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Can I Have Pets in an Apartment?

Pets may be a vital part of your family. But, if you live in an apartment, the rules about keeping pets have been mixed and unclear. The laws also vary in different states in Australia. New South Wales law has recently changed. Following a Sydney court judgment, owners’ corporations can no longer implement blanket bans on pet ownership in apartments or units. This article will explain:
how the rules cover pet ownership in apartments;recent changes to NSW by-laws regulating pet ownership; and how the new change will work in practice. 
What Rules Cover Apartments and Units?  
Most buildings that include more than two dwellings fall under an ownership system called a strata scheme. These buildings include apartments, unit blocks or townhouse developments.
In a strata scheme, each dwelling or ‘strata’ is owned separately. Together, the owners form a legal entity called an owners’ corporation (previously known as a body corporate). The owners’ corporation manages the common property and oversees repairs, maintenance and regulation required for the building. The common property includes all parts of the building accessible by all owners, such as driveways, foyers and gardens. All members jointly own the common property.
Each owners’ corporation has by-laws, which are rules that cover the day-to-day housekeeping for the building and the common property. The by-laws cover issues like parking and gardens, garbage and pets. For example, by-laws may grant exclusive use of common areas to particular owners. 
An owners’ corporation can make and register its own by-laws. Alternatively, they can adopt standard or ‘model’ by-laws provided through existing strata legislation. Any by-laws made by an owners’ corporation cannot be harsh, unconscionable or oppressive to owners. If an owners’ corporation wants to change or introduce any by-laws, it must do this at a general meeting. Once by-laws are passed, they are registered on the title of the property.

A by-law is only enforceable if 75% of members vote in favour of it at a general meeting of all members of the owners’ corporation. 

I’m Renting – Can I Have a Pet?
The same by-laws apply to both renters and owners in an apartment or unit block. However, renters may have additional rules that are covered by the lease they enter with the landlord. You should ask your real estate agent for a copy of a building’s by-laws before you sign a lease, so you can ensure they will be suitable for you. Even if the by-laws allow pets in the building, in some states, a landlord may not allow pets in an individual apartment or unit.
Before you sign a new lease, check if it specifically covers pet ownership. You should obtain the consent of the landlord before moving into an apartment with a pet. If you are already renting a property and want to buy a pet, you should ask the agent or landlord for consent before doing so. If you don’t, you risk eviction from the property.
New Case Law in NSW
Recently, the owner of a high-rise apartment in inner-city Sydney wanted to keep her pet miniature schnauzer, Angus, in her apartment. However, the apartment block’s by-laws banned all pet ownership in the building. The owner took the owners’ corporation to court, arguing the rules were unfair and asking the court to overturn the no-pets policy. The owner spent more than $250,000 in legal costs, and the court case took more than four and a half years, ending in the NSW Court of Appeal. 
In October 2020, the court found that the owners’ corporation could not make by-laws that impacted what owners did inside their own homes. Specifically, the court said owners’ corporations could not ban pet ownership in apartments. The case may impact all strata developments in NSW and potentially affect the limits on other types of by-laws that owners’ corporations can introduce. 
The Rules Around Pets in Apartments 
Even if your owners’ corporation allows pets in the apartment, you still need to follow certain rules. As a pet owner, you have a responsibility to ensure your pet does not cause problems for other owners in the apartment block. If your pet causes concerns with other owners, there is a chance the owners’ corporation may apply for orders to permit your pet from the building. 
Common rules around owning pets in apartments may include: 
dogs must be on a leash and supervised at all times in common areas; owners must clean or repair any mess or damage the pet makes to common property; pets must be house trained; limits on the number of pets kept in an apartment; andpets must not be excessively noisy or impact other residents in any negative way.
Owners’ corporations give exceptions to pets working to assist people with disabilities. For example, ‘assistance animals’ including guide dogs for bling persons.
Key Takeaways
The rules about pet ownership in apartments and units have been varied in Australia. There are often different rules across states and within particular owners’ corporations in some buildings. A 2020 court judgment in NSW changes the regulation of pets in buildings. Specifically, owners’ corporations can no longer place a blanket ban on pets. 
Whether you own or rent, it is important to understand the by-laws that cover pet ownership in your building. This includes any behaviour that could get your pet permanently banned. If you have any questions about pet ownership in apartments or the laws around strata ownership, contact LegalVision’s litigation lawyers on 1300 544 755 or fill out the form on this page.  

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What Is a Subsidiary Company?

Running a successful business involves understanding the best way to structure your company. You are able to structure your businesses so that there are multiple companies within the same corporate group. The main advantage of this structure is to separate assets or divisions of a business and ringfence liabilities. One way to structure your businesses is through the parent-subsidiary relationship. This article will explain what a subsidiary company is and the reasons for structuring your business using subsidiaries.
What Makes a Company a Subsidiary?
Where a company controls or majority-owns another company, that company is a subsidiary company. A parent company or holding company will then control or own the subsidiary. Company 1 will be a subsidiary of Company 2 if they can answer ‘yes’ to any one of the following questions:
does Company 2 have the power to appoint or remove a majority of the directors of Company 1; roes Company 2 have the right to cast more than 50% of the votes that may be cast by the shareholders of Company 1; ordoes Company 2 own more than 50% of the shares in Company 1?
If Company 2 owns 100% of the shares in Company 1, Company 1 is a wholly-owned subsidiary of Company 2. Generally, Company 2 will be referred to as a holding company if its sole purpose is to hold shares in its subsidiaries. If Company 2 also operates a business, then it is generally a parent company. 
A company may also be an indirectly held subsidiary of an ultimate holding company. This structure occurs if a company is a subsidiary of another company which is already a subsidiary of an ultimate holding company. If a company owns less than 50% of the shares in another company, it will be called ‘affiliates’, ‘associates’ or ‘related entities’. 
Using Subsidiaries to Separate Businesses 
A large or diverse business that operates from different sites or consists of different aspects may be structured using subsidiaries. 

For example, the owners of a hairdressing business may operate three different hair salons. Consequently, the owners may set up three subsidiaries. Each hair salon will own the property or the lease of the property where the salon operates from, plus the assets from that salon. It will also be responsible for the operating expenses and liabilities of the individual salon that it owns. 

The holding company may decide to own various subsidiaries if it gains businesses by way of purchasing the entire share capital of the operating company of those businesses. 
Why Separate Business?
An advantage of this structure is that if one subsidiary company is in financial difficulty, the others are safe from external creditors. In the example above, if one hair salon is unable to repay its debts, a creditor claiming against the company is unable to recover any amounts from the other salons. The other salons are protected by virtue of being held in separate subsidiary companies. An exception to this is if a subsidiary has given a guarantee concerning the obligations of another subsidiary. In this case, it will be liable for the debts of the other company. 
A holding company will fully own each of its subsidiaries. The purpose of this structure is solely to hold the shares within the subsidiaries. 

From the example above, the business owner may want to give an ownership interest to a salon employee without giving them total ownership of all three salons. In this case, shares can be issued to the employee by the relevant operating company.

The operating company will still be a subsidiary of the holding company for so long as it owns at least half of the shares (or satisfies one of the other tests set out above). If multiple shareholders own a subsidiary, it is good practice for the holding company to enter into a shareholders’ agreement. Likewise, the minority shareholders should govern the relationship between the shareholders and set parameters around the operation of the business by its Board. 
Using Subsidiaries to Separate Key Assets
Equally, a smaller business that carries only one operation may have key assets that it wishes to protect. To do so, it may set up a holding company structure. This usually consists of one holding company and one wholly-owned subsidiary. 
The key asset, for example, a trademark or a franchising contract, will be owned by the holding company. The business will be owned and operated, and all liabilities will be incurred, by the subsidiary. Hence, any key assets are safe from any claim brought against the operating entity because the subsidiary does not own it. 
Is a Branch or Division the Same as a Subsidiary?
A subsidiary is a separate entity with its own legal identity. It can enter into contracts, own assets, incur liabilities and employ staff. 
Both a branch and a division are part of a company and are not separate entities. Usually, a branch runs part of a business in a different location to the rest of the company. The term division typically refers to an arm or specific operation of a business. If you are entering into a contract which relates to a branch or division, it will be entered into by the company that operates the branch or division.
Accounting and Tax Treatment
Each subsidiary in a group is a separate company which will have its own assets and liabilities. Hence, each subsidiary should keep separate financial records. There may be transactions between a subsidiary and its holding company or other companies in its corporate group. For example, you should record any payments for shared services.
Equally, each subsidiary may be treated as a separate company for tax purposes. However, it is possible for holding companies to prepare consolidated financial statements. These statements reflect the assets and liabilities of all of the subsidiaries in its group. Additionally, it may also be possible to submit income tax returns on a consolidated group-wide basis. 
You should contact your accountant or financial adviser to find out whether your business can submit income tax on a consolidated basis.
Key Takeaways
Where a company controls or majority-owns another company, that company is a subsidiary company. Subsidiaries can be useful to:
ringfence businesses and assets from the rest of a corporate group;separate your business into several small individual businesses; or to protect key assets. 
If you are considering to structure your businesses through the parent-subsidiary relationship, contact LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.

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Am I Eligible For The Global Talent Visa?

If you are interested in living and working in Australia, you may be eligible for the Global Talent Visa. The visa attracts highly qualified, experienced and exceptionally talented individuals to live and work in Australia as a permanent resident. In particular, those who can demonstrate the relevant skills in a number of targeted health, technology, scientific and financial sectors.
The Global Talent Visa is part of a federal government initiative to help support the post-COVID recovery and boost local jobs. As a result, the Department of Home Affairs plans to invest heavily in the Global Talent Independent Program (GTIP) and has tripled its intake to 15,000 for the 2020/2021 fiscal year. 
This article will explain the benefits, eligibility criteria, process and costs associated with the Global Talent Visa.
Benefits of a Global Talent Visa
Provided the eligibility criteria can be met, the Global Talent Visa is an extremely attractive option over other permanent residency visas (such as the skilled independent visa – subclass 189 and 190) or employer-sponsored visa (subclass 186). 
This is because eligible candidates:
do not need to provide a skills assessment;are not required to meet the minimum points threshold; are not required to meet minimum English requirements;do not require state/territory nomination or employer sponsorship; can be up to 55 years of age or older if they can demonstrate exceptional economic benefit to Australia; andcan be a recent Bachelor (Honours), Masters or PhD graduate in one of the key target sectors. 

If your employer is not willing to nominate you for permanent residency under the subclass 186, and provided you can meet the eligibility criteria, this may be an option for you to remain in Australia permanently. 

Eligibility Criteria
As a highly-skilled candidate with a relevant Masters or PhD, the Global Talent Visa is an attractive option for you. Your eligibility for this visa is determined based on the following criteria. You:
have an internationally recognised record of exceptional and outstanding achievements;are prominent in your field of expertise;would be an asset to the Australian community;would have no difficulty in obtaining employment, or becoming established independently, in Australia in your area of talent;have an organisation or individual in Australia with a national reputation in the same field, who can attest to your record of achievement;have a current or potential income of AUD $153,600; meet onshore qualifying visa requirements including Schedule 3 (if applicable); and your application has been made in relation to one of the following target sectors, or a related sector:

AgTech
FinTech
MedTech
Cyber Security
Space and Advanced Manufacturing
Energy and Mining Technology
Quantum Information, Advanced Digital, Data Science and ICT.

Unlike the skilled independent visas (subclass 189, 190 and 491) and the employer-sponsored visas (subclass 482 and 186), there is no occupation list for the Global Talent Visa.
Visa Process
Regardless of whether you are onshore or offshore,  there are several steps in securing the Global Talent Visa: 

submit an Expression of Interest (EOI) to the GTIP and wait to receive a unique identifier number (UIN); 
secure a nominator and complete Form 1000; and 
submit a visa application for a subclass 858 – distinguished talent visa (DTV).

