Commercial Law

All employers now subject to employee “right to disconnect”

Whilst it isn’t news that, under amendments to the Fair Work Act 2009 (Cth) (FW Act) and consequent amendments to Modern Awards, from 26 August 2024 employees of larger employers have the new ‘right to disconnect’ outside of work hours… what many small businesses employers don’t realise is that this law will also apply to them from 26 August 2025.

What is a “small business employer”?

A small business employer is an employer with fewer than 15 employees at a particular time.

When counting the number of employees, employees of associated entities of the employer are also included. Casual employees are not included in this headcount unless they are engaged on a regular and systematic basis (but they also have the right to disconnect).

So what is the “right to disconnect”?

Employees have the right to refuse contact outside their working hours unless that refusal is unreasonable. This right means an employee can refuse to monitor, read or respond to contact from an employer or a third party (such as customers, clients, suppliers and related businesses) outside of an employee’s working hours.

Contact is broad and can include in person contact, calls, emails, texts, WhatsApp chats or through other Apps etc.

The right to disconnect is a protected right all employees have under the FW Act. An employee can’t be punished or adversely treated for enforcing a workplace right. Employees are protected from any disciplinary action for reasonably ignoring such emails.

What is “unreasonable”?

When working out whether an employee’s refusal is “unreasonable” other matters may also be considered but the following factors must be considered:

  • the reason for the contact
  • how the contact is made and how disruptive it is to the employee
  • how much the employee is compensated or paid extra for:
    • being available to perform work during the period they’re contacted, or
    • working additional hours outside their ordinary hours of work
  • the employee’s role in the business and level of responsibility
  • the employee’s personal circumstances, including family or caring responsibilities.

It will be unreasonable for an employee to refuse to read, monitor or respond if the contact or attempted contact is required by law.

Importantly, employers are not prohibited from initiating contact with employees, but the employee is not obliged to respond unless it is deemed ‘reasonable’ for them to do so.

Senior employees on large salaries will have limited access to this right as their role or remuneration already will likely include ‘reasonable additional hours’. These laws are mainly for the benefit of Award and lower level employees and those who are expected to be available on call without additional compensation.

Disputes

Disputes about an employee’s right to disconnect should first be discussed and resolved at the workplace level (s.333N).

If that isn’t possible, employees or employers can go to the Fair Work Commission (FWC) to deal with a dispute (s.333P).

The FWC can:

  • make a stop order
  • deal with the dispute in other ways (for example, by holding a conference to try to resolve the dispute), or
  • both.

FURTHER INFORMATION

For further information in relation to business succession, estate planning, litigation and dispute resolution or any commercial law matter, contact McKillop Legal on (02) 9521 2455 or email help@mckilloplegal.com.au

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your commercial law needs.

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in Business / Commercial Law / Dispute Resolution / Employment / General / Litigation / Risk management  by 02 Aug 2025 0 comments

Who gets your Superannuation when you die?

On your death, your superannuation balance will not necessarily be dealt with in accordance with your wishes as stated in your Will. Read that again… slowly, then read on.

Unless you have a valid beneficiary death benefit nomination in place that directs your superannuation fund’s trustee as to who to pay your super balance to, your trustee may have a discretion as to who to pay it to.

The trustees of most retail super funds have a discretion as to who to pay a benefit to. Usually, the fund rules specify the member’s dependents as the class of beneficiaries to be considered first, with the trustee to determine the amounts/proportions but imagine what happens if you are perhaps separated (but not divorced) and you are living with another person (as a de facto) – a dispute could easily arise. What if you have children? What would/should the split be?

To minimise disputes and avoid applications to the Superannuation Complaints Tribunal or the Supreme Court, make a nomination. There are generally 2 types: Non-binding and Binding

NON-BINDING NOMINATIONS

A non-binding nomination is an indication to your trustee of your preferences but it is, as it states – non-binding so the trustee can ignore it. This can be a good idea if there are significant changes in circumstances before your death where you haven’t got around to updating your nomination. The trustee’s discretion could prevent it going to your ex spouse or avoid the situation of you accidentally omitting one of your kids from a benefit.

