There is no doubt that 2020 has been eclipsed by COVID-19 and the shift to remote learning (and back) for schools in Victoria. However, as we approach COVID-normal, schools need to start looking ahead and preparing for the year to come. Next year brings with it significant new legal requirements for schools, many of which were postponed from this year. Regulators will become less lenient and forgiving of schools using COVID-19 as an excuse for being unprepared.

As schools begin their final term, we have set out some of the key changes that schools in Victoria need to factor into their planning for 2021.

Child Information Sharing Scheme

In the first half of 2021, registered schools will be captured by the second phase of the Child Information Sharing Scheme (CISS) as Information Sharing Entities (ISEs). The change is set out under the proposed Child Wellbeing and Safety (Information Sharing) Amendment Regulations 2020 (Regulations) and allows the sharing of information about children and parents to better support children and families and prevent harm. You can read more about the CISS generally at our previous article.

The application of the CISS to schools was delayed due to the impact of COVID-19 and will now occur by July 2021. The implications for schools are significant, particularly as they are not familiar with the similar Family Violence Information Sharing Scheme. The CISS will allow schools to share and request information with other ISEs in a manner that would previously have been a breach of privacy laws.

Schools will also be able to contribute and request information from a centralised Child Link Register which includes a key set of factual information relating to children in Victoria. The CISS will have significant child safety, privacy and regulatory implications and risks for schools. Schools need to begin upskilling their staff and preparing to participate in the CISS.

Updated Guidelines

The Victorian Registration and Qualifications Authority (VRQA) has released updated Guidelines to the Minimum Standards and Requirements for School Registration (Guidelines) commencing on 1 January 2021 for new school registrations or 1 July 2021 for existing registered schools.

Some of the key changes include:

• New requirements for:
  • ELCs;
  • Not-for-profit record keeping and procurement; and
  • board processes regarding conflicts of interest;
• requiring schools to embed details of grooming offences into their child safety policies and procedures;
• clarifying evidence requirements relating to governing body structures and details; and
• clarifying the process for schools seeking to amend registration details.

Schools should refer to the VRQA’s updated Guidelines and ensure that they are taking steps to be compliant by the required dates. This is particularly important as the VRQA is due to release their updated strategic plan from 2021 onwards and it is anticipated that compliance reviews and audits will continue to be an area of focus for the regulator.

Amendments to the Child Safe Standards and the Ministerial Order 870

At the end of 2019, a review of the Victorian Child Safe Standards (Standards) was completed and recommended amendments to the Standards to align with the National Principles for Child Safe Organisations (National Principles). The Standards are applied to schools through the Ministerial Order 870.

It is anticipated that the Standards will be amended in 2021 to align with the National Principles, with the Ministerial Order 870 to be amended shortly after this. While it was recommended that organisations be given 12 months to comply with any amended Standards, schools should be cognisant of this upcoming change. It aligns with the continuing focus on child safety and scrutiny of organisations that fail to keep children safe.

Registration of boarding schools

The Education and Training Reform Amendment (Regulation of Student Accommodation) Bill 2020 (Bill) has passed the Legislative Assembly and is now with the Legislative Council where it is likely to pass. The Bill will expand the VRQA’s powers to include school boarding premises, including requiring boarding schools to register. The VRQA will have the power to take compliance or enforcement action against school boarding premises if they fail to comply with the Child Safe Standards or other requirements.

While the initial date for these changes was the beginning of 2021, this is now likely to be delayed. Once the Bill is passed, all boarding schools will be required to go through a registration process and then subject to five-yearly reviews.

How we can help

The significant upcoming changes demonstrate an ongoing prioritisation of child safety with many of the changes implementing the recommendations of the Royal Commission into Institutional Responses to Child Sexual Abuse.

To mitigate the risk of regulatory scrutiny and prepare, we recommend that schools take the following next steps.

1. Compliance planning – schools need to consider the above changes in their planning for 2021. Consider the key dates by which compliance is required and the steps that your school needs to take to meet the deadlines. Ensure that your risk and compliance teams are keeping updated on developments and responding appropriately.
2. Policy review – many schools have delayed their policy reviews as a result of COVID. Given the upcoming changes, this needs to be prioritised, particularly your privacy policy in response to the CISS and your child safety documents.
3. Set child safety strategy – child safety will continue to be a significant area of change and scrutiny by regulators. Schools need to implement a child safety strategy which is driven from the top. Now is a good time to review your strategy or put one in place to ensure it encapsulates the changing environment, the impact of COVID-19 and remote learning, and the upcoming legislative changes.
4. Training – as schools return, it is important that training programs are resumed. To prepare for the upcoming changes, schools need staff to understand their baseline child safety and privacy obligations. Leadership teams should also be upskilled to implement the upcoming changes.

For more information or guidance regarding the upcoming changes, please do not hesitate to contact us.

In the Office of the Australian Information Commissioner’s Notifiable Data Breaches Report January – June 2020, the number of data breach notifications attributed to ransomware attacks increased by more than 150% compared with the previous six months — increasing from 13 to 33. We are aware of a number of our Victorian school clients which have been subject of ransomware attacks in recent months.

The increase in ransomware attacks is due to a perfect storm created by COVID-19 of depressed economic circumstances, criminal groups being able to piggy-back off COVID-19 themes for phishing or whaling attacks and disruption or delay in usual processes for IT security due to workforce changes, crisis management needs and working from home arrangements.

