If your intended executor or beneficiary is living overseas (or may in the future), there are additional considerations that need to be taken into account in your estate plan.
One of the main considerations is tax (or more to the point – avoiding unnecessary and inadvertent tax). Tax largely depends on who controls or receives the asset.
If your intended executor is not an Australian resident for tax purposes, then your estate will be treated as a non-resident trust, which may adversely impact the intended beneficiaries’ entitlements. If any intended beneficiary is non-resident, this may also impact on the entitlements of the other Australian-resident beneficiaries, depending on what assets they receive.
Taxed as a non-resident. No access to the tax-free threshold available to resident estates or the ability to obtain franking credit refunds.
CGT Event K3 applies as soon as the asset passes to the beneficiary (personally or as trustee of a trust established in a Will) such that any gain or loss is included in the deceased’s final tax return as a disposal at market value, taken to have occurred immediately prior to death. This may result in a liability payable by the Estate (i.e. out of the beneficiaries’ residual entitlements).
If control passes to a non-resident:
There may also be additional implications in the jurisdiction where the beneficiary or executor/trustee is a resident for tax purposes.
Beneficiaries of course can change their residence so it is also important for a Will to consider the “what if” and appropriately address how tax might be paid or give options to keep the control within Australia.
The implications of non-resident executors and beneficiaries can be complex, but with careful planning, it is possible to navigate these challenges effectively and in line with your overall objectives.
Please contact us for more detailed and tailored help.
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A key decision for executors in administering an estate is whether the assets of the deceased are to be sold or transferred to a beneficiary. This article looks at the issues to be considered in making that decision.
Transfer of assets to a beneficiary is called an ‘appropriation’ in legal terms.
Where an asset is specifically gifted by the Will (eg. ‘I give my shares to John’) then it will generally be the case that the asset will be transferred to the beneficiary and not sold. This scenario is not contentious.
The more difficult scenario is when the Will is silent as to who receives the particular asset and it is instead part of the residue to be divided between a number of beneficiaries. In considering if assets that are part of residue should be sold or transferred the executors should consider:
It seems an obvious point, but it can be difficult when beneficiaries are desperate to keep an asset but the estate needs cash to meet its liabilities. Any arrangement for a beneficiary to fund liabilities on behalf of an estate, so that an asset can be retained, can have stamp duty or other cost implications that need to be considered.
The starting point for this question is to look at the powers contained in the Will. A properly drafted Will generally contains appropriation powers for the executors and may specify conditions as to how the power is to be utilised.
In default of any powers in the Will, then Section 46 of the Administration and Probate Act 1958 (Vic) should be considered which contains basic appropriation powers. This section requires consent of the intended recipient (except in limited circumstances) and provides that the executor may rely on a value determined by a duly qualified valuer.
It should be noted that if the executor is also a beneficiary of the estate, then an appropriation power will generally not operate to permit the executor to transfer assets to themselves without consent of interested beneficiaries, given they are subject to further obligations regarding conflict of interest and a prohibition against self-dealing.
Again, the terms of the Will should be considered to determine if it provides a mechanism to value appropriated assets. In lieu of any guidance in the Will, then:
Often, for assets with uncertain value, a formal valuation is the starting point but the executor may wish to put the valuation to the interested beneficiaries for approval or objection prior to the appropriation occurring.
An appropriation can be beneficial for an estate in saving capital gains tax (CGT) or other sale costs that may be incurred if the asset was sold by the estate. There must be careful consideration of the terms of the Will and the timing of the event to assess who will bear any CGT in relation to the sale or appropriation of an asset.
Further, care needs to be taken in transfers to foreign residents and other tax advantaged entities, as it may be the case that this will trigger CGT, notwithstanding that the estate has not realised the asset.
A beneficiary who receives the transfer of an asset should also consider that:
The executor’s obligation is to act impartially for the benefit of all beneficiaries. Generally, this issue will be satisfied by ensuring that a proper value is attributed to the relevant asset. However, there might be issues if multiple beneficiaries are interested in receiving an asset or there are other reasons why a sale will result in a better outcome for the estate.
