With the advancement of modern technology, organisations (including schools) are lucky enough to be able to manage the impact of COVID-19 through remote working and learning arrangements.

However, many schools are navigating unchartered waters trying to determine what resources and tools are needed to ensure students and teachers are supported and whether these tools can easily be used from home.

A privacy impact assessment provides a useful framework to screen for privacy issues and may help to further mitigate any privacy risks associated with remote learning arrangements.

Why assess privacy risks at the moment?

Right now, it’s more important than ever, because we are sharing and disclosing a magnitude of personal, confidential and sometimes even sensitive information online.

Under Australian Privacy Principle 11, organisations must take active measures to protect personal information they hold from misuse, interference and loss, as well as unauthorised modification or disclosure. Organisations also have obligations under the Notifiable Data Breach Scheme.

Assessment – key considerations

Collection:

• What personal/confidential/sensitive information will be collected?
• How will it be collected?
• How will consent to use and disclosure be obtained?

Consider these questions in the context of each learning platform that you’re using.

Use:

• Is the user aware of uses of their personal information?
• What measures are in place to ensure the information is used only the primary purpose of collection OR related secondary purpose?
• If the information is sensitive information, will use by with consent or only for primary purpose?

Disclosure:

• To whom will information be disclosed?
• Will information be disclosed only for the purposes for which it was collected?
• What measures are in place to vet the privacy practices of any recipient?

NB: You should also consider whether the Collection, Use and Disclosure of the information is consistent with your own internal privacy policy.

Security:

• What security measures apply to this personal information?  Do we have adequate cybersecurity and suitable policies?
• Do all devices, and firewalls have the necessary updates and the most recent security patches (including to operating systems and antivirus software) and have strong passwords?
• Have you implemented a secure method for staff to access your network and system?
• Do you have a system in place that all users are aware of in the event of a potential data breach?

Education:

• Are staff members educated on ICT and cyber security practices, such as identifying hazards, how to ‘lock rooms’, disciplining or removing students from rooms, and use of passwords and encryption?
• Are staff members educated on physical security and the handling of personal information when working from home?
• Is there a policy that covers information security when staff members work offsite, such as from home, a secondary site office or a temporary office?

How we can help

If you’re uncertain as to how your current policies and practices may equip you for the new environment, may wish to consider:

1. Reviewing, updating and amending your privacy policy;
2. Implementing and/or reviewing a data breach response plan;
3. Drafting consent forms for parents and students, detailing the types of programs they will be using and what information may be collected/used/disclosed; and
4. Training your staff on their rights and obligations.

Moores can provide assistance with all of the above and be available for online training with staff members. For more information, please do not hesitate to contact us.

The National Redress Scheme for child sex abuse survivors was established in July 2018. Established as a voluntary scheme, it gives survivors a straightforward way of seeking redress from participating institutions. Institutions that choose to participate must opt in by 30 June 2020.

As the opt-in deadline nears, pressure is mounting on organisations to join the National Redress Scheme. In Victoria, Attorney-General Jill Hennessy said on the weekend that “We will be making it a condition of contracts with the Victorian Government that institutions that have got a liability when it comes to institutional sexual abuse join the redress scheme”. The Victorian Government has identified 49 eligible organisations that could join the scheme but have not yet done so. Funding in jeopardy includes future grants and new funding arrangements to deliver social or other services. Organisations that rely on government funding may now need to choose between opting into the “voluntary” scheme and financial ruin.

There is no doubt that the Scheme is an important pathway for survivors who wish to access redress as part of their healing process. Organisations have a legal and moral obligation to support survivors of historical child abuse and for many organisations, opting into the Scheme is an important part of this commitment. However, deciding whether to join the Scheme is complex.

It is tempting to assume that the only considerations for organisations regarding opting into the Scheme is whether they are truly committed to child safety and willing to accept responsibility for historical child sexual abuse. Whilst both of those factors are extremely important and have led many organisations to join the Scheme, the considerations are far more complex than that. The directors of charities and not-for-profits have a range of duties to the organisation that they are required by law to balance. This includes a duty to manage the financial affairs of the organisation responsibly and to act in the “best interests” of the organisation. These are not considerations to be taken lightly. It is very difficult to assess potential financial liability under the Scheme. Joining the Scheme may also compromise insurance cover held by an organisation in relation to claims of molestation. Schools have also been warned by the Federal Government that they are not to use recurrent funding for the purpose of funding Redress payments, making it difficult for some non-government schools to meet the financial requirements of the Scheme. The “best interests” of an organisation include protecting vulnerable individuals, but may also include providing services to current beneficiaries, using the resources of an organisation to pursue its purpose and preserving insurance cover.

The Scheme is not the only avenue for redress and organisations can and do take responsibility for historical child abuse through alternative pathways. Organisations that do not join the Scheme are still legally liable for historical child sexual abuse and can still be sued. Organisations are increasingly responsive to direct approaches from survivors, offering processes that are not adversarial, settlement payments comparable to or greater than  the Scheme and personal apologies from key personnel.

The Scheme is also not perfect, from the perspective of both survivors and organisations. Importantly for survivors, compensation is capped at $150,000 (as well as a small payment towards legal and potentially counselling costs). By contrast, some claims brought through the Courts have recently seen record compensation in the millions. Survivors that accept a payment through the Scheme also waive their right to bring a claim through the Courts. The Scheme does not cover physical and psychological abuse (except for physical abuse where there are also allegations of sexual abuse). For organisations, there is a lower standard of proof, tight time frames to respond to requests for information, little visibility of the process and reasoning behind determinations, and very limited opportunity to test the evidence of applicants. The process for joining the Scheme is time consuming and complex, particularly where there are multiple associated organisations proposing to join as a group. It can take months to work through the necessary due diligence. If an organisation joins the Scheme, they may still face civil claims and may even be managing the same claim under the Scheme and through the Courts at the same time. This administrative burden is significant, especially for small charities and not-for-profits.