Furthermore, remote working significantly increases success rate of ransomware attacks, due to weaker controls on home IT systems and a higher likelihood of users clicking on ransomware lure emails when outside an office environment and its training and policy focus.

What is ransomware?

Ransomware is a form of malware that encrypts a target’s files. There are a number of ways that ransomware can access a computer:

• Via phishing spam, where attachments comes in an email, appearing as a file that the email recipient could trust. Once downloaded and opened, they can take over a victim’s computer.
• A more aggressive form of ransomware is where security holes are exploited to infect computers, without tricking the user of the computer first.

Once the computer has been taken over, the attacker will encrypt some or all of the user’s files. The attacker then demands a ransom from the target to restore access to the data upon payment. Users are shown instructions for how to pay a fee to get a decryption key. The costs can range from a few hundred dollars to thousands, payable to cybercriminals in Bitcoin.

Another variation of ransomware occurs in which the attacker threatens to publicise sensitive data on the target’s hard drive unless a ransom is paid.

What steps can you take to prevent a ransomware attack?

In order to prevent a ransomware attack occurring to your organisation, we recommend taking key steps including:

• Train and educate staff on how to identify and avoid potential ransomware attacks. Many cyber-attacks originate with a targeted email that encourages a user to click on a malicious link, so, education of staff is one of the most important defences an organisation has;
• Continuously back up your data to prevent losing data, so that you are able to recover it in the event of corruption or disk hardware malfunction;
• Ensuring your systems have the latest ‘patches’ (a small piece of software that a company issues whenever a security flaw is uncovered). Cyber criminals will look for the latest uncovered exploits in the patches made available and then target systems that are not yet patched;
• Delete or archive old data that you no longer use.

It is critical that if your organisation collects and stores personal information, including the information of clients, customers, business partners, employees and contractors, you fully understand how and where this information is stored on your network. Organisations should also consider network segmentation, additional access controls and encryption to reduce the risk of personal or commercial information being exposed by a ransomware attack.

Australian Information Commissioner and Privacy Commissioner Angelene Falk states that the growing trend of ransomware attacks “has significant implications for how organisations respond to suspected data breaches — particularly when systems may be inaccessible due to these attacks”. This statement by Ms Falk highlights the importance of having an up-to-date Data Breach Response Plan which members of your organisation are aware of and know how to enact quickly.

How we can help

Moores is committed to helping our clients respond to the critical and immense changes in the current pandemic. As part of this commitment, Moores has developed a complimentary privacy policy template in partnership with Our Community.

Is your Data Breach Response Plan up-to-date? If not, Moores is able to assist you with preparing or amending this crucial document. We also offer in-house privacy training for staff. For more information, please do not hesitate to contact us.

In a landmark case, the Supreme Court of Victoria has set aside a deed of settlement between the plaintiff, known as WCB, and the Catholic Church for historical child abuse. It was the first case decided after amendments in 2019 to the Limitation of Actions Act 1958 (Vic) (the Act) which allowed courts to set aside previous settlements if it was ‘just and reasonable’ to do so. The judgment has significant implications for all organisations that previously settled historical child abuse claims for sums that in the current environment could be viewed as insufficient. It also carries important lessons for organisations on ensuring their settlements are ethical and align with legal requirements in the current environment.

Legislative changes

Several important legislative changes have occurred in light of the findings and recommendations of the Royal Commission into Institutional Responses to Child Sexual Abuse (Royal Commission) and the Betrayal of Trust Report. This included removing the limitation periods that applied to civil actions for damages related to child abuse and allowing the identification of proper defendants, particularly where there are unincorporated structures.

In 2019, further changes were made to the Act to allow courts to set aside prior deeds of settlement in historical sexual or physical child abuse and related psychological abuse claims where it is ‘just and reasonable’ to do so. This only applies to matters which were settled prior to 1 July 2015. The purpose of the amendments is to remove barriers to actions for personal injury resulting from child abuse.

Facts of the case

The plaintiff in the case, known as WCB, was a former altar boy. He was abused by late priest Daniel Hourigan in Gippsland from 1977 to 1980 when WCB was aged between 11 and 14. WCB brought a claim against the Bishop of the Catholic Diocese of Sale for compensation for the post-traumatic stress he suffered as a result. The claim was settled for $32,500 in 1996 and a deed of settlement was signed (the Deed).

The recent legislative changes have allowed WCB to bring a claim against the Roman Catholic Trusts Corporation. However, the Trust argued that WCB was barred from bringing a claim due to the previous deed of settlement. WCB sought relief under the Act to have the Deed set aside. WCB stated that he felt bullied into accepting the settlement and that he felt like he “had no choice” because the Church had “all the power”, even though he knew at the time that it was a “terrible settlement”.

Judgment

Justice Keogh had to decide if it would be ‘just and reasonable’ to set aside the Deed. Justice Keogh stated that the applicant seeking relief under the Act to have a deed set aside bears a positive burden of demonstrating that it is just and reasonable that the Court exercise its discretion to do so. While the Act did not prescribe the relevant considerations, Justice Keogh made the following comments:

• The circumstances in which the settlement agreement was created and the consequences for each party would always be relevant but may not be the controlling factory.
• There is no additional onus for there to be ‘compelling’ reasons to set aside a deed, there is merely a positive burden on the plaintiff to demonstrate that setting the deed aside is just and reasonable.
• Change in legislation and other circumstances which have arisen since the settlement may be relevant.
• If the previous settlement reflected legal barriers which have now been removed, it may be just and reasonable to set aside the settlement in order to allow the plaintiff to seek adequate compensation.