Subject to the terms of the Will, this is not always required. However, even if there are powers of appropriation that do not require consent, there is always some risk if an executor proceeds to fix a value and transfer an asset against the wishes of other interested beneficiaries. So, care should be taken if considering an appropriation without consent.
If the transfer is to the executor as a beneficiary, then it is even more imperative that consent is obtained.
There is generally some flexibility in administering an estate as to whether assets are sold or transferred, but care needs to be taken in assessing the options.
For expert advice or guidance regarding Estate Planning, contact us.
Victoria’s child employment watchdog, Wage Inspectorate Victoria, is prosecuting Muffin Break’s Southland store in Melbourne for 360 alleged breaches of child employment laws.
Victoria’s child employment watchdog has alleged that Muffin Break in Southland:
Each of these breaches holds a maximum penalty of 100 penalty units (currently $18,429). The matter has been listed for a mention in the Melbourne Magistrates’ Court on 15 June 2023.
This case is the eighth child employment prosecution by Wage Inspectorate Victoria in the last 18 months. Many of these prosecutions have related to restaurants and cafes, although there have also be investigations to other workplaces such as chemists, tutoring companies and fashion companies. A prosecution is a regulator’s most serious compliance tool and decisions to take legal action are made in line with its Compliance and Enforcement Policy.
Victoria’s child employment laws require employers of children under 15 to obtain a permit from the Wage Inspectorate before any work takes place. This enables the Wage Inspectorate to check that matters like safety, hours of work, rest breaks and supervision are properly considered before employment starts. Workers under 15 must be supervised by someone who has WWC Clearance, and relevant organisations must comply with the Victorian Child Safe Standards (CSS).
This article summarises the key obligations that apply to organisations who employ children under the age of 15, and lessons from the current prosecution.
In Victoria, employers of children under 15 must comply with the Child Employment Act 2005 (Vic) (Child Employment Act). The Act aims to protect a child’s:
In order to employ a child under 15, employers must apply for a permit with Wage Inspectorate Victoria. The application must outline details of the child’s prospective employment including their duties, intended hours of work and whether the employment will occur during the school term and during school hours.
If a permit is approved, the employer must ensure a child:
A breach of any of these conditions has a maximum penalty of 100 penalty units (currently $18,429) for a body corporate or 60 penalty units (currently $11,095.20) in any other case.
From 1 July 2023, a child employment licensing system will replace the existing permit system allowing employers to employ multiple children under one licence.
Organisations that employ children under 15 and are required to have a child employment permit must also comply with the CSS1. The CSS sets out mandatory standards which organisations must meet to protect children from harm and abuse. The CSS require that:
On 1 January 2023, the Victorian Wage Inspectorate became a sector regulator, with responsibilities for promoting child safety outcomes, and monitoring and enforcing compliance with the CSS for organisations that employ children under 15.2
In regulating compliance with the CSS, the Victorian Wage Inspectorate has the power to enter and search premises and request documents. Compliance powers range from official warnings and notices to comply, to applications for an injunction or an enforcement order, as seen with Muffin Break. The Magistrate’s Court can also order organisations to pay penalties for their failure to comply.
The maximum penalty for a breach is 120 penalty units (currently $22,190.40) for a body corporate or 60 penalty units (currently $11,095.20) in any other case.
There are also a number of requirements for an employer or staff supervising children during their employment. Under the Child Employment Act, the supervision of a child is considered to be ‘child-related work’. Therefore, any person who supervises a child must apply for a WWC Clearance and receive a WWC clearance unless an exemption applies.
People who are exempt from having a WWC Clearance include:
The supervisor must directly and adequately supervise the child at all times in employment.3 Employers must also have a written record of any person who supervises a child and the number of their WWC Clearance, which must be kept for at least 12 months after the permit expires.4
Practically, this means that employers must ensure that supervisors hold appropriate WWC Clearance, provide appropriate supervision on all shifts when children under 15 are rostered on, and are aware of their obligations, as supervision of children under 15 involves a higher degree of responsibility.
The Muffin Break prosecution highlights the complex issues that must be considered to safely and lawfully employ children under 15, and provides an important insight into the way that the Wage Inspectorate is approaching its new compliance powers.
