Help & FAQs
The Fair Work Act establishes procedures for dealing with unfair dismissal claims and provides remedies, if a dismissal is found to be unfair.
- Employees of a small business are not able to make a claim for unfair dismissal until after they have served a minimum employment period of 12 months, while for larger businesses; the minimum employment period is six months.
- ‘Operational reasons’ are no longer a defence to a claim of unfair dismissal. However, a dismissal is not unfair if it is because of genuine redundancy.
- Workers who earn more than $100,000 a year won’t be able to make an unfair dismissal claim unless they are covered by an industrial award or enterprise agreement.
What is a Small Business
A ‘small business’ is any business which employs fewer than 15 full-time equivalent employees.
It should be noted that a careful calculation must be performed which includes your casual, part time and absent employees to determine whether your business meets the definition of a small business.
Under the new legislation, the Government defines a small business solely on the number of employees, regardless of the revenue the company earns.
A person has been unfairly dismissed if Fair Work Australia (FWA) finds that:
- they were dismissed by the employer or forced to resign (constructively dismissed), and
- the dismissal was harsh, unjust or unreasonable, and
- the dismissal was not a case of genuine redundancy.
It's not an unfair dismissal if the employer is a small business employer (employs fewer than the equivalent of 15 full-time employees) and they follow the Small Business Fair Dismissal Code when dismissing an employee.
When is a dismissal unfair?
When FWA considers whether a dismissal is unfair, they take into account a range of factors including:
- if there's a valid reason for the dismissal relating to the employee's conduct or capacity,
- if the employee is notified of the reason and given an opportunity to respond,
- if the dismissal relates to unsatisfactory performance, then whether the employee is warned about it before the dismissal.
Note: An employer has the right to summarily dismiss an employee for serious misconduct.
Making a Claim
When an employee applies to FWA, the FW.A will check the application to see if it's complete and valid. You'll be notified about this.
Usually, a conciliation conference is then arranged, to assist both sides to resolve the matter by agreement.
If a resolution can't be reached, a hearing will be held and if FWA finds that the dismissal was unfair, you can be ordered to either:
- reinstate the employee (give them back their job), or
- compensate them for up to 26 weeks pay (if this is more than $54,150, then compensate them for up to $54,150).
Objecting to an application
You can apply to the FWA for an application to be dismissed:
- if it's lodged outside of the prescribed time limits,
- for jurisdictional reasons (i.e. FWA doesn't have the power to deal with it, for example if the employee isn't covered by the national workplace system),
- if the complaint is frivolous, vexatious or has no reasonable prospects of success.
A dismissal will not be unfair if it is a ‘genuine’ redundancy.
Redundancy happens when an employer decides they no longer want an employee's job to be done by anyone and terminates their employment (except in cases of ordinary and customary turnover of labour).
Note: What constitutes ordinary and customary turnover of labour may depend on individual circumstances.
Redundancy may happen when:
- the job someone does becomes mechanised - it can be done by a machine,
- business slows down due to lower sales or production,
- the business relocates,
- a merger or takeover happen,
- the business restructures or reorganises.
Under Commonwealth workplace laws, a person's dismissal is a genuine redundancy if:
- you no longer need the person's job to be done by anyone because of changes in the operational requirements of the business,
- you've followed consultation requirements in the award or agreement that applies.
When it's not a genuine redundancy
It's not a genuine redundancy if it is reasonable for the employee to be redeployed in:
- your business, or
- the business of an entity associated with you.
Small Business Fair Dismissal Code
If a business falls under the definition of small business, it should use the Small Dismissal Fair Code every time an employee is dismissed. The Code contains a step-by-step checklist which, if carefully followed when dismissing an employee, will mean Fair Work Australia will consider the dismissal to have been ‘fair’.
Contact us if you need any advice relating to the operation of the Fair Work Act.
A trust is a separation of the legal ownership and the beneficial ownership or use. That is, if an asset is held “on trust”, the person who is the owner of the asset is different from the person who gets the benefit or use of the asset.
A simple example of a trust arises where a parent gives their child a car, but rather than transfer the registration of the car to the child, leaves the registration in the parents name. In this case the child would have the benefit and use of the car, but the registered (legal) owner would still be the parent – creating a simple trust.
There are many different types of trusts and of these, 2 principal types of trust are generally used in a business or investment context, Discretionary Trusts and Unit Trusts.
Discretionary (Family) Trusts
The principal characteristics of a discretionary trust (sometimes called a family trust) are that
- the capital (including all monies and assets) and income are held by the trustee (the legal owner) on trust for a range of beneficiaries. The range of beneficiaries is often defined in terms of
- one or two people who are the principal beneficiaries,
- the relatives of the principal beneficiaries,
- companies owned by the principal beneficiaries and their relatives and
- the trustees of other trusts of which the principal beneficiaries and their relatives are beneficiaries.
- the distribution of capital and income to the beneficiaries is at the discretion of the trustee.