In this particular case, Justice Keogh noted that legislative changes have removed many of the legal barriers that existed at the time of the Deed. He noted that WCB struggled to identify a proper defendant and argue vicariously liability at the time of the Deed. These led to WCB having a disadvantaged bargaining position. Legal developments now mean that the prospects of WCB succeeding are greatly improved.

Justice Keogh noted that there was evidence that WCB was subjected to horrendous abuse by Hourigan over two and a half years and continues to suffer significant adverse impacts of the abuse. He found that the settlement sum in the Deed was “not a reasonable assessment of WCB’s loss and damage in 196 or adequate compensation by today’s standards”. Justice Keogh was therefore satisfied that it was just and reasonable to set the Deed aside.

Lessons for organisations

This case sets an important precedent as it is the first case to be heard since changes to the Act have allowed courts to set aside previous deeds for historical child abuse. It provides a new pathway for survivors who have previously been barred from bringing a new claim due to previous settlements. For organisations, it also demonstrates the potential risks of previous settlements with inadequate sums of compensation.

We recommend that organisations:

1. Review their historical settlements – it is worth organisations assessing their risks in light of this judgment and factoring in any potential challenges to previous settlements. Organisations need to be prepared for this and consider risk mitigation approaches, particularly where there is a history of low settlement sums or unethical behaviour during settlement discussions.
2. Take a collaborative approach to settlement discussions – while the changes to the Act only apply to matters which were settled prior to 1 July 2015, this case demonstrates an increased scrutiny by courts and legislators of an organisation’s behaviour when responding to child abuse claims. As such, organisations should ensure they are approaching these matters with a pastoral and collaborative stance.
3. Strengthen current practices – to avoid having deeds challenged, organisations should adopt practices of encouraging claimants to have their own independent legal advice and a solicitor’s certificate when signing deeds. Organisations should also index their settlement sums to align with other similar cases and the National Redress Scheme where appropriate.
4. Prevention is key – ultimately, prevention of child abuse is key. While organisations manage historical claims, they also need to turn their mind to the lessons learnt and how they can move forward and create a legacy of child safety.

How we can help

For more information or guidance to ensure your organisations settlements are ethical and align with legal requirements in the current environment, please do not hesitate to contact us.

WCB v Roman Catholic Trusts Corporation for the Diocese of Sale (No 2) [2020] VSC 639.

Big spending on jobs and tax, but many sectors face tough times for a while yet

The Morrison Government has delivered what has been touted the most significant budget since World War II. In this article, we focus on the key takeaways for Moores clients in the sectors we serve.

Education

This year’s budget showed a continued commitment from the Federal Government to support independent schools, with $12.8 billion allocated under the Quality Schools Program. Funding levels in 2020 are stable compared with previous years, with more significant funding increases projected for 2021-2022 ($14.66 billion). In light of the fastest growing part of the sector being low fee (and therefore heavily funded) schools, this increase will be needed to meet demand.

Despite this, pressure on non-government schools continues. Many schools are still facing:

• ongoing lack of access to international students unable to return to Australia;
• increased costs of operation arising from the need to comply with new COVID-safe requirements;
• fee pressure from parents in circumstances where schools are often locked in to salary increases; and
• the cost of complying with new regulations, including for registration and for boarding houses.

School management will see the relaxation of FBT requirements, including the elimination of FBT on re-training for people re-deployed due to COVID-19 and simpler means for schools to complete FBT returns.

On curriculum, the budget does provide a large STEM package of $27.3M over 5 years which will bolster the coffers of key industry groups partnering with schools to deliver STEM content.

There is also help for students and families, including:

• a number of initiatives to help disadvantaged students via key charities including the Clontarf Foundation ($39.8M supporting young indigenous men), the Smith Family ($38.2M supporting disadvantaged young people moving from year 12 into work or study) and a $25M Government Fund with a mandate to respond to educational challenges occasioned by COVID-19; and
• support for mental health of students by providing parents with mental health and career information in the midst of this pandemic via a $5M Prioritising Mental Health Initiative.

Childcare & Early Education

Earlier in the year, the Federal Government injected $2.6 billion of funding into the sector as part of its COVID-19 Response Package through childcare subsidies. Victorian out-of hours-care and childcare centres will continue to have access to those subsidies (albeit at a reduced rate) until the end of January 2021.

Notwithstanding the importance of this sector to our economy, there are really no new other spending initiatives. There is a renewed one year commitment to the Universal Access National Partnership, which is an initiative designed to ensure that every child has access to a quality preschool education for 600 hours (15 hours a week) in 4 year old kinder. However, sustained capacity building is unlikely to be promoted without a multi-year commitment.

Moores welcomes the removal of red tape to new entrants to childcare operation. Part of the budget measures include “reducing red tape” in order to making it easier for early childhood education and care centres to get approval to operate. We look forward to the detail of this initiative.