This Scheme was introduced as a voluntary scheme. Arguably this meant that the detail of the Scheme was not subject to the same scrutiny as if it has been a mandatory Scheme. It is concerning to see punitive consequences for failing to opt-in being threatened at this late stage (only two months before the opt-in deadline), when many charities and not-for-profits have already undertaken their due diligence regarding their Scheme and board decisions have been made. The announcement is also likely to add additional stress for charities and not-for profits that are currently wrestling with the impact of COVID-19.

How we can help

At a time when many organisations are feeling the pinch, it’s more important than ever to get sage advice on joining the Scheme, and the potential consequences if you don’t. For more information, please do not hesitate to contact us.

The $130 billion JobKeeper payment may enable your organisation to access a wage subsidy to assist you to continue paying your employees. Government guidance is helpful, but be aware of conditions of the scheme that only apply to charities and not-for-profits.

Since the release of the Jobkeeper Rules on 9 April 2020, details of the scheme have been outlined in Treasury factsheets and unpacked in extensive expert commentary. While much of this information is helpful in relation to the general structure of the scheme, it glosses over important details that may affect charities and not-for-profits.

Below we outline these key issues related to JobKeeper eligibility for charities and not-for-profits.

The big picture

Under the scheme, eligible employers experiencing a decline in turnover may be able to claim a fortnightly payment of $1,500 per eligible employee. Fall in turnover is typically assessed with reference to the comparable period in 2019 and must meet the relevant threshold for the entity. Payments may be made for the duration of the scheme, being 30 March through to 27 September 2020.

Charities and not-for-profits with significant overseas activities or expenditure may not be eligible

Unless it qualifies as an entity that ‘carries on a business in Australia’, a charity or not-for-profit is only eligible to participate in the scheme if it ‘pursues its objectives principally in Australia’.

The phrases ‘pursues its objectives’ and ‘principally in Australia’ are not defined in the Rules or the accompanying Explanatory Statement. These phrases have, however, been considered by the ATO in a recent Taxation Ruling^[1] that gives some guidance on how it may be interpreted for the purposes of the scheme. The Taxation Ruling indicates that:

• the term ‘principally’ carries its ordinary meaning of ‘mainly’ – more than 50% will ordinarily meet this requirement;
• an entity ordinarily ‘pursues its objectives’ in the place where it seeks to realise its purposes. Consider factors such as:
  • what are your purposes (these are usually in your governing document)?
  • where you seek to realise those purposes – where are your beneficiaries located?
  • where do you incur the majority of your expenditure? 

Government owned charities and not-for-profits are not eligible

A charity or not-for-profit that is wholly owned by a government body will not be eligible for the JobKeeper payment. For example, a company limited by guarantee whose sole member is a local Council will not be eligible. This overlaps with, but is different to the ‘government entity’ test – even if your organisation is not a government entity, it may still be wholly owned by government and unable to qualify for the scheme.

The turnover threshold

The relevant threshold for decline in turnover is:

• ACNC registered charities (other than schools and universities) – 15%; and
• all other not-for-profits (including those ACNC registered charities that are schools and universities) – 30%.

What counts as turnover?

GST turnover always counts for the purposes of assessing decline in turnover – this applies to all charities and not-for-profits. In addition to this:

• tax deductible gift recipients can also take into account the value of tax deductible gifts (other than gifts from an ‘associate’);
• ACNC registered charities (excluding deductible gift recipients) can also take into account  the value of gifts of money, listed Australian shares and property with a market value of more than $5,000 (other than gifts from an ‘associate’).

This means that any decline in donations received by ‘mere’ not-for-profits (that is, not-for-profits that are not charities or deductible gift recipients) cannot be taken into account for the purposes of the turnover test. 

Mergers, changes in structure or change of control

Any interruption to employment due to a merger, change in structure or change of control of your organisation that results in a change of the legal employer may affect the eligibility of employees. For example:

• individuals (other than casual employees) who were employed on 1 March 2020 may cease to be eligible under the JobKeeper scheme if the legal employer changes; or
• casual employees may not have been employed on a ‘regular and systematic basis’ during the twelve months ending on 1 March 2020 (and therefore may not be eligible) if their legal employer changed during that period.

The JobKeeper Rules attempt to ensure individuals are not disadvantaged in these circumstances, introducing the rather unhelpful concept of a ‘non-profit body’ whose purposes are currently ‘carried on by’ an entity and but were previously ‘carried on by a different entity’. Not-for-profit entities and charities that may be affected by a change in control, change in structure or merger should seek legal advice regarding the impact on the eligibility of their employees.

What about payments to directors?

JobKeeper payments may be able to be claimed by a business for certain ‘business participants’ that are not employees of the business, including directors. Not-for-profits and charities cannot claim JobKeeper payments for business participants.

General application of the scheme

If you’ve jumped these hurdles and the JobKeeper scheme may still apply to your organisation, you can find more details about the scheme here.

How Moores can help

Moores is currently providing advice and support to our clients who are navigating the complex requirements of the JobKeeper Scheme. For further information and guidance, please do not hesitate to contact us.