Moores supports organisations to safely and lawfully engage younger workers and meet the CSS. Please contact our Child Safety team on (03) 9843 0418 if you would like to discuss any aspects of this article further.
1 – https://ccyp.vic.gov.au/child-safe-standards/who-do-the-standards-apply-to-page/2 – Other entities with responsibility for regulating compliance with the CSS include the Commission for Children and Young People (CCYP), the Department of Families Fairness and Housing and Social Services Regulator, Department of Health, Department of Education and Training, and Victorian Registration and Qualifications Authority.3 – Child Employment Act 2005 (Vic) s 19(1)(b)4 – Child Employment Act 2005 (Vic) s 19(2)-(3)
Recently, the Australian Law Reform Commission (ALRC) sought responses to its Religious Educational Institutions and Anti-Discrimination Laws: Consultation Paper (Consultation Paper).
Whilst submissions closed in February this year, the ALRC has stated that its report “will now be delivered to the Attorney General by 31 December 2023” and that “the extension responds to a request made by the ALRC in late February for further time to consider more than 420 submissions received […], and more than 40,000 survey responses”.
The Consultation Paper proposes to:
Ultimately, the ALRC proposes to clarify the scope of existing exceptions under anti-discrimination laws and the circumstances in which they may apply to religious schools, while introducing additional safeguards to ensure that discrimination is not permitted in specific circumstances. At the heart of the Consultation Paper and its proposals is the balancing of a religious school’s right to operate in accordance with its faith, and the need to protect individuals from discrimination on the basis of their personal attributes.
You can read more about the Consultation Paper, and its proposals, in our article published in February.
The commentary from faith and education leaders suggests that these proposals – for many – go to the very heart of what it means to be a religious school.
However, discussions on how religious schools navigate these matters is not new. School leaders have, for many years, been required to balance:
Many religious schools successfully navigate these complex – and sometimes competing – issues by implementing policies and procedures that achieve a robust balance of interests, including in relation to enrolment and employment. The publication of the Consultation Paper provides an opportunity for religious schools to reflect on how they can maintain and celebrate their distinctive religious identity, values and ethos consistent with their legal obligations.
For assistance with understanding your school’s anti-discrimination obligations, or reviewing your policies and procedures, please contact Practice Leaders Skye Rose, Cecelia Irvine-So or Rebecca Lambert-Smith on (03) 9843 2100.
The case of Bird v DP (a pseudonym) VSCA 66 (3 April 2023) marks a significant development in historical abuse cases in religious institutions, and confirms that the principle of vicarious liability is not limited to employment relationships.
In that case, the Victorian Supreme Court of Appeal upheld the decision that the Catholic Diocese of Ballarat was vicariously liable for sexual abuse committed by a parish priest.
This decision is significant because of the overall quantum awarded, the award of aggravated damages, the costs decision, and the failure of the Plaintiff’s case in negligence.
However, this article will focus on its ramifications for the law of vicarious liability and organisations that engage volunteers and religious leaders.
The Plaintiff (DP) alleged that he was sexually abused by Father Coffey (Coffey), a priest within the Diocese of Ballarat (the Diocese), on two occasions in 1971. DP attended St Patrick’s Primary School (School) and St Patrick’s Catholic Church (St Patrick’s), which were located in the Diocese. Coffey was an assistant priest at St Patrick’s and a teacher at the School. Coffey attended DP’s family home to provide matrimonial advice to DP’s parents, and the abuse occurred at DP’s home when DP was 5 years old.
DP commenced proceedings against the Diocese through the Bishop, Paul Bird, who was the nominated defendant for the purpose of the proceeding pursuant to s 7 of the Legal Identity of Defendants (Organisational Child Abuse) Act 2018 (Vic).
DP alleged that the Diocese of Ballarat was vicariously liable for Coffey’s assaults, and that the Diocese was directly liable in negligence as a result of the failure by the Bishop of the Diocese to exercise reasonable care in his authority, supervision and control of Coffey’s conduct.