Not for Profit Sector

COVID-19 has placed significant strain on the NFP sector. Moores’ clients report that demand for their services have never been higher, yet their funding sources are constrained, partly because their donors are also under financial pressure. Many flagship fundraising events and campaigns have been cancelled or modified, resulting in less revenue. Church and community halls which are normally booked with functions or after-school activities have been closed without any hire fees for the owner despite the ongoing costs of operation.

The Federal Government has earmarked $2.9 million over the next three years to strengthen the Australian Charities and Not-For-Profits Commission (ACNC) capacity to carry out field based compliance reviews of charities at high risk of failing. It appears that this may have been prompted in part by responses to natural disasters, including the much-publicised Celeste Barber appeal which arguably failed to meet the expectations of a significant proportion of its donors.

The ACNC Governance Standards are principle-based standards – each charity must carefully consider how to apply the standards in their own context to ensure compliance. With increasing ACNC oversight, charities must not only be compliant, but must be prepared to provide evidence of compliance if and when required.

Meeting increased demand for services, funding constraints and (in the case of charities) managing ongoing compliance obligations will place significant strain on some NFPs. This may result in increasing mergers and collaborations to maintain operational efficiency and impact. Regrettably, in some instances it may also result in winding up for some organisations that cannot continue to operate.

Many NFPs have not been eligible for JobKeeper, either because they do not meet the decrease in turnover test or because they pursue their objectives principally outside Australia (unless they are international aid organisations). Pleasingly, the JobMaker initiative discussed below may be available to NFPs who have not received JobKeeper.

Employment Hiring Incentives

Much has been made in the media about the JobMaker credit. The credit is available for new jobs created between 7 October 2020 and 6 October 2021. The aim of the program is to encourage employers to create new jobs for individuals who have received a JobSeeker payment, Youth Allowance or Parenting Payment. Employers claiming the JobKeeper payment are not eligible for the credit.

The credit ($200 a week for 16 to 29 year olds, and $100 for 30 to 35 year olds) is for jobs involving at least 20 hours of work per week (on average), and the employee can be hired on a permanent, fixed term or casual basis. Employers need to report this and other tax and superannuation information to the ATO through “Single Touch Payroll (also known as “STP”).

The incentive does not make age discrimination lawful. The policy was framed in this way in order to encourage non-JobKeeper businesses to create entry level positions, which tend to attract younger candidates. Given that the labour market is in turmoil, employers might find older candidates applying for those positions. It will be important for employers to maintain records documenting their decisions to ensure that selection processes are meritorious and not discriminatory.

Industrial Relations & Enterprise Bargaining

The centrepiece of the Federal Government’s budget is income tax cuts for lower and middle income Australians. Some businesses that are struggling in this environment may be dreading the prospect of another round of enterprise bargaining with locked in increases for the next three years.

For those employers, it will be worthwhile to crunch the numbers on the benefit their employees may receive as part of this package.

Enterprise bargaining under the Fair Work Act requires parties to engage in “Good Faith Bargaining”. There is no legal requirement to commit to pay increases that a business cannot afford. Particularly in these turbulent uncertain times, employers can legitimately take income tax cuts into account when bargaining for wage increases. (Note: in its most recent minimum wage determination, the Fair Work Commission took into account the impact of tax policy on low paid workers.)

Parental Leave Scheme – relaxation of eligibility

Changes have also been announced to supported paid parental leave for new parents (by birth or adoption) who earn less than $150,000 a year.

The eligibility criteria relating to adoptions and births between 22 March 2020 and 31 March 2021 have been relaxed. Parents earning less than $150,000 a year will now be eligible for paid parental leave payments if they have been working during at least 10 months of the last 20 months before the birth/adoption (relaxed from 10 months out of the last 13 months previously). This initiative will help parents who have lost their job due to the pandemic remain eligible under the Scheme.

Elder Law and Granny Flats

Moores commends the announcement that the Federal Government is supporting older Australians and their families by providing a targeted CGT exemption for granny flat arrangements where there is a formal written agreement in place. The CGT exemption will enable older Australians and their family members to protect their interests should they decide to live together.

Granny flat arrangements refer to an arrangement where an older person cohabits with their adult child and often their family. Commonly the older person contributes funds to acquire or renovate a property (or contributes the property itself) so that the extended family can live together. The arrangement often also includes provision of care or support to the older person. All too often, what seemed like a good idea at the outset becomes unmanageable over time due to a familial relationship breakdown, the increasing care needs of the older person or unexpected difficulties associated with cohabiting.

Historically, formally documenting a “granny flat” agreement or family agreement that documents the arrangement has had the potential to give rise to a CGT liability on the sale of the property. Moores has dealt with a number of instances where family members in dispute have entered into informal granny flat arrangements in order to avoid potential CGT consequences.

Implementing the CGT exemption will allow older Australians and their family members to document their arrangements and protect their interests should they decide to live together, without facing any significant tax consequences in future.

Social Housing

Although welcoming the additional funding for the National Housing and Finance Investment Corporation (NHFIC), the budget did not contain major announcements or new direct funding to increase the supply of social or crisis housing. This was a little surprising in the face of so many economists and experts encouraging government to stimulate the economy by building this kind of social infrastructure.

Perhaps a missed opportunity, the theory must surely be that better employment outcomes afforded to many will flow through to alleviate demand. It will now be for housing providers to seek funding opportunities directly through other means, including philanthropy, State or local governments, corporate partnerships and charitable donations.