Seeking Nomination For The Global Talent Visa
You are required to select a nominator and have them complete Form 1000 at the time of lodging your DTV application. A nominator must be:
an Australian citizen; oran Australian permanent resident; oran eligible New Zealand citizen; oran Australian organisation.
The nominator must be able to attest to your international and exceptional record of achievement, based on their expertise in the same area. 
Only one nominator is necessary for your application; if you provide more than one nomination, the Department may request that you select only one nominator. However, you can provide as many letters of support from:
Australian citizens;Australian organisations; and internationally recognised individuals or organisations in your area of expertise to support your application. 

When submitting your EOI to the GTIP, it is not a requirement for you to have a nominator but it does strengthen your EOI to include a completed Form 1000 identifying an appropriate nominator.

You can also change your nominator between the time of submitting an EOI and lodging the DTV application. However, once you submit your DTV application with a completed Form 1000 (identifying your nominator), you will not be able to change nominators. 
Processing Times
After submitting an EOI to the GTIP, it can take anywhere from a few days to a few months to receive a UIN. Please note that the GTIP is experiencing extensive delays in assessing EOI requests and some eligible candidates are likely to wait three to four months (possibly longer) to receive an outcome. 
After receiving a UIN, you can proceed to lodge a DTV application. The DTV application processing time is between one and two months from the time of submission. This is an incredibly fast turnaround for applicants to achieve Australian permanent residency. 

If you are onshore, you can now apply for the DTV if you hold a substantive visa, a bridging visa A, B or C (a substantive visa is any visa that is not a bridging visa). Historically, onshore applicants who held a visitor visa or bridging visa were not permitted to apply for the DTV. However, new regulations introduced from 14 November 2020 have removed these barriers and allow more eligible applicants to apply.

Visa Application Costs
As of November 2020, the following DTV application fees apply:
   Primary Applicant   $4,110   Applicant over 18   $2,055   Applicant under 18   $1,030

Additional costs may include health examinations, police checks, translations of documents, and so forth.
Key Takeaways
As an exceptional candidate with expertise in one of the target sectors, you may be eligible to apply for the Global Talent Visa. The visa offers a priority processed and streamlined pathway to Australian permanent residency. The Australian Government is highly invested in the GTIP as part of its initiatives to assist in Australia’s economic recovery post-COVID-19. 
If you are considering applying for this visa, LegalVision’s expert immigration lawyers are offering complimentary 15-minute consultations to any potential candidates who would like to discuss their eligibility for the Global Talent Visa. To make an appointment, call 1300 544 755 or complete the form on this page.

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How and When Should My Employees Accept Workplace Policies?

Workplace policies can be a valuable tool to effectively communicate with employees and reduce your legal liability. You need to ensure employees are aware of, understand and agree to comply with your workplace policies. This article sets out:
what workplace policies are;differences with an employment contract; and when and how new and existing employees should accept and access them.
What Are Workplace Policies?
In short, policies are written directions from the employer to employees (and other workers such as contractors and volunteers). As an employer, you’re entitled to make lawful and reasonable directions to employees verbally or in writing including using policies. They are useful as a way to efficiently and consistently communicate key items to your employees without having to direct each employee individually. There are two types of policies: 
operations policies; andcore policies.
Operations Policies
Operational policies speak to any business matters that you wish to efficiently communicate and may include matters such as parental leave, expenses or company car usage.
Core Policies
Core policies may speak to your legal liability by demonstrating that you took reasonable steps to prevent certain conduct that you are otherwise vicariously liable for. Such conduct could include:
bullying;harassment; and conduct which would put workers’ work health and safety at risk. 
The core recommended policies are:
a work health safety (WHS) policy;an anti-discrimination harassment and bullying (ADHB) policy; andan information technology (IT) policy.
Policies can also be a basis for disciplinary action or performance management as well as a tool to defend a claim such as an unfair dismissal claim. Your policies should include that a breach may result in disciplinary action including termination. 
Breaching a policy alone may not be sufficient to justify or defend termination, but may assist you along with other items and this will depend on the facts.
Differences Between Workplace Policies and an Employment Agreements
An employment agreement includes the terms of the employment between you as the employer and the employee. It includes key items such as:
intellectual property;confidentiality;probation;termination including notice period; andspecifics of the engagement such as remuneration, duties and hours of work.
It can only be varied by written agreement and it should not create unnecessary obligations on the employer to avoid being in breach of the agreement.
By contrast, policies are not an agreement but written directions from you to the employee. They can be varied at any time so long as changes are meaningfully communicated to employees. It is best not to include any promissory language or create unnecessary obligations on the employer in the policies.
When Should New Employees Accept Workplace Policies?
On that basis, employment agreements should be separate to policies and should not incorporate policies. If your employment agreement makes reference to and includes policies, this has the potential to expose you to breach of contract claims where the policy is breached by the employer.
Although employers may like to issue policies along with the contract of employment as a starter pack, that can risk the policies forming part of the contract. Best practice is to issue policies and the contract at different times. A good approach would be to issue the contract before the employee starts work and then provide the policies on commencement.
How Should New Employees Accept Workplace Policies?
You can provide your policies to new employees in hard copy or over email on commencement. You should require them to read them and respond in writing that they have read, understood and will comply with the policies. They can complete this by signing a declaration at the end of the policies or confirming via email.
How Should Existing Employees Accept and Access Workplace Policies?
You should maintain your policies in one easy to find place. This is typically on your company intranet page. In addition, you should regularly send them to employees to receive confirmation in writing they will comply with the policies.
For new policies or changes, you should send a business-wide email updating employees and require all employees to read the new or amended policies and agree in writing to comply with them.
In some circumstances, acceptance in this form is not sufficient. This will depend on the nature and circumstances of your business and you may consider carrying out regular training on the policies.

For example, for a construction business, you may wish to undertake regular training on employees’ WHS obligations including with respect to your WHS policy. If you’ve recently investigated workplace harassment, you may also wish to respond by undertaking training on workplace harassment including with respect to your ADHB policy.

Key Takeaways
As an employer, workplace polices can be an important tool to manage and discipline employees as well as reduce your liability. It is important to ensure they are communicated and agreed to separately to the employment agreement to avoid breach of contract and so you can vary your policies without agreement. Instead, provide the policies at a later time, for example, on commencement of employment. You should maintain easy access to the policies, regularly communicate existing policies and update employees on changes to policies. If you need help writing your policies or understanding your obligations at law, contact LegalVision’s employment lawyers on 1300 544 755 or fill out the form on this page.

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What Are the Industrial Manslaughter Penalties in My State?

As an employer, you may face situations where a worker is seriously injured or dies in the workplace. In these circumstances, you may be liable for industrial manslaughter penalties. Industrial manslaughter laws differ between the Australian states. They aim to prevent workplace deaths and deter employers from breaching health and safety duties owed to workers. You must understand how industrial manslaughter offences arise and establish effective work health and safety systems. This will minimise the risk of workplace deaths and incurring severe penalties. This article explains the industrial manslaughter offences and penalties in each state.
Industrial Manslaughter in Australia
New South Wales
The death of a person at work may constitute manslaughter in NSW. It is captured by the category of ‘gross negligence or reckless conduct’. The offences apply when an employer is grossly negligent or reckless in breaching a health and safety duty owed to a worker and exposes that worker to a risk of death or serious injury or illness.
The maximum penalty is 25 years imprisonment or 6,925 penalty units (currently $761,750). An individual could face both penalties while a body corporate could face 34,630 penalty units (currently $3,809,300).
Victoria
The workplace manslaughter offences apply in Victoria when an employer negligently breaches a health and safety duty owed to a worker and causes the death of that worker.
The maximum penalty is 25 years imprisonment for an individual or 100,000 penalty units (currently $16,522,000) for a body corporate.
Queensland
The industrial manslaughter offences apply in Queensland. It occurs when an employer negligently causes the death (or injury and then death) of a worker while the worker is carrying out work for the business.
The maximum penalty is 20 years imprisonment for an individual or 100,000 penalty units (currently $13,345,000) for a body corporate. The District Court of Queensland recently convicted an auto wrecking business for industrial manslaughter arising from the injury and death of a worker. The Court imposed a $3,000,000 penalty on the company. It also imposed a suspended 10 months imprisonment term for the directors of the company.
Australian Capital Territory
The industrial manslaughter offences apply in the Australian Capital Territory. They apply when an employer negligently or recklessly causes the death (or injury and then death) of a worker in the course of the worker’s employment.
The maximum penalty is 20 years imprisonment or 2,000 penalty units. This is currently $320,000 for an individual or $1,620,000 for a body corporate, or both.
A court may also require a corporation who is guilty of an industrial manslaughter offence to:
publicise the offence, the deaths or any penalties imposed (e.g. advertise on television or in a daily newspaper);notify certain people of the offence, the deaths or any penalties imposed (e.g. publish a notice in an annual report or distribute a notice to shareholders of the company); orcarry out a project for the public benefit (e.g. develop and operate a community service).
Northern Territory
The industrial manslaughter offences apply in the Northern Territory when an employer intentionally and recklessly or negligently breaches a health and safety duty owed to a worker and causes the death of that worker.
The maximum penalty is life imprisonment for an individual or 65,000 penalty units (currently $10,270,000) for a body corporate.
Western Australia
A new bill is currently being considered by the Western Australia state parliament and will likely pass into law soon. The bill proposes two types of industrial manslaughter offences.
Firstly, the ‘crime’ offence applies when an employer fails to comply with a health and safety duty owed to a worker and causes the death of that worker, with the knowledge that their conduct was likely to cause death. The maximum penalty for a ‘crime’ offence is 20 years imprisonment and a $5,000,000 fine for an individual or a $10,000,000 fine for a body corporate.
Secondly, the ‘simple’ offence applies when an employer fails to comply with a health and safety duty owed to a worker and causes the death of that worker. The maximum penalty for a ‘simple’ offence is 10 years imprisonment and a $2,500,000 fine for an individual or a $5,000,000 fine for a body corporate.
South Australia and Tasmania
South Australia and Tasmania are not currently planning to introduce specific industrial manslaughter legislation.
Considerations for Employers
In light of the harsh penalties for an industrial manslaughter offence, you should:
understand the industrial manslaughter laws in your state and stay up to date with any changes in the law;support the senior officers and managers of your business to understand and comply with their health and safety duties;review and update your work health and safety policies and procedures to reduce the risk of workplace injuries and deaths;regularly conduct training sessions and provide information to workers to ensure everyone is aware of their safety risks and obligations;ensure that the induction program for new workers covers relevant safety matters;prepare and maintain good records on work health and safety matters and incidents and review those records to identify any patterns and areas of risk;take a proactive approach to safety matters; andfoster a culture within your business of taking safety issues seriously.
Key Takeaways
Employers can be found guilty of industrial manslaughter if you negligently cause the death of a worker in your business. The maximum penalties for industrial manslaughter vary in each state. They can include fines and imprisonment for individuals and fines for body corporates. You should take proactive steps to:
understand the industrial manslaughter offences;communicate work health and safety policies and procedures to workers; and keep good records of safety matters to reduce the risk of workplace injuries and deaths.
If you have any questions about the industrial manslaughter offences and penalties in your state, contact LegalVision’s employment lawyers on 1300 544 755 or fill out the form on this page.

