ByLawyers News and Updates

Insolvency – FED

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Insolvency practitioners and lawyers acting for small business clients are advised that the Corporations Amendment (Corporate Insolvency Reforms) Act 2020 and Corporations Amendment (Corporate Insolvency Reforms) Regulations 2020 commenced on 1 January 2021.

These instruments amend the Corporations Act 2001 and Corporations Regulations 2001 to introduce two new insolvency processes: small business restructuring and the simplified liquidation process.

Small business restructuring

Under Part 5.3B of the Corporations Act 2001 an eligible company may have a small business restructuring practitioner appointed. This enables small companies that are financially stressed to restructure debt to continue to trade. The process is supervised by a small business restructuring practitioner, who must be a registered liquidator. Directors play a large role and retain control of the business under supervision. This reduces the costs of external administration and may see the company survive the financial stress experienced.

Simplified liquidation process

Eligible companies may access a simplified and faster liquidation process under Part 5.5 of the Corporations Act 2001, which reduces the costs and time of the process to ensure creditors are paid. In this process liquidators are able to adopt a simplified liquidation process with reduced compliance requirements.

The two new processes are aimed at supporting small businesses in financial stress.

The By Lawyers Insolvency – Company Liquidation commentary has been updated accordingly.

Employment and the coronavirus

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Employers have legal obligations to ensure the health and safety of their employees and contractors and also to ensure that the health and safety of members of the public is not put at risk from the conduct of their business or undertaking. This includes managing the risk of exposure to and spread of coronavirus, COVID-19, in the workplace.

Health risks such as coronavirus need to be carefully and sensitively managed as they can give rise to a risk of claims of discrimination, unfair treatment and even unfair dismissal.

Therefore, employers should ensure they act fairly and on the basis of reliable and current medical information. Similarly, employers should not permit or encourage their employees to target or treat adversely any particular demographic in the workplace.

There are legal protections against discrimination or adverse action based on race, ethnicity, national origin or impairment, which can include disease or illness. In an atmosphere of heightened anxiety due to the impact of coronavirus it is important that employees’ emotions and conduct are managed by clear and open communication from senior management.

The rapidly changing situation with the coronavirus pandemic means that many employers will be focused on reducing their labour costs in the current business climate. To reduce labour costs employers may consider options such as:

  • Asking employees to take their accrued paid leave such as annual leave and long service leave;
  • Implementing stand downs pursuant to s 524 of the Fair Work Act 2009 (Cth); or
  • Implementing redundancies.

Leave

Under the Fair Work Act full-time and part-time national system employees are entitled to 10 days personal/carer’s leave each year of service. The entitlement accumulates progressively.

Employees who access their accrued personal/carer’s leave due to injury or illness such as coronavirus are considered to be temporarily absent from work and, as such, are protected from dismissal because of their illness or injury: s 352.

That does not mean that an employee on personal/carer’s leave who is suffering from coronavirus cannot be required to obey reasonable and lawful occupational health and safety based instructions intended to minimise the risk of the person spreading disease in the workplace. For example, an employee diagnosed with coronavirus who disobeyed an instruction not to attend the workplace unless cleared medically would risk disciplinary action.

Stand down

An employer may stand down an employee during a period in which the employee cannot usefully be employed due to circumstances for which the employer cannot reasonably be held responsible.

The employer does not pay wages for the period of a stand down. This is not a deferment but a pause during the stand down in the obligation to pay wages.

An employee stood down continues to accrue entitlements to annual leave and personal/carer’s leave under the National Employment Standards, as well as an entitlement to a public holiday that falls on a day the employee would ordinarily work during the stand down period: s 524.

Redundancy

For a redundancy based dismissal employees who are dismissed on the grounds of a ‘genuine redundancy’ are not eligible to bring an unfair dismissal application: s 385(d).

A genuine redundancy occurs where:

  • The person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and
  • The employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

A genuine redundancy does not occur if it would have been reasonable in all the circumstances for the person to be redeployed within:

  • The employer’s enterprise; or
  • The enterprise of an associated entity of the employer.

Dismissal

When interviewing a client who claims to have been dismissed due to the coronavirus it is important to ascertain the basis of the client’s belief. If there is evidence supporting the claim that the virus was the reason for the dismissal then a claim for unfair dismissal or breach of general protections provisions may be available.

Court books – All states

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Court books are an indexed collection of all documents that the parties rely upon in proceedings, collated for convenience of use during a hearing. They are commonly used in all litigation matters and are compulsory in some courts, especially in specialist lists and on appeal.

A court book ordinarily includes all pleadings and evidence. It generally omits any irrelevant documents, even if they were disclosed in the proceedings. For example, a voluminous bundle of documents may have been produced under a subpoena issued by one of the parties in the lead-up to the hearing, but the party only seeks to rely on a few documents out of the bundle. The court book will contain the subpoena itself plus those relevant documents only.

A properly compiled and indexed court book allows solicitors, counsel and the bench to have a common reference point and easily navigate to relevant documents and issues as the hearing proceeds.

Two new precedents for creating court books have been added to every By Lawyers litigation guide in Australia.