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^{[1] TR 2019/6, which considers (among other things) the meaning of the requirement for certain entities to have a physical presence in Australia, and to that extent, pursue their objectives principally in Australia in order to be exempt from income tax.}

If you’ve put in place a pre-paid funeral you might think that that’s a silly question. But even if you have, that doesn’t mean there aren’t still decisions to be made after your death. Burial or cremation? Religious or non-religious service? Who gets the final say?

Recent case

The recent NSW case of Gus Kak v Allison Sarah Kak (nee Boman)^[1] confirmed that the executor of your Will has to right to make your funeral arrangements, if they are ready, willing and able to do so.  

The case concerned a contest between the deceased’s widow Allison and brother as to whether his burial rights would be conducted in accordance with either the Catholic or the Muslim faiths. Born into the Muslim faith, the deceased later adopted Catholicism; on the evidence, he maintained a connection with both faiths throughout his adult life. He married in a Catholic Church, where his widow wished his funeral to be held; this was strongly opposed by his brother, who sought that he be buried in accordance with Muslim tradition. 

The decisive consideration in this battle of faiths was that the deceased’s Will appointed his wife as sole executor. In deciding in favour of Allison, the Court confirmed the executor has the right to dispose of the body, and decide where and how it is to be buried or cremated. Had the deceased not appointed Allison as his executor, the decision would doubtless have been very different.

But what if you die without a will?

The ‘likely administrator’ rule provides that the person most likely to be awarded the right to administer an estate on intestacy has the right to determine the deceased’s funeral arrangements and dispose of the body. In Victoria, the order of priority to determine the most likely administrator is spouse or partner, followed by children (or their guardian, if the children are under 18), then parents, or failing that then extended family members. 

In the absence of either executor or family members, the decision about how to dispose of the body will rest with the householder of the premises in which the deceased passed away.

If there are two people with equal rights to deal with the body, the question becomes one of practicality and avoiding unnecessary delay. 

The wishes of the deceased may also be relevant, as in the Victorian case of Keller v Keller.^[2] 

Although the late Mrs Keller had appointed an executor, a bitter dispute between her two children as to whether she should be buried or cremated meant the independent executor was understandably not willing to decide how to dispose of the body. 

In this scenario, the trust the deceased had placed in her daughter in life by appointing her a medical attorney, and accepting her care and support throughout the progression of her final illness, played a pivotal role in the daughter receiving the right to deal with her mother’s remains.

Cultural and spiritual values may also be taken into account, as in the case of Jones v Dodd^[3] where the Court released the body to the deceased’s father in accordance with Aboriginal tradition. This was despite the existence of a de facto partner and some conflicting evidence that the deceased had converted to Christianity. Importantly, the deceased in this case did not leave a Will or appoint an executor who could arrange for the disposal of his body.

Had he done so, however, it seems fairly safe to conclude that the right to deal with the body would have fallen to the executor – as long as they were ready, willing and able to do so. 

Key Lessons

These cases emphasise the importance of appointing the right executor, namely someone who is going to give effect to your last wishes (in more ways than one).  However, if you have a preference (or know your loved ones may have differing views), it’s worth documenting your funeral wishes and ensuring your executor and family members are aware of your intentions well ahead of time. 

For more information or guidance, please do not hesitate to contact us.

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^{[1] [2020] NSWSC 140
[2] [2007] VSC 118
[3] (1999) 73 SASE 328}

On 9 April 2020, the Federal Government enacted its changes to the Fair Work Act 2009 (Cth) and other amendments which will impact organisations as a result of the COVID-19 pandemic.

This article outlines the key changes introduced by the Coronavirus Economic Response Package (Payments and Benefits) Act 2020, the Coronavirus Economic Response Package Omnibus (Measures No.2) Act 2020 (the Acts) and Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (the Rules), and the impact of these reforms on employers.

The objectives of the Acts and Rules

The Acts and the Rules will operate from 30 March 2020 to 27 September 2020 and will be administered by the Commissioner of Taxation.

The Coronavirus Payments and Benefits Act introduces the Jobkeeper Scheme to provide wage subsidies for employees, and the Coronavirus Omnibus (Measures No.2) Act amends the Fair Work Act to provide organisations eligible for the JobKeeper Scheme with greater workplace flexibility in relation to their employees.

The main objectives of these reforms are to enable eligible employers that are suffering financially due to COVID-19 to:

• claim JobKeeper payments (a $1,500 fortnightly payment to subsidise wages for pre-registered eligible workers including some regular casuals); and
• stand down specific employees without pay (partially or completely) for any period that they cannot be usefully employed; and
• change employment arrangements by lawful direction, request or agreement (e.g. duties/tasks, location of work and working hours, taking leave) for specific employees.

These changes will override any modern award, enterprise agreement or employment contract, and are subject to strict legal requirements.

What employers are eligible?

Employers will be eligible for the JobKeeper payment under the Acts and the Rules if:

• they carried on business in Australia or were a not-for-profit organisation that pursued its objectives principally in Australia on 1 March 2020;
• their business faces a:
  • 15 percent fall in turnover (for ACNC registered charities other than universities and non-government schools);
  • 30 percent fall in turnover (for an aggregated turnover of $1 billion or less); or
  • 50 percent turnover (for an aggregated turnover of more than $1 billion);
• they are not an ineligible entity; and
• they employed at least one eligible employee on 1 March 2020, and their eligible employees are currently employed for the fortnights claimed (including those stood down or rehired).

How is revenue reduction calculated?

