. Unlawful termination of contracts of employment or enterprise agreements and unfair dismissal is a key issue in most employment law cases.
Unfair Dismissal
Fair Work Commission (‘Commission’) is conducting hearings and conferences for general protections and unfair dismissal but by way of phone or videoconference. If you have believe that you have been unfairly dismissed, you must apply to the Commission within 21 days of your dismissal taking effect. It is recommended that you seek legal advice prior to lodging an application to explore other avenues of action you could take.
Award Implications
The Fair Work Commission is in the process of varying industry awards to allow for more flexibility during the COVID-19 pandemic. On 8 April 2020, the Commission made determinations to vary 99 awards to provide for unpaid pandemic leave and great flexibility for annual leave for employees. The changes to these awards provide for two weeks of unpaid pandemic leave and the ability to take twice as much annual leave at half their normal pay if their employer agrees.
These measures will are temporary and are in effect until 30 June 2020. The leave does not need to have been accrued and is not pro-rated for employees who do not work full-time. If you are an employee looking to take unpaid pandemic leave, you should know your rights under this award as this should not affect other paid or unpaid leave entitlements or require you to use all your paid leave first.
JobKeeker Provisions
Not surprisingly, there has been a surge in applications to the ATO for relief and JobKeeper payments (which are set to be released in May 2020). If an employer is eligible to receive these JobKeeper payments they have an optional right to give an employee a ‘JobKeeper enabling direction’ that entitles them to payments. If an employee agrees to the terms of the JobKeeper payments, this does not diminish their existing rights under workplace laws.
The employee must continue to be paid the same base rate, or the applicable penalty rates, and any other allowances that apply to the hours they work. An employee may be asked to work additional hours, and these hours need to be reasonable. An employee can refuse a request to work, and if the only reason for a request to work additional hours is to ‘match’ the amount of the JobKeeper payment, this is not likely to be a reasonable request. Under general protection provisions of the Fair Work Act, it is unlawful to for an employee to work unreasonable additional hours, or require this to be a condition in order to receive the JobKeeper payment.
Further Information
It is important to be fully aware of your protections as an employee under workplace laws and your employment contract. If you would like more information on how we can assist you with your matter, do not hesitate to contact us on 9963 9800 or at law@etheringtons.com.au. Read more on our blog here for further more information and analysis on the restrictions and rules in place during COVID-19.
Apr 24, 2020 | Business Law, COVID-19, Employment Law
COVID-19 continues to disrupt the operation of businesses globally, presenting new challenges to company directors on how to continue to carry out their duties and obligations. While many directors are focused on the immediate practical implications of operating in these challenging times, directors must ensure they keep in mind their broader obligations to stakeholders under the Corporations Act 2001 (Cth). In this article, we address the potential issues facing directors in the context of the current pandemic.
Directors’ Duties
There are numerous statutory obligations directors must adhere to. Directors must continue their duty to act in good faith and in the best interests of the corporation. Given the uncertainties surrounding the COVID-19 pandemic it may be challenging for directors to determine how their immediate actions may impact the long-term success of the company and its various stakeholders.
While directors must of course focus on the immediate implications of operating in these uncertain times, they must ensure that they continue to act in good faith and in a reasonable manner and make decisions based on the most reliable and up-to-date information in front of them. Continue to place priority on protecting the health and welfare of staff, and consider enacting contingency plans to avoid exposing the company to outside risks.
Financial Reporting and Annual General Meetings
The coronavirus has temporarily impacted companies’ abilities to hold annual general meetings (AGMs). For listed and unlisted public companies required to hold an AGM by 31st May 2020, ASIC has confirmed that it would take no action if AGMs are postponed up to the end of July or if AGMs are held virtually in compliance with s 249S of the Corporations Act. The holding of virtual AGMs is permitted under the Corporations Act, however entities must check whether their constitution restricts meetings being held in this way and seek legal advice on section 1322 of the Corporations Act.
