What Employers Should Know About Unfair Dismissal Claims

It is important for an employer to know their rights when faced with an unfair dismissal claim.

What is an unfair dismissal claim?  Unfair dismissal if defined as the dismissal of an employee from their job in a harsh, unjust or unreasonable manner.

If an employee makes an application to the Fair Work Commission, the matter will be listed for a conciliation conference shortly thereafter.  This will give an opportunity for both parties to try to resolve the matter before an independent conciliator.  An employer will also be required to file their response within 7 days after the application has been served.

There are possible defences to an unfair dismissal claims including the following:

  1. That the employee was not terminated by the employer.

The employee has voluntary resigned or abandoned his/her employment.

  1. The termination was not harsh, unjust or unreasonable.

In considering whether a termination is harsh, unjust or unreasonable, the Commissioner must take into account the following factors:

  • Is there a valid reason for the dismissal relating to the employee’s capacity or conduct (including its effect on the safety and welfare of other employees)?
  • Has the employee been notified of the reason for dismissal?
  • Does the employee have the opportunity to respond relating to his/her capacity or conduct?
  • Did the employer unreasonably refuse to allow the employee to have a support person present to assist at any discussions relating to their dismissal?
  • Has the employer provided any warnings in relation to an employee’s unsatisfactory work performance prior to dismissal?
  • Has the employer provided assistance to the employee to improve his/her work performance?
  • How the size of the employer’s enterprise would likely impact on the procedures followed in effecting the dismissal.
  • Whether the employer has a dedicated human resource management specialists or expertise that would likely impact on the procedures followed in effecting the dismissal.
  • Any other matters that the Commission considers relevant.
  1. There was a genuine redundancy within the business.

There is a genuine redundancy in the following circumstances:

  • The employer no longer requires the employee’s job to be performed by anyone because of changes in the operational requirements of the employer’s business; AND
  • The employer has complied with any obligation imposed by an applicable modern award or enterprise agreement in relation to the redundancy.

We act on behalf of employers in the Fair Work Commission and Federal Court of Australia to obtain favourable settlement outcomes.  If you require advice regarding an unfair dismissal claim brought against your company, please contact our litigation department on (03) 9311 8511.

How should I own my real estate?

Purchasing real estate is usually one of the biggest financial transactions you undertake during your lifetime.  Failing to ensure the transaction is structured correctly may result in significant consequences over the term of ownership.  Such consequences may include, GST and Capital Gains Tax (GCT) implications, Land Tax liability, additional Stamp Duty being paid at the time of purchase and the property passing to an unintended recipient upon your death.

Each transaction should be structured to your individual circumstances and highly depend on a number of factors.  A member of our Property and Conveyancing and Business Law teams can evaluate and advise you on the best structures available to you and your circumstances.  Kennedy Guy also has an extensive network of Accountants who we work closely with to ensure our clients are provided the best possible advice.

Individual Ownership

For a vast number of people, property is held in their individual capacity – whether solely or jointly with another person (usually their spouse).  If the property is your Principal Place of Residence (PPR – i.e. your home where you primarily live) then owning the property individually may be the best course of action.

Owning the property in this manner will allow you to take advantage of any potential Stamp Duty concessions and exemptions that may be available to you, such as the First Home Buyer exemption/concession (which may also entitle you to the First Home Owners Grant), the Pension Concession, the Principal Place of Residence Concession or even the Off-the-Plan duty concession.  There are various requirements for each individual exemption/concession and a member of our team will be able to discuss this with you.

The sale of your PPR is most likely not going to attract any GST or GCT liability.  Additionally, the property is also likely to be exempt from any Land Tax liability (as long as you live in the property).

If you own the property jointly with another individual (i.e. your spouse) then it is important that the property is held in the correct ‘tenancy’.  You can own property as “Joint Proprietors” or “Tenants in Common”.

Joint Proprietors

This is the most common type of ownership for married couples, or couples in a long-term relationship.  The term joint proprietors essentially means that you own the property as a whole.  If one person is to die then their share of the property will automatically pass to the surviving partner.

Tenants in Common

Tenants in common allow you to own a distinct portion of the property – whether that is a 50% share with another person/persons or some other proportion.  The benefit to this method is that upon your passing your share of the property does not automatically pass to the other surviving owner, but instead can be bequeathed in accordance with your Will.

Trust Ownership & Company Ownership

A property may also be owned on Trust (with the property being held in the name of the Trustee) or through a company.

Before deciding on which structure is best for you and your individual circumstances, give a member of our team a call today to discuss the options best suited to you.