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New Innovative Toolkit Helps In-House Legal Drive Transformational Change

For many in-house legal teams, the need to undertake projects that will streamline their operations remains a high priority. This is especially the case for time-poor general counsel, who are under pressure to reduce costs and increase their team’s efficiency, so they can focus on strategic prerogatives.
However, identifying improvements and actually making them happen is a challenge for many teams.
“We saw that many of our clients wanted to explore new ways of working, but didn’t know how to get started,” said Thomas Kaldor, LegalVision’s Head of Legal Transformation. “We wanted to do something practical to help them, something different to a text-heavy white paper. That’s how the General Counsel Toolkit came about.”
The newly launched General Counsel Toolkit is a free resource featuring tools and tips that in-house teams can use to tackle some of the operational improvements that have been on their radar. It consists of 35 cards organised into the five phases of the transformation journey, from mapping your legal function through to successfully running a project.
Designed to sit on a corporate lawyer’s desk (or in their remote office), counsel can dip in and out of the Toolkit depending on their stage in the transformation process. 
“It’s a ‘choose your own transformation adventure’ framework,” Kaldor quips. 
How the Toolkit Transformed Ad Review
Kaldor explains that there are three types of cards within the Toolkit: explanatory cards that deepen your knowledge, practical cards featuring tools to make change happen, and case studies from corporates who have successfully undertaken transformation projects. 
“It’s best to choose a contained project to start with, rather than attempting to transform your entire operations from day one,”  he said. “In our experience, a great place to start is with advertising review. Transformation in this area has a huge impact and helps both the Legal and Marketing teams.”
Marketing often cannot move forward without Legal reviewing their collateral, while for Legal, the volume of ad review work can be challenging. It can be a source of tension between the two teams.
LegalVision has worked with a number of clients, including insurer IAG and property solutions company Domain, to streamline their ad review process. Kaldor explains how the General Counsel Toolkit can assist other in-house legal teams to undertake this journey, by tying it back to three cards within the Toolkit.
1. Map Internal Processes
“This is literally mapping the lifecycle for a piece of marketing collateral from beginning to end,” Kaldor says. He notes that when using this card from the General Counsel Toolkit, it is important to identify whether you want to map your current or future state. “They’re two different objectives. Are you looking at the here and now, to uncover opportunities and  pain points you want to fix, or are you painting a picture of the perfect solution?”
Kaldor said that initially when LegalVision worked with clients, their objective was to map their current state. They brought both the Legal and Marketing teams together to map out their existing process, then identified opportunities to improve it. 
Now, having built an advertising review solution, LegalVision uses process mapping to show new clients what a future state might look like. “It’s a different approach. We can say: ‘This is the holy grail of what ad review could look like – what would it take to make this happen in your business?’ then work towards that goal.” 
A case study on LegalVision’s experiences and lessons learned with IAG is included in the General Counsel Toolkit.
2. Build a Business Case
Having identified transformational improvements they want to make, Legal then needs to convince the rest of the business that it is worth the investment, with the GC acting as an advocate. 
“For most in-house legal teams, effective business case writing means drawing attention to opportunity cost and/or wider commercial impact,” Kaldor says. 
An effective business case carefully articulates the commercial impact of the proposed course of action. It demonstrates to the reader that your proposal is not only a sensible use of capital, but is a better use of capital than alternatives.
Kaldor suggests that if you need help articulating the benefits, consider involving the solution provider. Aside from the fact that it is in their best interest to help you get the business case approved, they are experienced at convincingly pitching their solution.
3. Run a Retrospective Workshop
Having successfully undertaken a transformation project to streamline your ad review process, Kaldor says it is worth spending an hour or two discussing how the project went, to identify opportunities for improvement. 
“This approach comes from agile project management and design thinking, where you continuously seek to improve a process,” he explains. 
There are many ways to run retrospective workshops. But, for a simple and effective approach, Kaldor recommends bringing the stakeholders together and asking two questions: “What’s working well? What can we improve?”
You can then prioritise the items raised and create a list of actions. “If you can have a frank and constructive discussion, you’ll come out of it with an actionable to-do list of high impact improvements.”
Key Takeaways
Kaldor says that it takes three key ingredients to get your transformation project off the ground:
an ability to take small, incremental steps; an advocate to help drive it along; anda willingness to change.
He recommends you then identify what you want to transform, preferably, an area where there is a steady flow of work, such as ad review. You can use the General Counsel Toolkit to guide you through the transformation process. 
“By engaging in incremental goals, and demonstrating the change that is expected to occur in your organisation, in-house legal teams will be able to drive innovation and create new value,” Kaldor says. 
This, along with the cost savings and operational benefits that come out of the change, are compelling reasons to take the General Counsel Toolkit for a test drive.
You can download a free digital copy of the GC Toolkit on the LegalVision website. To request a physical copy, call LegalVision on 1300 544 755 to arrange a meeting on how to get the most out of the Toolkit for your projects.    

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LVConnect Case Study – AIME Mentoring: A Solution to the Problem of Educational Inequality

Since launching 16 years ago, AIME Mentoring has been creating opportunities for Indigenous high school students across Australia (and the US and Africa). It does so by offering mentoring and tutoring programs, an online TV show, a podcast series, a virtual university and a global work marketplace. Being a large international non-profit corporation, AIME has many legal questions that require advice from experts in specific areas such as tax. However, as a charity they have no budget for external legal advice. We spoke to Justin Moses about some of the challenges he faces as AIME’s in-house lawyer and how he uses LVConnect to address legal issues on a global scale.
What Is AIME?
AIME is a not-for-profit Indigenous corporation and registered charity with a mission to eradicate educational inequality and build bridges to a fairer world. We rely on a combination of government funding, donations, and corporate financial and in-kind support, to run our free educational programs (and small apparel business) across Australia, the US and Africa.  
How Did You Get Legal Assistance Before LVConnect?
I am the first, and only, in-house lawyer at AIME. Before I joined the team in April 2019, AIME relied on pro bono legal assistance from two leading international law firms.
Why Did You Sign Up to LVConnect?
I was looking for a solution like LVConnect because our pro bono suppliers, while very generous, were not always as responsive as I needed them to be, particularly when I was looking for a sounding-board rather than for fully-fledged written advice.
I was very familiar with LegalVision from my dealings with them while I was in a senior in-house role at Westpac Banking Corporation. After leaving Westpac in 2017, I continued to watch LegalVision’s evolution as a firm because I admired its entrepreneurial spirit and its unconventional thinking.
I frequently drew on LegalVision’s extensive catalogue of articles and business legal templates for insights and guidance in areas of law that I was less familiar with. When I came across LVConnect, it seemed to be the perfect extension of that offering – expert advice on any legal question, available in bite sized pieces with the opportunity to dig deeper at an affordable price. 
AIME does not have a budget for legal support, and I pay for our LVConnect subscription myself. It is remarkable that such a recognised firm can make an offering like LVConnect available at a price that an individual can regard as strong value for money. 
How Has Your LVConnect Membership Changed the Way You Seek Legal Assistance?
LVConnect has given me the comfort of knowing that I can seek confirmation of my legal analysis (and often gain additional insights) at a time and at a price that amplifies my value to AIME’s business. I can use LVConnect to: 
distil my legal questions into digestible pieces; access the background and published articles of the lawyer who I will be speaking to on my phone consultation; enjoy a 30-minute consultation* with a relatable, engaged adviser; and then take a commercial, practical legal outcome back to my business to implement.
*unlimited lawyer consultations.
What Features of LVConnect Have Had the Biggest Impact? How?
The certainty around cost and timing have had the biggest impact for our business. I can plan with accuracy and keep our management team informed on the progress of my legal analysis, because when a legal need for expert support arises:
I’m able to lock in a 30-minute consultation with a LegalVision lawyer within two business days; andI know I will pay a regular, fixed fee invoice for their legal work.
How Has Adopting LVConnect Allowed You to Deliver Improved Results for Your Business?
I find that I am resorting to the LVConnect offering earlier in my legal analysis of the issues that AIME is grappling with. While I love to learn new things, research does take time. With AIME’s more unusual questions (of which there are plenty!), I often find myself falling a little short of an authoritative outcome, which means I’ll need to make a judgement call anyway. 
Being able to tee up a LegalVision expert in no more than 48 hours to listen to and supplement that judgment, means that AIME will be getting legal advice it can rely on with confidence by hour 49! 
What Is Next for AIME?
As a business, by 2023 we want to create $1 billion worth of opportunities and exchange through our IMAGI-NATION model, including $30 million per annum to support our day-to-day operations. We also want to reach our key milestones of 6,000 graduates per year and 1 million opportunities for marginalised kids, including through our Global Marketplace.
Affordable And Timely Legal Help 
Finding a trusted and affordable legal advisor can be challenging for charities and small businesses. From structuring your business or protecting your intellectual property, to reviewing your commercial lease, your website’s privacy policy or marketplace terms, LVConnect can give your business access to unlimited lawyer consultations and up to 50% fixed fee discounts, depending on the size of your legal project. Learn more about becoming an LVConnect member or join today by calling 1300 544 755.

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What Is a Contingent Liability?

As a business owner, it is crucial to be aware of your contractual obligations when entering into agreements with third parties. When signing a contract, both parties have an immediate or ‘present’ obligation to deliver on the agreed terms.  However, you should also understand the extent of your obligations, which may arise in the future. These are contingent liabilities. This article will explore how the law defines contingent liability and the types of situations where contingent liabilities exist.
How Is ‘Contingent Liability’ Defined at Law?
The Australian Accounting Standards Board is responsible for managing the expectations of financial disclosure at a Federal level. They define contingent liability in two ways:
a possible obligation that arises from past events, and characterised by uncertain future events outside the control of the parties; ora present obligation that arises from past events, but it is not possible to provide a reliable estimate of the amount of the obligation.  
There may be a requirement to disclose any contingent liabilities in the following commercial situations:
short-term leases;equipment leases, or other types of lease where the underlying asset is of low value;loan agreements; orsupply contracts.
It is good practice to record contingent liabilities in your financial statements. As a business owner, you should work out a range of possible liability issues which may arise from a contract. Consequently, you can determine the best financial estimates accordingly. You can estimate how much you may need to settle a present obligation by finding a quote for how much an entity would rationally pay. Often, business managers who have experience with similar transactions determine this amount.
Types of Contingent Liability
A contingent liability is primarily within business contracts through the indemnity, warranty or guarantee provisions. 
Indemnity
An indemnity provides you with the right for compensation for a specific loss. In ‘worst case’ scenarios, where you suffer a loss, the other party providing the indemnity must provide compensation. The compensation is given in the spirit of satisfying the contract, rather than as a penalty for breaching the contract terms.
Generally, indemnities are appropriate for matters which fall outside the responsibility of the customer or buyer. If you are the party providing the indemnity, you should carefully consider how you will fund the compensation in the event it is called on.
Warranty
A warranty is an assurance by the seller or supplier of goods and services. The party providing the warranty frames the warranty as a statement of fact. In the context of a business sale, the buyer will seek as many warranties as the seller will provide. 
If you are a manufacturer, the Australian Consumer Law sets out mandatory wording when providing warranties to consumers.

For example, a manufacturer of goods must provide customers with a warranty in the following wording: You are entitled to a replacement or refund for a major failure and compensation for any other reasonably foreseeable loss or damage. You are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure.

The obligation of the manufacturer only arises when the customer claims the goods are not of acceptable quality.
More generally, you may be a business owner providing a warranty on the condition of a product or service. If your product or service falls short of your statement of fact, you run the risk of the customer claiming you have made an untrue statement. The obligation will arise at the time the customer initiates a claim for damages due to a breach of the contract.
You should consider a warranty provided under a contract as a contingent liability, particularly when considering your insurance cover.
Guarantee
A guarantee, in the context of a contract, is a promise by a third party to compensate for future losses.
Suppose you are a business owner supplying goods or services valued under $40,000 or for household use. In that case, you cannot contract out of your obligation to provide basic consumer guarantees set by the Australian Consumer Law.
For example, a customer can expect an automatic guarantee that products purchased must:
be of acceptable quality (safe, lasting, with no faults);match descriptions made by the salesperson and in advertising;be fit for the advertised purpose and fit for any purpose the customer intended as communicated before purchase; andmeet any extra promises made about performance, condition and quality (such as lifetime guarantees).
Similarly, a customer can expect an automatic guarantee that services they engage must:
be provided with acceptable care, skill or technical knowledge;be fit for the purpose or give the results agreed between both parties; andbe delivered within a reasonable time.
Managing Your Business Insurance Risk 
The contractual liabilities you accrue as a business owner can have an impact on your insurance policies and your assets. You should check to have the appropriate insurance which covers your contract liabilities. In the case of contingent liabilities, you may need to obtain some additional insurance for your business.
In some cases, it may not be commercially possible to obtain insurance cover for more onerous clauses in your contracts. However, it is vital to be well aware of these risks before you enter into the contract.
Key Takeaways
Before entering into a new contract, ensure you understand the extent of any contingent liabilities which may exist. These can appear in your contract in the form of an indemnity, warranty or guarantee provision. If future possibilities arise, the cost of not understanding the full extent of any contingent liability can be significant. 
As a business owner, be sure to: 
record future obligations; and review your insurance policy at the time you enter into a new contract. 
If you need assistance understanding your contract liabilities, get in touch with LegalVision’s dispute resolution lawyers on 1300 544 755.