To satisfy the decline in turnover test, an employer must be able show that the current or projected GST turnover in a:

• a calendar month ending after 30 March 2020 and before 1 October 2020; or
• a quarter that starts on 1 April 2020 or 1 July 2020,

is at least 15 percent, 30 percent or 50 percent less than the corresponding turnover period in 2019 for their relevant entity type. For example, if an ACNC registered charity (excluding a non-government school or university) can demonstrate that it carried on a business in Australia prior to 1 March 2020 and that its projected GST turnover in April 2020 is 15 percent less than its revenue in April 2019, it will satisfy the revenue reduction requirement of the JobKeeper scheme.

The Commissioner for Taxation has discretion to set alternative or additional tests to qualify for the JobKeeper Scheme by legislative instrument.

What entities are excluded?

The following entities do not qualify for the JobKeeper Scheme.

• a company which was already in liquidation or had a provisional liquidator appointed prior to the Acts and Rules; and
• any entity that is wholly owned by a local governing body or Australian government agency.

What are the nomination and application requirements?

The JobKeeper Scheme requires eligible entities and employees to comply with specific nomination requirements. An entity must notify an eligible employee that they intend to apply to the Scheme so that the employee can provide written notice in the approved form confirming that they are:

• over 16 years of age;
• employees or long term casuals of the organisation (not short term casuals of less than 12 months employment or with irregular shifts or volunteers);
• Australian residents or residents for the purposes of the Income Tax Assessment Act (i.e. they hold a special category of migration visa);
• agreeing to be nominated by the entity as an eligible employee for the purposes of the JobKeeper Scheme;
• confirming they are only an employee of the organisation (e.g. in the instance of long term casuals); and
• not double-dipping by nominating a second time to be an eligible employee (if they work at another organisation e.g. this will be more relevant with long term casual workers or relief teachers at schools).

Employees that receive parental or partner leave pay at any time or receives workers compensation payments because they are totally incapacitated for work during any of the fortnightly period(s), will not be classified as eligible employees.

Entities will then need to:

• register interest in the JobKeeper payment with the ATO;
• obtain a notification of consent form from each employee to be included in any JobKeeper application;  and
• notify the ATO in the approved form:
  • that it wants to participate in the Scheme;
  • of details of the eligible employees each fortnight;
  • of the organisation’s previous monthly GST turnover and projected GST turnover for the next month.

If the Commissioner for Taxation is satisfied that the organisation meets the requirements of the Acts and Rules it will make the fortnightly JobKeeper subsidy payment of $1,500 to the organisation in accordance with the Acts and the Rules.^[1]

What are the new stand down and workforce flexibility provisions?

The new stand down and workforce flexibility provisions allow 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.^[2]

An entity can do this provided that:

• they are eligible for the JobKeeper Scheme and entitled to one or more JobKeeper payments at the time that the JobKeeper direction applies;
• they provide the employee with at least three days written notice of their intention to give the direction (or a lesser period by agreement) and consult with the employee (or their representative) about the direction;
• the period of the stand down is because the employee cannot be usefully employed due to the business changes associated with COVID-19 pandemic or Government initiatives to slow the transmission of COVID-19 (see below);
• the implementation of the stand down for the employee meets health and safety requirements, particularly in respect of the nature of spread of COVID-19. This is important when directing employees to work remotely or in a different place of business. The place must be suitable for the employee’s duties;
• in the case of workplace flexibilities, the new duties are:
  • within the employee’s skill and competence, including the requirements to hold any licences/qualifications;
  • reasonably within the scope of the organisations business operation;
• in the case of paid annual leave:
  • the organisation has made the request to the employee;
  • the employee considers and does not unreasonably refuse the request; and
  • the employee will maintain a balance of paid annual leave of no fewer than two weeks;
• the wage condition is satisfied because the entity qualifies for the JobKeeper Scheme and is entitled to payments under the Acts (e.g. the organisation paid the employee at least $1,500 a fortnight prior to 1 March 2020 inclusive of salary, wages, bonuses, commissions and allowances. For organisations that pay staff monthly wages, this amount will need to be calculated by what the employee would be allocated during a fortnight(s);
• the minimum payment guarantee is met (see below); and
• the hourly rate of pay guarantee is met (i.e. where an employer provides an employee with a stand down direction, the employer must ensure that the hourly base rate of pay is not less than the rate that usually applies to the employee (as if the direction had not been given to the employee). The only exception is if the duties of the employee have changed – the hourly base rate should be the greater of the previous duties or the rate applicable to the new duties now being performed).

How do I know when an employee can’t be usefully employed?

An employee can’t be usefully employed for the purposes of the Acts and the Rules when employee has no (or a reduced level of) useful work available to performed because of the COVID-19 pandemic or because of the Public Health Orders and state based Directions imposing restrictions on individuals and entities.

For example, a Victorian organisation that runs school camps in Term 2 of 2020 may not be able to usefully employ all staff due to the Victorian government’s restrictions and the decision to move to remote school learning. Therefore, there may be a period from April to June where the entity is captured by the JobKeeper Scheme, cannot have 100 percent of its employees undertaking their normal workload, and does not have any other or useful work available for the remaining employees to perform.

Useful work does not have to be the work that the employee ordinarily performs but needs to be genuine productive work that provides a net benefit to the employer. Employers should be able to demonstrate that the impacts of the virus or the Government’s measures to deal with it have caused the fact that there is none, or less useful, work available.

What is the minimum payment guarantee?

