Liquidating a company won’t necessarily avoid husbands and wives from back-paying employees out their own pockets.

In FWO v Sinpek Pty Ltd (In Liquidation) & Ors [2020] FCCA 88, the national workplace regulator secured orders against a director and spouse to personally reimburse two underpaid workers $52,722.48.

The Fair Work Ombudsman proved various underpayment and other workplace contraventions occurring between 8 January 2015 and 10 August 2016, which included requirements for employees to re-pay their tax returns to the employer and meet the costs of stolen fuel.

Central to the FWO’s success was its reliance on third party liability provisions in the Fair Work Act 2009, which extend exposure to contraventions of ‘civil remedy provisions’ to any individual person that was ‘involved’ or ‘knowingly concerned’ in the contravention.

Section 550 of the Act is extracted below:

550 – Involvement in contravention treated in same way as actual contravention

1.  Person who is involved in a contravention of a civil remedy provision is taken to have that provision.
    
2.  A person is involved in a contravention of a civil remedy provision if, and only if, the person:
   
   (a) aided, abetted, counselled or procured the contravention; or
   
   (b) has induced the contravention, whether by threats or promises or otherwise; or
   
   (c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
   
   (d) has conspired with others to effect the contravention.

To be knowingly concerned in a contravention, the person must have engaged in some act or conduct which “implicates or involves him or her” in the contravention so that there be a “practical connection between” the person and the contravention.

An analysis of historical FWO initiated cases demonstrates a consistent trend in it continuing to name individual persons as second, third or fourth respondents to legal proceedings (including Accountants^[1] and HR Managers^[2], for example).

Third party liability doesn’t end with underpayment cases either. Any breach of a civil remedy provision contained in the Fair Work Act, including unlawful dismissals, entitles an applicant to explore whether an individual should also be held to account.

Further, it’s unlikely you would be forgiven if you were only following your supervisor’s orders. For example, in FWBII v Baulderstone Pty Ltd [2014] FCCA 721, two HR managers were found to be co-liable after they complied with an employer’s instruction to terminate an employee’s salary contract because the employee resigned his membership with the CFMEU.

Accessory Liability – what you need to consider

Given the arm of accessory liability is longer and broader than you might think, all persons that are in any way involved within an organisation’s HR function need to consider the following:

• Advice on employment obligations should only ever be obtained from qualified experts (an accountant shouldn’t give workplace relations advice, in the same way that an employment lawyer shouldn’t give tax advice).
• If you are in doubt of your obligations, request that advice be verified in writing.
• Ignorance is not always bliss. You can’t un-know what you know.
• If you are an advisor and your client won’t accept your advice, you may need to consider recommending that they obtain a second opinion or ceasing to act for that client.

For more information or guidance regarding your obligations as an employer, please do not hesitate to contact us.

_{[1] FWO v Blue Impression Pty Ltd & Ors [2017] FCCA 810}

_{[2] FWO v Oz Staff Career Services Pty Ltd [2016] FCCA 105}

If you’re an employer reading this – chances are you’ve recently learned that your employee’s smartphone was, without your knowledge, on record… the whole time.

Or perhaps you’re in possession of an audio recording that raises concerns regarding your employee’s conduct at work?

Naturally you might be thinking:

• Is the recording legal?
• Can I trust the employee anymore?
• Am I placed to use the recording to my advantage?

In this article we debunk some of the myths surrounding secret recordings and aim to demystify the legalities.

Are secret recordings lawful?

The short answer is sometimes, because it depends on which state or territory you’re in.

Where a person is not a party to a private conversation, surveillance legislation in all states and territories generally prohibits a person secretly recording that conversation. Limited exceptions apply across all jurisdictions, including for law enforcement purposes.

On the other hand, surveillance legislation operating in Victoria, Queensland and the Northern Territory generally permits a person to secretly record a private conversation, provided that person was a party to the conversation.

For example, in Victoria:

• An employee will be entitled to record a confidential performance management discussion with their employer, provided the employee directly participated in that discussion;
• However, an employee will not be lawfully entitled to place a listening device in a room and record a private conversation that they were not a party to.

Even if a secret recording is lawfully obtained, it can still be unlawful for the recording to be communicated or published to a third party without the consent of the participants to the conversation.

Does the same apply to telephone calls?

Not quite.

The Telecommunications (Interception and Access) Act 1979 (Cth) operates in conjunction with state based surveillance legislation and imposes additional restrictions on the recording or interception of telecommunications systems (including telephone calls). Where a telephone call is recorded, consent must generally be obtained for that recording to be lawful (which explains the pre-recorded message each time you call your insurer).

How do courts treat secret recordings in cases involving termination of employment?

Where an employee seeks to rely on a secret recording, the value or utility of that recording will change depending on the precise legal claim made by the employee.