In its defence the Diocese admitted that in 1971 it appointed priests to parishes within the Diocese, including St Patrick’s, through the Bishop. The Diocese also admitted that Coffey’s duties as a priest at St Patrick’s and in the Diocese included the provision of pastoral support and spiritual guidance to members of the congregation that worshipped at the St Patrick’s. However, the Diocese denied that it was vicariously liable for Coffey’s actions as a Catholic priest.
Justice Forrest ultimately accepted that DP was abused on two occasions. In deciding whether the Diocese was vicariously liable for Coffey’s conduct, Forrest J considered the following questions:
Justice Forrest was satisfied that both questions could be answered in the affirmative, and found that the Diocese was vicariously liable for Coffey’s conduct. His Honour’s consideration of those questions is set out below.
DP asserted that the Diocese was vicariously liable irrespective of whether Coffey was an employee of the Diocese.1
The Diocese asserted that it could not be vicariously liable for Coffey’s conduct unless Coffey was an employee of the Diocese at the time of the alleged abuse. The Diocese relied on the High Court authority of Sweeney v Boylan Nominees Pty Ltd (Sweeney) to support their argument that vicarious liability is limited to employment relationships.
Considering relevant authorities from Australia, Canada and the UK,2 Justice Forrest concluded that ‘the Court in Prince Alfred College did not endorse a confined theory of vicarious liability (restricted solely to an employer/employee relationship) as contended by the Diocese’, and that vicarious liability ought not be limited to ‘preconceived notions of agency or employment’.
His Honour also explored the applicability of Sweeney in the context of this proceeding, and noted that that Sweeney ‘stands for the proposition that a principal cannot be liable for the acts or omissions of an independent contractor — no more, no less’.
Justice Forrest found that Coffey was not an employee of the Diocese, but was otherwise satisfied that the relationship between Coffey and the Diocese could give rise to vicarious liability.
Justice Forrest then considered whether the Diocese should be liable for Coffey’s conduct, given that the abuse was committed outside the lawful scope of Coffey’s engagement by the Diocese.
Citing Prince Alfred College, His Honour held that:
“The appropriate inquiry is whether [Coffey’s] role as [a priest] placed him in a position of power and intimacy vis-à-vis [DP] such that [Coffey’s] apparent performance of his role as [a priest] gave the occasion for the wrongful acts and that because he misused or took advantage of his position, the wrongful acts could be regarded as having been committed in the course of his employment.”
Justice Forrest found that Coffey was conducting a ‘pastoral visit’ when he committed the alleged abuse and that the Diocese was vicariously liable for Coffey’s criminal conduct by reason of:
Forrest J concluded:
“I am also satisfied that Coffey’s role as a priest under the direction of the Diocese placed him in a position of power and intimacy vis-à-vis DP that enabled him to take advantage of DP when alone — just as he did with other boys. This position significantly increased the risk of harm to DP. He misused and took advantage of his position as a confidante and pastor to DP’s family; this enabled him to commit the unlawful assaults upon DP.”
Consequently, the Diocese was held to be vicariously liable for Coffey’s abuse of DP, and ordered to pay $230,000 in general damages, and $20,000 in aggravated damages. Justice Forrest did not make a separate finding of negligence against the Diocese.
The Diocese ultimately appealed the decision to the Court of Appeal on the following grounds:
The Court of Appeal held that ‘Coffey was the servant of the Diocese, notwithstanding that he was not, in a strict legal sense, an employee’, and that the trial judge was correct to conclude that the relationship between Coffey and the Diocese was one which, in an appropriate case, would render the Diocese vicariously liable for any tort committed by Coffey in his role as an assistant priest within the Diocese.
The Court of Appeal upheld Justice Forrest’s decision that the Diocese could be vicariously liable for Coffey’s conduct on the basis that:
The Diocese argued that it did not provide Coffey with the opportunity and occasion for the wrongful conduct for the following reasons:
The Court of Appeal did not accept these arguments, and found that the Bishop ultimately retained overriding authority over all priests in the Diocese. Additionally, by appointing and maintaining Coffey as an assistant priest, the Diocese gave him a degree of power and authority to enable him to achieve such intimacy with DP’s family. It was also found that pastoral work required priests to develop personal acquaintances and friendships with parishioners. It was through this work that Coffey gained ‘authority, power, trust, control and the ability to achieve intimacy’ with parishioners, including with DP’s family and DP.
