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Miller Harris Lawyers wins state-wide award!

July 29th, 2016

Miller Harris Lawyers has won the Queensland Law Society (QLS)’s Equity and Diversity Award for 2016 in the Small Legal Practice Category (legal practices with 20 or fewer legal practitioners). Nominations for the award came from throughout Queensland and were judged across four main criteria:

• Promotion of diversity within the law profession
• Equity initiatives
• Policies supporting equal opportunity
• Flexible work practices

It is fantastic recognition for the variety of initiatives we have implemented to support equity and diversity in our workplace. Melissa Nielsen, a partner in our commercial and property law division, was in Brisbane recently to collect the award on the firm’s behalf and to celebrate our achievement.

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Miller Harris Lawyers has ‘signed up’ for Cairns Regional Council’s Waste and Recycling in Business Program

July 25th, 2016

Miller Harris Lawyers has ‘signed up’ for Cairns Regional Council’s Waste and Recycling in Business Program having recently taken delivery of its business recycling bin.  “It’s a way our firm can contribute to the sustainability of our region by bringing recycling to the workplace” Nick Masasso (Director of Operations) said. “I’m sure our team will embrace and support this initiative which contributes positively to the environment in which we all live”.

Miller Harris Lawyers is encouraging other businesses to get on board with business recycling.

More details are available on the Cairns Regional Council website.

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Government Casts a Wider Net for Environmental Compliance

May 1st, 2016

The Queensland Government recently passed the Environmental Protection (Chain of Responsibility) Amendment Act 2016, which commenced operation on 27 April 2016.  The Act amends the Environmental Protection Act 1994 to give the Department of Environment and Heritage Protection (“DEHP“) greater powers to enforce compliance with existing environmental obligations.

Most significantly, new provisions have been inserted into the Environmental Protection Act to enable DEHP to issue environmental protection orders to a person who is related to a company which has failed to comply with its environmental obligations or which is regarded as “high risk” due to the fact that it is in administration, liquidation or receivership.

DEHP has had the power to issue environmental protection orders for many years.  An environmental protection order is a mechanism which can be used by DEHP to require a person to take certain action to comply with the terms of an environmental authority, a management plan, or another aspect of that person’s duties under the Environmental Protection Act.  The problem which DEHP has apparently experienced is that where the person breaching the environmental law is a company which has no assets or which is in receivership, administration or liquidation, the environmental protection order mechanism is effectively rendered useless because the company is unable to comply with the order.  The government has therefore amended the act to enable DEHP to issue environmental protection orders to related persons, which include:

  • a holding company or parent company;
  • the land owner on which the activity has been carried out; and
  • another person who DEHP decides has a “relevant connection” to the company.

DEHP may decide that a person has a relevant connection with the company if the person is capable of significantly benefiting financially from the activity carried out by the company, or if the person has in the previous two years been in a position to influence the company’s conduct in relation to its compliance with the Environmental Protection Act.  This could conceivably include not only directors and managers of the company, but also joint venturers, and possibly financiers of the project.

The inclusion of land owners as a “related person” to whom an environmental protection order can be issued is very significant, but has received little comment in the press.  It brings landlords into the firing line where a tenant who is conducting an activity under an environmental authority fails to comply with its environmental obligations.  There is a variety of businesses which require an environmental authority of some sort to operate, including service stations, panel beaters and so forth.  If, for example, the tenant failed to meet its environmental obligations and went into liquidation, the landlord could be faced with having to bear the cost of environmental audits, remediation and other measures to fix the problem.  Land owners considering entering into a lease with a tenant who proposes to carry on a business using and environmental authority should carefully consider the risk that the tenant may fail to comply with its environmental obligations, and whether some form of security (such as a substantial bond) should be obtained to mitigate the risk of the land owner incurring significant costs as a result.

The changes to the legislation also have potential to impact upon property developers, who may potentially receive an environmental protection order as a result of a breach of an environmental authority by a contractor.  For example, if a contractor breaches its obligations in relation to work being done in rivers or water courses, or in relation to the storage of fuel or other chemicals.

Finally, the companies which conduct businesses under environmental authorities or which involve risk of significant environmental harm should be aware that the effect of the amendments is to remove much of the benefit of corporate structures which insulate the assets of the business from the environmental risk.  Effective risk management therefore becomes even more important.

For more information about this issue and all planning and environment law, please contact our accredited property law specialist and partner, Nigel Hales on 07 4036 9700.

