Superannuation Insurance Policies

MKG-newAttached to a lot of superannuation funds are insurance policies that will entitle the policyholder to a payment should they become unable to work.

Generally speaking there are either income protection policies or total & permanent disability policies.  An income protection policy entitles a person to an income whilst they are unable to work because of illness or injury.  There is usually a preclusion period and the payment will go for a finite period.

Also attached are total & permanent disability policies which provide for a lump sum to the ill policyholder.  Whether or not you are totally and permanently disabled will depend firstly on the illness and secondly on the definition of ‘total & permanent disability’.  There are two definitions for total & permanent disability policies:

  1. any occupation – if you have been unable to work as a result of illness or injury and are incapacitated to the extent that you will never work in any income earning occupation suited to your educational, training and experience; and
  2. own occupation – if you have been unable to work to such an extent that you are unlikely to engage in your own occupation.

Obviously the definition of ‘own’ as opposed to ‘any’ is a far easier definition to satisfy.  If for example your occupation is a builder and you suffer an arm injury which makes you unable to work as a builder.  It may however be that you can still undertake a sedentary job such as a lawyer, provided you have the education, training and experience and therefore you would fulfil the definition of ‘own occupation’ but not the definition of ‘any occupation’.

So in the above example you would be able to claim under the second definition but would not be able to fulfil the first definition.

To lodge a claim involves completing a great deal of paperwork as well as obtaining medical reports from treating doctors and complicated legal principals.

If we can be of assistance, please do not hesitate to contact us at Everingham Solomons because Helping You is Our Business.

Click here for more information on Mark Grady.

What constitutes a workplace?

TRA recent decision in the Federal Court has broadened the definition of “workplace” under the Sexual Discrimination Act 1984 (Cth).

The case of Ewin v. Vergara involved co-workers in a Melbourne accounting firm. Ms Ewin and Mr Vergara initially struck up a friendship, working on joint matters and going jogging together at lunchtime.

The relationship deteriorated however when Mr Vergara attempted to take the friendship to the next level. Ms Ewin was married and rejected Mr Vergara’s attempts to establish a relationship.

The Sexual Discrimination Act prohibits sexual harassment in a workplace, which is defined as “a place at which a workplace participant works or otherwise carries out functions in connection with being a workplace participant”.

Ms Ewin’s allegations of sexual harassment by Mr Vergara included conduct occurring in a pub after work; working back at the office after-hours; outside a hotel; in a taxi travelling to a work meeting; and at a work function where Ms Ewin became intoxicated and “blacked out”.

The conduct complained of included turning the lights off at the office and inappropriate touching; use of sexually explicit language; forced kissing; and sexual intercourse without consent in the corridor & lift of the office.

The Court held that Mr Vegara’s conduct in the office, in the taxi and at the work function amounted to a breach of the Sexual Discrimination Act. The sexual harassment in the office and taxi were related to Ms Ewin performing her work responsibilities, and so fell within the definition of “workplace”. The non-consensual intercourse was also found to have occurred in the workplace as the Court implied that the entrance, lift, corridor and other common areas of an office formed part of a “workplace”.

Mr Vergara was ordered to pay Ms Ewin over $470,000 in damages.

This case demonstrates that any place (including a vehicle) which is attended by an employee for the purpose of performing work duties will be classified as a “workplace”.

It is therefore important for employers to implement an anti-discrimination policy and have procedures in place for dealing with allegations of sexual harassment. To avoid becoming the subject of a case under the Sexual Discrimination Act, contact the HR team at Everingham Solomons where Helping You is Our Business.

Click here for more information on Terry Robinson

Are Post Employment Restraints Enforceable?

TRIt is not uncommon for an employer to place a restraint upon a departing employee which typically prevents the departing employee from being involved in a similar enterprise, contacting the past employer’s customers, utilising the employer’s confidential information and not poaching the employer’s employees.

In brief the law is that an employer must have a “legitimate interest” to protect and the reach of the post employment restraint must go no further than is reasonably necessary to protect that interest.

The Courts start from the premise that restraints are void, due to public policy. That is because a person should have the right to practice in his/her chosen occupation trade or profession.

That is not to say that a restraint is not worth the paper it is written on.  A carefully worded restraint which covers legitimate interests and is reasonable to protect that interest, is enforceable.

The employer has the onus of proving that the restraint is reasonable and the validity of the restraint is decided by reference to the circumstances that existed when the restraint was made.

What are “legitimate interests”.  It is clear that a desire to simply restrict competition will be primarily void and contrary to public policy.

The recognised “legitimate interests” for employers include:

  • Protecting customer connections;
  • Protecting confidential information which is not in the public domain; and
  • Restraining interference with the employers existing staff.

Once the appropriate interests are identified, then the area and duration of the restraint must be considered.  A restraint which seeks to impose an unreasonably wide geographic area and long restraint will in all likelihood  result in the whole clause being declared unenforceable.

Drafting, interpreting and enforcing restraints of trade is a complex area.