In the context of unfair dismissal claims for example, there is a growing consensus among industrial tribunals that recording colleagues without consent is inappropriate. The Fair Work Commission has, time and time again, denounced such behaviour and deemed secret recordings to constitute a form of misconduct.^[1]

Further, a surreptitious recording itself can in some cases give employers a valid reason to terminate employment.^[2]

The rationale for denouncing secret recordings in the workplace is helpfully summarised by Deputy President Coleman in Gadzikwa v Australian Government Department of Human Services [2018] FWC 4878, [83]:

Unless there is a justification, I consider the secret recording of conversations with co-workers to be highly inappropriate, regardless of whether it may also constitute a criminal offence in the relevant jurisdiction. The reason it is inappropriate is because it is unfair to those who are secretly recorded. They are unaware that a record of their exact words is being made. They have no opportunity to choose their words carefully, be guarded about revealing confidences or sensitive information concerning themselves or others, or to put their best foot forward in presenting an argument or a point of view. The surreptitious recorder, however, can do all of these things, and unfairly put himself at an advantage. Moreover, once it is known that a person has secretly recorded a conversation, this is apt to produce a sense of foreboding in others, an apprehension that they must be cautious and vigilant. This is potentially corrosive of a healthy and productive workplace environment. Generally speaking, the secret recording of conversations with colleagues in the workplace is to be deprecated.

DP Coleman’s sentiments may not, however, be persuasive (or even relevant) where an employee brings a general protections, adverse action or discrimination claim. Here, the Court’s assessment is confined to a question of what the substantive or operative reasons for dismissal were (rather than broad notions of fairness). In this instance, an employee may legitimately rely on a lawfully obtained recording as supporting evidence.^[3]

For example, where an employee alleges they were dismissed for exercising a workplace right (in breach of section 340 of the Fair Work Act 2009), a recording may help an employee advance their case and prove the true reasons for dismissal.

Key takeaways

• In Victoria, Queensland the Northern Territory, secretly recording a private conversation may be legal – particularly where the person recording the conversation was involved in it.
• National legislation regulates the interception of telecommunications systems – so think twice before you record a telephone call without consent.
• Recording colleagues in a workplace is generally not conducive to a healthy work environment, although it can be helpful evidence where the reasons for dismissal are called into question.

How Moores can help

The era of smart-phones and tablets, together with Australia’s adversarial workplace relations system, makes recording conversations tempting and accessible to employees. Employers may err on the side of caution and take the following protective measures:

• Ensure all discussions with employees are conducted in a manner that does not adversely impact their business.
• Consider training managers to be lawful, transparent and fair in their communications with staff – sometimes your business is only as lawful as your 2IC’s conduct.
• If you do not want a recording to be made, inform all participants that you do not consent to the use of listening devices – or consider a request for all participants to place electronic devices on the table.
• Have a witness present at all pertinent conversations to take detailed notes – this can be useful where a recording may only reflect a snippet of the actual conversation.

Moores can give you strategic guidance on how to deal with a secret recording in the workplace, and in some cases – use them to your advantage.

For more information, or to speak with a member of our workplace relations team, please do not hesitate to contact us.

_{[1] See for example Green v Lincon Logistics Pty Ltd [2017] FWC 4916; Evered v AHG Services (Vic) Pty Ltd [2013] FWC 9609}

_{[2] See Schwenke v Silcar Pty Ltd [2013] FWCFB 9842}

_{[3] See Wintle v RUC Cementation Mining Contractors Pty Ltd [2013] FCCA 694}

If you own property in Australia, it is likely that you will have to pay Capital Gains Tax (“CGT”) when you sell it.

That is, unless it’s your home.

The “Main Residence Exemption”, being the exemption for property in which you live, is the most common exemption from CGT. 

But what about if you take a job overseas and sell your home in Australia while you’re not an Australian tax resident?

A Retrospective Change to the Law

On 9 May 2017 the Government announced changes to be made to the main residence exemption from CGT, which were finally enacted on 12 December 2019, with effect from the announcement date. The key change applies to limit the circumstances in which a foreign resident (namely, a resident of a country other than Australia for tax purposes) can access the main residence exemption for their home owned back in Australia.

Essentially a foreign resident is now excluded from eligibility for the main residence exemption, if they are a foreign resident at the time of the sale of their home (or other CGT event).

Importantly, if you are a foreign resident when you die, this change applies to your executors and beneficiaries, surviving joint proprietors and to special disability trusts.

Example

You bought your home in January 1990.  You lived in it as your home until you accepted a job overseas in 2016.

In October 2020, you decide to sell it, while you’re still working overseas and not an Australian tax resident.

Even though the property was your home for 26 years, you will not have access to the main residence exemption.

Exception to the new rule

If, however, during your period of non-residency:

• you experience a significant life event; and
• you have been a foreign resident for a continuous period of less than six years

you will still be eligible to access the main residence exemption. 

The significant life events are limited to:

• a death of the owner, their spouse, or their child under 18 years of age;
• a terminal medical condition of the owner, their spouse or child under 18 years of age; or
• a divorce or separation, which causes the property to be transferred.

Transition to change

There is a short window during which foreign residents who owned property prior to 9 May 2017 may still access the main residence exemption. 

The catch? They need to sell it prior to 30 June 2020.

Any other relief?

Foreign residents also need to consider their ability (or lack thereof) to access the 50% CGT discount, which ordinarily applies to asset owned by an individual or trust for longer than 12 months. 