The precedents Court book cover page and Court book index are customised for each court in each jurisdiction. They comply with each court’s requirements and will assist practitioners in compiling court books in all types of litigation.

 

Unpaid parental leave – FED

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Unpaid parental leave entitlements have been enhanced by the Fair Work Amendment (Improving Unpaid Parental Leave for Parents of Stillborn Babies and Other Measures) Act 2020.

These amendments provide greater support to parents who experience stillbirth, infant death, premature birth and the hospitalisation of their baby immediately following birth.

The amendments ensure the following:

  • Employees who are parents of stillborn babies or parents of babies or infants that die have the same entitlement to leave as parents of babies that survive;
  • Following a stillbirth or the death of an infant or child, the employee parent’s unpaid leave can only be cancelled by the employee;
  • Employees who are parents of premature babies and newborns that require hospitalisation after birth can put their unpaid parental leave on hold during the hospitalisation; and
  • Employees cannot also take compassionate leave unless it is following the stillbirth or the death of the child.

Employees may choose to access flexible unpaid leave options in the first 24 months after the child’s actual or expected date of birth or placement, for example, to enable a gradual return to work or shared caring responsibilities between parents.

The commentary in the By Lawyers Employment Law publication has been updated accordingly.

The Lighthouse Project – FED

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The Lighthouse Project is a new family-violence and risk screening initiative that will run in both the Family Court and the Federal Circuit Court for parenting matters. The legislative framework is provided by the recent Family Law Amendment (Risk Screening Protections) Act 2020.

The project will be initially available in the Adelaide, Brisbane and Parramatta registries of the courts. It is scheduled to commence before the end of 2020.

The Lighthouse Project includes:

  • early risk screening through a secure online platform;
  • early identification and management of safety concerns; and
  • assessment and triage of cases by a specialised team, who will provide resources and safe and suitable case management.

All cases identified as high-risk following the screening process will be referred to a dedicated list in the court. The specialist list will be known as the Evatt List. This will be a judge-managed list which will focus on early information gathering and intervention through a judge-led, dedicated support team in appropriate cases.

Both courts have a dedicated page on their websites with information about the Lighthouse Project.

The By Lawyers Family Law Children publication has been updated accordingly. Information on The Lighthouse Project has been included under Pre-Action procedures in the full commentary and on the matter plan. Practitioners are also reminded of the related information on family violence and cross-examination of parties, in the Going to court folders.

COVID-19 employment measures – FED

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The Commonwealth Government has introduced two new COVID-19 employment measures.

JobMaker Hiring Credit

This scheme enables payments to assist workplace participation by people aged 16 to 35 years.

The first year of this program runs from 7 October 2020 until 6 October 2021. It is intended that the program will be extended.

Eligible employers can claim $200 per week for each additional employee hired during this period aged 16 to 29 years. For employees aged 30 to 35 years employers can only claim $100.

Employees can be hired on a permanent, casual or fixed-term basis.

The payments are made as credits claimed quarterly in arrears from the Australian Taxation Office.

Paid parental leave work test period amendment

The work test period in the Paid Parental Leave Act has been temporarily amended. This applies to births and adoptions that occur between 22 March 2020 and 31 March 2021.

It allows access to parental leave pay and ‘dad and partner’ pay by those who do not otherwise meet the criteria of the work test due to the pandemic.

The work test requirements have not changed. An individual must have worked:

  • at least 10 months in their work test period; and
  • at least 330 hours in that 10-month period with no more than a 12-week gap between any two consecutive working days.

The work test period is usually 13 months prior to the birth or adoption of the child. The temporary change means that it is 20 months for parents who have had their employment impacted by COVID-19.

Information on these and previous COVID-19 employment measures see the commentary available at the top of every By Lawyers matter plan: Dealing with COVID-19 legal issues – Some practical information.

101 Costs Answers – ALL STATES

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101 Costs Answers is the latest addition to the By Lawyers ‘101’ series of helpful reference materials.

Located in the Reference materials folder on every By Lawyers matter plan, this publication contains valuable commentary and precedents on all aspects of legal costs.

The precedents include all of the By Lawyers costs agreements/client services agreements and costs disclosures, drawn together from all By Lawyers publications into a convenient single publication.

The By Lawyers costs agreements are compliant with the strict requirements of the various state laws. They cater for all areas of law, with detailed recitals of the scope of work usually undertaken in each type of matter. This not only defines the retainer but makes it easy for practitioners to produce documents quickly upon engagement.

The 101 Costs Answers commentary includes:

Disclosure requirements

The commentary helps practitioners to navigate some of the more complicated disclosure requirements including regulated costs and the specific obligations for different types of litigation matters. The effect of non-disclosure is also covered.

Disbursements

Commentary on defining and recovering disbursements includes relevant case law and examples. The By Lawyers costs agreements are drafted to clearly identify usual disbursements.

Counsel’s fees

The commentary deals with the contractual relationship between solicitors and barristers as well as disclosure requirements. With the solicitor responsible for payment of counsel’s fees regardless of the solicitor’s agreement with the client, the By Lawyers costs agreements include counsel’s fees as specific disbursements which the client is obliged to pay.