At Everingham Solomons we have the expertise and skills to assist you because Helping You is Our Business.

Click here for more information on Terry Robinson

Gifts should have ribbons, not strings …

KXBbwKeiran Breckenridge, our Special Counsel, reports on a recent case industrial/employment law case.

Two unrelated companies gave certain employees $300 gift cards for working through a union strike.  But their gifts came back to bite.

The union took the companies to the Federal Court and argued that the failure to give gift cards to the striking employees amounted to the companies injuring the employees who went on strike and/or discriminating between employees based on who went on strike or not, all for simply exercising their workplace rights.  The union claimed that the companies breached s.340 of the Fair Work Act 2009, which prohibits the taking of ‘adverse action’ against an employee because he or she has exercised a workplace right.

The companies then had the burden of proving that they did not take adverse action.  They were able to satisfy the Judge that the reason for the gifts was to show gratitude to the employees who did not go on strike for their extra effort in assisting the companies continue business and meet their commercial obligations at a difficult time.  The employees did not miss out on a gift because they had gone on strike.

The Federal Court also concluded that, by not giving the striking employees a gift, the companies had not injured those employees.  Also, there was no discrimination between employees because they were not treated differently while in the same position.  They were in different positions;  some were striking and some were not.

The companies were successful against the union but at a price in terms of legal costs and distraction from their core businesses.  No less than seven senior managers had to prepare and give evidence in the case!  Costs are rarely recoverable in Fair Work Act matters.

Employers can still reward extra effort and high performance but they should seek advice for other situations, especially at times of union industrial activity.

The Employment Law team at Everingham Solomons is well equipped to assist you with all your workplace relations issues because Helping You is Our Business.

Click here for more information on Keiran Breckenridge.

Becoming a Section 457 Sponsor

MKG-newIf your business that wants to sponsor somebody from overseas there are a number of requirements, most of which are relatively straight forward, but the one that many businesses are not able to comply with straight away is that of “training benchmarks”.

Training benchmarks are evidence that an employer, has spent or will spend a certain amount on training.  The purpose is to ensure that employers are investing in Australian employees before they are able to sponsor overseas workers.

There are two ways that an employer can meet the training benchmarks.

The first way is to provide evidence that in the twelve months prior to lodging the application that at least 1% of payroll has been spent on training of employees of the business.  This also needs to maintained through the life of the approval.

Apprentices and trainees wages would be included as would fees paid for TAFE, University or funding of scholarship courses.  Evidence of payment of external providers, tuition fees and conferences would be required.  Also expenditure on “on the job training” needs to be a structured learning with identifiable outcomes and relevant to business activities.

If a business is unable to meet the 1% of payroll obligations, the second way for the business to comply is to pay 2% of their payroll to an industry training fund.  This is obviously not always attractive and the preferable approach is to train your own workers.

As a sponsor you will need to continue to meet the training benchmark requirements for the life of the sponsorship.

If you require any assistance in respect to becoming a sponsor of 457 visas, please contact us at Everingham Solomons for assistance because Helping You is Our Business.

Click here for more information on Mark Grady.

Changes to 457 Visa from 1 July 2013

MKG-newThe Migration Amendment (Temporary Sponsored Visa) Bill 2013 was passed in July 2013.  Although there are some positives for employers that are sponsoring overseas workers, generally they do not assist.

The Sub-Class 457 Visa allows skilled workers to come to Australia and for businesses to hire overseas workers on a full time basis for up to four years.  The purpose of the Visa is to fill a skill shortage.

The most draconian change is that employers must now prove that they attempted to hire Australian citizens and permanent residents before hiring overseas workers.  An employer must provide evidence of any retrenchments or redundancies in the four months prior, any testing undertaken and evidence of attempts to recruit local workers.

There is an increase in application fees from $455 to $900 but there are also a lot more additional fees that are payable such as fees for secondary applicants which includes children or spouses.

Perhaps the only positive for employers and workers alike is that if a worker ceased employment with a sponsor, they had to find another sponsor within 28 days or leave the country.  This period has been extended to 90 days which will give workers a better opportunity to find other employers and proposed sponsors an ability to complete any applications.

With the recent change in government, it will be of great interest to see if there amendments to the recent changes.

If we can of any assistance, please call us at Everingham Solomons because Helping You is Our Business.

Click here for more information on Mark Grady.

Employing Migrant Workers

MKG-newIt is the responsibility of the business to ensure that their employees are allowed to work in Australia.

On 1 June 2013 there were amendments to the legislation that broadens those people that can be found responsible for employing illegal workers.

The changes to the legislation also gives the government greater powers to obtain evidence and introduces not only harsher but more far reaching penalties.

It is the responsibility of the business to take reasonable steps to determine whether a worker is able to work in Australia. It is irrelevant that the workers are sourced directly or through a contractor or a labour hire company.