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Directors and HR Managers Liable for Employer Misconduct

April 2nd, 2016

In a number of recent cases, the Federal Court of Australia has lifted the corporate veil and found employees and directors personally liable for breaches of industrial relations laws and standards.  This is the result of section 550 of the Fair Work Act 2009 (Cth) (“the Act“), which imposes personal liability on persons who are involved in a contravention of certain provisions of the Act.

The Corporate Veil 

As soon as a company is formed, the law recognises it to be its own entity, separate from the individuals involved in it and liable for its own actions.  This legal principle is referred to as the corporate veil.

Disgruntled employees generally target their employer for breaches of industrial relations laws and standards.  At common law, it is usually only the employer who is liable for such breaches.

However, it is vital for directors and managers, particularly those involved in industrial relations, to understand that this is not always the case.  This has been highlighted in several recent Federal Court cases.

Cerin v ACI Operations Pty Ltd [2015] FCCA 2762

Mr Cerin had been injured at work and as a result, his employment could not continue.  His corporate employer gave 28 days payment in lieu of notice, instead of the five weeks required under the National Employment Standards.

The Court found that the Human Resources Manager, despite not being heavily involved in the company’s breach of the National Employment Standards, was personally liable under section 550 of the Act.  As a result, the Human Resources Manager was liable to pay a civil penalty of $1,020.00 (in addition to the company being liable to pay $20,400.00).

Fair Work Ombudsman v Oz Staff Career Services Pty Ltd [2016] FCCA 105

The employer, Oz Staff Career Services Pty Ltd, made unauthorised deductions from certain employees’ wages.  The wage records had also been altered, effectively concealing the deductions.

The Human Resources Manager argued that he was not aware of the unauthorised deductions.  The Court did not accept this, and stated that it was highly unlikely a person who was running the human resources activities of the company would not be aware of the unauthorised deductions.  As a result, the Human Resources Manager was found personally liable for the conduct because of section 550 of the Act, as well as the employer itself.

Fair Work Ombudsman v Centennial Financial Services Pty Ltd [2010] FMCA 863

The Fair Work Ombudsman took action against the employer, Centennial Financial Services Pty Ltd, as well as the company’s sole director and the company’s Human Resources Manager.

The company had failed to pay a number of employees their minimum employment entitlements over a period of 13 months, breaching several provisions of the now-repealed Workplace Relations Act 1996 (Cth) (“WR Act“).  The Human Resources Manager argued that his involvement in the offending conduct was minimal, as he had merely followed instructions from the sole director of the company.

This argument was not accepted by the Court, which held that the Human Resources Officer had knowledge of, and was involved in, the company’s breaches of the WR Act.  As a result, the Human Resources Manager was found personally liable and was ordered to pay a civil penalty of $3,750.00.

Conclusion

The above cases demonstrate that, despite the company being a separate entity, its directors and employees can still be found personally liable, if they are involved in the company’s breach of industrial relations laws.

It is now more important than ever for employees involved in industrial relations to be aware of their legal obligations.  To avoid the risk of being found personally liable, it is a good idea for individuals to seek legal advice if they are unsure or concerned about their potential liability.

For more information about this issue and all employment and industrial relations matters, please contact our partner, Elaine Jesurasingham on 07 4036 9700.

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Superannuation Binding Death Benefit Nominations – An Invaluable Estate Planning Tool

February 4th, 2016

With over $1.9 trillion worth of aggregated assets in Australian superannuation funds[i], it is really no surprise that your superannuation can be one of your largest assets at the time of your demise.  What is surprising, however, is that many Australians do not have a binding death benefit nomination (“BDBN“) in place to direct who is entitled to receive their superannuation death benefits, or often if they do have a nomination in place, it is invalid.

Superannuation is not automatically an asset of your estate and therefore is not (in the usual course) controlled by the provisions in your will.  The distribution of superannuation on your demise is governed by the Superannuation Industry (Supervision) Act 1993 (“SIS Act“), Superannuation Industry (Supervision) Regulations 1994, and the provisions in the trust deed which establishes the superannuation fund.  If you do not have a BDBN in place or your nomination is found to be invalid, the trustees of your superannuation fund can decide how and to whom your death benefit will be paid.

The recent decision of the Supreme Court in Munro v Munro [2015] QSC 061 (“Munro v Munro”) highlights the importance of having a valid BDBN and the care that must be taken when drafting these nominations.

The facts in Munro v Munro

Mr Munro (deceased) was survived by his wife, Mrs Munro (the respondent) and his two daughters from his previous marriage (the applicants).