Debt recovery

Where debt recovery is necessary, 101 Costs Answers contains letters of demand and example pleadings to assist with the recovery of costs. There is also detailed commentary on costs assessment procedures and the relevant forms for each state are available on the matter plan.

Like all By Lawyers publications, 101 Costs Answers contains interactive links to relevant legislation and cases, which are always kept updated.

Notice of risk – FED

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A new Notice of risk form has been released for use in the Family Court and Federal Circuit Court.

The new form is called ‘Notice of Child Abuse, Family Violence or Risk’. It harmonises the approach taken to risk notification in parenting matters. It is intended to assist in ensuring that families receive appropriate and targeted intervention within the family law system.

The new form replaces and consolidates the three previously prescribed forms, being:

  • Notice of Risk,
  • Notice of Child Abuse, Family Violence or Risk of Family Violence (Current Case), and
  • Notice of Child Abuse, Family Violence or Risk of Family Violence (Application for Consent Orders).

The new form must be completed by all parties filing an Initiating Application, Response or Application for Consent Orders where a parenting order is sought from 31 October 2020.

Applications that are part completed but have not yet been lodged for filing on the Commonwealth Courts Portal by 31 October 2020 will also need to have the new form completed.

If an allegation of child abuse or family violence, or risk of same, is made in the Notice then an affidavit must be filed setting out the evidence on which the allegation is based. In the Federal Circuit Court, this may be done within the affidavit filed with the Initiating Application or Response.

The Notice must be served on all other parties and any other relevant person as outlined in the form. The Notice of Risk should be eFiled where possible using the Commonwealth Courts Portal.

The new form enables a Judge or Registrar to consider multiple risk issues in addition to child abuse or family violence, at an earlier stage in proceedings. Multiple risk issues include mental health, substance abuse and threats of harm. The Notice will be referred to the relevant child welfare agency where appropriate.

This form is available on the matter plan of the By Lawyers Family Law – Children publication. The commentary has been updated to include some practical information on the use of the form.

Non-disclosure – All states

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Non-disclosure agreements and clauses have been added to all By Lawyers guides. These precedents augment the existing Confidentiality Deed and clauses in the Folder of Blank Deeds, Agreements and Statutory Declarations in Folder A. Getting the matter underway on every By Lawyers matter plan.

In general, non-disclosure is passive and unilateral, whereas confidentiality is active and bipartite. The former generally requires a party simply not to reveal or release confidential information, whereas the latter requires a party to take positive steps to keep information secret and safe.

There are also other distinctions to be drawn when dealing with confidential information. Sometimes only one party is to provide confidential information to the other. In other cases, two or more parties propose to exchange it. Sometimes the parties wish only to protect the contents of their agreement, whereas sometimes they wish to protect other specific information relevant to their decision to enter into the agreement, or relevant to the subject matter of the agreement.

The various By Lawyers deeds and agreements and precedent clauses have been revised and enhanced to encompass these distinctions.

The commentary on Deeds and agreements in the Folder of Blank Deeds, Agreements and Statutory Declarations has also been enhanced to cover these points.

Apart from the precedents available in the Folder of Blank Deeds, Agreements and Statutory Declarations, relevant precedents relating to non-disclosure and confidentiality are also located in various guides as required.

Adding these non-disclosure agreements and clauses, and revising the existing confidentiality deeds and clauses, is part of By Lawyers continual commitment to the expansion and enhancement of our content.

Amended precedents:

Deed for general use

Agreement for general use

Confidentiality deed

Confidentiality clause for defined information – All parties

Confidentiality clause for defined information – One party

New precedents:

Non-disclosure agreements – Informal

Non-disclosure agreement – Formal

Confidentiality clause for terms of agreement – All parties

Confidentiality clause for terms of agreement – One party

Insolvency – FED

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The temporary changes to insolvency laws under schedule 12 of the Coronavirus Economic Response Package Omnibus Act 2020 have been extended to end on 31 December 2020.

The temporary measure were originally set to end on 25 September 2020.

A recap of the changes are as follows:

Bankruptcy

The time for a debtor to comply with a bankruptcy was extended from 21 days to six months. The threshold for initiating bankruptcy proceedings increased from $5,000 to $20,000.

The same six month time extension applies to the time within which a debtor is protected from enforcement action by a creditor, following their presentation of a declaration of intention to present a debtor’s petition, under s 54A Bankruptcy Act.

Liquidation

The time for a debtor company to comply with a statutory demand was extended from 21 days to six months. The threshold to issue a statutory demand increased from $2,000 to $20,000.

Safe harbour

The temporary s 588GAAA ‘Safe harbour—temporary relief in response to the coronavirus’, of the Corporations Act 2001 provides that the existing civil penalties for directors failing to prevent insolvent trading under ss 588G(2) do not apply in relation to a debt incurred by a company if the debt is incurred in the ordinary course of the company’s business and until 31 December 2020.

The By Lawyers Dealing with COVID-19 legal issues commentary has been updated to reflect the revised end date of 31 December 2020 for the Commonwealth government’s insolvency measures.

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