You can contact our Property & Conveyancing team on 03 9311 8511.

Security of Payment – How to get paid in the Building and Construction Industry

In the building and construction industry, cash flow for builders and subcontractors is critical for a business’ survival and growth.

Security of payment legislation is found in each State and Territory in Australia, with the purpose of protecting businesses by providing strict statutory time frames for payments relating to construction contracts.  In Victoria, the applicable legislation is the Building and Construction Security of Payment Act 2002 (Vic).

The invoice sent out is treated as a payment claim.  In almost all cases, failing to serve a payment schedule in response to a payment claim, served pursuant to security of payment legislation, can have dire consequences for the person or business who received the payment claim that is in dispute.

Where a respondent fails to provide a payment schedule within the requisite time frame, the value claimed will be deemed payable and an applicant will be permitted to seek summary judgment in court, or have the matter adjudicated under the relevant security of payment legislation.  This means the invoice has to be paid and cannot be disputed.

Our firm has extensive experience in building and construction law.  Should you require advice regarding security of payments, or building and construction matters generally, please contact our office on (03) 9311 8511.

Governance issues for jointly owned or family run businesses

Many financially sound businesses cease to exist or fail to reach their full potential solely due the lack of good corporate governance. This is mismanagement to the extreme that is not recognised by the business owners. Often it is caused by lack of knowledge but generally it is caused by a lack of concern on the part of the owners until something goes horribly wrong. There are some simple techniques available to businesses which will minimise the risk of business failure and create an environment of good corporate governance.

Independent Chairman or Mentor
A simple way of avoiding conflict between business owners is to employ the services of an independent chairman or mentor. This person’s role is to give guidance, provide an independent view and to mediate disputes between business owners who have their own agendas or who have different views on how a business should be operated.

The independent person will give stability to the management of the business which is often lacking in businesses run by a group of individuals. So often one or more of those individuals try to impose their views on all owners of the business without consideration of any alternative views. When the view of the minority is not being considered, disputes generally arise and those disputes are destructive to the business.

Shareholder [Unitholder] Agreement
It is essential that all businesses that are jointly owned have a fair and equitable Shareholder [Unitholder] Agreement to govern the Shareholders [Unitholders]. This agreement should be in place at the outset and deal with matters including:
(i) Does any minority Shareholder [Unitholder] have a right to equal say and equal voting rights?
(ii) How will Shares [Units] be dealt with if one party:
(a) wishes to retire;
(b) becomes disabled;
(c) dies; or,
(d) is unable or unwilling to work or is dismissed due to poor work performance.
(iii) How will any buyout be funded?
(iv) What is the value of the Shares [Units] for any transfer? How will those Shares [Units] be valued in the future?
(v) Does any Shareholder [Unitholder] have a guarantee of work or position on the Board?
(vi) Who will manage the Company’s business?
(vii) Indemnity to persons giving guarantees or security on behalf of the Company.
(viii) Confidentiality issues for any intellectual property.
(ix) Is there any requirement for a Shareholder [Unitholder] to provide funding or services to the Company now or in the future?
(x) Restraints on key persons or Shareholder [Unitholder] whilst a Shareholder [Unitholder] or after.
(xi) Dividend distribution policy.
(xii) Terms and conditions of any Shareholder [Unitholder] loans and right to payment of interest and right to security (i.e. debenture).
(xiii) How will any disagreement or stalemate be resolved?
(xiv) Who will be the Company’s accountant, banker and lawyer?

Independent Board Members
Businesses often established a Board of Directors as part of their corporate governance strategy.

Why have a Board with independent Board members?

1. Some or all of the directors may have their own agenda which affects their decision making. Having independent Board members increase the likelihood that decisions will be made in the interests of all shareholders.

2. Often the business owners lack the skills to manage and guide the business. For example, if the business is design and construction of Water Treatment Plants and all of the owners are plumbers by trade, how will the Board be adequately skilled to deal with all of the management issues that arise without independent members? The company can bring in people with the required skills in areas of financial management, risk management, IT, legal, marketing etc.

3. A Board is less likely to attempt to micro manage the business if the Board has independent members. The day to day issues of the business will not be the focus at a Board meeting. The meetings are more likely to focus on “the bigger picture” and not get “bogged down” in minor day to day issues. Therefore, the business is run efficiently and effectively.

4. The more diverse the Board, the wider the ideas that are thrown up for discussion. New strategies and markets might be considered due to the diversity of ideas.

5. A properly selected Board will substantially increase the level of management experience.

For more information, contact Peter Guy at Kennedy Guy