If the owner became non-resident after 8 May 2012 there may be applicable apportioning rules based on the period of time that the current foreign resident was a resident of Australia during the period of ownership.  

What about the cost base?

A practical problem with the new measures will be the matter of compiling the cost base information for the property. This is likely to be extremely challenging given the owner would have previously believed such information was never going to be required, thereby the likely result will be an even larger capital gain than the owner would otherwise have had.

Are you currently (or planning to be) a tax resident of a country other than Australia?

Moores’ expert team can discuss how these changes may affect your tax position in relation to property ownership in Australia. For more information, please do not hesitate to contact us.

Victoria made history last night in passing Australia’s first Gender Equality Bill (the Bill). This landmark piece of legislation is designed to level the playing field so that all Victorians, regardless of gender, can benefit from equality of opportunity and equal rights. 

The passing of the Gender Equality Bill will improve workplace gender equality as well as signal to the Victorian community that equality is not negotiable and cultural change is integral to a safer, healthier and more productive community. 

What does this mean for organisations?

The new law applies to certain organisations with more than 50 employees, including public sector bodies, local councils, universities, the courts, the Office of Public Prosecutions and other defined bodies.

From March 2021, affected organisations will be required to promote gender equality in the community through a number of different means, such as reviewing and amending policies, programs and services. These organisations are obliged to develop a Gender Equality Action Plan and report publicly every two years on their progress against it.  The Bill establishes an independent Public Sector Gender Equality Commissioner, who amongst other things, will have an education function and be empowered in certain circumstances to take steps to ensure that affected organisations are complying with their legal obligations. Finally, the Act provides that Regulations can set targets and quotas against which affected organisations will be held accountable to.

How can we help?

Our Workplace Relations team at Moores has extensive experience in supporting universities, local councils and other employers to prevent gendered harm and discrimination, as well as respond to and resolve complaints.  Our Workplace Relations leader, Skye Rose, is an award winning workplace relations and discrimination lawyer, who is a recognized expert in discrimination, child safety and the prevention of sexual harm and misconduct.

The new Gender Equality Act has a commencement date in March 2021 so as to give affected organisations time to get their house in order.  Regardless of whether your organization has legal obligations under the Bill, Skye and our team would be delighted to work together with organisations to ensure that they are prepared for the commencement of this historic Bill.

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

From 1 July 2015, provisions in the Duties Act 2000 (Vic) have imposed additional duty on foreign purchasers of Australian residential property. Since 1 July 2019, the rate of additional duty has been 8%.

Foreign trusts are within the category of foreign purchasers targeted by the Act, and include a trust where:

• a foreign natural person, which includes a person who is not an Australian citizen; or
• a foreign corporation, which includes a company that is incorporated outside Australia or in which a foreign natural person has a controlling interest,

has a beneficial interest in more than 50% of the capital of the trust.

Typically, a discretionary trust (or family trust) is set up with a couple of key people as the “specified beneficiaries” and a broad range of other beneficiaries – from the immediate family to unnamed long-lost descendants of the grandparents of the specified beneficiaries. 

Yes, that even includes the specified beneficiary’s long lost cousin who lives overseas and is not an Australian citizen.

Stave Revenue Office

Until now, the State Revenue Office (“SRO”) has taken a practical approach to the application of the foreign duty provisions in relation to discretionary trusts. 

The SRO’s approach has been to treat a trust with foreign beneficiaries who have not and who are, based on the information available, unlikely to receive any distributions from the trust in the future, as not falling within the definition of foreign trust.

However, from 1 March 2020 the SRO will no longer be applying this practical approach. Instead, any discretionary trust that has within its beneficiary class a foreign natural person or a foreign corporation which is eligible to receive 50% of the capital of the trust will be considered to be a foreign trust purchaser for the purposes of transfer duty – attracting an additional 8% of duty. 

By way of example, if a Victorian residential property is purchased for $2,000,000 on 1 March 2020 by a discretionary trust which has the overseas cousin who is not an Australian citizen as one of its beneficiaries, then the duty on the purchase will be $270,000, rather than $110,000 if the cousin was not a beneficiary of the trust.

Next steps

If you are considering purchasing residential property in your family trust, it is extremely important to consider how you may be able to avoid foreign purchaser additional duty on the purchase.

This may be possible by amending the trust deed prior to settlement of the purchase. Obviously, there are many issues to consider before determining whether this is an appropriate strategy for you, including whether the amendment is permitted and advisable in your circumstances, and consideration of the risk of resettlement.

It is not clear whether the SRO will accept that excluding beneficiaries pursuant to an existing power in the trust deed will be sufficient. Setting up a new trust with no foreign beneficiaries may be a preferable way to go.

Contact us

For more information on how we can assist you in considering the best way to proceed in your own circumstances, please do not hesitate to contact us.

Originally featured on Our Community’s website. Click here to access the ‘Code of Conduct’ webinar recording.