Our clients in social and crisis housing continue to respond with innovation and grace to COVID-19, including re-purposing unused property for people experiencing homelessness and adapting face-to-face services so they can still be delivered in a safe way.

How we can help

This budget was devised to get Australians employed and paying less tax. Moores supports initiatives which will improve employment and the economy, as, in doing so, key sectors which look after and support others will also thrive. For more information, please do not hesitate to contact us.

Effective 1 October 2020, more employees working in the community service sector will need to be registered with the Victorian Portable Long Service Authority (Authority).  The Long Service Benefits Portability Regulations 2020 (Vic)(New Regulations) expand (and clarify) which community services sector employers need to register for benefits under the Scheme.

The Long Service Benefits Portability Interim Regulations 2019 (Vic) (Interim Regulations), which operated from 20 November 2019 to 30 September 2020, required employers to register workers (and contribute the 1.65% levy) for employees whose predominant activity is the personal delivery of community services.  Under the New Regulations, operative from 1 October 2020, the pre-dominant activity test no longer applies, meaning that an employee’s eligibility for the Portable Long Service Leave Scheme (Scheme) is determined by Award coverage. 

Given that the reforms are only recent, it is worth a recap on its key elements of the Scheme.

A recap on Scheme – What is it?

Put simply, there are three key features of the Scheme:

• An employer in the “community services sector” with at least one eligible employee must register itself with the Authority.  

• A registered employer must register with the Authority each employee who is performing “community service work”.

• Every quarter, the registered employer needs to provide the Authority with information about the registered workers’ service, any long service leave taken and pay to the Authority.  The levy for the community services sector is 1.65% of “ordinary pay”.  NB: As a reminder, the Victorian LSL entitlement is 13 weeks after 15 years of service, which works out to 1/60^th of an employee’s length of service (a little over 1.65%).

Step 1: Does my business provide “community service work” and does it need to register?

Coverage for employers is largely determined by whether the organisation provides community service work in the community services sector.  Schedule 1 of the Long Service Portability Act 2018 (Vic) and the New Regulations define the term “community service work”.

Since 1 January 2020, entities funded by the National Disability Insurance Scheme and entities licensed children’s service entities that are not schools are covered by the community services sector. 

Generally speaking, an employer in the community services sector is only required to register when it has one or more employees performing community service work.

Organisations operating in multiple states and territories may still be caught by the Scheme.

Step 2: Which employees perform “community service work”?

The Interim Regulations covered workers engaged in a role with the predominant activity being personal delivery of services.  However, the pre-dominant purpose test no longer applies.

When a business is covered by the community services sector, it is likely that it will have employees doing “community service work”.  The main change under the New Regulations is that a business is only required to register employees (and pay the levy for employees) who are covered by one of these Awards:

• Social, Community, Homecare and Disability Services Award 2010 (“SCHADS Award”);
• The Children’s Services Award 2010;
• The Educational Services (Teaches) Award 2010;
• The Labour Market Assistance Industry Award 2020; and
• The Supported Employment Services Award 2020 

Employers should now review relevant Awards to confirm whether their workers are Award-covered, as coverage may trigger the obligation to register the worker with the Authority.   Determining Award coverage is particularly challenging for two types of employees:

• Senior employees, because many employers do not typically think of members of the management team as “Award-covered” employees.  However, the SCHADS Award, for example, extends to senior leaders and managers within an organisation.
• Employees in hybrid roles, who are not directly involved in the “community service work” of an organisation. 

The test for Award coverage is whether an employee is substantially engaged in the duties of the classification.

Step 3: Quarterly reporting and paying the levy

Within one month of the end of each quarter, a registered employer must update the Authority as to how many days the employee has worked, their ordinary pay for that period and LSL taken by the registered employee or any payment in lieu of LSL to the employee.

The levy is calculated on an employee’s “ordinary pay”.  Ordinary pay is essentially, the employee’s wage excluding overtime pay, reimbursements, payments for using employee’s own material, equipment and motor vehicle, allowances, amounts paid on cessation of employment, and superannuation contributions.  Importantly, “ordinary pay” does include casual loading.

How we can help

Given the changes to eligible employees and the penalties associated with failing to register / pay the levy, employers should consider whether employees are covered by one of the modern awards above.

If you’d like advice on whether the Scheme applies to you and your workforce, and how it interacts with long service leave entitlements generally, please do not hesitate to contact us.

On 1 September 2020, the Federal Government announced that the Jobkeeper Scheme, introduced by the Coronavirus Payments and Benefits Act 2020 would be extended until 28 March 2021. Previously Jobkeeper was set to end by 28 September 2020. It was also announced that the changes to the Fair Work Act 2009 (Cth) and other amendments which will impact organisations as a result of the COVID-19 pandemic would also be extended.

For a detailed outline on the JobKeeper Scheme and the Fair Work Act reforms, please refer to our earlier article here.

The Extensions of JobKeeper Payments

There are two extension periods, each with two payment rates which employers will need to be aware of:

Extension 1:

28 September 2020 to 3 January 2021

            The rates of the Jobkeeper payment in this extension period are:

            Tier 1: $1,200 per fortnight

            Tier 2: $750 per fortnight

Extension 2:

4 January 2021 to 28 March 2021

            The rates of the Jobkeeper payment in this extension period are:

            Tier 1: $1,000 per fortnight

            Tier 2: $650 per fortnight

This means that from 28 September 2020, the payment rates have changed for eligible employees.

