The unprecedented nature of 2020 had a significant impact on child safety. Most organisations were required to shift the majority, if not all, of their interactions with children online. At the same time, many anticipated legislative reforms were postponed for a year.

As your organisation begins to plan for 2021, child safety needs to remain a key priority. Organisations need to be aware of the latest trends, developments and legislative reforms. We recommend that organisations take proactive steps to strengthen their approach to child safety.

Download our free guide by registering below to help your organisation set out your child safety agenda for 2021.

For more information regarding your child safety obligations, please do not hesitate to contact us.

Register:

The High Court handed down its decision yesterday in Westpac v ASIC [2021] HCA 3. 

The decision gives clarity around fundamental questions in financial planning – what is financial product advice?  How is personal advice different to general advice?  How do the differences between personal and general advice relate to the best interests duty?

The matter concerned a campaign by Westpac’s “Super Activation Team” which was tasked with writing to and then calling existing BT super fund members and encouraging them to roll any other super accounts into their BT super funds.  Staff were trained on the difference between general and personal advice.  Westpac provided staff with a script for the calls.  The script required the staff to ask customers about their personal financial circumstances including what their other super balances were. 

ASIC alleged that Westpac’s campaign was the provision of financial product advice, personal financial advice (without a license) and that the bank had failed to act in the clients’ best interests in relation to that advice.

The High Court found that:

• Westpac did provide personal financial advice.  The fact that a disclaimer had been given (“everything discussed today is general in nature”) and that the advice was free was not enough to characterise the advice as general advice.  The Court found that a reasonable Westpac customer would expect that the bank was taking into account one or more of their personal objectives, financial situation or financial needs.
• Westpac contravened the “best interests” duty.  Based on the call scripts, the Court found there were no substantive steps taken to determine whether the rollover was in the customer’s best interests. 

Clarification of the Corporations Act provisions concerning personal versus general advice and the “best interests” duty is welcome. 

The decision is relevant to advisors engaged in the provision of advice to their clients in at least the following respects:

1. Advisors who do not hold an appropriate financial services licence are exposed where they provide “financial product advice”.   The Court noted that financial product advice includes when advice given is intended to influence the party in making a decision about a financial product – retain or industry superannuation accounts, life and income insurance are all examples of  financial products;
2. Even for licencees, if the licence is restricted and does not permit the provision of “personal” financial advice, care will need to be taken not to cross the line into territory where the objectives and circumstances of the particular person are known to the advisor.    A disclaimer asserting the advice is general in nature, may not provide any protection from liability.
3. Although the case does not directly deal with the question of liability from an advisor to the client who may suffer financial loss as a result of provision of unlicensed personal financial advice, in general terms it would seem that a breach of these regulations would bolster any claim by a client against an advisor for negligence or for misleading or deceptive conduct.

How we can help

For further information or assistance regarding any of the above, please do not hesitate to contact us.

Moores’ child safety experts, Skye Rose and Rena Ou Yang were recently interviewed as guest speakers for the Child Safeguarding Podcast by Poynting Consulting and Advisory. The Child Safeguarding Podcast explores how people and organisations are embedding the National Principles for Child Safe Organisations and creating child-safe environments to protect children from abuse, neglect and exploitation in Australia.

Moores is dedicated to facilitating child safe organisations and empowering children and young people. From preventative work to responding to concerns, we harness our expertise to ensure a supportive and child centered approach. Learn more about our expertise in child safety.

Listen to SO1E06 with Rena Ou Yang:

Listen to SO1E04 with Skye Rose:

2020 was one of the most turbulent years for employers and employees in recent memory, and now is a great time to review your workplace relations strategy for 2021.

We saw worldwide recessions, state directed lockdowns, and pressure for employers to rapidly pivot to remote and virtual working environments.

From a workplace relations perspective, the pandemic prompted much more than a temporary homeworking experiment and a short term logistical challenge. It tested the foundation upon which our working lives operate, and required organisations, leaders and employees to embrace significant changes to the status quo.