Background

The recent public and controversial case of Australian Rugby player Israel Folau has raised questions about the rights of freedom of religion and freedom of expression in the context of employment and Employer Codes of Conduct. Folau faced disciplinary action for breaches of the player Code of Conduct over controversial religious social media posts, and was ultimately terminated by Rugby Australia. While this case was settled and left us without a ‘test case’ for the impacts of freedom of religious expression in the workplace, it has:

• reignited debate about the need for a federal Religious Discrimination Bill, which has been drafted and will shortly be presented to Parliament; and
• brought up some interesting considerations for Employers and Codes of Conduct.

Here are some of our top tips for organisations to consider for an effective Code of Conduct:

1. Tailoring
   
   An effective Code of Conduct cannot be generic. It should be tailored to your organisation’s values, beliefs and work. For example, if your organisation provides support/assistance to children, vulnerable persons or persons with a disability, the Code of Conduct should be descriptive on what is expected and what is inappropriate conduct in the workplace and when interacting with vulnerable clients.
    
2. Set clear expectations
   
   Your expectations for workplace behaviour should be clear, simple and concise. They should be presented in a format that is easily understood by all employees (i.e. it may be important to consider pictures / flow charts / examples etc.) The Code should set out the ramifications of a breach and serve as a guide for managers to understand and know when intervention/disciplinary action is required. The Code should not be legalistic.  Organisations should require staff, directors and volunteers to read the Code of Conduct as part of their on-boarding process, and verify that they will comply with it (electronically or in writing). Employment contracts should also be reviewed to:
   
   – ensure that they contain an obligation on the worker to comply with policies and procedures (including any code of conduct);
   – ensure that they stipulate the consequences of a breach by the worker, including disciplinary action up to the termination of employment;
   – clarify that the policies, procedures and code of conduct do not form part of the contract, without which an employer may be exposed to a breach of contract claim.
    
3. Don’t focus on the negative
   
   The Code should not just be framed in the negative by setting out what employees shouldn’t do. There should be a section on behaviours that are acceptable, encouraged or expected. Consider using a positive tone e.g. “we all must ensure…” or “the organisation depends upon…” rather than “you cannot do….” Or “you must not…”
    
4. Consideration? of out of work restrictions
   
   Does your organisation want to restrict comments/behaviour inside and outside of work, and to what extent? For example, it may be important to restrict comments that are contrary to the purpose/ethos of the organisation and wish could cause reputational damage (i.e. if the organisation has a strong LGBTQI presence and focus then comments made by workers out of work hours that are contrary to the LGBTQI community could be a breach of the Code). Given the Folau case and the potential impact of a Religious Discrimination Act, organisations should also consider the extent they wish to limit out of work comments for religious purposes, and whether the restrictions are likely to be lawful under the proposed reforms.
    
5. Online behaviour
   
   Given the rise of social media in the workplace through platforms such as twitter, Instagram, Facebook, even Linkedin, organisations should set expectations in respect of appropriate online behaviour. This may include cross-reference to your Bullying/Harassment/Discrimination Policy. As noted above, your Code of Conduct should clearly set out appropriate and inappropriate online behaviours both inside and outside of work. The importance of this was highlighted in the recent High Court Case, Comcare v Banerji [2019] HCA 23, in which a public servant’s public political comments outside work was found to have breached the Australian Public Service Code of Conduct.
    
6. Consult
   
   Given the Code of Conduct will govern employee behaviour, organisations should consult their workers on what ethics means to them and what values/beliefs they believe the organisation holds. Seek feedback in respect of previous codes to see what is working and what might need to be refreshed.
    
7. Fraud
   
   Not-for-profit entities should have a Code of Conduct to establish the organisation’s ethical culture and to help protect against fraud. The number one concern raised by the public with the ACNC relates to fraud and financial crimes within charities. This greatly impacts an organisation’s financial prospects (i.e. funding), reputation, morale and sustainability. Having a well-drafted Code of Conduct which includes behaviour around best-practice (i.e. not receiving presents/gifts from donors or clients) will reduce the risk of fraud within the organisation and embeds the ethical culture.
    
8. Other resources
   
   Organisations should consider other resources that should be referred to in the Code of Conduct, especially those that are relevant to the ethos, values, industry of the organisation. For example, if there are ethical resources in respect of behaviour towards vulnerable persons, persons with a disability, LGBTIQ communities, consider referencing these at the end of the Code for any one that may be interested in reading in their own time. These resources can then be explored in greater detail during subsequent training sessions.
    
9. Lead by example
   
   Board members, CEO and managers should led by example and model the expected behaviour/culture. Employees are more likely to follow suit.
    
10. Training
    
    Induction training and periodic training for employees on policies and procedures and the Code of Conduct should be undertaken by organisations. These sessions should aim to workshop problems and allow employees to deepen their understanding of the workplace’s expectations.

How Moores can help

If your workers engage in behaviour that breaches your Code of Conduct, disciplinary action (including dismissal) may be appropriate. Moores provides assistance with drafting contracts and policies, legal advice on the proper process to address misconduct, and representation if a claim arises.

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

Click here to access the ‘Code of Conduct’ webinar recording, created in partnership with Our Community

A recent survey found that 31 January is the most popular day for employees to quit their jobs. The New Year is a time for reflection: New Year, new career!