What this means for Employers currently registered for the JobKeeper Scheme

Employers have until 31 October 2020 to meet the wage conditions for fortnights ending in October for all eligible employees.

Additionally, to remain eligible for Jobkeeper during Extension 1, employers will need to demonstrate to the ATO that it satisfies the decline in turnover for the September 2020 quarter (July, August, September) relative to a comparable period (i.e. July, August, September 2019).

Organisations that are already eligible for Jobkeeper will need to check their continuing eligibility from 1 October 2020. If organisations remain eligible they will be required to submit the relevant information to the ATO and then, between the 1^st and 14^th of each month, the organisation or registered tax or BAS agent will need to submit a monthly declaration to the ATO to receive reimbursements for payments made in the previous month.

The organisation also will need to select which payment tier it is claiming for each eligible employee or business participant by the first monthly business declaration in November.

Organisations that are new to the JobKeeper Scheme

Organisations that may not have previously qualified for Jobkeeper but which now meet the eligibility requirements, can sign up through the ATO’s online portal.

These organisation will need to satisfy the actual decline in turnover test after enrolment.

The actual turnover test:

• must be done for specific quarters only;
• requires organisation to use actual sales made in the relevant quarter, not projected sales, when working out their GST turnover;
• requires organisations to allocate sales to the relevant quarter in the same way the organisation would report those sales to a particular business activity statement if registered for GST.

For Extension 1: The actual decline in turnover test is satisfied when the current GST turnover for the quarter ending 30 September 2020 (the months of July, August and September) has declined by the specified shortfall percentage (15%, 30% or 50%) in comparison to the current GST turnover for the quarter ending 30 September 2019.

For Extension 2: The actual decline in turnover test is satisfied when the current GST turnover for the quarter ending 31 December 2020 (the months of October, November and December) has declined by the specified shortfall percentage (15%, 30% or 50%) in comparison to the current GST turnover for the quarter ending 31 December 2019.

If the quarter ending in 30 September 2019 or 31 December 2019 is not an appropriate comparison period, an organisation may be able to use an alternative test.

Extension of the new stand down and workforce flexibility provisions

The stand down and workforce flexibility provisions in the Fair Work Act previously allowed an employer to direct an employee to:

• not work on specific day(s) which they would usually work,
• work for a lesser period than the employee would ordinarily work on a particular day or days,
• work a reduced number of hours (compared with the employee’s ordinary hours of work), and not be paid for the period that work is not performed; and
• take paid annual leave.

As a result of the extension by the Federal Government, qualifying employers who are receiving Jobkeeper payments for their employees after 27 September 2020 or which now qualify for the Jobkeeper scheme can:

• give their employees JobKeeper enabling stand down directions (for example, a direction to work less or no hours)
• give their employee’s JobKeeper enabling directions (for example, a direction to change duties or work location)
• make agreements with their employees to change their days or times of work (for example, an agreement that an employee will work on different days).

However, employers are no longer able to use the JobKeeper provisions to make agreements with their employees to take annual leave (including at half pay). Those provisions stopped applying from 28 September 2020 and any agreement that was made under the previous provisions ceases.

Organisations will need to follow the usual rules for taking and requesting annual leave (as set out in contracts, awards or industrial instruments) from 28 September 2020.

Any JobKeeper enabling directions or agreements to change an employee’s days or times of work already in place on 27 September 2020 keep applying after this date as long as the employer continues to qualify for the Scheme and the requirements to give a direction or make an agreement continue to be met. These agreements and directions can only be ceased when they are cancelled, withdrawn or replaced (including by a Fair Work Commission order), or on 29 March 2021 (whichever comes first).

What about Legacy employers?

Legacy employers are organisations which were previously receiving Jobkeeper but are now no longer eligible after 27 September 2020.

Provided that these organisation meet certain conditions, they may be able to continue using some of the stand down and workforce flexibility provisions in the Fair Work Act. However, any Jobkeeper enabling directions or agreements already in place ended on 27 September 2020 and organisations will need to reissue or make a new direction or agreement if they wish to extend beyond this date.

These conditions include:

• previously participating in the JobKeeper scheme, but no longer participating from 28 September 2020;
• demonstrating at least a 10% decline in turnover for a relevant quarter, by obtaining a certificate from an eligible financial service provider, or a statutory declaration for small businesses;
• only using the flexibility provisions in relation to employees that they received JobKeeper payments for before 28 September 2020 and in accordance with enhanced notice and consultation requirements and any other relevant changes applicable to them.

More information about legacy employers and the rules they need to follow can be found here.

How we can help

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

Retail leasing will change from 1 October 2020. With all of the leasing focus in recent months being on the Commercial Tenancy Relief Scheme, it would be easy to miss these changes.

But don’t miss them, they’re important.

The changes bring some much-needed clarity to one of the more contentious issues that arises in the retail leasing space – Essential Safety Measures.

Essential Safety Measures

Landlords can now recover Essential Safety Measures (ESM) costs from a tenant provided the lease makes the tenant liable to pay those expenses. ESM can include items such as smoke detectors, water sprinklers and other fire protection measures as well as the cost of the annual safety inspections.

This change will apply to all existing retail leases, as well as new ones entered from now on (but will not capture the cost of works payable before the commencement of the Act). This amendment changes the current ruling on recovery of ESM costs as set out in VCAT’s advisory opinion issued in May 2015.