In the midst of these challenges, the federal government moved swiftly to establish IR Working Groups tasked with finding ways to urgently rebuild jobs lost as a result of COVID-19, while our federal courts interpreted historical workplace legislation through the lens of a global pandemic.

For good or for bad, the challenges of 2020 present a learning tool for your workplace relations strategy moving forward. In this article we explore the key learnings from 2020, and what to expect for the year ahead.

1. Working From Home is Here to Stay… at least in some form

One positive outcome of the pandemic is that many industries have embraced remote working.

Working from home arguably offers opportunities to improve our working lives – be it through reduced commuting, greater efficiency and productivity, or flexibility to integrate our professional and personal responsibilities.

For industries that continue to embrace remote working or move towards hybrid models, employers need to balance the improvements with the emerging risks:

• Data loss prevention – is your confidential information being printed, copied to a USB or otherwise misappropriated by your remote staff? Can confidential discussions be overheard in the home?
• Occupational health & safety – organisations were initially forced to transition to a virtual environment with little to no notice. Beyond the obvious step of assessing the ergonomic set up for employees at home, what steps has your organisation taken to ensure that your staff are physically and mentally safe in a remote environment?  Will it direct staff to obtain a COVID-19 vaccination, and on what basis?
• Workers’ compensation liability – the rise of remote working will inevitably lead to disputes about the boundaries of the remote workplace, where it starts and where it finishes.
• Tracking hours of work and preventing underpayments – record keeping is not only a legislative requirement for some employees, but a failure to implement accurate tracking measures can lead to costly underpayment disputes. Does your organisation properly record and monitor the working arrangements and hours of your staff?

2. Equal Employment Opportunity Compliance

One of the additional challenges with continued remote or hybrid working models is a perceived lack of employer visibility regarding EEO compliance.

The rise of remote working has seen bullying, discrimination and harassment materialise in different ways:

• Inappropriate workplace behaviour is less likely to be witnessed.
• The anonymity of virtual communications (such as email or instant messaging software) can lead to disputes regarding misconceptions and misunderstandings.
• The increased use of videoconferencing software can lead to changes in employee behaviour, particularly where traditional office or other professional atmospheres have been traded for a more relaxed home-based environment.
• For many, the stress of 2020 through lock downs and home schooling has prompted the need for additional support and accommodation on the basis of disabilities and family responsibilities.

We’re also likely to see debate about the extent to which employers can direct employees to obtain a COVID-19 vaccination, with some objecting to the direction on the basis of their disability, religion or political belief.

These challenges present an opportunity for employers to revisit their EEO compliance training and ensure it is contemporary and fit for purpose.

3. Rise of the Side Hustle

Did you hear about the two teenage entrepreneurs that made $70,000 over the course of a few months operating an E-Commerce store and selling brainteaser puzzles to bored Australians during lockdown?

2020 has seen the rise of the side hustle, enabling people to pursue creative interests or source alternative income.

It is generally settled that an employee’s private life is ‘out of bounds’ and beyond an employer’s jurisdiction.  In very limited situations, an employer may have some rights to regulate an employee’s external activities, which may include circumstances where the:

• external activity is conducted during work hours
• external activity operates in competition to the employer’s business
• employee diverts business opportunities away from the employer
• external activity utilises the employer’s confidential or proprietary information, or
• external activity causes the employee to be fatigued at work.

The circumstances of each case will impact an employer’s options to respond to the issue.

Importantly, employers should ensure that any disciplinary action is proportionate to the relevant conduct. In Jackman v Lek Supply Pty Ltd [2018] FWC 6154, Commissioner McKinnon ordered reinstatement of a worker dismissed for conducting personal business affairs during work hours (specifically, the employee had responded to a customer complaint relevant to her hobby business making and selling candles and other related goods).

In this case, the Commissioner acknowledged that, during working hours, the employee should have devoted her full attention to her employer’s interests. However, the conduct could have been rectified by a written warning, and there was no evidence to suggest that her employment duties and personal interests could not co-exist. This can be contrasted to other situations where external activities encroach on an employee’s ability to perform two jobs (e.g. see Bertos v Northern NSW Football Limited [2020] FWC 2819), or where an employee uses an employer’s email and customer lists to set up a related business (e.g. see Post v NTI Limited [2016] FWC 1059).