Insolvency and ‘COVID-19 safe harbour’ provisions
The Coronavirus Economic Response Package Omnibus Act 2020 included, among other measures, a new section 588GAAA into the Corporations Act granting temporary relief for financially distressed businesses. The amendments provide a ‘safe harbour’ to grant relief for directors from potential personal liability for insolvent trading.
In order to be able to rely on these measure, the debt leading to insolvency must have been incurred in the ordinary course of the company’s business, during the six month period commencing from the 25 March 2020 (or longer as prescribed in another regulation), and before any appointment of an administrator or liquidator during that period.
In relation to insolvent trading, directors should seek advice early from a qualified and independent advisor about the company’s financial affairs and the options available to manage the disruption caused by COVID-19.
Check out our blog here for further more information and analysis on the restrictions and rules in place during COVID-19.
Further Information
It is important to be fully aware of your duties and obligations as a director during this rapidly evolving and challenging environment during COVID-19. If you would like more information on how we can assist you, do not hesitate to contact us on 9963 9800 or at law@etheringtons.com.au.
Apr 24, 2020 | COVID-19, Employment Law
The Fair Work Commission (FWC) announced on 1 April 2020, that it intends to temporarily amend 103 modern awards in response to the COVID-19 pandemic. This amendment is set to operate until 30 June 2020. The FWC has confirmed that this initiative is intended to provide protection from dismissals for employees. This amendment is intended to provide employers and employees with additional flexibility amid COVID-19. In this article, we outline the temporary variations and what they mean for the impacted awards.
What are the temporary variations?
The FWC has proposed to temporarily vary 103 modern awards to:
- provide employees that are affected by COVID-19 (including full-time, part-time and casual employees) with an option to take 2 weeks unpaid pandemic leave; and
- Offer for employees, through agreement with their employer, to take twice as much annual leave at half the rate of pay.
Some examples of the impacted modern awards are the Aged Care Award 2010, Banking, Finance and Insurance Award 2010 and the Educational Services (Teachers) Award 2010.
A full list of the 103 awards can be found here on the FWC Statement, page 28.
Unpaid Pandemic Leave
The first proposed amendment would allow employees to elect to take up to 2 weeks unpaid leave. This is only available if the employee is “required, by government or medical authorities or acting on medical advice, to self-isolate or is otherwise prevented from working by measures taken by government or medical authorities in response to the COVID-19 pandemic in circumstances where the employee is required to work at premises operated by an employer.”
Employees do not have to use any paid leave before accessing the unpaid pandemic leave, however they must provide reasonable evidence of the need to take unpaid pandemic leave.
Annual leave at Half the Rate
The proposed amendment also provides that an employer and employee may come to an agreement where the employee can elect to take up to twice as much annual leave at half the rate of usual pay. Additionally, the deduction from an employee’s leave loading balance must only be what would have been subtracted for half the period at full pay. For example, if an employee takes two weeks leave at half pay, only one week’s leave is to be deducted from their leave loading balance. It isimportant to note that any agreement between an employee and employer in relation to this scheme should be properly recorded in writing and retained on the employee’s record.
Further Information
With so many changes happening in the legal sector at the moment due to COVID-19 it is important to be fully aware of your rights and obligations as an employee or an employer. If you would like more information on how we can assist you with your matter, do not hesitate to contact us on 9963 9800 or at law@etheringtons.com.au.
Check out our blog here for further information and analysis on the restrictions and rules in place during COVID-19.
Mar 30, 2020 | COVID-19, Employment Law
Under work health and safety laws, all employers have a duty to ensure that their employees’ health and safety are protected as far as reasonably practicable. This means employers are required to take reasonable steps to ensure that the workplaces are without health and safety risks. With the current COVID-19 pandemic, it is important that employers provide as much information as possible about health and safety risks associated with COVID-19, ways to reduce those risks and ensure that they have a system in place to monitor and minimise the risks.