The case confirms that vicarious liability is not limited to employment relationships and sends a strong message that religious organisation may be vicariously liable for abuse committed by religious leaders (such as priests), even if those leaders are not employees. The case also highlights how liability can attach to pastoral care provided by individuals connected with religious organisations, and how claims can be effectively pursued against unincorporated organisations under the Legal Identity of Defendants (Organisational Child Abuse) Act 2018 (Vic).
It is important that organisations that engage or appoint volunteers and religious leaders consider whether they hold insurance that extends to criminal abuses by volunteers and other non-employees. As it stands, there is no absolute, unequivocal defence against liability for the consequences of criminal abuse simply because the perpetrator is not an employee.
Moores is supporting religious organisations to understand the impact of this decision, and the safeguards that can be adopted to minimise the risk of harm and liability.
1 – following authorities from the UK and Canada, as well as the decision of the High Court in Prince Alfred College Inc v ADC,102 – Hollis v Vabu Pty Ltd (Bicycle Couriers case) (2001) 207 CLR 21; 181 ALR 263; [2001] HCA 44; Plaintiff A and B v Bird (2020) 300 IR 235; [2020] NSWSC 1379; Roman Catholic Trusts Corp for Diocese of Sale v WCB (2020) 62 VR 234; [2020] VSCA 328; Bazley v Curry [1999] 2 SCR 534; Lister v Hesley Hall Ltd [2002] 1 AC 215; BN v Anglican Church [2020] MBQB 2; Maga v Archbishop of Birmingham [2010] 1 WLR 1441; Various Claimants v Catholic Child Welfare Society [2013] 2 AC.
Children’s privacy has been in the news for the last few years, with the introduction of information sharing schemes for child safety, the technological upskilling that came with online schooling, and an emphasis on online safety by the eSafety Commissioner. In big privacy news, the U.S. Federal Trade Commission has ordered Epic Games, the maker of video game Fortnite, to pay $245 million (USD) to consumers in part for letting children make purchases without parental involvement.
The proposed amendments to the Privacy Act released by the Attorney-General continue this trend. Below we deep dive into the proposed changes to children’s privacy, and consider how these changes align with other regulatory changes and requirements to protect children.
There are multiple different definitions of a “child” or “young person” in different regulatory regimes. Currently, in privacy, there is no rule about who is considered a child. In the absence of a rule, organisations need to apply the “Gillick competence” test to determine a child or young person’s capacity to consent to information handling. This is based on the person’s capacity to understand the consequences of their consent.
There are two alternative proposals to amend the Privacy Act to provide greater clarity:
Currently, there is no definition of consent in the Privacy Act. There is a proposed amendment to codify the principle that consent must be given with capacity to be valid.
Whether an individual has capacity to consent depends on their age and other factors or vulnerability and diversity, such as understanding of English and disabilities. These kinds of considerations are a common trend in legislative amendments, for example, the increasing focus on wide scale vulnerabilities in child safeguarding legislation.
Another proposed amendment is for collection notices and privacy policies be clear and understandable, in particular for any information addressed specifically to a child. This empowers the individual to give informed consent and have more control in the handling of their personal information.
The ability to implement specific Codes which enforce additional requirements to address identified risks is already in the Privacy Act. This proposal is for a Children’s Online Privacy Code which would:
Privacy and online safety are increasing elements of child safety and safeguarding measures, particular as the Child Safe Standards require organisations to take steps to protect children in online environments. We can help you implement these proposed changes – as recognised best practice ideals – to ensure children in your care are safe online, and are also empowered to understand their privacy rights.
To continue our series on the Privacy Act Review, we have summarised the proposed reforms most likely to affect Not-for-profit (NFP) organisations and charities.
Other articles in this series include:
Currently, the “small business” exemption means organisations with a turnover of less than $3 million annually do not need to comply with the Privacy Act. A limitation on this exception is health service providers. Despite their size, health service providers must comply with the Privacy Act. This may include many NFP organisations and charities.