4. Casual Employment

Long term casual employment remained an unresolved issue for employers throughout 2020, particularly following the judgement in WorkPac Pty Ltd v Rossato [2020] FCAFC 84 whereby the full federal court:

• awarded Mr Rossato, an employee engaged on an ostensible casual basis, the paid leave entitlements of a permanent employee; and

• rejected the employer’s proposition that a casual loading should be set off against the outstanding leave entitlements.

At the time of writing, the High Court has granted special leave for the Full Federal Court’s decision to be appealed, although in the absence of a national and legislated definition, casual employment remains a void of ongoing uncertainty for employers.

The federal government’s IR Omnibus Bill, which passed through both houses of parliament in December 2020, proposes to curb this uncertainty by offering the following definition of casual employment:

“A person is a casual employee of an employer if:

• an offer of employment made by the employer to the person is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person; and

• the person accepts the offer of that basis; and

• the person is an employee as a result of that acceptance”.

However, we can expect the Omnibus Bill to face continued opposition and criticism in the coming months, including from the Australian Labour Party whom have described the proposed legislation as ‘the worst attack on workers since WorkChoices’.

5. Wage theft and criminalising underpayments

For the most egregious underpayments, the federal government’s IR Omnibus Bill proposes to introduce criminal prosecution for employers that dishonestly engage in a systematic pattern of underpaying employees.

Maximum penalties are set to involve four years imprisonment, $1.11 million fines for individuals and/or $5.55 million fines for corporations.

It is not entirely clear how, if at all, the federal reforms will interact with the existing Victorian Wage Theft Act 2020 which is due to commence on 1 July 2021. It is possible that, should the federal government’s IR Omnibus Bill be enacted into law, the validity of the Victorian legislation could be challenged on constitutional grounds, rendering it obsolete.

However, irrespective of which regime will apply in 2021, employers can expect regulator powers (such as the Fair Work Ombudsman) to expand with a view to facilitating coercive measures, enforcement and deterrence.

Now more than ever, employers are urged to audit or health check their compliance systems to ensure they are providing minimum employment entitlements under the National Employment Standards and their applicable industrial instruments.

How we can help

If you would like support on your workplace relations strategy and future proofing your organisation, please contact do not hesitate to contact us.

Click here to register for a link to our recent webinar recording which takes a fresh look at workplace relations in 2020, and how you can best prepare your organisation for what lies ahead,

On 30 October 2020, the Government published the Issues Paper and Terms of Reference (Issues Paper) for its review of the Privacy Act 1988 (Cth) (the Privacy Act).

The review builds on the Government’s announcement in March 2019 of reforms to increase the maximum civil penalties under the Privacy Act and develop a binding privacy code to apply to social media platforms and other online platforms that trade in personal information.

Large scale reforms also will likely mean that, for the first time since the Privacy Act was introduced in 1988, small and micro organisations, including charities, churches, schools and early childhood services which have a turnover of less than $3M will be required to comply.

This arguably represents a significant imposition on a sector which has already seen a drop in income in 2020, even as demand for services, particularly welfare and mental health, has boomed. It is likely to continue to place pressure on smaller organisations to merge to gain economies and scale and be positioned to attract funding. This is not without impact on sector diversity and jobs. Other important mooted changes include:

• An updated definition of ‘personal information’ to include technical data and online identifiers;
• An individual right to erasure of personal information; and
• Strengthening of individuals’ rights to privacy by equipping them with a direct right to enforce privacy obligations under the Privacy Act and inclusion of a statutory tort for ‘invasion of privacy’.

If implemented, these changes would require organisations to reconsider how they define personal information and necessitate technological change in order to implement and operationalise the reforms. We detail what steps your organisation may need to take to respond to these amendments.

What matters is the Privacy Act Review considering?

Removal of the small business exemption

Currently, organisations with a turnover of less than $3 million do not need to comply with the Privacy Act. The Government is considering the appropriateness of this threshold and considering its removal. This change would dramatically increase the number of organisations that need to comply with the Privacy Act.