When an employee wants to move on and you’re asked to provide a reference, it’s not always easy to work out how honest you should be. You may be able to provide a glowing reference for a star performer with a clean record, but what should you say about a poor performer or an employee  accused of misconduct? What about employees who required extensive leave for family or health reasons, or those who raised complaints? Legally and morally, where’s the line?

This article explores the legal, moral and practical considerations of providing a reference.

Privacy obligations

Organisations that are bound by the Privacy Act 1988 (Cth) (the Act) will be bound by the obligations it imposes, including the Australian Privacy Principles (APPs). In general terms, this requires organisations to collect, handle and disclose personal information (including sensitive information) in accordance with the Act.

While an individual’s employment record will contain personal information, and sensitive information, there is an exemption under the Act for “employee records”.

This means that employers can disclose an employee record “in the scope of an employment relationship”. An employee record is defined by the Act as a record of personal information relating to the employment of a current or former employee.

The exemption will only apply to acts that are directly related to a current or former employment relationship, not prospective employees.

This has some important ramifications:

• the fact that an employee does not have the right of access and correction under the Act does not mean they cannot access their employment record.  Remember also that employees have rights to their records under workplace laws, so keeping accurate records which are complete and adhere to best practice record is still important.
• contrary to popular belief, “off the record” conversations with referees can be discoverable. Unsuccessful job seekers are permitted to seek records/transcripts of referee interviews, because they do not relate to a current or former employment relationship.  So, it’s key to remain factual, objective and avoid straying into territory which would be discriminatory, such as talking about the person’s illnesses or injuries, family situation. If you have concerns about the employee’s conduct or performance, focus on the objective facts rather than your opinion. What you disclose may be recorded and discovered.
• acts outside of the current or former employment relationship are not caught – for example, selling personal information to another organisation for marketing purposes would not fall under the exemption, as it is not related to the employment relationship, and therefore could still be a breach of the Privacy Act.
• volunteers and contractors are not considered employees.  Therefore, employers should seek consent from volunteers or contractors before they disclose information in a reference check.  If the individual has provided the organisation’s contact details for a reference check, you may be able to rely on implied consent.

What can I say?

As a result of the exemption above, organisations can provide the following personal information when providing a reference check for an individual:

• the engagement, training, disciplining or resignation of the employee;
• the termination of the employment;
• the terms and conditions of employment;
• the employee’s:
  • personal and emergency contact details;
  • performance or conduct;
  • hours of employment;
  • salary or wages;
  • membership of a professional or trade association;
  • trade union membership;
  • recreation, long service, sick, personal, maternity, paternity or other leave; and
  • taxation, banking or superannuation affairs.

What should I not say?

Avoid overly personal or discriminatory statements and any griping. If you can’t provide an employee with a favourable reference, consider letting them know.  

Where a person feels that their reputation has been damaged by a reference check, they may seek damages for defamation. The recent case of Bowden v KSMC Holdings Pty Ltd t/a Hubba Bubba Childcare on Haig & Chapman [2019] NSWDC 98 demonstrated the potentially costly consequences of making disparaging comments about former employees. In that case, the director of the organisation made comments alleging that the staff member was not truthful about his studies and not suitable to work in childcare. The Court found the comments to be false and rather, the organisation was simply dissatisfied that the employee was taking longer than the organisation expected to finish his course. The employee was awarded $237,970 in damages.

Keep in mind that employees are entitled to take leave for personal and family reasons, and to raise grievances and complaints. Avoid any disparaging comments about the employee’s personal leave, requests for flexibility or complaints, as this may expose you to a claim of adverse action or victimisation.

We recommend that employers limit the information they provide in reference checks to the facts. While opinion about a person could be personal information (and therefore fall into the exemption), inability to substantiate such an opinion may create risks of defamation or workers’ compensation claims. It is also preferable for reference checks to be provided verbally to ensure that information is not taken out of context.

Can I say nothing? Will I will liable for omissions?  What if the employee poses a risk?

There is no requirement that an employer provide an employee with a reference check beyond confirming the key details (e.g. length of time with the organisation, role, and responsibilities).

There may be difficult situations where employers choose to stay silent in their response to a question rather than say anything. For example, where there were unsubstantiated allegations against an employee. Similarly, personality differences or grievances between employees can be difficult to explain when it is matter of opinion. In these situations, it is open to you to say nothing when asked direct questions such as “would you hire this person again?” or “do you have any concerns about this person’s ability to work with vulnerable persons?” If you choose to elaborate, qualify your comments carefully.

Some organisations may be concerned that they owe a duty to advise a prospective employer about an employee where they have concerns about the employee posing a risk to, for example, children. If you are asked for a reference for an employee moving into a child facing role, you should be honest regarding any child safety concerns, especially if asked a direct question about the person’s suitability to work with children. However, it’s extremely important to:

• be careful not to over disclose or spread gossip. Stick to the facts and your personal observations;
• qualify any negative or disparaging statements carefully; and
• watch your language. Avoid using emotive words such as “paedophile” or “bully” unless this has been proven.

Next steps

Employers need to be mindful of their responses to reference checks, keeping in mind an environment of increased litigation regarding defamation.

We recommend that organisations mitigate their risk by taking the following actions.  