If a JobKeeper payment is payable to an employer for an employee for a fortnight, the employer must ensure that the total amount payable to the employee in respect of the fortnight is not less than the greater of the following:

• the amount of JobKeeper payment payable to the employer for the employee for the fortnight; or
• the amounts payable to the employee in relation to the performance of work during the fortnight.

This means that organisations must use the Jobkeeper payment to cover or supplement the normal wage of the employee, and cannot pocket this extra money or use it for other purposes. For example, if an employee is normally paid $1,750 per fortnight for the work that they do within the organisation, the organisation must still cover the remaining $250.

The amounts payable includes salary, wages, bonuses, commissions and allowances payable in respect of the fortnight.

What is the hourly rate of pay guarantee?

If an employer provides and employee with a stand down direction, the employer must ensure that the hourly base rate of pay is not less than the rate that usually applies to the employee (as if the direction had not been given to the employee).

If an employer has directed the employee to perform different duties to normal, the employer must ensure that the employee’s hourly base rate of pay is not less than the greater of the:

• the hourly base rate of pay that would have been applicable to the employee if the direction had not been given to the employee.
• the hourly base rate of pay that is applicable to the duties the employee is performing.

For example, if an employee was earning $25 an hour prior to the stand down, they must still receive the equivalent of $25 an hour despite the change in working hours or arrangements. The only exception is if the duties of the employee have changed and the hourly base rate should be the greater of the rate for the previous duties or the rate applicable to the new duties now being performed.

What other requirements apply to workforce flexibility directions?

An employer can only provide a workforce flexibility direction (e.g. changes in duties/tasks, location of work and working hours, taking leave) if the employer has information before them that leads them to reasonably believe that a JobKeeper direction is necessary to maintain their employment.

In short, this means that organisations need to satisfy itself that “but for this direction, the employee would be made redundant”.

How Moores can help

Moores is currently providing advice and support to our clients who are navigating the complex requirements of the JobKeeper Scheme. If you’d like to understand your rights, responsibilities and options to ensure your workforce is safe, sustainable and prepared to brace the ramifications of COVID-19, please do not hesitate to contact us.

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^{[1] See Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 sections 14 and 15 at https://www.legislation.gov.au/Details/F2020L00419}

^{[2] Note that this can also occur by request or agreement. Organisations can also request or agree with an employee that they take double leave on half pay. For example, an employee agrees to take four weeks leave but only has two weeks annual leave deducted from their leave balance and is only paid for two weeks’ worth of leave.}

Victorian registered schools are now permitted to mark the roll once per day, instead of twice, which is required by the Minimum Standards (Attendance register, under Enrolment Minimum Standard).

Consistent with our advice to school clients, the VRQA however notes that:

“It’s important schools continue to ensure the care, safety and welfare of their students, including child safety and the risks posed in an online environment. Schools should consider the duty of care owed to their students and that different and sometimes greater measures need to be taken for younger students or students with disabilities.

The ministerial direction is in place for the duration of Victoria’s state of emergency or until a date determined by the Secretary, during which time the VRQA is to refrain from:

• reviewing or evaluating school compliance with the prescribed minimum standard for monitoring and recording student attendance twice a day
• pursuing a principal or person in charge of a registered school for non-compliance with section 4.3.7 of the Education and Training Reform Act which states it is an offence if attendance is not recorded in the attendance register in accordance with the minimum standard.”

The Ministerial Direction dated 14 April 2020 will last for as long as the state of emergency lasts, and applies to school compliance from 14 April 2020 until end of the state of emergency.

Attendance Recording Advice has also been published by the Department. One FAQ provides:

“Schools may use a range of mechanisms to determine if students are attending in a remote learning context. This includes:

• Learning contact: the school verifies that the student has engaged with learning tasks through participation in teaching schedule. This may include through the student’s engagement with the school’s learning platform, through teachers’ direct interactions with the student and through student’s submission of work.
• Student, parent or carer contact: the school makes contact with the student, parent or carer to verify the student’s participation that day.
• Onsite attendance: student is recorded as present at a school site for onsite programs.”

Next steps

If you have any questions about your compliance with the Minimum Standards during this time, please do not hesitate to contact us.

While most States are still finalising plans for Term 2, it is clear that school is going to look very different in light of COVID-19. Many schools will be moving online and utilising remote learning environments.

Guidance from the Office of the eSafety Commissioner and other digital organisations have been that the combination of remote learning and increased online activity by students is likely to create increased child safety risks. Whilst regulators are expected to announce some flexibility or accommodation in relation to curriculum learning areas, child safety and risk management obligations will not change. Parents have a duty to maintain a safe physical environment, while schools will be required to maintain a safe online environment.

This article covers our key tips for schools to facilitate a child safe remote learning environment and mitigate risks to students.

What will Term 2 look like for each State?

This section provides a summary of the guidance provided by each State regarding Term 2. Please note that this is continuously changing and the information provided is relevant as at 10am on the date of this article. Schools should refer to the relevant government department for the most up to date information.

Schools should also keep in mind that other requirements may also apply, such as requirements in most states that camps, excursions, assemblies, sports and other activities be postponed or cancelled.