Definition of personal information

In order to keep up with technological advancement, the Australian Competition and Consumer Commission recommended in its inquiry into digital platforms that the definition of personal information under the Privacy Act should include technical data such as IP addresses, location data, device identifiers and any other online identifiers. This change would require an organisation to adapt its privacy processes and procedures to ensure this data is being protected in the same way as other personal information that is collects, uses and discloses.

The right to erasure

Under current law, organisations must delete data once it is no longer necessary. An individual right to erasure of data would remove this burden on organisations and create a right for individuals to request erasure of their data. Subject to some exceptions, this right would not:

• override existing obligations to retain personal information for legal reasons;
• overshadow public interest reasons for retaining information (such as retaining information in the interests of national security); or
• negatively affect freedom of expression and the free flow of information.

Giving individuals more control over their personal information, this right would enable them to make a direct request to an organisation for erasure of their personal information. They would no longer need to request a declaration from the Office of the Australian Information Commissioner (OAIC) to have their personal information deleted.

In response to this recommendation, you may like to consider whether your current organisational data retention practices would enable you to swiftly respond to an individual’s request for deletion of their personal information.

Stronger Privacy Protection

The review is currently considering whether a direct right of action should be created for individuals to enforce privacy obligations, or a statutory tort of privacy should be created.

A direct right of action to enforce privacy obligations

Currently, there is no right under the Privacy Act for individuals to seek compensation through the courts for interference with their privacy. Instead, a privacy complaint must be lodged with the OAIC, and once the OAIC has made a determination, a complainant may then apply to the Federal Court or the Federal Circuit Court to enforce that determination. A direct right of action would enable individuals to bring actions or class actions against organisations to seek compensatory damages as well as aggravated and exemplary damages for breach of privacy.

The Issues Paper states that this direct right of action would be confined to serious rather than trivial breaches of the Privacy Act and a requirement would be imposed on complainants to take genuine steps to resolve their matter (by, for example, attending conciliation) before filing a complaint in court.

Statutory tort of privacy

Instead of a direct cause of action, the Government is also considering a tort for invasion of privacy, which would respond to breaches of privacy. However, the Issues Paper does note that the need for a tort of privacy may be negated by recent changes to criminal law that address serious invasions of privacy, such as image-based abuse. The Issues Paper seems to favour a direct right of action.

Next steps

We expect further announcements by the Government next year, with a second issues paper due for release in early 2021. In the interim, if you believe your organisation may be affected by these changes, you should consider whether:

• your data collection and retention practices comply with the current requirements of the Privacy Act; and
• your organisation would be in a position to adapt to the proposed changes.

Furthermore, given the prevalence of online attacks and data breaches brought about by the pandemic, it is more important than ever that organisations comply with Privacy Act requirements. You are therefore encouraged to ensure:

• your privacy policies and procedures are up-to-date and compliant;
• you are collecting and retaining data and personal information safely and securely; and
• you act swiftly in response to known or suspected instances of data breaches or privacy interference.

How we can help

If you would like further information about the proposed changes to the Privacy Act, or assistance with ensuring your organisation has up to-to-date and compliant privacy practices and procedures, please do not hesitate to contact us.

On 27 November 2020, the Federal Government announced plans to introduce sanctions for charities that fail to join the National Redress Scheme (Scheme) for victims of institutional child sexual abuse.

These plans involve introducing a new Australian Charities and Not-for profits Commission (ACNC) Governance Standard (proposed standard). The proposed standard is intended to promote the desired result of full participation in the Scheme.

The Scheme

The Scheme’s objectives include holding institutions accountable for institutional child sexual abuse. A key component of this involves participating institutions providing redress to individuals who experienced child sexual abuse in connection with those institutions. In order to meet this objective, institutions have been encouraged to join the Scheme following its commencement on 1 July 2018.

However, some institutions have still not joined or signified their intent to join the Scheme. By announcing plans to introduce sanctions for charities that fail to join, the Federal Government is taking a firm stance towards charities which have thus far avoided accountability under the Scheme.

Proposed Changes

The Federal Government’s plans can be summarised as follows.