For NFPs and charities that are not health service providers, the removal of the small business exemption would greatly increase privacy obligations by making them subject to the Privacy Act, including the Australian Privacy Principles and the Notifiable Data Breach Scheme (NDB Scheme). Recognising this, the proposal includes a process of consultation and gradual implementation for “small businesses”.
This prospective right is far-reaching and would greatly increase the burden on organisations to proactively delete all records relating to an individual, on request by that individual. Currently, there is no such right, although individuals do sometimes ask for it, particularly after a publicised data breach at the organisation or elsewhere.
There is a proposal to introduce this right to erasure where:
In addition to the general exceptions similar to those already existing for access and correction requests, certain limited information should be quarantined rather than erased on request so the information remains available for the purposes of law enforcement. This is particularly important in relation to child safety records, which must, in many instances, be retained permanently or for an extended period of time.
The policy objective behind the right to erasure is to give individuals more control over their personal information. However, practical implementation of this right may be difficult for organisations which do not have strong technological capabilities, or funds to invest in upgrading their technology systems to allow for erasure requests.
A right to erasure was introduced in the European Union in the General Data Protection Regulation (GDPR) in 2017.
The proposed new data breach reporting obligation would require organisations covered by the NDB Scheme to notifying the Office of the Australian Information Commissioner (OAIC) within 72 hours of becoming aware of a data breach, so that, when a data breach occurs, quick action can be taken to minimise harm to affected individuals.
The current requirement is 30 days. This is a significant change, and will require NFP organisations to upskill in how they respond to data breaches.
This amendment is similar to the GDPR’s 72-hour requirement for breach reporting to national Data Protection Authorities (Article 33).
Big or small, we can help NFPs review how they handle personal information, assist with preparing privacy policies, or conduct privacy audits. We understand your data can be incredibly important to your charity, whether you are collecting donations or providing services to your clients. Please contact our privacy lawyers for any assistance.
There has been quite a lot of movement in the world of workplace regulation over the last year or so. While we are a forgiving bunch at Moores, the law is a little less so. So, in case you’ve let a few go through to the keeper, we’ve summarised some of the key changes below.
We’ve seen a lot of change in how the law views sexual harassment following the release of the Respect@Work Report (see more here). Since 10 September 2021, sexual harassment has been recognised as a form of serious misconduct in the Fair Work Regulations 2009 (Cth). The change is relevant to an employer’s obligation to provide notice of termination, but is more broadly an important signal in the workplace about the seriousness with which sexual harassment in the workplace can be treated.
The Fair Work Act 2009 (Cth) (FW Act) now contains a definition of sexual harassment, adopted from the Sex Discrimination Act 1984 (Cth), which provides that a person sexually harasses another person if they:
For a person to have sexually harassed someone else, it has to be reasonable for the person to expect that in the situation, there’s a possibility that their behaviour would offend, humiliate or intimidate the other person.
Additionally, since November 2021, employees who believe they have been sexually harassed have been able to apply to the Fair Work Commission for a Stop Sexual Harassment Order. These orders are similar to the Stop Bullying Orders you may be familiar with. However, reports of sexual harassment should be dealt with appropriately by your organisation so employees do not feel they must seek relief from the Fair Work Commission.
More recently, since 7 March 2023, employers have a positive duty to prevent sexual harassment, sex discrimination and victimisation in the workplace. This duty applies in addition to the duties under occupational health and safety law and extends to conduct by third parties, customers and clients. It requires employers to shift from taking a complaints-based approach to respond to sexual harassment after it has occurred, to taking a proactive approach to prevent sexual harassment before it occurs.
There has been a raft of changes to support families and those impacted by domestic violence. Of note:
Employers have been unable to discriminate against a person on the basis of certain protected attributes under the FW Act such as age, sex, marital status and disability for some time now. On 7 December 2022, a person’s gender identity, intersex status and breastfeeding were added to the list of protected attributes. These characteristics were already protected under anti-discrimination law and employers are now prohibited from taking adverse action against employees on the basis of these characteristics.