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I Sell Tiles. What Do I Need in My Terms and Conditions?

If you sell tiles to individuals or other businesses, you should have a set of terms and conditions in place. Your terms and conditions will govern the relationship between you and your customers. It is an important document to make sure both you and your customers are on the same page. This can help reduce any disputes that may arise, as well as manage any risk you take on by running a tiling business. Below, we unpack what you should include in your terms and conditions if you sell tiles.
Who Are Your Customers?
As a first step, you should consider who your terms and conditions are for. It is useful to consider if you have a different relationship with some customers.  There are two types of customers:

Either individuals looking to purchase tiles for their home or tilers making one-off purchases from you in the same manner as an individual.
Companies that purchase from you on a wholesale basis, where you might want to lock in their business for a set period or provide them with better prices based on how much stock they purchase from you.

If you are servicing different customers in different ways, it can be appropriate to have two sets of terms and conditions. This is because you probably service them on different terms. For example, you may allow your wholesale customers to purchase tiles on 60-day payment terms. However, you may ask your individual customers to pay for their tiles upfront.
What Should You Include in Your Terms and Conditions?
Your terms and conditions lay out the framework for your relationship with your customers. Below, we set out some key clauses your terms and conditions should address.
Goods
Your terms and conditions should make it clear:

how customers can order tiles;
the type of tiles being purchased; and
the quantity of tiles being purchased.

This may be set out on your website order form, in a quote, in a purchase order or verbally agreed between you and your customer. You should also consider whether there are any limitations on ordering. Limitations include whether customers need to order an entire box of tiles at a minimum and whether there is a chance you may not have the right tiles in stock and what will happen if you cannot source them.
Price and Payment
The terms and conditions should specify:

what price you are expecting the customer to pay – you may refer to your website, pricing list or quote when setting out what the price is;
who is responsible for paying delivery costs, and if it is the customer, what the delivery costs will be;
how to make payments; and
what the payment terms are, for example, do you take money upfront or do you allow your customers to pay in arrears?

Tip: If you provide your customers with the opportunity to order samples, then you should be clear on whether these are free or if they need to be paid. If your samples are free, but you require the customer to pay for shipping, then this should be obvious to your customers.

Delivery and Collection
Your terms and conditions should specify whether the customer needs to collect the tiles from the showroom or a warehouse, or if you will deliver them to your customer. This will avoid any confusion and manage expectations.
It is essential for you that customers pick up their tiles on time or are available for delivery. Since tiles take up a lot of room, it can be difficult to keep the stock at your premises. Many businesses will choose to insert a clause in their terms and conditions to charge their customers a storage fee if they have to hold the stock for an extended period.
Installation and Laying
Once installing your tiles, it is not easy for you to replace them. It will be a burden if a customer changes their mind about the tiles after they are already installed. For this reason, you should include a clause in your contract asking customers to inspect the tiles for any obvious visual defects before laying them. Another useful clause is that you will install the tiles according to Australian standards or other guidelines. You should provide these guidelines to your customer. The purpose of this is to exclude your liability for any damages caused to the tiles once you have already delivered them.
Liabilities
A key concern for many tile businesses is reducing their liability. Some risks that your terms and conditions should contemplate are:

your customer installing the tiles themselves and causing damage to the tiles, or your customer engaging a tiler to install the tiles and the tiler damaging the tiles;
your customer ordering the wrong type of tiles and the tiles not being fit for purpose; and
your customer providing you with incorrect information or instructions.

Given that for many types of tiles, no two pieces of tiling or stone are the same, it is also useful to include a disclaimer in your terms and conditions. This should acknowledge that polished and honed tiles can exhibit swirls, polish marks and optical hazing, and this is an inherent characteristic of the tile and not a flaw.
How Do I Offer a Warranty Against Defects?
It is common for tile retailers to offer a warranty against defects for their tiles. That is, a promise about the quality of their tiles that goes above and beyond the protections already afforded to consumers under the Australian Consumer Law. In the case of tile retailers, the warranty against defects will be a statement to the effect that you will repair or replace the tiles or otherwise compensate the customer if the tiles are defective.
The Australian Consumer Law prescribes mandatory wording and certain items that your warranty documentation must include for the warranty against defects to be valid. This includes:

what your business will do if the goods or services are defective;
what your customer must do when a defect arises;
your contact information;
how long the warranty will apply for;
how a customer can claim warranty;
who is responsible for expenses in making a warranty claim (i.e. delivery costs); and
a statement that the warranty is additional to the consumer’s rights and remedies at law.

Key Takeaways
Whether you sell tiles to individuals or businesses, it is important to have a set of terms and conditions in place to manage your relationship with your end customer. Your terms and conditions should address the goods being purchased, how payment will work, delivery and collection, risks associated with installation and laying and liabilities in general. If you are offering a warranty against defects, it is important that you seek advice on what needs to be included, to make sure that the warranty will be valid under the Australian Consumer Law.
If you need terms and conditions drafted for your business, contact LegalVision’s commercial contracts lawyers on 1300 544 755 or fill out the form on this page.

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What Is a Merchant of Record?

If you run an online business that sells products or services, you will need to have a merchant of record to process credit and debit card payments. This article will explore:

what a merchant of record is;
what role they have; and 
the obligations they hold when processing online payment transactions. 

What Is a Merchant of Record?
A merchant of record is a payment transaction processor that processes debit and credit card payments on behalf of a business. There are a couple of options for payment processing integration which will determine who is the merchant of record. These include using a:

hosted gateway: the hosted gateway acts as a third party to take payment, which will be integrated into your website or on an external site. The hosted payment gateway takes on the risk of being the merchant of record. However, you will need to pay a fee for this service. Some examples of a third party merchant of record are PayPal and Stripe; or
non-hosted method: you can be the payment processor for your website. However, this means that you will be the merchant of record. This requires compliance with the relevant laws. 

Larger businesses will act as their own merchant of record. On the other hand, many small or medium businesses will use an external third party as merchant of record on their behalf. 
What Does the Merchant of Record Do? 
When someone purchases a good or service from your website, they will proceed to the checkout and pay for delivery and GST. After they enter the credit card information, the payment gateway securely sends the customer card information to the merchant bank for processing. This payment gateway is the merchant of record for your business. The merchant of record:

maintains a merchant account;
negotiates credit card processing fees; and
administers refunds and chargebacks.

What Obligations Does the Merchant of Record Have?
The merchant of record has a number of important obligations to facilitate customers’ transaction. These include complying with legislation which is designed to protect your customers’ data. The merchant of record typically holds the risk of any fraudulent transactions, and so should ensure that they process payments correctly.
PCI Compliance
As a merchant of record, you must comply with the Payment Card Industry Data Security Standard (PCI DSS), developed by the PCI Security Standards Council. These global standards ensure that any card payment is always secure. The merchant of record must comply with the PCI DSS regardless of business size. The key requirements of the standards include obligations to:

use a firewall; 
protect stored cardholder data; 
develop and maintain secure systems; 
meet audit requirements on a regular basis; and 
implement an information security policy. 

Maintaining the Payment Gateway 
As a merchant of record, you must maintain the payment gateway from the customer to the merchant’s bank account. This includes authorising, capturing, refunding and voiding payments. Transaction data is encrypted and passed through to the merchant bank, so this must be facilitated properly. 
Compliance with Laws and Regulations
Aside from complying with the PCI DSS, a merchant of record must comply with various legislation in Australia. 

For example, the law prevents businesses from passing on excess credit card surcharges. 

There are also AUSTRAC, APRA and ASIC regulations that a merchant of record may need to comply with. 
Should I Be the Merchant of Record?
As you can see, there are a number of obligations when taking on the role as a merchant of record for your business. These include: 

ensuring PCI DSS compliance;
building and maintaining the payment gateway; and 
complying with Australian laws. 

However, as your business grows, becoming your own merchant of record can lower the fees you need to pay to third parties and allow you to implement a custom payment feature solution for your business. 
If you decide to choose a third party merchant of record, you should consider the pricing structure they offer and ensure that they support multiple currencies if you are selling overseas. You will also want to check that they offer multiple payment methods, such as credit or debit card and e-wallet transactions, which consumers increasingly expect when online shopping. Third party merchants of record can also have quite specific refund policies, and the ability to handle disputes with customers. You should familiarise yourself with these rules and make sure that you are comfortable with handing off the ability to make those decisions yourself.
Key Takeaways
If you offer online payment for customers on your e-commerce website, you will need to ensure that payment is processed by a merchant of record. The merchant of record facilitates the online payment processing by sending the data to the merchant bank. You can choose to pay a fee for an external merchant of record to take on these obligations for you, such as Stripe or PayPal, or you may decide that it is more economical for you to become a merchant of record yourself. If you are an e-commerce business owner and have any further questions about merchants of record, get in touch with LegalVision’s e-commerce lawyers on 1300 544 755 or fill out the form on this page.

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How Do I Start a Labour Hire Business in Victoria?

Starting a labour hire business in Victoria simplifies the usually long and expensive recruitment process for businesses seeking new staff. When doing so, however, it is important to take note of important legal considerations, such as operational licence requirements under the Labour Hire Licensing Act 2018. Additionally, you should ensure that you have well-drafted labour hire agreements and employment agreements in place. These agreements are useful to outline everything clearly to other parties and minimise any future risk. This article outlines the key legal factors to consider when starting a labour hire business in Victoria. 
Recruitment or Labour Hire Business?
Recruitment businesses and labour hire businesses are similar in nature, as they both connect willing workers with businesses seeking labour. However, there are fundamental operational differences in recruitment and labour hire businesses. On the one hand, businesses looking to fill a role will usually provide recruitment agencies with a job description. A recruitment agency will then provide their client business with candidates who meet the criteria. The client business meets and selects a suitable candidate to engage as a new employee. At this point, the relationship between the recruitment agency and the candidate ends as the selected candidate becomes an employee of the client business. 
Labour hire businesses, on the other hand, have an ongoing relationship with their candidates or workers. Workers will usually wear the host business’ uniforms and use the host business’ tools and resources. However, the workers remain directly employed by the labour hire business. The host business has obligations in relation to workplace health and safety and general workplace protections. However, the labour hire business ultimately bears the responsibility for ensuring both they and the host business comply with employment laws.
Why Labour Hire?
A labour hire business offers numerous benefits to host businesses.

For example, a labour hire business can provide:

reduced costs in comparison to recruitment companies;
reduced downtime as labour hire businesses vet workers;
expertise, as labour hire businesses can provide workers with a specialised skill set, allowing host businesses to avoid the cost and time associated with training; and
flexibility, as labour hire businesses can provide workers to suit current workloads and seasonal needs.

What Is a Labour Hire Agreement?
A labour hire agreement is a written agreement that outlines the relationship between you and the host business to whom you supply workers. Similar to having a written employment agreement, a written labour hire agreement clearly sets out the rights, obligations and expectations of both you and the host business. In particular, the agreement should focus on:

the performance of obligations and regular reviews;
the process of requesting workers;
legal obligations (e.g. in relation to employment laws); 
insurance requirements; 
resolving disputes; and
invoicing. 

Drafting a thorough labour hire agreement can help with minimising future disputes and your risk in relation to your legal obligations to your workers. 

For example, the agreement should ensure the host business warrants to provide your workers with general employment standards under the National Employment Standards (NES). To ensure your workers are not working over the maximum number of hours per week as per the NES, you should require the host business to keep accurate and up to date timesheets for each of your workers.  