• Introducing a new ACNC Governance Standard: The Federal Government plans to introduce a new ACNC Governance Standard requiring registered charities to take all reasonable steps to become a participating non-government institution in the Scheme if a claim has been, or was likely to be, made against them. This includes charities named in the Royal Commission as well as charities that are notified by an individual that they intend to seek redress.
• Amending the ACNC Act: The Federal Government also plans to amend the definition of ‘basic religious charity’ under s 205-35 of the Australian Charities and Not for-profits Commission Act 2012 (Cth) (ACNC Act) to provide that a religious institution that has been named in a redress application but refuses to join the Scheme will not be entitled to be a ‘basic religious institution’. This will mean that the religious institution is then required to comply with not only the proposed Governance Standard but all of the existing Governance Standards unless and until it joins the Scheme.

Potential consequences

Under the new sanctions, registered charities which fail to fulfil their obligation to join, or take reasonable steps to join, the Scheme will be subject to the ACNC’s suite of existing compliance powers, including revocation of charity registration.

In addition to ACNC compliance action, registered charities which fail to join or signify their intent to join the Scheme already risk having their name published on the Scheme website in accordance with Scheme legislation. As well as providing transparency for individuals who have applied or are considering applying to the Scheme, this places public pressure on charities to join.

Coverage

Although there are currently over 58,000 charities, very few charities are likely to be affected by the proposed standard. The ACNC Commissioner noted that only ‘a very small number’ of Australian charities are likely to be affected by the proposed changes’ .

This narrow application (and the prescriptive nature of the standard) makes the proposed standard an unusual addition to the current Governance Standards (which generally have broad application and are principle-based rather than prescriptive). This could be ameliorated by reframing the proposed standard as a principle applicable to all charities while still achieving the Federal Government’s goal of encouraging charities to join the Scheme.

Specifically, the proposed standard could be reframed to require charities to ‘protect vulnerable persons’ (with an explanatory statement confirming that failure to take reasonable steps to join the Scheme was a breach of the standard). This would:

• be consistent with the current Governance Standards;
• align with the ACNC’s compliance focus of protecting vulnerable individuals;
• ensure charities’ obligations within Australia are consistent with their obligations outside Australia – the External Conduct Standards already require charities to take reasonable steps to protect vulnerable individuals overseas, while no corresponding obligation applies within Australia; and
• give the ACNC powers to intervene in all situations where vulnerable individuals are not appropriately protected – not only for failure to join the Scheme, but in other situations where charities place vulnerable individuals at risk.

Treasury is seeking submissions on the draft legislation introducing the proposed Governance Standard until 8 January 2021.

How we can help

Charities that have been named in the Royal Commission, in an application to the Scheme or in information provided to the Scheme should seek urgent advice on the process to join the Scheme.

Otherwise, charities should always ensure that they are aware of and complying with the Governance Standards, particularly in relation to managing historical claims and the protection of vulnerable individuals. In particular, charities are encouraged to:

• review their child safety documentation and ensure that it is up-to-date and compliant with current legislation;
• review and upgrade their policies and procedures in relation to historical claims as necessary;
• ensure that they carry out their activities in a manner which is consistent with their charitable purpose; and
• maintain good governance policies and practices which accord with the ACNC’s Governance Standards.

For more information or guidance regarding the new sanctions for charities or any of the above, please do not hesitate to contact us.

Further to Moores’ recent article (here) detailing extensions to the JobKeeper Scheme (among other Fair Work Act reforms), the ATO has relaxed a series of deadlines that are relevant to an employer’s eligibility to receive JobKeeper payments in 2021.

As a reminder, the second JobKeeper payment extension period will commence from Monday 4 January 2021, covering JobKeeper fortnights up to Sunday 28 March 2021. For this period:

• Employers that are eligible for the second JobKeeper extension will need to complete a new decline in turnover test; and
• The fortnightly JobKeeper payment rates will decrease from $1,200 to $1,000 (tier 1 employees), and $750 to $650 (tier 2 employees) respectively.