Since 7 December 2022, employees have a new workplace right to choose whether or not to disclose their pay and terms of their employment that might relate to their pay outcomes. This means that pay secrecy clauses in contracts entered into or varied after 7 December 2022 will be prohibited or will have no effect. Penalties can apply from 7 June 2023.
There are also changes on the horizon for fixed term contracts. From 6 December 2023, employers will be prohibited from entering into fixed term contracts:
Some limited exceptions apply (e.g. where an employee earns more than the high-income threshold, which is currently $162,000). This means that an employer’s ability to enter into fixed term contracts will be significantly reduced. Employers should consider how this change will interact with the option for casual staff to request permanent employment status under the casual conversion provisions in the NES. Additionally, employers will need to provide employees engaged under new fixed term contracts a Fixed Term Contract Information Statement. See more on these changes here.
We’ve also seen a number of changes to industrial awards. For example, the Fair Work Commission has recently confirmed that pay increases for ‘direct care’ workers in the aged care sector will come into effect from 30 June 2023 (see more on those changes here). Changes to the Educational Services (Teachers) Award 2020 were also introduced last year (see more on those changes here).
The Secure Jobs Better Pay legislation introduced changes to enterprise bargaining requirements and has put a sunset date on ‘zombie agreements’, which will come to an end on 7 December 2023 unless extended by the Fair Work Commission. The Fair Work Commission has published a list of the zombie agreements that will be impacted by the change. Please contact us if you require assistance with your expired enterprise agreement.
Changes are also coming to single and multi-employer enterprise agreements. Employers looking to bargain this year and onwards may be impacted by the changes. See more on these changes here.
From 7 January 2023, job ads must not include pay rates which breach the FW Act, industrial awards or enterprise agreements (e.g. rates lower than the minimum in the award, agreement or legislation). The Fair Work Ombudsman has the power to issue compliance notices and commence legal proceedings for any breach.
Well, it depends on how their workplace is impacted by the changes. Some employers will take one or more of the following steps:
Our Workplace Relations Team is passionate about helping employers facilitate positive change to make their workplace a safe and enjoyable space for everyone. We can guide you through identifying and implementing the changes necessary to meet your obligations and stay ahead of the pack, including working on your policies and contracts.
In the decision of The Police Federation of Australia (Victoria Police Branch) v Chief Commissioner of Police T/A Victoria Police [2022] FWC, the FWC considered an employer’s refusal of a flexible work arrangement request based on ‘reasonable business grounds’ under section 65 of the Fair Work Act 2009 (Cth) (FW Act). Ultimately finding in favour of the employer’s decision, the decision is a timely reminder of the onus on employers to give due consideration to such requests and the importance of analysing and documenting the ‘reasonable business grounds’ relevant to the request.
Legislation change in this area is also imminent with the recent FW Act changes passed in late 2022 and effective in June 2023. You can read more about the changes here.
The employee was employed in the position of ‘First Constable’ within the Transit Safety Division of Victoria Police. The employment was on a full time basis and worked over five days with shifts of eight hours in length. Many of these shifts required the operation of large vehicles, including vans. In October 2022, the employee requested that his shift pattern be changed to four, ten hour shifts on the basis that he had family caring responsibilities (Request).
Once the Request was received, the employer engaged in discussions with the employee but could not come to an agreement. The employer then sent the employee an email stating that the employee’s Request had been refused. A further discussion occurred, leading to the employee requesting a formal response to the Request.
Victoria Police responded with its reasons which included:
After the Request was refused, the employee made an application to the FWC to challenge the decision under section 65 of the FW Act.
Under section 65 of the FW Act, employees are entitled to make requests for a ‘flexible work arrangement’ if the employee:
The employer has an obligation to consider the request and must do so within 21 days of receipt of the request. A refusal of a request can only be based on “reasonable business grounds”.
In this case, the employee was eligible to request a flexible work arrangement due to his caring responsibilities (which included care for his wife and primary school aged children).