BINDING NOMINATIONS

A binding nomination is exactly that – binding (provided that it is valid as at the date of death). There are 2 sub-categories of binding nomination: lapsing and non-lapsing.

  • LAPSING – Many funds provide for the lapsing type – and unfortunately these need to be renewed every 3 years or the nominations lapse.
  • NON-LAPSING – Most Self-Managed Super Funds (SMSFs) and some retails funds allow in their deeds for nominations that never lapse (unless you update it). Older SMSF Deeds and their Rules do not allow for the non-lapsing type and may need to be updated.

There are requirements for making any nomination legally valid, witnesses etc.

Speak to us about your estate planning and ensure your wishes are properly documented.

FURTHER INFORMATION

If you would like any further information in relation to Wills, estate planning, superannuation death benefit nominations or updating SMSF deeds , please contact us on (02) 9521 2455 or email help@mckilloplegal.com.au

in Commercial Law / Estate Planning / General / Litigation / Probate / Superannuation / Tax Planning  by 01 Aug 2025 0 comments

What is an Injunction?

An injunction is a Court order directing a person or entity to do a specific thing or not to do a something.

Most injunctions are temporary and are often made pending the outcome of a full hearing (known as an “interlocutory injunction“). An example may be to restrain a former employee from doing work for former clients where they have agreed to post-employment restraints pending a hearing on whether the restraint is lawful or to prohibit the publication of a potentially defamatory article in a newspaper or television program.

A Court will not grant an interlocutory injunction unless:

  • the Plaintiff has made out a “prima facie” case – a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial – or established that there is a serious question to be heard;
  • the balance of convenience favours the granting of the injunction; and
  • the Plaintiff provides “the usual undertaking as to damages” (that they will pay any damages the restrained party suffers if at a final hearing the Court determines that the injunction wasn’t justified).

A Court has discretion as to whether to make such an order and will consider thongs like whether or not you have asked the other party to do/not do the relevant thing, whether damages would be an appropriate remedy, if you have waited too long to seek the order etc.

Where an injunction is sought from a Court without the affected party being notified, this is known as an “ex-parte injunction” as it is made in the absence of a party. They are for that reason only temporary and the Court requires the applicant to disclose all relevant facts to the case, including those that may lead to refusal of the application, not just those in favour of the injunction as there is no respondent in Court to oppose it. Examples can be “freezing orders” that stop the sale of assets or to freeze a bank account to preserve them pending the Court’s further orders.

Mandatory injunctions can be obtained where for example a party to a contract refuses to comply with their lawful obligations under it. An example of this is a party to a Contract for the Sale of Land that unlawfully refuses to sign a Transfer in registrable form. Such an injunction imposes a positive obligation on the affected party to do something, not just stopping them from doing something.

FURTHER INFORMATION

For further information in relation to business succession, estate planning, litigation and dispute resolution or any commercial law matter, contact McKillop Legal on (02) 9521 2455 or email help@mckilloplegal.com.au

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your commercial law needs.

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in Business / Commercial Law / Debt Recovery / Dispute Resolution / Employment / General / Insolvency & Bankruptcy / Intellectual Property / Litigation / Property  by 01 Jun 2025 0 comments

Why updating ASIC records is critical

Under the Corporations Act 2001 (Cth), among other methods, any document may be served on a company by:

(a) leaving it at, or posting it to, the company’s registered office; or

(b) delivering a copy of the document personally to a director.

This means that ASIC, the ATO, other government authorities or any other creditor can serve important papers on a company at its former place of business (where that address has not been updated at ASIC) even if they have since moved.

Documents that could be served on a company can include:

  • Court proceedings such as an Originating Process / Statement of Claim / Summons

As these important documents can be served on a company even though they may not actually come to the attention of the company or its directors, demonstrates why updating ASIC records is critical.

Similarly, if the ATO was to serve a Director Penalty Notice (DPN) on a director, note that:

  • DPNs are sent via ordinary mail to the Director’s last recorded residential address on ASIC’s database
  • notice is given on the day the DPN is issued, not when it is or is likely to have been received
  • actual non-receipt of a DPN is not a defence.