State	Start Date	Remote Learning
ACT	28 April 2020 (TBC)	Schools have been pupil free since 24 March 2020 (except students who need to attend) to allow schools to prepare for remote learning. Guidance for Term 2 has not yet been released.
NSW	28 April 2020 (TBC)	Guidance for Term 2 has not yet been released. However, it is expected to be similar to guidance towards the end of Term 1 which is that parents are encouraged to keep their children at home if possible but schools remain open for students who need to attend.
NT	20 April 2020	NT Government has indicated that schools should be prepared to move to flexible learning for Term 2, with schools beginning holidays early in Term 1 to allow them to prepare for the change.
QLD	20 April 2020	Guidance for Term 2 has not yet been released. However, it has been indicated that schools may move to home-based learning.
SA	27 April 2020 (TBC)	To date, schools are expected to remain open but parents may keep their children at home. Schools were given four student free days before Easter to prepare for online and flexible teaching options.
TAS	28 April 2020	Students to learn from home where possible but schools to remain open for students who cannot learn at home. Schools will close if there is a confirmed case of COVID-19 at that school.
VIC	15 April 2020	All students who can learn from home must learn from home. All staff members who can work from home must work from home. Staff who are medically vulnerable or live with medically vulnerable people must not work on-site. Minimum teacher to student ratio of 1:8 and a maximum of 10 students in a room.
WA	28 April 2020 (TBC)	Guidance for Term 2 has not yet been released. However, at the end of Term 1, guidance was that students were encouraged to learn from home if possible.

Key child safety risks

Moving to remote learning will lead to both an exacerbation of existing child safety risks and create new hazards. Schools need to be mindful that their child safety obligations continue to comply, including their duty of care, reporting requirements and compliance obligations.

Some of the key risks include:

• Staff members grappling with maintaining professional boundaries with students while engaging with them directly online, in circumstances where this has often been prohibited or discouraged in the past;
• Students experiencing heightened levels of stress, isolation and anxiety as a result of social distancing requirements and the impact on their studies;
• Students suffering abuse or being exposed to violence at home;
• Student-on-student abuse including cyberbullying, image based sexual abuse and other types of inappropriate online behaviour both on school platforms and social media;
• Online abuse as students explore new forms of social media and online networks;
• Outsiders gaining access to online classrooms or materials;
• Students accessing the online environment to a much greater extent without parents, who are working, being available to minimise or monitor activity;
• Breaches of student privacy and confidentiality;
• Students becoming disengaged from studies; and
• Discrimination risks as schools need to continue to make reasonable adjustments for students with disabilities, learning disabilities or other vulnerabilities.

Top tips

To ensure schools maintain a child safe remote learning environment, we recommend that schools keep in mind the following top tips.

1. Understand your risks
   
   Most schools will be utilising online platforms that are new and unfamiliar. It is important that schools undertake a thorough risk analysis of both the platforms and moving to remote learning to understand their unique risk profile. This will also allow schools to prioritise action during a busy time. Conduct Privacy Impact Assessments of technology, and understand how information is captured, stored, secured (or not) and used. Ensure that educators know how to “lock” rooms, how to avoid students setting up “side” rooms or rooms within rooms, and which platforms are school-endorsed.
    
2. Set clear expectations of behaviour
   
   Schools must set clear expectations of behaviour with staff members, students and parents. This should be through either amending existing Codes of Conduct or providing tailored codes for remote learning.
    
3. Continue child safety training
   
   It remains important, if not more important, for schools to be educating staff members on child safety. This should be tailored to remote learning environments, including expectations of behaviour, noticing red flags, guidance on privacy settings and locks on school platforms and recapping reporting requirements.
    
4. Provide training or information to students
   
   Along with training for staff members, schools should be considering training for students on staying safe online. For older students, this should include use of social media, apps and online games and guide them through privacy and safety features. For younger students, consider inviting parents in to the training as well to ensure a cohesive approach to child safety.
    
5. Run regular Child Safety Officer meetings
   
   With the majority of school staff are also working from home, there is a risk that information regarding red flags and child safety concerns will fail to be shared. Child Safety Officers will play a critical role in being a contact point to discuss any concerns. We recommend schools set up recurring Child Safety Officer meetings and provide clear communication to staff members regarding who the officers are and their contact details. Advise staff and students about reporting channels, especially if the usual phone or email will not be answered.
    
6. Monitor online activity
   
   Ensure you as a school are able to monitor and record activity on any platform you are using. Schools need to be aware that any inappropriate behaviour that occurs through the use of school online platforms could be a breach of their duty of care. Similar to monitoring students while on the school premise, schools should be monitoring online behaviour including emails, messages and other online communication. Staff members should be reporting any inappropriate content.
    
7. Comply with reporting requirements
   
   Regulatory authorities have reminded schools that their reporting requirements will continue to comply. In fact, many organisations have reported an increase in domestic violence due to social and financial pressures. It is important that schools remind staff members of their reporting obligations, particularly those with strict timeframes such as reportable conduct schemes. Ensure the ongoing availability of school counsellors too.
    
8. Provide guidance to parents
   
   Schools will have much less oversight of students while they work from home. Schools must work in partnership with parents to create a child safe environment. Consider providing guidance to parents on how they can interact with the school and the risks they should be aware of. Manage parent expectations about the nature and extent of online learning, and their involvement in any virtual classrooms and brief them well in advance. Government guidance notes schools cannot rely too heavily on parents to assist with learning or to monitor any online activity. They will be likely working too and potentially caring for other family members as well. Make sure the parents know who they can contact with any queries or concerns, and that usual grievance procedures can still be followed. They should also be made aware of requirements for a safe physical environment.
    
9. Keep updated on governmental guidance
   
   Guidance for State and Federal governments is being constantly updated as the situation and medical advice changes. Schools need to be kept up to date on these changes. Consider assigning a staff member to provide a summary of any relevant updates on a regular basis.
    