While section 65 of the FW Act provides guidance on what circumstances might be considered as ‘reasonable business grounds’ to reject a request for a flexible working arrangement, the list is not exhaustive. Those factors include:
In the Decision, the employee submitted that there were no reasonable business grounds for the refusal, stating that the employer had sufficient resourcing to perform the shifts that were required and that a loss of only two shifts every fortnight would have a “small adverse impact” on the employer’s operations. The employee also stated that he was willing to reasonably perform administration duties to make up for the two extra hours that he would have otherwise performed during each shift.
In his decision, Deputy President Andrew Bell considered the operational impact of the Request and the fact that 17% of the relevant section of the workforce was on some form of leave, or absence due to recreation or workers’ compensation. The implication of that level of absence was that further accommodations were challenging when there was a shortfall of employees already. The shortfall was not the usual or ‘typical’ level.
In considering evidence on the impact of the Request, the Deputy President stated that:
“I do not accept [the employee’s] case that there existed sufficient resources to perform the requisite number of “van shifts”. The assumptions underlying the arithmetic concerning that issue are not reflected by the evidence of each witness called by Victoria Police. That evidence, which I accept, showed that there were clear shortfalls in available staffing levels, which were not merely transitory and were also well in excess of typical absences.”
The counterpoint was that if the ‘reason’ the employer points to deny such a request is something that is part of the ‘business as usual’ workforce features or factors, it will be harder to argue that it will meet the threshold to deny the request.
Turning to the impact that the Request would have in regards to the reduction of up to two shifts per week, the Deputy President stated the following:
“Even if it might be concluded that this would have little impact on Transit South’s overall operations, the reduction in productive work that could be performed by the individual officer (even if not equivalent to a full two shifts per fortnight) is non-trivial.”
The Deputy President also found that the employee would not be able to “routinely” perform sufficient productive work to make up the additional two hours a day he proposed.
The employer successfully defended the case.
The case serves as a timely reminder for employers as they deal with an increasing number of flexible work arrangements, particularly following the changes in many workplaces after the pandemic and the transition to hybrid work environments.
Justifying a refusal of a flexible work request requires consideration and analysis. It is also important to document the decision making considerations and final decision as it may be necessary to rely upon in any legal challenge.
New FW Act changes will require employers to discuss such requests with employees and provide explanations for any refusal.
Other upcoming legislative changes on 6 June 2023 include:
For assistance with responding to requests for flexible working arrangements, or advice on your organisation’s obligations, contact our workplace relations team. Our team is well-placed to assist with practical and legal guidance for organisations seeking to balance their obligations to employees, and their operational and workforce needs.
In the coming months, a new term dealing with annual leave during a planned ‘shutdown’ period will start to take effect in many modern awards which currently contain a term, or terms, dealing with leave arrangements and related matters during shutdown periods. Impacted awards include the:
Some awards are impacted from 1 May 2023.
The change is part of the Fair Work Commission’s four yearly modern award review and a desire to standardise the requirements and obligations for annual leave during shutdown periods.
Many employers have planned shutdown periods including for an annual close down during the Christmas holiday season. This type of shutdown is different to a stand-down of employees required because of a third-party cause (such as a breakdown of machinery, natural disaster or industrial action in certain circumstances). While sometimes the terminology is used interchangeably, they are different concepts under the legislation. The award change which is the subject of this article relates to planned shutdowns of a whole or part of an employer’s operation.
Currently, many awards deal with how an employer can require an employee to take leave, whether paid or unpaid, during the ‘shutdown’ period. Some awards are more prescriptive than others.
The upcoming change will see the inclusion of a new ‘model term’ in each of the 78 impacted awards. The key feature of the change is that an employer will not be able to require or direct an employee to take unpaid leave during the shut down period. That does not mean that the employer has to pay the employee where the employee has exhausted their paid annual leave entitlements but the employer may need to work with the employee on a specific mix of leave to cover the period, such as use of any remaining paid annual leave entitlement, agreed leave in advance or leave without pay with agreement of the employee.
Other features of the change include:
If your organisation’s workforce, or part of your workforce, is covered by an award, it is recommended that your organisation:
Moores can help you to identify the necessary steps to ensure that your organisation is compliant with the new changes, including updating of leave policies, to ensure compliance. Get in touch with the Workplace Relations team at Moores if you or your organisation need any assistance with these matters.