Mr Munro and Mrs Munro had a self managed superannuation fund of which they were the trustees and members, and in 2009 Mr Munro signed a BDBN form with respect to his superannuation death benefits.

The BDBN form was prepared by Mr Munro’s accountant and included the following instruction when nominating a beneficiary:

“Each nominated beneficiary must be your spouse (legal or de facto), child (including adopted or step-children), financial dependant, interdependent or the executor of your estate (as stated in your will).  When you nominate your executor you should enter ‘legal personal representative’ in the relation column.”

The section, however, on Mr Munro’s form that allowed for the nomination of a beneficiary had the words “Trustee of Deceased Estate” and the relationship of the nominated beneficiary was shown as “Trustee”.

In 2011 Mr Munro passed away, and following his death he was replaced as co-trustee of the fund by a daughter of Mrs Munro, who was also a respondent to the application.

In March last year, the respondents gave notice to the applicants of their intention to exercise their discretion (as the trustees of the fund) to pay out Mr Munro’s death benefits.  The respondents argued they were entitled to use their discretion as the nomination was not in accordance with the governing rules of the superannuation fund.

The issues for the Court to consider were: what did Mr Munro mean by nominating “Trustee of Deceased Estate” and was the nomination valid?

The governing rules of Mr Munro’s self managed superannuation fund permitted the trustee of the fund to pay a death benefit in accordance with a BDBN only if the nominated beneficiary is:

  1. one or more dependants of the member; or
  2. the legal personal representative.

The term “legal personal representative” is defined in the SIS Act as “the executor of the will of a deceased person”.

The Court acknowledged that although the term “executor” may sometimes be used interchangeably with the term “trustee”, the roles are distinct.  The executor carries out the functions and duties of the administration of the estate (for example calling in the assets and paying out any liabilities), and upon completion of those duties, the same person who was the executor of the estate may then become the trustee.  The trustee then distributes the balance of the estate to the beneficiaries in accordance with the provisions in the will.

Under Mr Munro’s will, his two daughters were to become the trustees of his estate after completing the administration duties.  However, at the time of this application, the administration duties had not been carried out and therefore Mr Munro’s daughters were not yet the trustees.

The applicants argued that the nomination made by Mr Munro in favour of the “Trustee of Deceased Estate” was intended to be operative as a BDBN and that the words “Trustee of Deceased Estate” was another way of referring to the executors.

The Court considered the applicants’ argument, however found it difficult to reach that conclusion when the form itself provided the option of specifying a legal personal representative in the instructions.

The decision 

Justice Mullins ordered that the 2009 nomination signed by Mr Munro was not a valid BDBN.  The nomination did not comply with the governing rules in the trust deed, which required a nomination to be in favour of the member’s dependants or legal personal representative.

Although the judgment does not state to whom the death benefit was to be paid, it could be assumed that Mrs Munro wanted to receive the benefit herself, rather than Mr Munro’s daughters.

What can we take away from Munro v Munro?

  1. Superannuation binding death benefit nominations must be prepared with care and precision.  Drafting a binding death benefit nomination is not as simple as just filling out a form.
  2. Knowing who you can appoint as your beneficiary is crucial.  It is important to keep in mind that there are only certain people who can be nominated as beneficiaries of a superannuation death benefit.
  3. The governing rules of self managed superannuation funds must always be considered when drafting binding death benefit nominations.
  4. Binding death benefit nominations, just like wills and enduring powers of attorneys, are legal documents which should be prepared by an experienced succession lawyer.

Superannuation is an asset nearly all working age Australians have.  Whether you are a member of a public fund or a self managed superannuation fund, as part of your estate plan, we strongly recommend that you have a binding death benefit nomination in place.

For more information about superannuation death benefit nominations and all estate planning matters, please contact our Wills and Estates Solicitor, Bianca Stafford on 07 4036 9700.

 


[i] The Association of Superannuation Funds of Australia Limited Superannuation Statistics December 2015

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How to Separate Amicably and Control the Process Yourself

January 4th, 2016

Are you separating?  Do you know someone who is?  Discussing and agreeing on important matters such as who the children should live with, who will retain the home and whether the superannuation should be split, is a crucial step in the process. What most people don’t know is that this critical step in the process of separating is one the parties themselves (not lawyers) can control.  How, you ask? The answer is – collaborative law.

What is collaborative law?