10. Evaluate, learn and improve
    
    Moving to a remote learning environment across the whole school will be a very new and unprecedented act for most schools and the education sector. It is important that schools review and evaluate their platforms, practices and procedures. Where there are gaps, see this as an opportunity to learn and improve to best ensure you are creating a child safe environment. Schools in the non-government sector can use this crisis as an opportunity to demonstrate why they are the schools of choice for so many in Australia.

Next steps

For further information or guidance on how to respond effectively to COVID-19, please do not hesitate to contact us.

Are you a member of a self managed superannuation fund (SMSF)?

Does your investment strategy includes ownership of a commercial property? 

Is your business run out of the property, and you pay rent to the SMSF trustee?

If you answer yes to these questions then this article is for you.

According to the Australian Taxation Office (ATO), there are currently almost 600,000 self managed superannuation funds (SMSFs) nation-wide, owning over $70 billion worth of non-residential property among them.

Given the strict regulation of SMSFs, many of  our clients have been wondering whether they are permitted to grant rent relief to their tenants in the context of the economic difficulties we’re seeing arising in the COVID-19 environment.

Thankfully, the ATO has now provided some guidance on this issue.

Rent relief where landlord is an SMSF

As you would likely be aware from media coverage, many tenants are approaching their landlords seeking rent relief to help them deal with the increasing economic impact COVID-19 is having on their income. 

It has been unclear whether SMSF landlords would be breaching their obligations under the Superannuation Industry (Supervision) Act 1993 (SIS Act) by granting such a request.  On the face of the legislation, it is likely that such action would render a SMSF non-compliant. 

However, guidelines just released by the ATO provide assistance for SMSF landlords who are considering offering rent relief to its related party tenant, allowing this to be done without risking non-compliance with the landlord’s SIS Act obligations.  

The ATO guidelines (available here) confirm that for the 2019-20 and 2020-21 financial years, that no action will be taken if the SMSF trustee offers “a temporary rent reduction” to a related party tenant.  It appears that so long as the rent reduction is temporary in nature, SMSFs are free to determine the amount of rent reduction and the rent reduction period amd market evidence is not required to support those numbers.  However, it’s important to note that the current ATO concession does not apply to other lease incentives or relief which are not a ‘temporary rent reduction’.

The guidelines make no distinction between commercial and residential leases – it appears that both are within the scope of the ATO concession.

Maintaining SIS Act compliance

In considering whether rent relief should be granted, the significance of non-compliance with SIS Act obligations should not be underestimated. 

Substantial monetary penalties can be imposed by the ATO on the SMSF trustee for non-compliance with requirements of the fund to deal at arm’s length (as if with an unrelated third party) and to meet sole purpose test (to increase a member’s retirement benefit).  

It is important that all reasons and arrangements are properly documented and as such, we recommend that SMSF trustees to consider seeking expert advice on each individual lease, property and tenant circumstances.

What does this mean for you?

If you are considering whether rent relief is appropriate in your SMSF arrangements, please get in touch with our team for further information or guidance. Senior Lawyer, Kate Drummond and Associate, Rowdy Johnson can be contacted on (03) 9843 0402.

While there is some relief for Victoria and Northern Territory associations, all associations should be aware of penalties that may apply in their own State or Territory. Registered charities will benefit from the ACNC’s announcement of an aligned approach to interpreting Governance Standard duties.

The temporary coronavirus insolvency safe harbor offers some protection to directors of corporations in respect of debts incurred by companies that are or become insolvent in the next six months (this period may be extended). Provided debts are incurred honestly and in the course of ordinary business, directors will be protected from civil penalties (of up to $200,000) and personal liability to compensate creditors or the company from losses arising from trading while insolvent. The protections apply to directors of both for-profit and not-for-profit corporations.

Incorporated associations are separately regulated in each State and Territory of Australia. This means that the extent to which the Corporations Act duty to prevent insolvent trading applies differs in each State and Territory. For the purposes of the temporary coronavirus insolvency safe harbor, the key differences are as follows:

Victoria

The temporary coronavirus insolvency safe harbor provisions do apply to Committee members – they are protected from the civil penalty for trading while insolvent and from liability to compensate creditors or the association for losses in the next six months.

Northern Territory

The temporary coronavirus insolvency safe harbor provisions do apply to Committee members – they are protected from the Corporations Act civil penalty for trading while insolvent and from liability to compensate creditors or the association for losses in the next six months.

However, there is no protection from the separate offence in the Associations Act 2003 (NT) of incurring debts not likely to be paid (maximum penalty $62,800 or two years)

New South Wales

The Corporations Act duty to prevent insolvent trading does not apply to New South Wales associations.

There is a separate offence under the Associations Incorporation Act 2009 (NSW) of incurring debts while insolvent (or that cause the association to become insolvent). A maximum penalty of $8,000 or one year’s imprisonment applies.

South Australia

The Corporations Act duty to prevent insolvent trading does not apply to South Australian associations.

There is a separate offence under the Associations Incorporation Act 1985 (SA) of incurring debts while insolvent (or that cause the association to become insolvent). A maximum penalty of $5,000 applies.

Western Australia

The Corporations Act duty to prevent insolvent trading does not apply to Western Australian associations.

There is a separate offence under the Associations Incorporation Act 2015 of incurring debts while insolvent (or that cause the association to become insolvent). A maximum penalty of $5,000 applies.

Queensland, Tasmania and ACT

The Corporations Act duty to prevent insolvent trading does not apply in these jurisdictions.

There is no separate offence of incurring debts while insolvent. 

How we can help

The Australian Charities and Not-for-profits Commission has advised that it will align its interpretation of the Governance Standard duties (which includes a duty “not to allow the charity to operate while it is insolvent”) for all charities with the insolvency safe harbour provisions.