FURTHER INFORMATION

For further information, please contact McKillop Legal on (02) 9521 2455 or email help@mckilloplegal.com.au 

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

in Business / Commercial Law / Dispute Resolution / General / Insolvency & Bankruptcy / Litigation / Risk management  by 01 May 2025 0 comments

Order for Security for Costs

An Order for security for costs is to help ensure that unsuccessful proceedings commenced by a Plaintiff do not disadvantage the Defendant. Such applications are more usually made in relation to an appeal rather than an original matter.

A security for costs order generally requires a Plaintiff to pay a certain amount of money into Court (or a solicitor’s trust account) before their proceedings can continue – that is the proceedings are in effect stayed pending the security being provided.

The Court has several sources of power to make an order for security for costs, including:

  • the Court’s inherent power to stay proceedings to ensure the proper and effective administration of justice
  • the relevant Court rules (eg, Rule 42.21 of the Uniform Civil Procedure Rules 2005);
  • s.1335 of the Corporations Act 2001 (Cth).

Due to the weight an order for security for costs may carry, Courts must weigh the rights and interests of all parties to the proceedings. The Court has a broad discretion as to whether to grant such an order and will usually look to factors including (in no specific order):

  • the inherent legal right of a Plaintiff to bring legal proceedings;
  • the strengths and bona fides of the Plaintiff’s case
  • where the Plaintiff ordinarily is resident;
  • the financial standing and asset position of the Plaintiff in the jurisdiction in which the claim has been commenced (including where the Plaintiff may have divested itself of assets);
  • whether there is reason to believe that the Plaintiff can satisfy an order for costs not only from its own resources, but from other resources including those who will benefit from the litigation; the public importance of the case;
  • delay of bringing the application for the order;
  • if the Plaintiff hasn’t disclosed an address or has moved and not updated it, particularly if there is reason to believe that it was done to to avoid the consequences of the proceedings;
  • whether such an order will frustrate the litigation;
  • the justice of the case.

It is uncommon for such an order to be made against an individual Plaintiff (as opposed to a company, partnership or trustee) but not impossible, depending in the circumstances of the particular case and Plaintiff.

FURTHER INFORMATION

For further information, please contact McKillop Legal on (02) 9521 2455 or email help@mckilloplegal.com.au 

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

in Asset Protection / Business / Commercial Law / Debt Recovery / Dispute Resolution / General / Insolvency & Bankruptcy / Litigation / Risk management  by 01 Apr 2025 0 comments

Why you should have a Shareholders Agreement

CONSIDER THESE COMMON ISSUES

What would happen to your company if you or your business partner became so ill that one of you could no longer work – or worse still, died?

Would you still be paying dividends or making distributions of profit to that person even through he or she is not around, or to their spouse or family?

If they died and left their spouse everything in their Will (including their shares in your company), would you want to be in business with his or her spouse?

What if your business partner sold his or her shares in your company to a complete stranger or a competitor following an argument?

How are your shares to be valued and over what period will the purchase payments be made to your family? Or is there an insurance policy to fund the payment in a lump sum?

HOW CAN A SHAREHOLDERS AGREEMENT HELP?

A Shareholders Agreement can cover these not uncommon scenarios and tailor the rights and obligations of the shareholders of a company to fit your personal circumstances and your particular business to help avoid some of these potential problems for everyone’s ultimate benefit.

You may have a Will, but you may not have certainty in relation to what will happen to your family or your business in the event of your death or serious illness unless these matters are clearly dealt with in a Shareholders Agreement.

FURTHER INFORMATION

For further information in relation to business succession, estate planning, litigation and dispute resolution or any commercial law matter, contact McKillop Legal on (02) 9521 2455 or email help@mckilloplegal.com.au

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your commercial law needs.

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in Business / Commercial Law / Dispute Resolution / General / Risk management  by 10 Feb 2025 0 comments

General Security Deeds

A General Security Deed (GSD) or a General Security Agreement is effectively a legal document used to secure the repayment of a loan or some other legal obligation.