From 4 January 2021 until 28 March 2021, the decline in turnover test will be satisfied if current GST turnover for the quarter ending 31 December 2020 has declined by the specified shortfall percentage (15%, 30% or 50%, depending on the nature and size of the organisation) in comparison to GST turnover for the quarter ending 31 December 2019.

If you are otherwise new to the JobKeeper scheme, your business can still enrol to participate in the remaining fortnights.

In light of the busy Christmas/New Year period (and catering for increased leave entitlements accessed during this period), the ATO has announced it will give businesses more time to meet their JobKeeper obligations.

A summary of important deadlines are summarised below:

• 4 January 2021 – Wage Condition Due
  • For JobKeeper fortnight 20 (21 December 2020 to 3 January 2021), the ATO will allow eligible employers until 4 January 2020 to satisfy the wage condition for eligible employees.
    
• 28 January 2021 – Business Monthly Declarations Due
  • Eligible employers can complete their business monthly declaration from 4 January 2021, to be reimbursed for payments made to eligible employees between 23 November 2020 and 3 January 2021.
    
• 31 January 2021 – Further Wage Condition Due (Fortnights 21 & 22)
  • For JobKeeper fortnights 21 and 22 (starting 4 January 2021 and 18 January 2021), eligible employers will have until 31 January 2021 to meet the wage conditions for their eligible employees.

More information about the key dates for the JobKeeper scheme (and extensions) can be found here.

How we can help

Moores is continuing to support many employers navigating the complex requirements of the JobKeeper Scheme and JobKeeper eligibility. If you’d like to understand your rights, responsibilities and options in light of the JobKeeper extension, please do not hesitate to contact us.

Recent high profile cases tell a cautionary tale to employers and employees about public comment and expressing personal views in the course of employment.

Moores’ CEO and Practice Leader, Tessa van Duyn, discusses the increasing use and prevalence of social media, and how employers are taking steps to preserve and protect their reputation through control and monitoring of employees’ private activities online.

Read Tessa’s article published in the Law Institute Journal here or click on the following link for the full publication (p. 44).

For more information or guidance on what is reasonable and lawful monitoring in relation to employee activities online, please do not hesitate to contact us.

The Australian Taxation Office has recently issued Practice Statement Law Administration 2020/3 (PSLA 2020/3) which provides for the administration of penalties imposed under s166(1) of the Superannuation Industry (Supervision) Act 1993 (Cth) (“SISA”) for contraventions involving SMSFs.

PSLAs are internal documents which provide direction to ATO staff on approaches to take when performing duties on the laws they administer. They are not law or public rulings and cannot be relied upon to provide interpretative advice on particular legislation, but do provide helpful insight as to the approach case officers will take.

Section 166(1) of SISA

Section 166(1) sets out a list of the SISA provisions where liability for an administrative penalty applies if that provision is breached. These provisions include many well-known SMSF compliance sections such as the in-house asset rule, the prohibition on borrowings and providing a loan or financial assistance to a member or relative.

The purpose of the section is to encourage voluntary compliance by ensuring that there are consequences where trustees or directors of trustee companies have behaved poorly. Section 166 also aims to shift trustee behaviours for better compliance, particularly where an educational approach taken by the ATO has not been effective.

Penalty amounts for breaches of SISA provisions, measured in penalty units, are also specified in s166. The penalty applies to the trustee of the SMSF. If the trustees are individuals, separate penalties are imposed on each trustee for the same offence. If, however, the trustee is a company, a single penalty is applied which is shared between the directors. Importantly, a penalty must be paid from personal funds, not from the SMSF assets.

PSLA 2020/3

The purpose of PSLA 2020/3 is to provide guidance to ATO staff on a number of matters arising from a contravention of a provision listed in s166 of SISA, including penalty remission considerations. It includes a number of indicative examples of compliance treatment and the approach that can be taken by the ATO when considering a remission of penalties.

Remission of Penalties

The ATO has an unfettered discretion to remit all, part of or none of a penalty imposed. According to the practice statement “remission provides the administrative flexibility to ensure that the penalty imposed is appropriate for the observed behaviour”.