What Licence Do I Need?
To operate legally in Victoria, all labour hire providers must have, or have applied for, a labour hire licence. To obtain a licence, you will need to pass a ‘fit and proper test’ and show that you comply or plan to comply with workplace laws and labour hire laws. 
Under the Labour Hire Licensing Act 2018 and regulations, you also need to provide annual reports on your activity to the Labour Hire Authority in Victoria. 

You may also face substantial fines for operating without a licence, the maximum penalties being upwards of $120,000 for an individual as a sole trader and $500,000 for a corporation.

How Do I Get a Labour Hire Licence?
You can apply for a Labour Hire licence through the Labour Hire Licensing Online portal. There are two types of applications available through the portal: 

an individual application for businesses structured as sole traders; and 
an organisation application for companies. 

To submit your application, you will require information including but not limited to:

personal details such as full name, address and date of birth (individual applicants must provide more information for police checks and companies must submit personal details of each officer);
whether you are registered with the Australian Tax Office (ATO) and WorkSafe Victoria;
the number of workers you expect to supply to hosts in the next 12 months;
industrial instruments that will determine the terms and conditions of employment or engagement of your workers;
 whether your workers will hold temporary work visas and, if so, details including the number of workers who hold such visas and the types of visas they hold;
the industry in which you intend to provide your labour hire services;
whether you intend on providing transport or accommodation for your workers; and
whether you or anyone connected to your application has or may have breached laws in relation to the labour hire industry, workplace laws or minimum accommodation standards.

The Labour Hire Authority will also conduct a ‘fit and proper person’ assessment for each relevant individual included in your application. To determine whether or not you are a fit and proper person, the Authority will consider a number of factors.

For example, these factors include whether you have:

been found guilty of certain offences;
contravened workplace laws; or
been insolvent or under external administration within specific time frames.

Do I Need to Comply With Any Other Laws?
Additionally, you will need to declare that you have a business compliance plan in place that details how you will comply with relevant legal obligations and laws.

For example, these include:

taxation laws;
superannuation laws;
occupational health and safety laws;
workers compensation laws;
labour hire industry laws;
workplace laws;
migration laws; and
applicable minimum accommodation standards.

Do I Need Employment Agreements?
An employment agreement is a legal agreement between your labour hire business and the workers that you provide to host businesses. It is important to clearly set out the relationship and rights between you and your worker and reduce the risk of a future dispute. Your employment agreements must cover key factors of the arrangement.

For example, this includes payment terms, hours, leave and termination.

Additionally, you will need to ensure that your agreement provides your workers with entitlements under the NES, including:

maximum weekly hours;
requests for flexible working arrangements;
leave (including, for example, annual, parental, long service, personal carer’s and compassionate leave);
public holidays;
notice of termination and redundancy pay; and
fair work information statement.

Key Takeaways
When operating a labour hire business in Victoria, it is important to adhere to the operational and licensing regulations. Further, you should also have well drafted employment agreements and a labour hire agreement in place to protect your business and minimise any risks. If you have any questions or need assistance with drafting legal documents for your labour hire business, get in touch with LegalVision’s commercial contract lawyers on 1300 544 755. 

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Insolvency Reform to Support Small Business:  Restructuring and Liquidation

The temporary insolvency relief comes to an end on 31 December 2020. As a result, a significant wave of insolvencies may occur in early 2021. To preemptively combat this wave, the Federal Government has announced a reform to the insolvency regime for small businesses. This article looks at: 

what has prompted the reform; and 
how the changes will impact eligible businesses and their creditors. 

What Prompted the Reform?
Many creditors are currently biding their time, as temporary insolvency relief provided to debtors as a direct result of COVID-19 is due to expire on 31 December 2020. Once that temporary relief expires, however, there will be a significant increase in small businesses facing financial distress. As a result, some of these businesses will inevitably enter into external administration or liquidation.  
The proposed reform aims to allow small businesses to restructure more quickly and easily than the current regime permits. Hopefully, this will result in more Australian small businesses surviving the economic impact caused by COVID-19. However, in many instances, restructuring will simply not be possible. The proposed reform aims for those businesses to be wound up faster. In turn, this may result in higher returns for creditors.  
In addition to the economic distress caused by COVID-19, a number of problems have been identified with the current system. These problems have prompted the proposed reform.

For example, they include:

the fact that small business insolvencies follow the same process as complex large company insolvencies. This ‘one size fits all’ approach has proven to be fundamentally flawed; 
the high costs of voluntary administration, which can consume most, or sometimes all, of a small business’ assets. This makes small business owners reluctant to engage in the process; and
small business owners’ reluctance to put an external administrator in control of their business.

Who Is Eligible and When Will the Changes Come Into Effect?
Subject to the passing of legislation, the new process will commence on 1 January 2021. 
To be eligible, businesses must meet two criteria. Namely, the business must: 

be incorporated; and 
have liabilities of less than $1 million.  

Simplified Restructuring 
The reform has identified the need for transitional measures, which will be available to businesses until 31 March 2021. During the transitional period, eligible businesses will be able to declare their intention to access the new restructuring process to their creditors (possibly via an ASIC published notice). Once it has made a declaration, the business will have a period of three months to access the restructuring process. During this time, the business and directors will continue to access the existing temporary insolvency relief.  
The Proposed Restructuring Process
There are a number of elements to the proposed new restructuring process. 
First, the business approaches and appoints a small business restructuring practitioner, whose role will be to:

assist in determining whether the business is eligible;
support the company to develop a plan; 
certify and communicate the plan to creditors; and 
manage any disbursements if a plan is put in place.

Directors work with the restructuring practitioner over 20 business days to:

develop a restructuring plan;
identify creditors; and
provide supporting documents to creditors for consideration.  

The business continues trading under the control of its directors while the restructuring practitioner develops a debt restructuring plan. Trade can continue in the ordinary course of business. However, trade outside of the ordinary course of business will require the prior approval of the restructuring practitioner.
Once the process commences, creditors cannot take action against the business. Further, any personal guarantee the director of the business provides is not enforceable. 
The restructuring practitioner then:

sends the restructuring plan to creditors; and 
certifies whether they consider the business can meet the proposed repayments.  

Creditors then have 15 business days to vote on the plan.  
The company must pay any employee entitlements due and payable prior to creditors voting on a restructuring plan.
The plan requires a vote of 50% or more (based on debt value) for the restructuring plan to become binding on all unsecured creditors. Secured creditors will only be bound to the extent that their debt exceeds the value of their security interest. 
Finally, if the creditors approve the restructuring plan, the restructuring practitioner will administer the plan and make distributions to creditors. On the other hand, if the creditors reject the restructuring plan, the business may choose to: 

enter voluntary administration; or 
use the simplified liquidation process. 

Simplified Liquidation
Regulatory obligations on liquidators will simplify, to align with the asset base, complexity and risk profile of the company being wound up. A simpler process means there is potential for more money to become available for distribution to creditors and employees.  
Whilst the general liquidation framework will remain, key modifications may reduce both the time and cost of the process.

For example, these modifications include:

reduced circumstances where a liquidator can take action to clawback an unfair preference payment from a creditor unrelated to the company; 
reduced reporting obligations on potential misconduct of directors, unless there are reasonable grounds to believe that misconduct has occurred; 
removing requirements to call creditors meetings;
removing the ability to form committees of inspection; and 
simplifying the proof of debt and dividend processes.

The rights of secured creditors and the current rules pertaining to the priority in which the company pays creditors will not change.  
What Protections Will Be Put in Place?
The proposed reforms see the inclusion of a number of safeguards to prevent the misuse of the new process and ensure the protection of creditors’ rights. The safeguards include: 

only making the process available to a business or directors once within a prescribed period (currently proposed to be a period of 7 years);
giving the restructuring practitioner the power to stop the process should they identify any misconduct;  
ensuring the independence of the restructuring practitioner;
ensuring the rights of secured creditors do not change;
maintaining creditors’ right to vote on the business’ restructuring plan, with a majority vote necessary before the plan will become binding;  
prohibiting creditors related to the business (such as subsidiaries) from voting on the restructuring plan; and  
giving creditors the ability to convert a simplified liquidation back to a ‘full’ liquidation process. 

Key Takeaways
The proposed reform to restructuring and liquidation of small businesses aims to simplify and streamline a currently complex process. Whilst the Federal Government has unveiled its initial guidelines, however, there are still many details which remain unclear. If you need help with the restructuring or liquidation of a small business, contact LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page. 

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What Are the Legal Considerations of Outsourcing?

Outsourcing business functions can be a beneficial business strategy. As well as increasing profitability, as it can allow you to streamline your business costs in reducing overheads, outsourcing may also: 

provide you with access to resources that may not be available within your internal team; and
accelerate the scalability and transformation of your business. 

Before outsourcing and engaging a service provider, it is important to ask yourself:

why you are outsourcing;
what you are outsourcing; and 
who your stakeholders are. 

Your answers will help you in noting legal considerations and assess whether the benefits of outsourcing outweigh the risks. Whether you plan on outsourcing IT services or bookkeeping services, this article outlines some important considerations to help you manage your legal risk. 
Performance Guarantees 
When outsourcing, you want to make sure that your service provider: 

makes their services available to you as you require; and 
delivers their services in a timely manner to ensure your business operates smoothly. 

It is crucial that milestones and guarantees for performance are clear and accurate, because without objective criteria it can be difficult to manage the outsourcing relationship. The performance guarantees of service providers are usually set out as defined criteria in the form of:

Key Performance Indicators (KPIs); or 
a Service Level Agreement (SLA), either within or as an annexure to a formal agreement. 

Setting out KPIs or service levels in an SLA allows you to not only measure the performance of the service provider, but also hold them accountable for their services. 
When considering the performance and setting out the criteria as KPIs or service levels for your service provider, you should consider:

what KPIs or service levels will drive the outcome you want;
whether the KPIs or service levels are clearly defined;
whether the KPIs or service levels are measurable;
how often you should report performance against the KPIs or service levels;
how many times a service provider can fail to meet a KPI or service level before triggering a consequence; and
what an appropriate consequence might be. 

The specific criteria in KPIs or service levels will largely depend on the outsourced services and your negotiations with the service provider. 

For example, if you are outsourcing the management and maintenance of your internal IT systems, you should be clear about how quickly they respond to your complaints and how quickly they can resolve any issues in an SLA. 

Intellectual Property 
Intellectual property (IP) is a very valuable business asset that you should seek to protect. In the process of outsourcing services, the service provider may create new IP for your business. 

For example, if you are outsourcing IT work, an IT service provider will create IP in the software they develop for your business. The main question to keep in mind is whether you want to:

own the IP that they create; or
use the IP under a licence (which may impose certain restrictions on how you can use it). 

If you expect to own the IP the service provider creates through the outsourcing arrangement, you must include an IP assignment clause in your formal agreement. This clause will assign all of the IP that the service provider creates to your business. This allows you to own and use the IP as you please. 
Sometimes the service provider may want to retain ownership in the IP and provide you with a licence to use the IP. If this is the case, you should ensure that the licence clause in your formal agreement allows you to use the IP for your needs. If you are negotiating an IP licence with your service provider, you should consider:

what the licence is for;
whether you can modify the IP in any way;
Whether there are any limitations on how you can use the IP (e.g. can you only use the IP for a specific purpose? Can you only use the IP in a particular area? Can you only use the IP for a particular duration of time?); and
whether you can sell the IP to third parties.

Privacy and Security of Information
You may need to share data and personal or confidential information with the service provider when outsourcing services. 

For example, when providing IT services, IT service providers will likely need access to your data, personal and confidential information. 

You want to ensure that service providers: 

use due care and skill when handling data;
securely store data; and 
do not transfer your data without your express permission. 