So in any year the trustee can determine in respect of any of the capital or income held in the trust
- to pay the capital or some of them to one or more of the beneficiaries and not to others,
- to pay income or some of the income, to one or more of the beneficiaries and not to others,
- to retain capital or income in the trust (although there may be significant tax consequences associated with retaining income),
- to change the way they distribute income and capital (and the beneficiaries who receive the income or capital) from time to time in their discretion.
This obviously means that the trustee can favour one or more beneficiaries to the exclusion of the remaining beneficiaries and so a discretionary trust is normally used within a family group (thus the name Family Trust) and not between business partners.
Often but not always the trustee will be a company which is controlled by the principal beneficiaries.
A trustee can resign or be removed and a new trustee can be appointed.
The most important role in a discretionary trust is that of the appointor. This is the person (or persons) who can remove trustees and appoint new or additional trustees.
So while a trustee can make a determination in respect of assets or income, if the appointor does not agree then he can remove the trustee and appoint a new trustee. The appointment of a new trustee can also be used in a range of other circumstances and is entirely at the discretion of the appointor.
The principal advantage of a discretionary trust is that allows flexibility in the distributions of income and capital and the corresponding disadvantage is that there is no guarantee of income or capital for any of the beneficiaries.
So if your circumstances require flexibility and lack of certainty of income distribution is not an issue then you may wish to consider using a discretionary trust although given there are a number of considerations in relation to whether you should use a discretionary trust, including tax you should speak to your adviser about whether a trust is right for you and if so what type of trust should you use.
The principal characteristics of a unit trust are that
- the capital (including all monies and assets) and income are held by the trustee (the legal owner) on trust for specific beneficiaries. These beneficiaries are all specifically named and can be persons, companies or trustees of other trusts,
- the interest in the trust is divided into units and each of the beneficiaries is allocated a specific number of units (in consideration of a pre-agreed payment per unit),
- the interest that the beneficiary has in a unit trust is determined by how many units they have and how many units have been issued in total.
- the trustee if a trustee determines to distribute income and capital (and this is generally up to the trustee) then the trustee MUST distribute income or capital to the beneficiaries in the proportion in which they hold units in the trust.
So if beneficiary A holds 30 per cent of the units in a trust and the trustee decides to distribute income to the beneficiaries then the trustee must pay 30 per cent of the income distributed to beneficiary A.
Contact us so that we can assist you with with business structuring and assessing whether a trust is right for you.
Intellectual property (“IP”) is the general name given to property such as patents, trademarks, copyrights and designs and confidential information.
IP is important to your business as it will often include those things which distinguish your business from other businesses.
Your businesses name and logo;
Your name and logo (including slogans, pictures, colour schemes and other things which identify you) are your IP and are obviously important. Your ability to prevent others from trading off your name and logo and your reputation rely on your ability to protect them.
There are 2 ways that you can protect your name and logo.
Register your name and/or your logo as a trademark.
- If you do this and someone improperly uses your name/logo, you can take action against them for infringement of your trade mark.
- A registered Trade Marks will protect you across Australia in the categories in which your trade mark is registered.
Trade under and promote your name/logo.
- The extent to which you can protect your name/logo by trading under and promoting your name/logo will depend on the amount and extent to which your name/logo is known.
- For example if your name/logo are only known in the suburb in which your business is located, then you can only protect your name/logo in this suburb and someone else could start up a business in the next suburb using your name or logo as long as they didn’t promote their business in your suburb.
- Registration of a company name, a business name or a domain name does not give you any protection for the registered name.
- As you will see registration of a Trade Mark is the best way of protecting your name/logo.
Your documents and software.
- Your original documents and software are also your IP. This would include any original letters, e-mails, articles, manuals timetables, databases and computer programs as well as any original videos.
- Except in certain circumstances, copyright protects this IP.
- Copyright and does not need to be registered to protect you.
- Copyright only protects the actual document, video, computer program etc. It does not protect ideas, information or concepts. An idea, concept or information can still be copied unless it is protected in some other way.
Trade secrets and confidential information,
- Trade secrets and confidential information are also your IP.
- You cannot register this IP and unfortunately you can only protect this IP by keeping it secret. The most common way to do this is by reaching agreement with those persons who have access to the information - a confidentiality agreement.
- In addition it is desirable that persons who have access, enter into an agreement not to compete with you or to work with anyone that competes with you.
- However confidentiality agreements and non compete agreements are only going to be enforceable if they are not an unreasonable restraint of trade.
- Considerable thought should therefore be given to drafting of these agreements to ensure that they are both comprehensive and enforceable.
- If there are any devices, substances, methods or processes which are unique to you and important to your business then you should, if possible, register these as a patent.
- You will then have the exclusive right to use and licence others to use the patented device, substance, method or process.
Contact us to assist you with any intellectual property questions and issues.
There is no definition of independent contractors and the rules relating to whether someone is an independent contractor can vary depending on the reason for which the determination is made.
The following are some of the considerations in determining whether someone is an employee or an independent contractor. In this article the person paying for work is “the Company” and the person receiving payment is “the Worker”
- Who determines how the work is performed?