GSDs are often used by lenders such as banks where there is no real property security available to place a Mortgage or Caveat over, so in addition to signing a Loan Agreement or Letter of Offer, a borrower will likely also be asked to sign a GSD.

Prior to the creation of the Personal Property Securities Register (PPSR), a GSD used to be known as a ‘fixed and floating charge‘ which was registered over companies at ASIC. A GSD however, can be registered on the PPSR against any legal entity including a trustee of a trust, a partnership or sole trader and can cover any form of personal property.

Personal property is basically anything other than land and can include motor vehicles, intellectual property, shares in companies, units in unit trusts, stock and business equipment.

Under the GSD, the borrower is known as the ‘Grantor’ and the lender is called the ‘Secured Party‘ and the terms of the GSD can be complicated but basically provide that the Secured Party can take, hold and sell the secured personal property to repay the debt or until the obligation the GSD is securing has been met – this is known as a ‘Security Interest’.

GSDs have priority in the order in which they are registered so there is often a real benefit to registering them on the PPSR (known as ‘perfection’) as soon as possible.

General Security Deeds are complicated and important documents, so before you sign one, you ought to take appropriate advice as to their meaning and effect.

FURTHER INFORMATION

For further information, please contact McKillop Legal on (02) 9521 2455 or email help@mckilloplegal.com.au 

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

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in Business / Commercial Law / General / Insolvency & Bankruptcy / Property  by 01 Dec 2024 0 comments

Partnership Agreements

A partnership is defined in the Partnership Act 1892 (NSW) as “the relation which exists between persons carrying on a business in common with a view of profit”.

Advantages of having a partnership, in addition to having additional business owner/s to bounce ideas off and share the workload, can include the fact that there is virtually no cost to establish it, little external regulation and very little paperwork involved.

Disadvantages include unlimited joint and several liability, a maximum of 20 business owners, liability for the acts and omissions of partners and risk of disagreement between partners.

Although the Act does govern some aspects of the partnership relationship, a Partnership Agreement can be invaluable when there is a difference of opinion or the relationship between partners breaks down as often happens.

Similar to a Shareholder Agreement, a Partnership Agreement can cover:

  • the business name the partners will trade under
  • the agreed business activities of the partnership
  • how the partnership will be managed (regular meetings, duties and responsibilities)
  • contributions to the partnership  and the agreed partnership percentage/split (and hence how profits and losses are shared)
  • how the respective interests in the partnership are valued
  • retirement, death and expulsion of partners (and if and how new partners can be introduced)
  • whether any post-partnership restraints apply
  • agreed dispute resolution mechanisms

Partnership Agreements can be simply drafted to cover common situations or be specifically tailored to your specific your business.

FURTHER INFORMATION

For further information, please contact McKillop Legal on (02) 9521 2455 or email help@mckilloplegal.com.au 

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

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in Business / Commercial Law / Dispute Resolution / General / Risk management  by 01 Oct 2024 0 comments

Casual employment changes

On 26 August 2024, there are more casual employment changes for employers to consider:

  1. a new definition of “casual employee” comes into effect;
  2. casual employees will have the right to request to convert their casual employment to a permanent one after 6 months (instead of 12 months); and
  3. Casual employee information statements have to be provided more often

New definition of casual employment

From 26 August 2024, a new definition of casual employment in the Fair Work Act 2009 (Cth) (Act) applies as follows:

“An employee is only a casual where:

(a)  there is no firm advance commitment to continuing and indefinite work, considering a number of factors, including the real substance, practical reality, and true nature of the employment relationship, and

(b)  they are entitled to receive casual loading or a specific casual pay rate.”

This is a substantial move away from the prior position in s.15A of the Act following the High Court of Australia’s judgment in Workpac Ltd v Rossato & Ors [2021] HCA 23 that determinative weight is to given to what was stated in the employment contract. Now there is no single determinative factor of casual employment but rather the substance of the arrangement is to be considered.