The service provider may also require access to personal information your business owns which may be from your customers or your employees. You should consider whether your business and your service provider are required to comply with privacy laws. Even if you have a legal obligation to comply with privacy laws and your service provider does not, it is best to require your service provider to handle any personal information in a responsible manner and comply with privacy laws.
If your business needs to comply with privacy laws, you will also need to report eligible data breaches to the Privacy Commissioner and notify any of your customers who may have been affected. If your service provider becomes aware of a data breach, they should notify you so that you can respond and report it accordingly. This is very important if you are outsourcing IT services, as the service provider should assist you with a prompt response and contain the breach. You may also want to find out who caused the breach and you should hold your service provider responsible if it was them.
Restraint of Trade
If you are outsourcing client services, you should ensure that your service provider cannot terminate the agreement they have with you and provide the same or similar services directly to your clients. To prevent this from occurring, you should include a restraint of trade clause in your agreement with your service provider. A restraint of trade clause protects your business interests by preventing your service provider from working directly with your clients for the duration of your arrangement with them and for a certain period of time following your arrangement. 
Dispute Resolution 
The best way to reduce the risk of a dispute arising is to outline your outsourcing arrangement with the service provider in a formal agreement. Setting out the process and steps to follow in the event that something goes wrong with the service provider helps with: 

addressing the issue quickly;
preventing it from escalating; and 
avoiding any significant business losses. 

You can do this by ensuring the formal agreement you have in place includes a clause outlining the process to resolve a dispute. 

For example, a dispute resolution clause may require parties to first notify each other of any disputes in writing and give the other party a chance to respond. The next step may be for authorised representatives from both parties to meet and seek to resolve the matter in good faith. If that does not work, you may agree to refer the matter to mediation or arbitration. As a last resort, you could escalate the matter to the appropriate court. 

Key Takeaways
Outsourcing can be very beneficial to your business, but it involves risks. Some important legal considerations to take note of when outsourcing include: 

clearly setting out performance guarantees that the service provider should adhere to in the form of KIPs or service levels;
ensuring you can use any new IP that the service provider creates for your business needs by either assigning or licensing the IP to you;
protecting your data and any personal information your business owns; and 
having a clear dispute resolution process in place.  

If you need assistance with drafting or negotiating an outsourcing agreement with a service provider, please contact LegalVision’s contract lawyers on 1300 544 755 or fill out the form on this page. 

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What Are the NSW Security of Payment Laws Changes?

If you work in the building and construction industry, or you are engaging an industry participant (for example, a builder or other tradesperson), you will need to be across changes to the security of payment laws in New South Wales (NSW).
Fair Trading NSW has published new Regulations, the Building and Construction Industry Security of Payment Regulation 2020 (NSW) which replace the 2008 Regulations. These Regulations accompany the Building and Construction Industry Security of Payment Act 1999 (NSW) (Act), which was recently amended.

The new security of payment Regulations cover four key areas:

trust account management;
supporting statements provided by head contractors;
adjudicator requirements; and
owner occupier contracts.

This article will explain the latest changes and their impacts.
Recap – What is The Security of Payment Legislation?
The security of payment legislation allows building and construction industry participants to claim interim progress payments. It is designed to improve cash flow, which is key to the industry. The legislation also includes an adjudication process, where parties to a contract can settle payment disputes, in what is intended to be a quick and relatively cheap forum.
What Are The Key Changes?
In NSW the new Regulations, for the most part, came into effect on 1 September 2020. The remaining change comes into effect on 1 March 2021.
The 1 September 2020 Changes
Trust accounts – there are now requirements regarding the management of trust accounts for contracts valued at at least $20 million. Head contractors need to deposit retention money into an approved retention money trust account as soon as reasonably possible. This must occur within five days of the head contractor receiving the money from a subcontractor. There are restrictions on when retention money can be withdrawn from the trust account, and reporting obligations on the head contractor (including to notify and provide certain details to, the Commissioner of Fair Trading NSW within 10 business days of establishing a trust account). Directors of companies can face personal liability for breaches of some of these trust account requirements.
Supporting statements – head contractors have an obligation to provide a supporting statement along with a payment claim, but only to those subcontractors or suppliers that they have engaged directly. In other words, the obligation does not extend to sub-subcontractors (i.e. third parties engaged by the head contractor’s subcontractors). The supporting statement is used to declare that all subcontractors have been paid all amounts that are due and payable to the subcontractors, in relation to construction work they have carried out. The new Regulations also no longer require the statement to separately identify amounts that the head contractor is in dispute over with a subcontractor.
Adjudicator requirements – there are new eligibility requirements for adjudicators. To be an adjudicator, a person needs to have either:

a degree or diploma in architecture, building surveying, quantity surveying, building and construction, construction management, project management, engineering or law from an Australian or foreign university or tertiary institution, and at least five years of relevant experience, or
at least 10 years of relevant experience.

Adjudicators must also complete the required continuing professional development to remain eligible. An adjudicator will be considered ineligible if a reasonable person would conclude the person has an actual or perceived conflict or would not adjudicate impartially.
The 1 March 2021 Changes
The Regulations also include a change that will come into effect on 1 March 2021, and which relate to residential construction projects.

Under this change, owner occupier contracts will no longer be exempt from the Act. 

An owner occupier contract means a residential building contract under the Home Building Act 1989 (NSW), or in other words, a contract between a builder or tradesperson and a homeowner. This is significant, as previously, the security of payment legislation had only applied to commercial building projects. 
Under the legislation, the payment process is relatively simple, however, the important thing is to ensure the timeframes in the legislation are complied with. These will differ between commercial and residential projects and can depend on what is written in a particular contract. The payment process involves:
A builder issuing a Payment Claim to the homeowner for a progress payment.The principal (or homeowner) issuing a Payment Schedule in response to the Payment Claim, specifying how much it intends to pay (if any), and stating any reasons for not paying the full amount claimed in the Payment Claim.If the principal (or homeowner) fails to respond to a payment claim or does not intend to pay the full amount claimed, the builder can then bring an adjudication application under the legislation. In certain circumstances, it could also recover the unpaid amount in court.

The key benefit of the changes for builders is that they will have additional paths to recover payment from homeowners. If a homeowner fails to make payment in accordance with the legislation, the builder will have the option of commencing an adjudication application, and in some circumstances, to commence court proceedings to recover the unpaid amount as a judgment debt.

Homeowners will need to be aware of the payment process under the legislation, and the ability for the builder or tradesperson to commence an adjudication application. Homeowners will need to pay close attention to Payment Claims they receive, and to ensure they respond to them within the timeframes in their contract and/or the legislation.
We anticipate that this will result in homeowners needing to engage lawyers during building projects to assist with responding to Payment Claims, and to assist with adjudications.
Key Takeaways
The new Regulations in New South Wales have implications for residential construction projects, commercial construction projects worth over $20 million, and for adjudicators. In terms of the commercial projects over $20 million, there are new trust account requirements, including reporting obligations to Fair Trading, and restrictions on when monies can be withdrawn from trust accounts. 
For residential projects, from 1 March 2021, residential projects will no longer be excluded from the operation of the security of payment laws in New South Wales. This means that homeowners may need assistance from lawyers in relation to adjudications under the security of payment legislation. Homeowners will need to become aware of their obligations to issue payment schedules and to make progress payments to builders within the timeframes in the legislation, and the repercussions of failing to do so.
Builders will need to consider whether their residential building contracts need to be adjusted to align with the payment regime under the Act. They will also need to understand their rights to be able to pursue homeowners who fail to make payment in accordance with the legislation. This is particularly relevant for builders who solely operate in the residential space and may not have had prior exposure to the security of payment legislative regime.
There are new preconditions that adjudicators need to satisfy to become an adjudicator, including to obtain a relevant diploma or degree, or 10 years’ experience otherwise.
If you need legal assistance with a building or construction project, including understanding and implementing the latest changes, our experienced building and construction lawyers can help. Just call 1300 544 755 or complete the form on this page. 

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Can You Charge Interest on Unpaid Invoices?

Cash flow is a significant factor which contributes to the financial stability of small business owners. Yet, a third of small businesses are negatively impacted by late payments each year. Whether you have experience dealing with customers delaying payment on overdue invoices, or want to be proactive with your business accounts, consider if charging interest on unpaid invoices is right for your business.
This article will explore the legal considerations for charging interest on unpaid invoices. This involves being proactive in the following ways:
Revisit your business terms and conditions;Determine and ‘fair and reasonable’ interest rate; andCommunicate well with the customer.
Revisit Your Business Terms and Conditions
Charging interest on unpaid invoices can: 
provide a deterrent to late payments; and help offset ongoing operating costs. 
This is not always a commercial solution depending on the type of business you are operating. However, this approach tends to be more suited to service-based industries.
You should revisit your business terms and conditions to ensure the payment terms are clear, adequate and robustly drafted before your first sale transaction. Well-drafted payment terms make it easier to recover unpaid invoices, whether or not you are also charging additional interest for late payments.
Your business’s terms and conditions should specify the interest rate to be charged on late payments. If not, you will need to refresh your payment terms to hold new customers accountable. Once your business terms are suitable, you can provide your existing customers with the revised terms at their next transaction.
Determine a ‘Fair and Reasonable’ Interest Rate
As a business owner, you should prioritise building and maintaining a large customer base. Accordingly, any interest rate you wish to charge should not be so unreasonable that it deters existing or potential customers. Setting a fair interest rate will avoid a court deeming the rate unfairly high or the payment term unreasonable in the event a customer chooses to dispute the invoice.
Calculating the Interest Payable
There are numerous tools which can assist you in calculating an appropriate interest payable, including:
excel spreadsheet; oronline Interest Calculator tools.
The basic premise for the ‘per annum’ interest rate is that the percentage rate stipulated should be a portion of the total invoice, payable as interest over a year. For example, you have set an interest rate of 10% per annum on a late payment of $1000. The customer should pay an additional $100 in interest over the year. This is assuming they have not made further payments during the year.

You can calculate the total interest payable by dividing the unpaid invoice total by 365 (being the number of days in a year), then multiply this amount by the number of days the payment is overdue. Multiply this figure by the per cent of interest you are charging.

Communicate Well With the Customer
Suppose you have done the above preparation and remain committed to charging interest on late payments. In that case, you should ensure your payment policy is communicated clearly with your customers. 
Disputes arise more frequently when customers feel they have not been fully informed. To minimise these situations occurring, be sure to specify your payment terms and any interest charges for late payments. It is also best practice to set out the due date on your invoices, particularly when you want to impose a financial penalty on the customer for missing the payment due date.
Be sure to demonstrate how your business focuses on transparency and disclosure with your customers. This will generally be more favourably viewed by a state tribunal or fair trading body, in the event a customer decides to escalate a complaint.
Consider Faster Payment Terms Policy
In New South Wales, business owners who supply goods or services to a participating agency within the state government body can register to benefit from the Faster Payment Terms Policy. From 1 December 2018, business owners who register have the benefit of knowing at least 80% of the invoiced total, to the maximum value of $1 million, will be paid within five business days of receipt by the relevant finance department. Late payments can still accrue interest depending on your specific supplier terms with the government agency.
Key Takeaways
As an owner of a small business or start-up, unpaid invoices can be an administrative burden which challenges your ability to meet the business cost of operation. Many business owners incentivise customers not to miss payment due dates by charging a reasonable rate of interest for late payment. If you have decided this is the right approach for your business, seek legal advice to ensure your business terms are suitably drafted. 
If you want assistance recovering a debt, get in touch with LegalVision’s debt recovery lawyers on 1300 544 755.

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What Is the Difference Between Discharged and Undischarged Bankruptcy?

Bankruptcy is a legal process that gives individuals a chance to resolve their debt problems and get a fresh financial start. While you are bankrupt, a bankruptcy trustee is appointed to look after your finances and deal with your debts and assets. The bankruptcy period is limited, usually to three years and one day. During that period, you are known as an undischarged bankrupt. Once undischarged bankruptcy ends, you are called a discharged bankrupt. The bankruptcy process, and the language around it, can be confusing and complex if you have not experienced it before. This article will explain the: 

difference between a discharged and an undischarged bankrupt; and
key stages of bankruptcy, including what happens during those stages. 