Collaborative law is a form of dispute resolution which involves the parties setting an agenda of matters they wish to resolve, and working through them together in a series of meetings, assisted by collaborative law trained professionals.  The parties control the process, and work together to come up with solutions to meet their needs and the needs of their children.  This process is undertaken without the threat of litigation hanging over either party’s head.

Collaborative law trained professionals involved in the process include each of the parties’ lawyers, and if required, an accountant, financial advisers or psychologist.

This model of dispute resolution can be utilised by married, de facto or same-sex couples when separating, or by people entering into a relationship who wish to have a financial agreement (often referred to as a “pre-nup”) prepared.

Why chose collaborative law over negotiation and mediation?

Collaborative law is a process driven by the parties themselves in which they brainstorm together, solutions to such issues as how to divide their matrimonial or de facto pool of assets.  This process allows separating couples to discuss their concerns as well as the legal, financial and other issues in order to come up with a settlement that meets the needs of both of them.  The collaborative law process focuses on resolving family law disputes with minimal conflict.

The process is unlike negotiations, mediation or litigation in court, in which each party puts forward competing proposals and there is often a high level of conflict and stress.

Does Miller Harris Lawyers have collaborative law trained professionals who can assist?

Yes. Miller Harris Lawyers have two family lawyers who are collaborative law trained professionals – Michael Keogh, Partner, and Julie Hodge, Senior Associate.

For more information about collaborative law or if you wish to discuss the suitability of this process for your separation or for someone you know, please contact Julie Hodge, Senior Associate on 07 4036 9706 or by email at juliehodge@millerharris.com.au.

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Employment Law News and Tips

November 29th, 2015

Release of draft Productivity Commission report

As reported in the media, the Productivity Commission recently released its draft report into the workplace relations framework.

The report summarised the current workplace relations system as “not dysfunctional” and in need of “repair not replacement”.  It also reported: “Toxic relationships between employers and employees can sometimes surface due to poor relationship management rather than flaws in the WR framework”.

One of the most innovative proposals is a new form of agreement – the “enterprise contract”.  This would fill the gap between enterprise agreements and individual arrangements and offer many of the advantages of enterprise agreements, without the complexities, making them particularly suitable for smaller businesses.  Any risks to employees would be assuaged through a comprehensive set of protections, including the right to revert to the award.

The Commission is now receiving further submissions and holding public hearings before releasing its final report in November 2015. 

When a conference or hearing is mandatory for unfair dismissal cases

I recently appeared before the Full Bench of the Fair Work Commission sitting in Sydney in relation to an appeal against a jurisdictional decision.

Prior to making the original decision, the Commissioner wrote to the employee advising that unless he requested a hearing in person, a decision would be made on the basis of the written material filed only (ie. ‘on the papers’).  The employee (unrepresented at the time) did not seek a hearing, was unsuccessful and appealed.

The Full Bench held that whenever there are “facts in dispute”, as was the case here, the Commission must conduct a conference or hold a hearing in person regardless of the wishes of the parties.  As a hearing on the papers is not sufficient, the matter was remitted back for rehearing.

Tip:      Unless it is clear there are no disputed facts in unfair dismissal matters, parties should, if given a choice, elect a conference or hearing in person to avoid the prospects of an appeal.  This issue often arises when an employer raises a jurisdictional objection that may be dealt with prior to conciliation.

How to calculate compensation for unfair dismissal cases:  the cap is the last consideration 

The compensation cap for unfair dismissal matters is the lesser of $68,350.00 or the total amount of remuneration received by the employee (or entitled to receive) 26 weeks prior to the dismissal.

Sometimes, there is a mistaken view that the legislative cap on compensation operates as a maximum to be awarded in only the most serious or grievous cases.  However, the cap is simply an arbitrary one and is the last consideration to take into account.

In allowing an appeal and awarding an employee full compensation, the Full Bench of the Fair Work Commission recently held that the following steps are to be followed:

  1. estimate the amount the employee would have received or would have been likely to receive if the employment had not been terminated;
  2. deduct monies earned since termination;
  3. deductions for contingencies;
  4. calculate any impact of taxation;
  5. deductions for any misconduct; and
  6. apply the legislative cap.

Tip:        Employers should beware the long-standing employee.  Absent any evidence suggesting the employment relationship might have come to an end (eg. resignation or lawful termination) the Commission will more readily accept a submission that the employee expected to work for 12 months or more.  This often outweighs other discounting factors resulting in an award of compensation equal to the legislative cap.    

For more information about this issue and all employment and industrial relations matters, please contact Elaine Jesurasingham, Partner on 07 4036 9700.

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