- Who determines where the work is performed?
- Who determines when the work is performed?
- Who is responsible if the work needs to be rectified?
- Who pays any expenses incurred in conducting the work?
- Is the work paid for on a time basis or on the basis of completion of a task or a part or stage of a task?
- Is the Worker engaged by the Company for a particular task or series of tasks or on a continuous basis or for a period of time?
- Who provides any machinery, tools and equipment needed to perform the work?
- Can the Worker delegate or subcontract the work or task to someone else?
- Can the Worker perform work for someone other than the Company without the Companies consent?
- Does the Worker perform work only for the Company or for a range of companies/persons and if for a range what percentage of the work carried out by the worker is carried out for the Company?
- Did the Worker respond to an advertisement from the Company or the Company respond to an advertisement from the Worker?
- In what circumstances can the Company terminate or suspend the Worker?
- Does the Company pay annual leave, sick pay or superannuation to the Worker?
- Does the company withhold tax from payments to the Worker?
Once you have considered and collated detailed answers to all of these questions contact us and we can help you to assess whether you are in an employment relationship.
A sole trader is someone who trades in their own name.
If you are a sole trader:
- there is no requirement for you to register your business or the business name if the business is traded in your name,
- you own the assets of the business,
- you are personally responsible for the debts of the business,
- all contracts are in your name,
- you are liable to taxation in your own right.
- your business is cheap to set up compared to other structures,
- your business is easier to administer than other structures,
- you have full control over the business,
- you are personally entitled to profits and capital,
- your business is relatively easy to wind up.
- you are personally responsible for the debts and other liabilities of the business,
- you are personally responsible for the day to day running of the business,
- it is less likely that large sums of capital will be available for injection into your business,
- there may be issues of continuity of the business in the event of death or illness.
Contact us so that we can help you to assess the best structure for your business.
A partnership is a type of business structure where the owners (called the Partners) share with each other the profits and losses of the business
If you are a partner:
- you are jointly and severally liable for all of the debts of the business. It doesn't matter whether you have incurred the debts or another partner has incurred the debts, you are still liable,
- there is no requirement for you to register your business or the business name if the business is traded in the name of the partners,
- you own the assets of the business together with the other partners of the business,
- you share the profits and losses of the partnership together with the other partners in accordance with the partnership agreement.
- your business is easier to administer than some other structures.The partners can generally agree how they want to set up and run the partnership,
- you are personally entitled to profits and capital in accordance with the partnership agreement,
- your business is relatively easy to wind up. The partners can decide how they want to terminate the partnership.
- you are personally responsible for the debts and other liabilities of the partnership business even if you have not incurred the debts,
- you are personally responsible for the day to day running of the business,
- the partners of business usually manage the business,
- there may be issues of continuity of the business in the event of death or illness partnership,
- disputes can be messy if each party does not know what is required and there is not a well drafted partnership agreement.
Contact us so that we can
- advise you of the pros and cons of this type of business structure,
- prepare a partnership agreement for you,
- assist you in the event of a dispute with your partners.
A company is a separate legal entity - this means that the liability of its owners is limited.
In a company limited by shares
- the shareholders are the owners of the business - they own shares in the capital of the company,
- the liability of the shareholders for the debts of the company is limited to any unpaid amount on their shares,
- the shareholders/owners are generally not involved in the day to day running of the business,
- the board of directors is appointed by the shareholders to manage the company,
- the operation of the company is goverened by a constition.
The main advantage of operating as a limited company is the limited liability of the owners. However trading partners and banks may require personal guarantees from the owners or the directors of the company. In these circumstances the advantage of limited liability is significantly reduced.
- a company is more expensive to set up than a sole trader or partnership structure,
- there is a lot more administration required with a company that with a sole trader or partnership structure ie minutes of meetings and the filing of annual returns,
- a company may be difficult to wind up if you want to cease operating.
Contact us so that we can
- advise you on the pros and cons of operating as a company,
- form a company for you,
- prepare a shareholders agreement for you.
Franchising is generally a way of doing business which allows a number of people to share a brand or trademark, a successful method of doing business and a proven marketing and distribution system.
One person (called "the Franchisor") gives another person (called "the Franchisee") the right to market and sell its own products and services using
- its brand or trademark,
- method of doing business,
- marketing and distribution system.
- less capital is required to establish a franchise network because it is the franchisee that foots the bill to open an outlet,
- the franchisee is responsible for managing staff and the day-to-day operations, while the franchisor retains control over the manner in which the franchisee carries on the business.
- the franchisor is obliged to provide the franchisee with
- training in the operation of the franchise system,
- continuing support including staff training,
- advertising, and
- the development and improvement of the franchise system to keep it profitable.
- poorly performing franchisees can be difficult to deal with and resolving problems created by them can take considerable amounts of your time and energy.
- franchising is highly regulated and a lot of administration is required.
Contact us so that we can
- assess whether your business is suitable to franchise,
- assist in all compliance and set up issues.