Employee choice – casual conversion

Generally, from 26 August 2024, where an employee of a business (other than small businesses) believes they no longer meet the new casual employee definition, they will have the right to request conversion of their casual employment to a permanent one after 6 months instead of 12 months.

Prior to this date, once a casual had been employed for 12 months and was working a regular pattern of hours on an ongoing basis without significant change in the last 6 months of their employment, the employer had to make a written offer of casual conversion within 21 days of the anniversary of their commencement date and the employee had 21 days to accept or reject it.  Similarly, a casual could request it and the employer could only reject it within 21 days on reasonable grounds or if the employee didn’t meet the regular pattern requirement.

For small business employers, from 26 February 2025, casual employees will have the right to request to convert their casual employment to a permanent one after 12 months. Prior to this, small business employers did not have to deal with casual conversion requests or offer them at all.

Under the new regime, employers may still refuse but only on grounds that the definition isn’t met or that fair and reasonable operational grounds apply such as that it would have a significant impact on the business, that substantial change to the business is required etc.

Casual Employment Information Statements

From 26 August 2024, the Casual Employment Information Statements will need to be provided to

  • new casual employees before, or as soon as possible after, they start their casual employment
  • all casual employees employed by non-small businesses as soon as possible after
    • 6 months of employment
    • 12 months of employment; and
    • every subsequent 12 months of employment
  • all casual employees of small businesses as soon as possible after 12 months of employment.

Note that there is no change to the requirement for Fair Work Information Statements on commencement of employment.

Steps for employers to take

Employers should urgently:

  1. check the commencement date for all staff and diarise to review obligations each 6 months
  2. send CEIS as required
  3. consider whether employees are in fact casual
  4. consider if conversion offers need to be made
  5. if necessary, issue updated Contracts of Employment

FURTHER INFORMATION

For further information, contact McKillop Legal on (02) 9521 2455 or email help@mckilloplegal.com.au

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

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in Commercial Law / Dispute Resolution / Employment  by 01 Aug 2024 0 comments

Serving documents on companies

Section 109X of the Corporations Act 2001 (Cth) provides that a document may be served on a company by means including:

(a)  leaving it at, or posting it to, the company’s registered office; or

(b)  delivering a copy of the document personally to a director of the company.

Documents that may need to be served may be a Summons, Statement of Claim or even a Creditor’s Statutory Demand.

Companies are obliged to register a change of registered address within 28 days of at changing. Directors are also required to ensure their address details on the register are maintained.

Where service of a document not properly effected or there is a dispute about its, there is a risk that the Court may determine that service wasn’t effected, set it aside altogether and there could be consequences such as costs orders.

Service by post

Service by post is cheap and easy.

If posted to a company’s registered address, a document is presumed under s.160 of the Evidence Act 1995 (Cth) to have been received at that address on the 7th working day after being posted.

A problem with service by post however, is that the recipient could argue that it was never received or a dispute could arise as to timing of service.

Personal service

Arguably, personal service by a process server of a document on a director of a corporation is the best way to effect service.

These professionals are in the business of doing this and provide an Affidavit of service which can be used in evidence to prove service to a Court and as they are a third party service provider, there is often no dispute raised as to service and when so there is no “he said”/”she said” type argument as there may be if the parties themselves effected service.

Leaving it

An alternative to posting it or serving it on an officer of a company is leaving it at the company’s registered office.

Again, this is best done by a licensed process server who can swear or affirm what they did and when.

Informal service

The Courts are increasingly allowing alternative methods of service where parties are evading service or any of the above methods do not result in effective service such as through third parties, email, text messages, social media accounts etc.

FURTHER INFORMATION

For further information in relation to Corporations Act issue, legal proceedings, serving documents on companies or any business or commercial law matter, contact McKillop Legal on (02) 9521 2455 or email help@mckilloplegal.com.au

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

Stay up to date – LinkedIn | Facebook | Instagram

in Business / Commercial Law / Debt Recovery / Dispute Resolution / Litigation  by 03 Jun 2024 0 comments