The ATO is directed to consider the individual circumstances of the case when making a remission decision and in particular, for each case:

• The background and experience of the trustees and/or directors;
• Historical compliance by the trustees or directors;
• Attempts to voluntarily disclose prior to ATO intervention; and
• Any circumstances that may have caused or contributed to the contravention, or affected the ability to rectify the contravention.

The practice statement also outlines a number of other factors to be considered, including:

• Would the main objectives of s166 be compromised if the penalty was remitted;
• Did the trustee act in a way that would reasonably be expected of another trustee in the same circumstances?
• The seriousness of the contravention. For example, how were the fund’s assets affected?
• Whether the penalty is unreasonable such that it would cause unintended or unjust results;
• Were there multiple breaches of the same provision? An example of this may be where there have been multiple withdrawals of member funds without satisfying a condition of release; and
• Has a particular event resulted in breaches of multiple provisions referred to in s166(1)? If one particular event results in breaches of multiple provisions, the ATO could potentially remit the penalty for the secondary contravention and then consider whether there should be a remission of any part of the penalty for the primary contravention.

Whilst good prior compliance or even attempts to rectify the breach may support a penalty being remitted, this may be outweighed by other factors that would warrant otherwise. It is also important that trustees or directors are aware of their role and responsibilities in acting in this role. The practice statement specifically notes the relevance of the trustee or directors being required to declare that they understand their duties and obligations at the time of setting up the SMSF when considering penalty remission. The trustee declaration form is required to be kept for the life of the SMSF and for a period after wind-up of the SMSF, and made available to the ATO if requested.

A trustee or director who is dissatisfied with a remission decision has rights to appeal in certain circumstances, which may include applying to the Administrative Appeals Tribunal or Federal Court of Australia.

Tips and Awareness

Whilst there should never be an intention to establish and operate a SMSF with a view to contravening any of the administrative penalty provisions, PSLA 2020/3 is now a valuable published tool in understanding the practical approach taken by the ATO around the issue of penalty remission.

Steps or actions that trustees or directors could take which could result in penalties being remitted, all or in part are:

• Immediately taking action to rectify the breach as soon as they become aware of the contravention;
• Initiating and putting in place measures to ensure that a breach does not happen again;
• Promptly engaging with the ATO by making voluntary disclosure. This is likely to be seen as favourable by the ATO, although all of the circumstances of the contravention will be considered. In some cases, the ATO may require an enforceable undertaking to be provided by the trustees or directors demonstrating how a contravention is intended to be rectified;
• If a contravention is identified, noting down the circumstances that may have contributed to the contravention or inhibited the rectification of the breach. In example 11 of the PSLA which involved a borrowing, the case officer determined that there should be further remission for one of the trustees because he was in hospital and temporarily incapacitated at the time of the contravention and the other trustee had acted on her own and claimed full responsibility; or
• Providing an undertaking to the ATO to further educate themselves on what a SMSF can and cannot do such as completing a SMSF education course.

How we can help

An understanding of the compliance requirements is paramount in operating a SMSF. There are onerous responsibilities imposed on trustees or directors and contraventions of any provision outlined in s166(1) of SISA can result in one or more administrative penalties applying. PSLA 2020/3 now gives an understanding of the approach by the ATO to administering penalties and the factors that will be considered in determining remission of penalties. For more information or guidance regarding any of the above, please do not hesitate to contact us.

The National Employment Standards (NES) has recently been updated to improve unpaid parental leave for parents, including for parents of stillborn babies, infant deaths and premature births.

The key changes are two-fold:

1. Eligible employees can now take up to 30 days of flexible unpaid parental leave in the two years following birth or adoption. Leave can be taken as:
   • Single continuous period of one or more days; or
   • Separate periods of one or more days each.
     ** Note that these 30 days are to come out of the employee’s entitlement to 12 months of unpaid parental leave.
2. Employees who have experienced the trauma of stillbirths, infant deaths and premature births will now have access to improved unpaid parental leave entitlements.

The entitlements are available to full time, part time and casual employees.

How we can help

For more information on what this might mean for your organisation or how to apply it practically, please do not hesitate to contact us.

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