This means a charitable association will not be in breach of the ACNC Governance Standards if it trades insolvent between now and 25 September 2020, provided it:

• ensures that its directors are aware of the issue and have an achievable aim for their charity to return to viability when the COVID-19 crisis has passed, and
• informs its members and the ACNC if it is trading insolvent.

For further assistance or guidance on any of the matters above, please do not hesitate to contact us.

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For more information regarding changes to Insolvent Trading Duties for Directors, please read our article here.

As part of its response to the national emergency arising from the spread of the Coronavirus, the government announced changes to insolvent trading duties in March 2020.

This will assist organisations under pressure to keep going, pay necessary staff and be positioned to return to normal business.

The relevant legislation (Coronavirus Economic Response Package Omibus Act 2020 (Cth) (the Act)) came into effect on 24 March 2020.  

Critically, the laws have been softened, not repealed, and other directors’ duties remain in place. 

Acting now, boards should:

1. Ensure you have proper and thorough modelling on the effect of COVID.
2. Stick to proper processes, including procurement. 
3. Ensure management has clear view on “ordinary course of business”.
4. Regularly review what constitutes “ordinary course of business”.  Business may contract and require further cost cutting.
5. Understand the organisation’s solvency before COVID and note you may still need to place a company into administration.  The laws protect robust businesses which temporarily become insolvent, not those which were already.
6. Proactively review contracts for services before terminating.  Do not assume you can obtain a refund, noting many fixed term contracts may need to be paid out.  Consider whether there are any “frustration” clauses or clauses which might be penalties, which could assist.  Be pragmatic about preserving relationships with suppliers you will need after the crisis abates.

Changes to Insolvent Trading – How does the coronavirus Safe Haven work?

By providing some relief to insolvency provisions of the Corporations Act, the changes seek to avoid otherwise robust organisations going into financial distress and collapsing due to the COVID-19 pandemic. For the next six months (which may be extended), if a debt is incurred in the ordinary course of a company’s business while that company is insolvent or that causes that company to become insolvent:

• the civil penalty provisions in 588G(2) will not apply (protecting directors from a potential penalty of up to $200,000); and
• consequently, directors cannot be required to compensate creditors or the company for any loss or damage suffered through insolvent trading.

Note these protections will not apply if a director dishonestly fails to prevent a debt being incurred. Further, this moratorium is not retrospective and does not apply to debts incurred before 24 March 2020.

For companies that are registered charities, the Australian Charities and Not-for-profits Commission has advised that it will align its interpretation of the Governance Standard duties (which includes a duty “not to allow the charity to operate while it is insolvent”) for all charities with the insolvency safe harbour provisions. This means a charitable company will not be in breach of the ACNC Governance Standards if it trades insolvent between now and 25 September 2020, provided it:

• ensures that its directors are aware of the issue and have an achievable aim for their charity to return to viability when the COVID-19 crisis has passed, and
• informs its members and the ACNC if it is trading insolvent.

What does the ordinary course of business mean?

This does not cover dishonesty and fraud but does include debts deemed necessary to facilitate the continuation of the business during the 6 month period commencing on 24 March 2020.  

This emphasises the need to ensure directors still exercise sound judgment and do not breach other directors’ duties. The laws have been relaxed, not repealed entirely.

These would still be problematic: an organisation increasing director pay, entering into agreements which involved a director’s conflict or interest, or entering into an unnecessary agreement involving excessive payments (in the school context, an example would be a prohibited arrangement).

However, entering into a modelled temporary insolvency to pay staff who are still working and who will be needed after the crisis, in the context of considered and suitable cost cutting, would be much less problematic.

In good news for employees, the Explanatory Memorandum specifically notes these would be likely to be in the ordinary course of business:

• continuing to pay employees during the COVID-19 pandemic, or
• a director taking out a loan to move some business operations online.

As this legislation was passed swiftly to enable businesses to survive in these extreme conditions, it could be expected that the term “ordinary course of business” will be widely interpreted.

Safe Harbour

In conjunction with this additional relief given by the Act, directors are still able to rely on the existing provisions of the Corporations Act which provide “safe harbour” from insolvent trading where they:

Start developing one more courses of action that are reasonably likely to provide a better outcome for the company than an immediate liquidation or administration. Directors are protected from insolvent trading liability arising from debts incurred directly or indirectly connected to such course of action.

That is, a debt incurred as a result of rescue financing may be provided safe harbour protection, if not by the new provisions of the Act.

Proper financial modelling is therefore key.

Bankruptcy

Further amendments to the Corporations Act include a temporary increase to:

• the threshold for a creditor to initiate bankruptcy proceedings from $5,000 to $20,000;
• the time period to respond to a bankruptcy notice from 21 days to 6 months; and
• the period of protection a debtor receives after making a declaration or intention to present a debtor’s petition.

Statutory Demands

Previously, creditors could issue a statutory demand on a company for a debt of $2,000 or more. This threshold has now increased to $20,000. The time limit to respond to a statutory demand has been extended from 21 days to 6 months. Once again, these amendments only apply to statutory demands issued after 24 March 2020 and will only last for 6 months, unless the provisions are extended.

What does this mean for you?

In summary, the laws allow you to sleep at night, but diligent work is still required. Follow the 6 actions above to ensure you have the protection of the new regime.

How we can help

If in doubt or you require further information and/or guidance, please do not hesitate to contact us.

For more information on how Incorporated Associations are separately regulated in each State and Territory, please read our article here.