Landlord’s disclosure statement

The timeframe for the provision of the landlord’s disclosure statement will be increased to 14 days (formerly 7 days) prior to the commencement of the lease. For those landlords that fail to comply with this obligation, financial penalties have been introduced – up to 250 penalty units (that’s over $40,000) for a body corporate or 50 penalty units for an individual.

Notice and disclosure obligations in relation to further terms

Where a lease contains an option to renew for a further term, a landlord must, at least three months before the deadline for exercising the option, give a notice containing the following information to a tenant:

• the date by which the tenant must exercise the option to renew;
• the rent payable for the first 12 months of the new term;
• the availability of an early rent review;
• the availability of a cooling off period; and
• any changes to the landlord’s most recent disclosure statement (other than changes to the rent).

The most beneficial change for tenants here being the requirement for landlords to provide early notification of the proposed new rent for the further term.

Market rent reviews for further terms

A new section 28A is introduced into the Retail Leases Act affecting leases that include a market rent review mechanism. The new section allows tenants to ask the landlord for an early market rent review – the request must be made within 28 days of receiving the landlord’s renewal notice (see above). The Act will operate to make sure the tenant always has at least 14 days to exercise the option after the market rent has been determined.

Cooling off periods

A retail tenant will now enjoy a cooling off period if the tenant has not requested an early rent review under section 28A (see above). The cooling off period will give a tenant 14 days from the date it exercises its option – within that period the tenant can serve written notice on the landlord stating that it no longer wishes to renew the lease.

Return of Security Deposits

Where a tenant has met its obligations under the lease, the tenant’s security deposit must be returned within 30 days of the end of the lease.

How we can help

Both landlords (and their agents) and tenants need to be aware of the changes and the impacts they may have on their respective leases. If you are about to enter into new retail leasing arrangements or are concerned about how the changes may affect your current lease, Moores can assist you in navigating the new requirements. For more information, please do not hesitate to contact us.

Most of us are familiar with the concept of a Will being a testamentary act (a revocable disposition of property intended to take effect at death).  On the face of it, a superannuation binding nomination also appears to be a document that disposes of property upon a person’s death.

Many Wills include the provision “I revoke all previous testamentary acts”.  If a binding nomination was considered to be a testamentary act, then a later Will expressed to revoke all previous testamentary acts would seem to revoke that binding nomination. 

However, recent cases considered by Australian Courts are determining that binding nominations are not testamentary documents and also that in some circumstances administrators and attorneys can make or revoke a binding nomination on behalf of a person. 

The impact of these cases will have ramifications for a person’s estate planning in relation to:

1. whether someone else may be able to make or revoke a binding nomination in respect of their superannuation entitlements;
2. the importance of appointing an enduring power of attorney for financial matters;
3. who they choose to act as their financial attorney;
4. whether or not the power of attorney document should expressly permit or prohibit the making or revocation of a binding nomination.

Recent cases

There are statutory prohibitions on someone holding a power of attorney exercising particular powers such as making a Will (for example, section 26, Powers of Attorney Act 2014 (Vic)).  If a binding nomination was considered to be a testamentary document like a Will, then it might be inferred that there are similar limitations on who can sign a binding nomination on behalf of a person.

In the recent case Re SB; Ex parte AC [2020] QSC 139, the Supreme Court of Queensland declared that the administrator of the represented person, could execute a binding nomination in relation to the represented person’s superannuation entitlements in the Perpetual Super Wrap Trust.

In considering the question of whether or not an administrator can sign a binding nomination, the Court noted that section 33(2) of the Guardianship and Administration Act 2000 (Qld) provided that unless the tribunal orders otherwise, an administrator is authorised to do “anything in relation to a financial matter” that the adult could have done if the adult had capacity …”.  However, they noted that attending to financial matters did not extend an administrator or attorney’s authority to the making of a Will, which includes “a revocable disposition of property intended to take effect at death”.

In deciding that a binding nomination is a financial matter and not a revocable disposition of property intended to take effect at death, the Court said that the “nomination does not dispose of property but, by the exercise of a contractual right, directs the trustee how the death benefit should be dealt with”.  In support of these conclusions, the Court relied on previous cases such as:

• The Queensland case in Narumon Pty Ltd [2019] 2 Qd R 247, where it was held that a binding nomination is not a testamentary act, and so is not captured by the restriction against delegating to an attorney the making of a Will;
• The New South Wales case in McFadden v Public Trustee in Victoria {1981] 1 NSWLR 15, where the Court considered that the making of a binding nomination was a contractual right and not a testamentary power.

How we can help

Whilst this decision seems to clarify the position in Queensland, and provide guidance across all States, we note that it is not binding outside of Queensland.  In particular, the consideration of what constitutes a “financial matter” relied heavily on the definition in the Queensland Guardianship Act which is not included in powers of attorney acts in other jurisdictions.

What these cases also highlight is that powers in the superannuation fund deed and any express power or prohibition in the documents appointing the administrator or attorney will also be determinative in whether or not there is a power to make a binding nomination on behalf of a person.  Superannuation fund deeds should be reviewed to ascertain who is authorised to make a binding nomination and careful consideration should be given as to whether an attorney should be given the power to make or revoke a binding nomination or expressly prohibited from doing so.