You can:
- restrict employee business travel but you cannot restrict personal travel
- direct employees to work from home if it is necessary to close your workplace for a period of time
- stand down employees in circumstances which the Fair Work Act permits
- direct employees to take annual leave provided that the applicable modern award or enterprise agreement permits.
You should:
- stay up to date with information released by state and federal health departments: www.health.gov.au
- keep employees up to date with health information
- provide hygiene facilities
- ensure that you change the way you interact with customers, for example, at shops:
- “no cash” and contactless card payment only policy install signs to remind customers comply with the social distancing rules
- install barriers so that customers do not stand too close to your workers
- consider directing employees to work from home if it is not possible to maintain the social distancing rule
- develop a contingency plan for the worst case scenario – when one of the employees tests positive.
Going forward, there will be disputes about whether COVID-19 is a workplace injury. This will depend on the circumstances of infection. It will be difficult for one to assess whether the infection occurred in the work place.
As an employer, you should also consider what your obligations are under the workers compensation insurance policy. In order to mitigate risks, you should ensure that you have best practices for work health and safety.
Further information
If you require assistance with understanding your obligations and minimise potential exposure to liability, please do not hesitate to contact one of our experienced employment and litigation solicitors on 02 9963 9800 or law@etheringtons.com.au.
Mar 20, 2020 | COVID-19, Employment Law
Working from home has become the predominant way businesses function given the recent effects of COVID-19 closing many workplaces. But what happens to the employees of a business where the essence of the work requires employee attendance and working from home is not feasible, for example in retail or hospitality? In this article, we explore what legal options employers have during this challenging time.
Standing Down
Normally, an employer can direct its employees to take annual leave during slow business seasons such as Christmas and New Year. What about in circumstances that are beyond the employer’s control and the business has to close?
Under the Fair Work Act 2009, an employer may ‘stand down’ an employee without pay during a period in certain circumstances if that employee cannot ‘usefully be employed’. An example of certain circumstances include industrial action, breakdown of machinery or a cause for which the employer cannot reasonably be held responsible.
A stand down happens when an employer sends employees home if there is no useful work for them to do due to the nature of the business and for reasons beyond an employer’s control. Whether an employee can be ‘usefully employed’ is a question to be determined on fact by having concern to the circumstances that warrant the stand down. For example, a retail company may stand down a worker due to a natural disaster as they are unable to be ‘usefully employed’ during this period of time.
Under this provision in the Act, an employer is not required to pay the employee during the stand down period. Full-time and part-time employees will still accrue annual and sick leave.
The repercussions of a stand down can be difficult for employees as they may be deprived of income for a long period of time. It is important that employers review provisions regarding stand down in modern awards, enterprise agreement or employment contracts to make sure that they comply with the relevant provisions.
What if you can still operate but are struggling with the cash flow?
Most employers would consider redundancy. However, you may consider agreeing with your employees to:
- temporarily reduce their salary;
- send employees on part paid leave; or
- send employees on leave without pay
so that employees can keep their jobs and businesses stay afloat.
Further information
It is important to be fully aware of your obligations and options as an employer during these difficult times. Likewise, employees should be fully briefed on their rights under their employment contracts when they face employment uncertainty. If you would like further information, please do not hesitate to contact one of our experienced employment law solicitors on 9963 9800 or via email at law@etheringtons.com.au.
More information about COVID-19 can be found here: www.health.gov.au
Feb 27, 2020 | Employment Law
It’s important for all businesses to have systems in place to determine whether workers should be classified an employee or independent contractor, as tax, super and other government obligations are different depending on whether the working arrangement is employment or contracting.
Employees generally have PAYG withholding, superannuation (and occasionally fringe benefits tax) paid by the employer.
Contractors generally look after their own tax obligations.
If you, as an employer, get it wrong and fail to meet your obligations, you risk having to pay penalties and charges.