1. Ensure you have a policy and provide training to your HR team and managers setting out who is authorised to give references, with Dos and Don’ts.
2. Review your privacy policy to ensure it clearly sets out when the organisation will disclose employee records and the personal information of employees, contractors and volunteers.
3. Ensure the personal information in your employee records are contained to the facts and limit the amount of opinion or personal commentary in your records.
4. Seek advice when providing reference checks in difficult situations such as where there is an ongoing dispute with a current or former employee or it relates to sexual harassment, bullying, discrimination or child safety etc.

Contact us

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

If you suspect a data or privacy breach, you need to act quickly to stem that damage and respond to affected parties.

Many organisations also grapple with the question of whether they need to report any privacy or data breach to the regulator.

Based on our work with clients who have suffered a suspected privacy breach and conducted internal investigations, here are our top 10 tips to guarantee that you’re ticking all the right boxes:

1. Act diligently and promptly
   
   Firstly, consult your Data Breach Response Plan.  Step 1 should be containing any immediate damage by, for example, removing information from websites, recalling any emails or gathering up any papers containing personal information.
    
2. Follow your policies and procedures
   
   This is important! Many investigators inadvertently breach privacy in seeking to investigate a privacy breach.  Ensure that you understand the purpose of the investigation, who will receive the report, who is permitted to know about the suspected breach and who is on your Data Breach response team.
   
   If you have a privacy policy and/or investigation policy, you should follow its process. This will help to avoid any complaints of mismanagement or lack of procedural fairness.  You have 30 days to investigate, so, assuming you have acted to ensure no ongoing breaches, then an investigation plan comes next.
    
3. Create a plan of action
   
   This includes considering:
   
   – What are the allegations?
   – Should anyone else be informed about the complaint?
   – Should any information be redacted when handling the complaint?
   – Are there any witnesses into the alleged behaviour?
   – Who should be interviewed?
    
4. Evidence gathering
   
   All supporting documentation should be gathered, analysed and assessed. Remember to keep copies of websites or emails that you may have destroyed/deleted/removed in the immediate containment of the breach.
   
   Be sure to detail the type of evidence collected for each allegation including any response to contradictory evidence.
   
   You should also assess the relevance and reliability of the evidence.
    
5. Confidentiality
   
   Consider:
   
   a) Do you need to redact any personal or sensitive information from the investigation report depending on who will be reading it?
   b) What are you going to tell witnesses and parties to the complaint to ensure that confidentiality is maintained?
    
6. Procedural fairness
   
   To ensure procedural fairness and transparency, we recommend that any substantive information provided by a party to a complaint will be provided to the other party to facilitate the handling of the complaint. This includes information such as the complaint and the respondent’s response.
   
   You should provide each party has the opportunity to be heard and to respond to the allegations. This may be less important if there are no allegations against staff, and you are merely making factual findings for the purpose of privacy reporting.Knowing the scope of the investigation is important here and will impact the statements to witnesses, the type of questions and the emphasis on procedural fairness.
    
7. Impartiality
   
   The person in charge of the investigation and the ultimate decision maker should be unbiased and have no direct involvement in the alleged incident.
   
   The more serious the allegations (and the possible consequences), the more important it is have the investigation conducted by an independent person who has no relationship with either party.
   
   If the complaint is serious and impartiality is not possible, consider whether you need to seek external assistance.
    
8. Has there been a data breach?
   
   A data breach occurs when personal or sensitive information is accessed or disclosed without authorisation (or is lost).
   
   Under the Notifiable Data Breach Scheme, you must notify the Officer of the Australian Information Commissioner if the data breach is likely to cause serious harm.   You’ll need to consider whether a data breach has the potential to harm an individual whose personal or sensitive information has been affected.  Not every breach causes harm, and many organisations assume the mere fact of a breach is harmful. 
   
   If you make a finding that it is notifiable, you’ll need to refer to the evidence you have relied on in making that finding.
   
   It will be open to you in many instances to make a finding that the breach would have been reportable, except that it was contained in the early stages of the breach response or investigation.
   
   Note that the Office of the Australian Commissioner notes that some “overreporting” occurs.  There are a couple of traps here. 
   
   Be sure that you:
   
   – Do not report a privacy breach unless it’s notifiable; and
   – Do not report any breaches which do not actually involve personal information.
    
9. Balance of probabilities
   
   Findings should be made only on the balance of probabilities. That is, that any decision made is based on clear, convincing and strict evidence.
    
10. What is the outcome?
    
    Consider what you have learnt from this process and what next steps are. For example:
    
    – a change in practice, procedure or policy;
    – staff training; or
    – review of privacy policies or procedures.

How can we help you?

Our privacy team here at Moores can assist by providing guidance and advice on the likely implications of a data breach, reviewing policies and procedures and providing your organisation with privacy training. We want to ensure that you feel empowered to run an effective and useful privacy investigation internally, keeping any potential risk and liability minimised. For advice or guidance, please do not hesitate to contact us.

Privacy Training

When was the last time your staff did privacy training? Moores privacy training is informative, engaging and entertaining and regularly receives excellent participant feedback and learning outcomes.