The fines range from $3,060 per illegal worker for an individual up to $255,000 for a corporation, again per illegal worker. What can you do to ensure that a non-citizen is able to work:

  1. sight an Australian or New Zealand passport;
  2. sight an Australian or New Zealand birth certificate;
  3. use the Department of Immigration and Citizenship Visa entitlement and
    verification online services (VEVO);
  4. sight the worker’s passport that has a valid work Visa label.

Copies of all documentation that you sight need to be kept.

It is imperative that workers are checked to ensure that they are able to work in Australia as the penalties are great.

If you need assistance in this regard, please call us as Helping You is Our Business.

Click here for more information on Mark Grady.

Family Friendly Employment

jmhSome of the changes to the Fair Work Act which came into effect on 1 July 2013 include ‘family friendly’ amendments, such as unpaid parental leave, special maternity leave, and the right to request flexible work.

Parental leave

The following changes have been made to the Fair Work Act:

  • The existing right to request flexible working arrangements has been extended to include employees who are parents of school age children, are carers, have a disability or are over 55 years old. There are also extended provisions in connection with violence from family members.
  • The inclusion of a non-exhaustive list of what constitutes ‘reasonable business grounds’ for refusing requests for part-time work on return from parental leave or a request for flexible working arrangements.
  • The amount of concurrent unpaid parental leave that a couple can take has been increased from 3 weeks to 8 weeks and can now be taken at any time within the first 12 months of the birth or adoption of a child.

Transfer to a safe job

The Fair Work Act is also amended to expand the right for pregnant women to transfer to a safe job to all pregnant employees, even if they have been employed for less than 12 months.

Information Statement

The Fair Work Information Statement — which must be provided to all new employees — is also amended with effect from 1 July 2013, so that it must now include details of the range of circumstances in which an employee may request a change in working arrangements.

The Employment Law team at Everingham Solomons is well equipped to assist you with all your workplace relations issues because Helping You is Our Business.

Click here for more information on Jessica Simmonds.

Acquiring Employees on Transfer of Business

jmhWhen a new owner takes over a business, at what point is he considered to have ’employed’ the existing staff?

In a recent case before the Fair Work Commission, a café in Melbourne was taken over by a new owner, SK, on 10 September 2012. No information was given about future employment conditions but the manager encouraged staff to be patient and understanding with the new owners. There was no new paperwork in respect to employment, no change to shifts, no change to wages, and no request for taxation declarations.

Annual leave entitlements were paid out at the time of the transfer of business.

At that time, one of the workers, B, had been employed on a permanent part-time basis for more than 12 months. He continued working on the usual basis until 22 September, when he received a text message from SK which read: ‘Hi B, it is S, I just want to tell u that I’m not happy to have u with our staff members anymore, I will contact u very soon for ur wages.’

Unfair dismissal proceedings were commenced by B against SK even though B had only been employed by SK for about two weeks.

During the proceedings, SK submitted that he felt a need to reduce the number of employees and observed their performance over a two-week period to choose who should stay and who should go. He said that after watching the workers he ‘didn’t select B for my staff’.

SK added: ‘I didn’t dismiss him, for he was not my employee, I simply chose not to select him for my business.’

Employed ‘before and after’

The Fair Work Commission found that B was employed in the business before the transfer and after the transfer.

The Commission determined that because B had not been informed in writing that the period of service with the old employer would not be recognised, the period of service with the first employer counts towards the period of continuous service.

Accordingly, the Commission found that B did in fact have more than 12 months of continuous service and was protected from unfair dismissal.

The Employment Law team at Everingham Solomons is well equipped to assist you with all your workplace relations issues because Helping You is Our Business.

Click here for more information on Jessica Simmonds.

Changes to Superannuation

jmhMost people will probably be aware of the changes to superannuation guarantee contributions but what do these changes mean for employers?

All employers need to be aware that the changes to the superannuation regime will increase employers’ superannuation obligations. Starting from 1 July 2013 the compulsory contributions rate will increase from 9% to 9.25%.

Superannuation regime

The changes introduced by way of the Superannuation Guarantee (Administration) Amendment Act 2012 means that compulsory superannuation guarantee contributions will increase over a seven year period, from the current rate of 9% to 12%.

The increases will be gradual, as follows:

Income year                           Charge percentage

Starting 1 July 2013-2014          9.25%

Starting 1 July 2014-2015          9.5%

Starting 1 July 2015-2016          10%

Starting 1 July 2016-2017          10.5%

Starting 1 July 2017-2018          11%

Starting 1 July 2018-2019          11.5%

Starting 1 July 2019-2020          12%

Removal of the Upper Age Limit

The Act also has an impact for employers when it comes to paying superannuation guarantee contributions to employees over the age of 70. Currently, employers are not obliged to make payments in respect of employees who are age 70 and over. However, from 1 July 2013 employers will be obliged to make superannuation contributions for all their employees. The changes will also ensure that employers will be able to claim income tax deductions for superannuation guarantee contributions made to employees aged 70 and over from 1 July 2013.

The Employment Law team at Everingham Solomons is well equipped to assist you with all your workplace relations issues because Helping You is Our Business.

Click here for more information on Jessica Simmonds.