Employee or Contractor: What factors do you need to consider?
There are a number of factors to take into account when determining whether a worker is an employee or an independent contractor.
No single factor can determine if a person is an independent contractor or an employee. To correctly determine whether a worker is an employee or contractor, you need to look at the whole working arrangement.
A worker isn’t automatically a contractor just because they have an ABN or specialist skills or you only need them during busy periods.
Courts will look at the whole relationship between the parties when determining the status of a person’s employment.
The Fair Work Ombudsman has produced a table of common indicators that may contribute to determining whether a person is an employee or independent contractor:
| Indicator | Employee | Independent Contractor |
| Degree of control over how work is performed | Performs work, under the direction and control of their employer, on an ongoing basis. | Has a high level of control in how the work is done. |
| Hours of work | Generally works standard or set hours (note: a casual employee's hours may vary from week to week). | Under agreement, decides what hours to work to complete the specific task. |
| Expectation of work | Usually has an ongoing expectation of work (note: some employees may be engaged for a specific task or specific period). | Usually engaged for a specific task. |
| Risk | Bears no financial risk (this is the responsibility of their employer). | Bears the risk for making a profit or loss on each task. Usually bears responsibility and liability for poor work or injury sustained while performing the task. As such, contractors generally have their own insurance policy. |
| Superannuation | Entitled to have superannuation contributions paid into a nominated superannuation fund by their employer. | Pays their own superannuation (note: in some circumstances independent contractors may be entitled to be paid superannuation contributions). |
| Tools and equipment | Tools and equipment are generally provided by the employer, or a tool allowance is provided. | Uses their own tools and equipment (note: alternative arrangements may be made within a contract for services). |
| Tax | Has income tax deducted by their employer. | Pays their own tax and GST to the Australian Taxation Office. |
| Method of payment | Paid regularly (for example, weekly/fortnightly/monthly). | Has obtained an ABN and submits an invoice for work completed or is paid at the end of the contract or project. |
| Leave | Entitled to receive paid leave (for example, annual leave, personal/carers' leave, long service leave) or receive a loading in lieu of leave entitlements in the case of casual employees. | Does not receive paid leave. |
A simple way to help tell the difference between employees and contractors
The Australian Taxation Office on its website uses the following simple descriptions:
- Employees work in your business and are part of your business.
- Contractors run their own business and provide services to your business.
Why is the distinction important?
Employment relationships are regulated by specific labour protection laws and various awards and workplace agreements. These laws generally provide a higher degree of protection to employees than the general commercial laws that regulate contractor relationships.
This protection includes minimum conditions and standards of employment for employees including minimum entitlements for leave, public holidays, notice of termination and redundancy pay.
Adopt good business processes
Business owners need to keep records to support any decision on whether a worker is an employee or contractor and the factors relied on to make that decision.
Most of the information needed to support the decision can be found in a service contract for independent contractors or an employment contract for employees, which should accurately reflect the actual conditions of the working arrangement.
All contracts should:
- be in writing;
- specify whether it is a contract for services or an employment contract;
- set out the period of engagement and the remuneration;
- include dispute resolution provisions;
- specify if/how the relationship can be terminated.
Penalties
It is illegal for an employer to misrepresent an employment relationship or a proposed employment arrangement as an independent contracting arrangement or make a knowingly false statement to persuade or influence an employee to become an independent contractor.
Under the Fair Work Act inspectors can:
- seek the imposition of penalties for contraventions of sham contracting arrangements;
- apply to the courts to grant an injunction or an interim injunction if an employer seeks (or threatens) to dismiss an employee for the purpose of engaging them as an independent contractor. The purpose of the injunction would be to prevent the dismissal from occurring, or otherwise remedy the effects. Courts can also make other orders to have the employee reinstated or compensated.
If you need more information or if you need assistance or advice on how to proceed please contact us on (02) 9963 9800 or via our contact form.