Simulated Data Breach Workshop – Expressions of interest

We’re also taking Expressions of Interest for our Simulated Data Breach Workshop. If you’ve wanted to test your own policies, systems and responses against a breach, but without the risk, this session is for you. Aimed at privacy officers, this Workshop takes participants through a simulated data breach, from containment, through investigation, to writing a press release.

The outbreak of the Coronavirus has presented significant challenges for employers, schools and universities balancing their duty of care with their occupational health and safety and anti-discrimination obligations. Perhaps unsurprisingly, requests for individuals who have recently visited China (and in some cases, any country where there has been cases of coronavirus) to remain home for 14 days, has led to an increase in complaints of racism and discrimination.

This article explores the relevant obligations for employers and educational organisations, and sets out our practical tips for balancing competing obligations.

What is coronavirus?

Coronavirus (2019-nCOV or novel coronavirus) is a new strain of coronavirus that had previously not been identified in humans. Coronaviruses are a large family of viruses that cause a range of illnesses from the common cold to more severe diseases such as MERS and SARS.

The outbreak of the novel coronavirus is reported to have originated in Wuhan, China in December 2019. It is suspected to have been transmitted from animals. It causes cold like symptoms such as fever and cough but can progress into pneumonia, kidney failure and breathing difficulties.

As of 10 February 2020, the Federal Government reported that there have been 37,562 confirmed cases of coronavirus and 813 reported deaths. The fatality rate is currently 2.16%. In Australia, the Federal Government reported 15 confirmed cases as of 7 February 2020 (no deaths).

What are the Australian Government requirements?

Previously, the Australian government was requiring that individuals who had visited Wuhan or had been in contact with individuals who had a confirmed case of novel coronavirus isolate themselves for 14 days. On 1 February 2020, this was expanded given an increasing risk.

As of 10 February 2020, the Australian Government issued an alert with the following requirements:

• if you have travelled to Hubei Province within the past 14 days, you must isolate yourself for 14 days after leaving Hubei Province;
• if you have left or transited through mainland China on or after 1 February 2020, you must isolate yourself for14 days after leaving China; and
• if you have been in close contact with a confirmed case of novel coronavirus, you must isolate yourself for 14 days after last contact with the confirmed case.

These requirements apply to students attending childcare, school or higher education. There are also travel restrictions for individuals who have left mainland China only on or after 1 February 2020.  

As at 10 February 2020, isolation is not required yourself if you:

• left mainland China before 1 February 2020 and did not travel in Hubei Province; and
• have only travelled in Hong Kong, Macau and Taiwan.

What are our obligations to protect our students and staff from coronavirus?

Employers and educational authorities have a duty of care to students and staff, and legal obligations to maintain a safe learning and working environment. This is also reflected in common law and generally seen to be an implied term of the employment contract.

However, organisations need to be careful that any safeguards put in place are reasonable and necessary to mitigate the risks, and do not breach of anti-discrimination laws. For example, blanket bans on individuals from mainland China or affected countries attending work or school are unlikely to be reasonable, and create a risk of discrimination claims.

What are the risks?

Organisations need to be aware of several risks other than health and safety including discrimination, underpayment and failure to educate claims.

Organisations should only impose health and safety restrictions consistent with departmental guidelines, as the failure to do so could lead to discrimination claims. For example, a NSW school is facing scrutiny for asking a year 10 student from South Korea to leave her dorm at a boarding school. The international student had not travelled to China but was asked to leave as the school decided to ask all students who had recently travelled to “other affected areas” to not attend the school for 14 days.

It is also important to note that the governmental restrictions only apply to individuals who have transited through mainland China on or after 1 February 2020. For schools, this quarantine may have little effect since most students should have returned to Australia before 1 February 2020.

If an employee or student is required to quarantine themselves for 14 days (in accordance with governmental guidelines), organisations will still need to comply with their other obligations. For employers, support should be provided in terms of allowing the employee to work from home if possible or providing them with different leave options. Personal leave is available not just when an employee is unwell, but when the employee is caring for a family or household member who is affected by an unexpected emergency.

For schools, the student should be given homework or remote learning opportunities to avoid failure to educate claims. For international boarders, schools will need to assist in organising alternative accommodation if they are unable to stay in the boarding house.

What should we do?

Australia has close ties with China and several other countries affected by the coronavirus. Many organisations and schools will have employees or students who have been personally affected by the coronavirus or have family members who are. Care and sensitivity is crucial to supporting those affected.

At a minimum, we recommend that organisations take the following steps.

1. Assign an employee (e.g. OHS representative or HR manager) to regularly review guidance from the Australian Government on restrictions and safeguards in place to ensure that any organisational procedures are reasonable and up to date.
2. Put in place incubation periods for employees and students in accordance with governmental restrictions. This should be clearly communicated and organisations should consider the support that they can provide such as allowing the employee to work from home or providing course work online to students.
3. Ensure your communication is based on recent travel not race to align with governmental restrictions. Any communication should avoid generalisations or assumptions which could be seen as racially discriminatory.
4. Respond swiftly to any complaints by employees or students of vilification or racism and provide support as needed. It is important that organisations are mindful of vicarious liability risks and the positive obligations that apply to prevent discrimination.