Undischarged Bankruptcy is the period during which a person is bankrupt and their financial affairs are managed by a bankruptcy trustee. The person is known as an undischarged bankrupt.
Discharged Bankruptcy is a bankruptcy that has ended or been discharged under the legal bankruptcy process. Once bankruptcy, has ended a person is known as a discharged bankrupt.

How Does Bankruptcy Start? 
Bankruptcy starts when an individual is insolvent, meaning they cannot afford to pay their debts. Bankruptcy can be triggered by: 

you: you can voluntarily enter bankruptcy to resolve your debt problems. This means preparing and filing a Debtor’s Petition with the Official Receiver, a role the Australian Financial Security Authority (AFSA) administers; or
a company or individual: If you owe money to a company or individual, they are a creditor and can file a Creditor’s Petition in court to make you bankrupt. 

The bankruptcy period starts when either AFSA accepts a Debtor’s Petition or a court makes a bankruptcy order, known as a sequestration order. Once the period starts, you become an undischarged bankrupt. This period is undischarged bankruptcy. 
How Long Does Bankruptcy Last?
Bankruptcy, or undischarged bankruptcy, usually lasts for three years and one day. It ends when AFSA discharges the bankruptcy, which will occur automatically after three years and one day if there are no extensions. Bankruptcy can be extended for up to eight years if you fail to comply with all required steps, such as: 

disclosing all assets and debts to the bankruptcy trustee; and 
making the required payments. 

If you do not meet these steps, your bankruptcy trustee can object to the discharge and request an extension. The length of the extension will depend on the extent and number of compliance failures. 
Bankruptcy can also:

end early; or
be annulled or cancelled.

This will occur if you pay your debts in full or prove to a court that you should not have become bankrupt. 

For example, this may be the case if someone stole your identity. 

Undischarged Bankruptcy 
What Happens During Bankruptcy?
At the start of bankruptcy, you will need to provide your bankruptcy trustee with a Statement of Affairs that:

sets out all your personal and financial information; and 
gives full disclosure of all debts and liabilities. 

Once you have a bankruptcy trustee, they will take over management of your financial affairs. Most of your debts will be released during the bankruptcy or paid from your bankruptcy estate following sale of any available assets. Your bankruptcy trustee has a wide range of powers, including to: 

investigate your affairs; 
sell your properties; and 
run or sell any business.

During the bankruptcy period, they may: 

investigate and identify all saleable assets; 
sell or realise those assets; 
investigate your affairs; 
recover any debts other people owe to you; 
report to creditors and distribute any funds available; and
report to AFSA. 

Some of your assets are protected from sale by your bankruptcy trustee and are therefore not ‘divisible’ by the trustee. These include ordinary household items of reasonable value, such as

furniture;
TV, computer and appliances; and
other items worth less than a certain amount indexed under the bankruptcy laws, such as a car or tools used for work. 

What Can I Do During Undischarged Bankruptcy? 
While you are bankrupt, or an undischarged bankrupt, you can keep earning an income. However, you are limited in the activities and business roles you can do.

For example, you: 

must give any income above a fixed amount to your bankruptcy trustee; 
must request permission from your bankruptcy trustee to travel overseas; 
may not act as a company officer; 
cannot obtain credit above a certain amount without telling the lender you are an undischarged bankrupt; and
must give all information to your trustee regarding your finances, such as income and mortgage statements. 

Discharged Bankruptcy
What Happens When Bankruptcy Ends? 
Once you are discharged from bankruptcy, you can take back control of your financial affairs. Even though you are a discharged bankrupt, the bankruptcy will be permanently recorded on a national record called the National Personal Insolvency Index. This record is publicly available. 
You may have difficulty obtaining credit, such as a home loan, after your bankruptcy ends. Credit reporting agencies keep a record of your bankruptcy for five years from the date you became bankrupt or two years from when your bankruptcy ends, whichever is later. 
You may not repay some debts during bankruptcy, and so may have to deal with these once the bankruptcy ends. These include:

any penalties or fines;
student debts;
any debts you incurred by fraud; or
debts under maintenance agreements, such as child support debts. 

Key Takeaways
The aim of bankruptcy is to give individuals who cannot pay their debts the chance to reset their financial affairs. During the period of bankruptcy, the individual is an undischarged bankrupt and a bankruptcy trustee manages their financial affairs. Once the bankruptcy ends, they are known as a discharged bankrupt. Life can mostly get back to normal. However, there may be some lingering impacts from the bankruptcy, such as a permanent public record of the bankruptcy. If you have any questions about the process of bankruptcy or dealing with debts, contact LegalVision’s litigation lawyers on 1300 544 755 or fill out the form on this page.  

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What is Stress Leave?

Stress leave is when an employee takes personal leave from work due to stress. In Australia, stress leave is not an official category of leave. However, full-time employees are entitled to personal leave, which they can take to recover from physical or mental illness, including stress.
What is Stress?
Stress is when a person feels overwhelmed and unable to deal with certain life circumstances.

For example, work-related stress may occur when an employee feels they are unable to cope with: 

an unmanageable workload; 
lack of control of their tasks; or 
emotionally difficult situations.

Causes of Stress
The workplace can often become unpredictable as conditions change. For example, new projects may pop up or staff changes can land an employee in the middle of somebody else’s task. Additionally, work volume can fluctuate and deadlines can be challenging to meet. 
The most common causes of work-related stress include:

high or low workload;
poor support;
lack of clarity in role;
disorganisation;
isolated working conditions; and
negative workplace relationships, including bullying.

Stress Leave
Under the Australian Government’s National Employment Standards, employers may take leave from work due to personal reasons. This may include illness or caring for another person who is ill. Illness includes mental illnesses such as stress and anxiety. Stress leave is personal leave an employee takes to relieve workplace pressure and recover from stress-related symptoms. In Australia, stress leave is not a category of leave in itself and only refers to the cause of personal leave.
How Does an Employer Grant Stress Leave?
Employers grant stress leave in the same manner as they would grant personal leave for other illnesses (for example, usually through HR in larger businesses). Under Australia’s National Employment Standards, permanent employees are entitled to 1 hour of personal leave for every 26 hours worked. This ratio of 1:26 usually equates to 10 days of personal leave per year for full-time employees, and 1:26 pro-rata for part-time employees.
Employers’ Obligations Surrounding Stress Leave
Work, Health and Safety (WHS) laws state that employers have a duty of care for employees’ safety. This includes employees’ psychological safety. Accordingly, employers should maintain WHS policies that prevent employees from creating situations that may cause stress or mental health issues to coworkers. 

For example, you could introduce a no-bullying policy to your workplace.

The law protects employees from any adverse actions taken by an employer in relation to employees suffering from mental illness, including stress.
Returning to Work
When employees take personal leave due to stress, they should take care of their health and focus on being well enough to return to work. During this time, employers should take the claim seriously and support the employee to get back to full health and return to work. Accordingly, it may be necessary to assess the employee’s situation to identify any potential causes of stress and adjust their working conditions to limit stressful situations in the future. SafeWorkAustralia has some recommendations to reduce stress upon returning to work, including: 

writing tasks down for clarity;
modifying the work environment; or 
managing the number of tasks the employee must complete.

The Best Treatment is Prevention
Employers should prioritise creating an accepting workplace in relation to mental health and encourage open discussion. Stress-free employees are more engaged with their tasks, take fewer sick days and generally provide an overall improved performance. Early detection and stress management could prevent a future psychological injury compensation claim against your business. You should regularly check in on employees to see how they are managing their workload and their environment. Many businesses are opening the discussion for mental health and providing relaxation and mindfulness support, such as meditation and yoga sessions. Ensure your employees are aware of mental health organisations that they can reach out to. These include Lifeline, Beyondblue, Black Dog Institute and Sane.
COVID-19 and Stress
The COVID-19 pandemic has disrupted society in many ways. Quarantine and working from home are creating a sense of isolation. Existing jobs are changing to make working conditions more challenging and, for many, loss of income is creating financial stress. You should be aware that the COVID-19 pandemic may be causing additional personal stress for employees, and as a result, requests for stress leave may increase during this period.
The Australian Government is offering Medicare subsidised psychological therapy sessions for people affected by the pandemic.
Key Takeaways
Stress leave is when an employee takes personal leave due to work-related stress. Although stress leave is not an official category of leave, employees may use personal leave to take time off work when they are feeling stressed or overwhelmed. As an employer, you should take requests for stress leave seriously. Stress prevention is better than trying to deal with the effects of a stressed workforce, so you should implement strategies to help your employees cope with their roles. If you need help understanding your employees’ leave entitlements, contact LegalVision’s employment lawyers on 1300 544 755 or fill out the form on this page.  

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Can SMEs Engage Litigation Funders?

The private litigation funding industry in Australia has grown in recent years, providing businesses with a channel to secure funding for large and complex claims. There are presently around 25 active litigation funders in the Australian market, including domestic and overseas funders. Increasingly, litigation funders are a viable option for SMEs with a legal claim that is likely to succeed. This article will explain: 

how third-party litigation funding works; and 
the advantages and disadvantages for SMEs considering engaging a funder.

How Do Litigation Funders Work?
Litigation funders provide the funding required for legal action in exchange for a portion of any settlement payment or court-awarded proceeds. Put simply, they ‘invest’ in good claims by:

paying the cost of the litigation;
accepting the risk of paying the other party’s costs if the case fails; and
taking a cut of the payout in the event the claim succeeds or settles.

Why Do You Need Litigation Funding?
Going to court is expensive. Even straightforward claims can set you back tens, if not hundreds, of thousands of dollars in legal fees. For many SMEs, this cost is simply too high, especially if you are up against an opponent with deep pockets who can afford to drag out proceedings. 
In the context of commercial disputes, your business is unlikely to qualify for legal aid or any kind of government support. In practice, this means that SMEs are frequently ‘locked out’ of litigation despite having a good claim.
Is It the Same as ‘No-Win, No Fee’?
Litigation funding is not quite the same as ‘no-win, no-fee’, which typically refers to the business model where law firms fund claims themselves. However, the logic is similar: if they think your claim is strong, they will: 

take on the risk of financing the litigation; and 
take a cut if you win or settle. 

Law firms that provide ‘no-win, no-fee’ services usually only offer them in a narrow range of categories, such as: 

personal injury;
motor vehicles;
public liability;
workplace/employment claims; and 
professional negligence claims.

Third-party funders can often provide more flexibility, both in terms of: 

practice areas; and 
bespoke funding packages. 

Engaging a third party funder also means you can utilise your law firm of choice.
How Do SMEs Engage a Funder?
If you are in a commercial dispute and you think that you have a strong claim, the first step will be to speak to a solicitor, who will essentially act as a broker with the funder. Your solicitor will: 

prepare a detailed summary of the estimated legal costs and timeline of the case; and 
present it to the funder. 

In turn, the funder will consider the merits of financing your claim from a commercial point of view. This means they will consider: 

whether the claim has reasonable prospects of success; and 
its risk as an investment.

If the funder agrees to finance your case, you will need to enter into two agreements; namely, one with: 

the funder; and 
your solicitor. 

Each of these will be conditional on the other.

Funding Agreement 

Litigation Costs Agreement 

The funding agreement is between: 

you (the plaintiff); and 
the funder. 

Your solicitor will negotiate this agreement on your behalf. The key terms will include:

your overall budget and timeline, including its application (i.e. how much money will be paid towards solicitor fees, counsel fees, insurance against adverse costs orders, security for costs and indemnities);
the sum payable to the funder on a successful outcome, as well as other fees such as ongoing management fees;
the extent that the funder has a say in the proceedings (or veto power); and
how the agreement can be varied or terminated.

This will be between: 

you; and 
your solicitor. 