For more information or guidance about estate planning, including superannuation death benefits, please do not hesitate to contact us.

For many of us, the COVID-19 pandemic has created significant financial difficulties. Whether it be being in receipt of job keeper or seeker payments or the closure of international trade routes, it has had and will continue to have a lasting impact.

For many of our clients, their income and / or parenting arrangements have altered due to the pandemic which therefore affects their ability to pay child support. Particular issues may arise where parents have a Binding Child Support Agreement (“BCSA”) in place which have strict criteria surrounding termination.

To successfully set aside a BCSA, the Court must be satisfied that:

1. there are exceptional circumstances that relate to a child or party to the BCSA;
   
2. the exceptional circumstances arose after the BCSA was made; and
   
3. the applicant or child will suffer hardship if the BCSA is not set aside.

I have recently been placed on job keeper payments, can I terminate my BCSA?

The Family Court recently considered this question in Martyn and Martyn [2020] FamCA 526 (“Martyn and Martyn”). The relevant factors are as follows:

1. The parties’ entered into the BCSA in 2012 which provided the Father pay to the Mother the sum of $1,350 per month.
   
2. In 2016, the Father issued proceedings in the Family Court seeking his BCSA be set aside on the basis that his business was suffering financial hardship. The Husband’s business was in financial difficulty and had accrued substantial business debts due to the Father being unable to meet his expenses. The Court ordered that the Father stop paying the Mother the rate stipulated in the BCSA and began paying a reduced amount of $580 per month.
   
3. In January 2020, the Father again issued proceedings in the Family Court seeking the BCSA be set aside due the existence of exceptional circumstances.
   
4. The Father submitted the following to the Court:
   (a) his business had been financially difficulty since 2016;
   (b) international commerce had been halted due to the global pandemic;
   (c) the usual sales made by the Father’s company had been reduced by 90% due to COVID-19;
   (d) 100 of his employees had been stood down;
   (e) the Father and his current partner were receiving job keeper payments; and
   (f) the Father submitted that unless interstate and international boarders reopened by September 2020, he would be required to declare bankruptcy.
   
5. The Court, when taking the Father’s submissions into consideration, found that the impact of COVID-19 upon the father’s business and financial circumstances justified setting aside the BCSA rather than staying or suspending the BCSA.
   
6. The Court’s decision importantly considered the impact of the pandemic on global markets was not yet known and that the Father’s business may not recover.

How we can help

A loss of reduction or income due to COVID-19 and whether this constitutes exceptional circumstances will be dependent on the facts and circumstances of each case.

If you have lost your job, your income has reduced or your business is suffering financial hardship, it is important you seek legal advice regarding your BCSA and in particular your obligation to continue to pay child support. For more information or guidance, please do not hesitate to contact us.

When a person believes they haven’t been adequately provided for by a loved one’s will, and makes a claim seeking more, the Court’s power to award them further provision from the estate is limited to what the person actually requires for their ‘proper maintenance and support’.

Accordingly, the need for a claimant to demonstrate ‘financial need’ is crucial to success in these claims, particularly where the claimant is an adult child, where the Court must also consider the degree to which that child can support themselves. This requires a close examination of the person’s financial situation, rather than mere speculation or assertion as to what their need may be.

For this reason, any person seeking family provision from an estate must provide sufficient evidence of their financial and personal circumstances in order to demonstrate ‘financial need’. The extent to which ‘financial need’ must be established is relative to each case and depends on a number of factors, not the least of which is the size of the estate and the competing needs of the beneficiaries.

Case update: Re Janson; Gash v Ruzicka

The recent case of Re Janson; Gash v Ruzicka demonstrates the Court’s inability to award family provision from an estate on speculation of financial need alone.

In this case, the deceased’s daughter was unsuccessful at trial at obtaining further provision from her father’s estate, as she was unwilling or unable to provide evidence of her assets, liabilities and expenditure at trial, and therefore did not establish her financial need. This was despite the fact that it was clear that the daughter was not wealthy and it had already been conceded by the defendant that she had not been adequately provided for from the estate, meaning the only question before the Court was ‘how much’ she should receive.

Therefore, due to the defendant’s concession, the Court held off on dismissing the application altogether, and instead allowed the daughter another opportunity to file evidence of her financial need.

This case is a timely reminder that the onus of proof in family provision claims remains with the claimant and that unless a degree of financial need can be evidenced, it is unlikely that the claimant will succeed. It is insufficient for a person to simply assert financial need, without also providing information and documentation to evidence the extent of their need.

Key lessons

The Court’s discretionary power to amend a will is limited to the ability to award family provision for an eligible person’s ‘proper maintenance and support’. It does not extend to ensuring all children are treated equally, or compensating a person for past slights by the deceased.

If a willmaker excludes or makes limited provision for an immediate family member, whether they can bring a successful family provision claim against the willmaker’s estate will frequently turn on their own financial circumstances (and willingness to disclose these).

The lessons from Re Janson are useful for anyone seeking to bring or defend a claim for family provision, but also for anyone who is making their will and is worried about whether it might be challenged by a disgruntled family member.

How we can help

Our expert team can assist you with your estate planning queries or strategic advice in relation to Will disputes including family provision claims. For more information or guidance, please do not hesitate to contact us.

Re Janson; Gash v Ruzicka: [2020] VSC 449