How we can help

For more information or guidance regarding your obligations please do not hesitate to contact us.

Purpose Purpose Purpose

The unfortunate complications encountered by Celeste Barber’s Bushfire Fundraiser are an example of good intentions colliding with the legal concept of charitable purpose. Here are two lessons that all charities can learn from the saga.

Background

Celeste Barber’s extraordinarily successful Bushfire Fundraiser through Facebook broke records, raising more than $51 million. The fundraiser was accompanied by the following text:

“Want to join me in supporting a good cause? I’m raising money for The Trustee for NSW Rural Fire Service & Brigades Donations Fund and your contribution will make an impact, whether you donate a lot or a little. Anything helps. Thank you for your support.”

As with all Facebook fundraisers, donations went to the Paypal Giving Fund, a public ancillary fund set up to receive and distribute funds to deductible gift recipients.

Given the large amount of funds raised and the relatively limited purpose of the NSW Rural Fire Service & Brigades Donation Fund (the RFS Fund) donors and media then began asking how the money was going to be distributed and to whom. There were suggestions (including from Ms Barber) that the funds would be distributed across a range of different organisations and states/territories.

At this point Barber learned (through some “pretty long and pretty boring conversations”)  that things were not so simple – amongst other things, the RFS Fund trust deed prevents money raised from going to anyone other than the RFS. Once the funds go to the RFS, they can’t (easily) be distributed by the RFS to bushfire relief organisations, such as those providing housing or services to affected families.

Others have proposed solutions for a broader distribution of funds. Below, we focus on the principles at play and key lessons charities can take away.

Lesson 1 – What you say when fundraising constrains what you can do with the funds

The first lesson is for charities (and individuals and organisations) who fundraise – be careful when articulating the purpose you are fundraising for, and how you intend to spend the money.  

Some donors have asked why PayPal doesn’t simply distribute the funds raised to a number of different organisations. Unfortunately, PayPal can’t do so without potentially breaching the law. The accompanying text for the Celeste Barber Fundraiser clearly said funds would go to the RFS Fund. The Facebook page also listed the RFS Fund as the charity the fundraiser was “benefitting”. There are terms on PayPal’s website that state that it retains exclusive control over how funds are distributed, but overall it was very clear to donors who read the page that money was going to the RFS Fund and not to other organisations or funds.

This constrains how the funds can be distributed. If PayPal distributed the funds in a manner contrary to the clear purpose of the fundraiser, it could be in breach of fundraising, consumer and trust law:

• Fundraising laws vary from state to state, but generally require fundraisers to ensure funds raised are directed to the beneficiaries or purpose communicated to the donors;
• Consumer Law includes prohibitions on misleading and deceptive conduct in trade and commerce – which the ACCC has stated extends to some fundraising campaigns.
• Trust law may also impose a trust over donations for a particular purpose – in which case use for any other purpose breaches the trust.

These are sensible restrictions, but may have unintended consequences for charities that are not careful with their fundraising materials. For example, a health care charity might say in its fundraising materials that “100% of your donation goes to free hearing tests”. This fairly innocuous statement could breach the above laws if the health care charity used some of the money for unrelated admin costs, or a different program (such as eye-sight tests).

Charities can avoid this through clear, careful fundraising communication. Instead of “100% of donations” charities could say “Your donation will help us provide free services like hearing tests”. This is makes the charity’s intended use for the donation clear but still gives that charity flexibility if circumstances change.

Lesson 2 – A charity’s purpose constrains how it can use donations it receives

The second lesson is for charities who have received funds– you can only spend funds to further your charity’s purpose.

The RFS Fund Trust Deed states that its Trustees must use its funds:

“to or for the Brigades in order to enable or assist [RFS] to meet the costs of purchasing and maintaining fire-fighting equipment and facilities, providing training and resources and/or to otherwise meet the administrative expense of the brigade which are associated with their volunteer-based service activities.”

Supporting Brigades is important for bushfire preparedness, but given the amount raised donors (including Ms Barber) wanted to provide broader relief – including to wildlife and affected families. The restrictions of the RFS Fund will make this very difficult to achieve.

This is not a failure of charity law. Being purpose-driven (rather than profit-driven) is what separates charities from the for-profit sector. Purpose helps donors know what they are supporting. It also provides charity Boards with a framework to guide their decisions. There a good reasons why charities can’t stray outside their purpose.  

For charities, this is a reminder to be familiar with your purpose (usually set out in your governing document), and make sure your resources are directed towards it. We often engage with charities with good intentions that want to support a cause or project outside their usual activities. All too often the charity’s focus is on the value of the cause or project without first establishing whether it is consistent with the purpose of the charity.

Next steps

The Celeste Barber fundraiser is a heartening example of generosity in the face of disaster, but it also highlights the importance of careful fundraising communications and awareness of charitable purpose. Charities should ensure they understand these principles.

If you need help, have a conversation with our For Purpose team at Moores. It won’t be long or boring, and it might be just what you need to ensure your fundraising efforts don’t go awry. For more informaiton, please do not hesitate to contact us.