You may want to seek independent legal advice before entering into this agreement. It will be a tailored version of your solicitor’s standard costs agreement, with specific clauses relating to the payment and funding, such as:

the ‘non-conditional’ fees charged by your solicitor (i.e. fees that will be usually be covered by the funder’s budget);
speculative fees (i.e. work that goes beyond the funder’s budget, which will not be charged if the case fails); and
uplift (i.e. if the case is successful, your solicitor may receive a higher overall payout based on speculative costs they incurred, which serves as an incentive for your solicitor to work on the case even if the funding budget does not cover the entirety of the claim).

What Are the Advantages of Litigation Funding?
There are many advantages to engaging a third party funder, including:

greater access to the courts, given that litigation funding opens the door for SMEs who have a strong claim but do not have a large internal budget set aside for legal fees;
budget certainty, as you are essentially offloading your legal risk, which enables you to focus on moving forward with your actual business; and
levelling the playing field because funding will enable you to fight your claim on its merit, rather than facing a well-resourced defendant who could drag the case out strategically until you have no option but to compromise.

What Are the Disadvantages of Litigation Funding?
While litigation funding is often a great solution, there are some downsides, such as:

greater complexity, given that litigation itself is complex and it can take a lot of work to arrange the budgetary implications of litigation funding and reach a balanced three-way agreement between you, your solicitor and your funder;
lack of control, as once a funder is onboard, they will want close involvement with the case (effectively veto power), which can limit your control over the proceedings;
limited availability because you need to have a legitimately strong claim to get anywhere with litigation funding. Even if you think you have a strong claim, litigation funders are unlikely to fund cases that they consider uncommercial based on their own criteria.

Is Litigation Funding Regulated?
The litigation funding industry has been under scrutiny recently. In 2020, the Australian Government conducted a formal inquiry into the industry and began taking steps to regulate it. From 22 August 2020, operators of litigation funding schemes will generally need to hold an Australian Financial Service Licence and each scheme will need to be registered.
Key Takeaways
The increase of third party litigation funding in Australia in recent years opens the door to SMEs who may have previously been locked out of litigation altogether. If you think you have a strong claim, litigation funding is an option worth exploring. However, you should talk it through with your solicitor before proceeding, to ensure you understand the risks involved with bringing on a third party. If you have a large claim that you want to explore and would like help approaching litigation funders, contact LegalVision’s litigation lawyers on 1300 544 755 or fill out the form on this page.

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Partner Visa Application: How Can I Establish My Spousal or De Facto Partner or Relationship?

If you are married or in a de facto relationship with an Australian citizen, Australian permanent resident or eligible New Zealand Citizen, you may qualify for a partner visa. However, partner visa applications have a refusal rate of almost 40%. Therefore, you are unlikely to be successful if you do not prepare your application correctly. This was the situation with a real-life case heard by the Administrative Appeals Tribunal (AAT), after the Department of Home Affairs (DOHA) refused an application for a partner visa. The applicant was ultimately successful in overturning this decision because he was able to demonstrate that his relationship with his Australian spouse was genuine and continuing. This article outlines the facts and reasoning applied in this case to secure a partner visa application.
Why Was the Partner Visa Application Initially Rejected?
DOHA refused the applicant’s visa because it was not satisfied that the applicant was in a genuine and committed relationship with their Australian sponsor. However, on appeal, the court found that there was a genuine, committed and continuing relationship at the time of the application. We will discuss below how they came to this decision.
Are the Parties in a Spousal or De Facto Relationship?
You should first determine whether you and your partner are in a spousal or de facto relationship. This will determine the correct legal relationship between the parties and impact your visa application requirements.
A spousal relationship refers to a situation in which you are married to your partner. Importantly, you must: 

be in a marriage that is valid under Australian law;
have a mutual commitment to a shared life as a married couple to the exclusion of all others;
be in a relationship that is genuine and continuing; and
live together, or not live separately and apart on a permanent basis.

In contrast, a person is in a de facto relationship with another person to whom they are not married if: 

they have a mutual commitment to a shared life to the exclusion of all others; 
the relationship is genuine and continuing;
the couple live together, or do not live separately and apart on a permanent basis; and 
the couple are not related. 

Further, the court will consider four elements of a relationship to help establish either a spousal or de facto situation. These include:

financial aspects of the relationship;
the nature of the household;
social aspects of the relationship; and
the nature of commitment to one another. 

In this particular case, the applicant and sponsor were found to still be legally married and had not divorced. 
Applicant’s History with the Sponsor 
The applicant and the sponsor: 

were married in 2007; and 
had a son and daughter in 2008 and 2010. 

The applicant and the sponsor separated soon after the birth of their second child, in late 2010. The sponsor arrived in Australia with her children in 2015 on a special global humanitarian visa. They received Australian citizenship.
During 2010-2015, the applicant and the sponsor did not have any contact due to limiting circumstances. This was primarily due to his job restrictions and the state of unrest in his country of residence. 
It was only from late 2015 that the applicant re-established and maintained regular contact with the sponsor and his two children. Since making contact, the applicant had developed strong emotional connections with his two children and resumed the relationship with the sponsor. 
Considerations in Determining the Existence of a Genuine and Committed Relationship 
The table below outlines the factors a court will consider when determining the existence of a genuine and committed relationship. This list is not exhaustive and the court will consider each case on its own merit.  

Consideration

What it Looks Like in Practise 

Case Application

Financial aspects of the relationship

The court will look at whether you and the sponsor:

own any real estate or major assets together;
have shared loans in both your names;
pool your finances;
owe a legal obligation in respect of your partner; and
share day-to-day household expenses.

The applicant and the sponsor did not share any assets or loans together. However, the sponsor provided financial support to the applicant by sending him money transfers that were a significant amount of her income.

Nature of the household 

The court will consider:

any joint responsibility for the care and support of children;
your shared living arrangements; and
any sharing of the responsibility for housework.

The sponsor had sole physical and financial responsibility for the care and support of the children. The applicant was not physically present and was not able to provide financial support, all due to limiting circumstances beyond his control. However, from an emotional and decision making view, the parties had joint responsibility for the care and support of children.

Social aspects of the relationship

The court will examine whether:

you present yourselves to society as married to each other;
other people consider you to be in a relationship; and
you attend social activities together.

The court accepted that the two parties represented themselves as married and were viewed by friends, family and acquaintances as married. 

Nature of the commitment to each other 

The court will acknowledge:

the duration of the relationship; and
the length of time you have lived together; and
the degree of companionship and emotional support you draw from each other; and
whether you and your partner see the relationship as a long‑term one.

The court accepted that the applicant and sponsor had re-established their relationship in 2015. They had since provided each other with companionship and emotional support, despite not being able to be together physically.

How Did the Court Come to Their Conclusion?
After considering all the evidence on the circumstances, the ATT determined that the parties were in a continued spousal relationship. This was due to the analysis of the four elements of a relationship outlined above, leading the AAT to conclude that the:

two parties had and continue to have a mutual commitment to a shared life together as an exclusive, married couple; and
relationship between the applicant and the spouse was genuine and continuing. 

Key Takeaways
This case highlights the list of factors that a court will consider when determining whether a relationship is genuine and continuing. Notably, however, it is not a list of minimum requirements that you need to meet. Rather, it is a list of guiding factors for the court to take into consideration whilst holistically assessing the overall situation and the relationship itself. If your situation with your partner is not straightforward and does not seem to meet the required grounds of a de facto or married couple at face value, this does not automatically preclude you from accessing a partner visa. If you would like the assistance of a qualified immigration lawyer in preparing your application, contact LegalVision’s immigration’s lawyer on 1300 544 755 or fill out the form on this page.

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Subclass 491: Small Business Owners Pathway (Queensland and Tasmania)

There are not many visa options for small business owners in Australia. Normally, a business owner would explore the Business Innovation and Investment Visa. However, this option requires the applicant to meet quite onerous financial thresholds, relating to their assets and business revenue. However, visa subclass 491 offers small business owners an alternative option when nominated through Tasmania or Queensland. This is a new skilled independent visa, requiring a specific skill set and level of business experience. The visa came into effect on 16 November 2019. Subclass 491 visa holders will be eligible for permanent residency through the subclass 191, which comes into effect on 16 November 2022. This article explores the small business owners pathway in Queensland and Tasmania. To be eligible for this visa, you must meet both the Australian Department of Home Affairs (DOHA)’s and the relevant state’s criteria. 
DOHA Eligibility Criteria
There are various DOHA criteria that you need to meet. You must have:

received an invitation to apply for this visa;
been nominated by a state or territory government agency, which they have not since withdrawn;
a positive skills assessment in a nominated occupation;
a points test result of 65 points or higher (this includes any points you receive from being nominated by your state);
applied before you are 45 years of age;
established ‘Competent English’ language skills, meaning the equivalent of at least IELTS 6.0 in each band level (the DOHA website specifies the other equivalent test scores); and
met certain health and character requirements.

A skills assessment is issued by the relevant skills assessing authorities. This is an organisation that analyses your skills against the minimum standards for the relevant occupation.

Queensland (BSMQ) Eligibility Criteria
In addition to the DOHA criteria, you must satisfy the requirements for Queensland State nomination. This requires you to have:

previous business experience or qualifications to run the business successfully;
an existing visa that allows full-time work and the ability to operate the business for a minimum of 35 hours per week;
been living in a regional area for at least 6 months prior to lodging an EOI;
purchased an existing business in regional Queensland and paid at least $100,000 for the business;
100% ownership in the business (for example, you cannot be in a partnership);
been trading in the business for six months prior to lodging the 491 visa application;
at least one Australian resident employed for a minimum of 20 hours per week; and
evidence of sufficient settlement funds. 

This visa stream is not available for start-up businesses or home-based businesses. Further, your business location must be in one of the following Queensland postcodes: 4124, 4125, 4133, 4183, 4184, 4207-4275, 4280-4287, 4306-4498, 4507, 4517-4519, 4550-4575 or 4580-4895. 

Tasmania Eligibility Criteria
Tasmania also has a small business owner pathway for the subclass 491 visa. In addition to the DOHA eligibility criteria, you must also:

be living in Tasmania when you lodge your 491 application;
have established and operated your business for at least six months;
show that the business would offer you a personal income that exceeds the taxable income requirement set by DOHA ($53,900 per year at the time of writing) for at least three years in the next five years;
provide a comprehensive business plan, including evidence of research and understanding of the target market, relevant industry conditions and licensing or registration requirements; and
prior business ownership or business management experience.

An additional consideration is the nature of the business and its long-term benefit to Tasmania. However, this visa stream is not available for: 

franchises; 
share-owned businesses; 
service stations; 
massage clinics; and 
taxi/Uber related businesses.

Application Process
To apply, you will first need to: 

submit an expression of interest (EOI) with SkillSelect; and 
select either Queensland or Tasmania as the nominating state of choice. 

You will then need to apply for either Queensland or Tasmania State nomination. DOHA will then assess your EOI to see if you meet all criteria. If you are successful you will receive an invitation to apply for the subclass 491. Importantly, you need to lodge the 491 visa within 60 days of receiving an invitation from DOHA. 
Length of Visa and Permanent Residency (PR) Pathway
This visa is a provisional visa that allows the nominated worker to work and live in regional Queensland or Tasmania for five years. It is also a pathway to permanent residency. After meeting certain criteria, you will become eligible for the subclass 191 Permanent Residence (Skilled Regional) visa.
These criteria require you to have:

lived in Queensland or Tasmania for at least three years; and
earned a minimum taxable income of $53,900 for at least three years.

The subclass 191 visa is a new visa that commences on 16 November 2022, as the subclass 491 visa only commenced recently on 16 November 2019.

Key Takeaways
There are limited options available for business owners based in regional locations. The subclass 491 small business owner pathway may be appropriate for your business. Fortunately, it also has a permanent residency pathway through the subclass 191 visa. To apply for this visa, you must:

ensure that you satisfy the DOHA and state-based requirements;
submit an EOI with DOHA; and
if you receive an invitation to apply, submit your application within 60 days.

If you would like help assessing your eligibility and obtaining a subclass 491 visa, contact LegalVision’s immigration lawyers on 1300 544 755 or fill out the form below.

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