The Fair Work Commission’s recent decision in relation to cashing out annual leave entitlements is now in effect. As of the first pay period on or after 29 July 2016, employees now have the ability to cash out their annual leave entitlements in accordance with the relevant Award, provided that:
at least 4 weeks’ annual leave will be left over after the cash out;
a maximum of 2 weeks’ paid annual leave can only be cashed out in a 12-month period;
a written agreement is made between the parties which outlines the amount of leave being cashed out, the amount that will be paid and the date it will be paid;
the payment for the cashed out annual leave must be the same as what the employee would have been paid if they took the leave; and
an employee must not be forced or pressured by their employer to cash out their annual leave entitlements.
For the Vehicle Manufacturing, Repair, Services and Retail Award 2010 see clause 29.13 and for the Clerks—Private Sector Award 2010 see clause 29.9.
Need assistance?
Employer Assist provides AAAA members with information and advice on all employment matters including the annual leave provisions. Please contact Employer Assist on 1300 735 306 or aaaa@employerassist.com.au to discuss any employment issues that arise in your business.
From 12 November 2016, small businesses will be protected from unfair contract terms in standard form contracts. While the protection of consumers from unfair contract terms is not a new concept, the extension of this protection to cover small businesses will have a significant impact on the way in which businesses contract with each other. Businesses should obtain specific legal advice and review their standard form contracts to ensure that they do not breach of the new law.
Who will be protected?
The new law protects small businesses entering into or renewing standard form contracts for the supply of goods or services where the upfront price payable under the contract is no more than $300,000 or $1 million if the contract is for more than 12 months (Threshold Amounts).
The upfront price payable is the total consideration payable under the contract which is disclosed at or before commencement but does not include any amounts that are contingent.
Some contracts are excluded from the unfair contract terms laws including shipping contracts, constitutions and insurance contracts.
What is a small business?
For the purpose of unfair contract terms under the Australian Consumer Law (ACL), a small business is one that employs less than 20 people including casuals employed on a regular and systematic basis. The number of employees will be determined by a simple head count.
(Note – small business is defined differently under the ACL compared to the Fair Work Act which defines a small business as having less than 15 employees).
What is an unfair contract term?
A term is considered unfair if:
It would cause a significant imbalance in the parties’ rights and obligations arising under the contract;
It is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and
It would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.
Examples of unfair contract terms are provided in the ACL.
Terms that define the main subject matter of the contract, set the upfront price payable or are required by law are exempt from being declared unfair.
A court or tribunal will decide whether or not a term is unfair. If a court or tribunal finds that a term is unfair, the term will be void.
What is a standard form contract?
There is no set definition for a standard form contract. However, under the ACL, where a party alleges a contract is a standard form contract, the presumption is that the contract is a standard form contract unless the other party can prove otherwise.
In making a determination as to whether or not a contract is a standard form contract, a court will consider the following:
Does one part have all or most of the bargaining power?
Was the contract prepared by one party before the transaction?
Was one party required to either accept or reject the terms of the contract as presented (i.e. take it or leave it basis)?
Was the other party given an opportunity to negotiate the terms of the contract?
Is the contract tailored?
Any other matters provided in the regulations that must be considered.
When will this protection apply?
The new law will apply to standard form contracts entered into or renewed on or after 12 November 2016 provided that:
The contract is for the supply of goods or services;
One of the parties is a small business; and
The upfront price payable under the contract is no more than the Threshold Amounts.
The new law will also apply to terms varied on or after 12 November 2016.
What should businesses do now?
Businesses should conduct a review of all of their standard form business contracts prior to 12 November 2016 to ensure that they are compliant.
Businesses should also consider creating separate contracts for small businesses.
Small businesses should ensure that they obtain legal advice prior to entering into or renewing contracts from 12 November 2016.
Need assistance?
Industry Legal Group can provide clients with information and advice on unfair contract terms. We can also assist with reviewing and amending standard form contracts so that they comply with the new law. Please contact Industry Legal Group on 1300 736 435 or info@industrylegalgroup.com.au if you have any question relating to this article or to discuss any legal issues that arise in your business.
This article is intended for information purposes only and should not be regarded as legal advice. Please contact Industry Legal Group for specific legal advice before taking any action.
Australian Consumer Law (ACL) requires businesses (suppliers) to provide consumers with certain guarantees for goods and service. However, consumer rights are not limitless and consumers are not always entitled to return goods or terminate services. This post will explore the circumstances in which businesses are required to provide consumers with a remedy and explain the benefit of implementing a clear returns policy which is compliant with the ACL.
If not managed properly, returns can have a negative impact on cash flow, profit margins, customer satisfaction, business reputation and future sales.
There are many reasons that a consumer may want to return their purchase or terminate a service and depending on the circumstances – the consumer may ask for a repair, replacement, refund or other remedy.
Businesses must be careful when dealing with returns and terminations to ensure that they are satisfying their responsibilities under the ACL and promoting customer satisfaction while also ensuring the ongoing viability of the business.
Consumer Guarantees
Under the ACL, there are guarantees which apply to the supply of goods and services to consumers (Consumer Guarantees). Consumer Guarantees include, for example:
The supplier guarantees they have the right to sell the goods;
The supplier and manufacturer guarantees the goods are of acceptable quality;
The supplier guarantees the goods are fit for any disclosed purpose;
The supplier and manufacturer guarantees the goods match their description;
The supplier guarantees the goods correspond with the sample or demo model;
The manufacturer that facilities for the repair of the goods, and parts for the goods, are reasonably available for a reasonable period after the goods are supplied unless otherwise agreed;
If applicable, the supplier and manufacturer guarantees the goods comply with any express warranty;
The supplier guarantees the services will be rendered with due care and skill;
The supplier guarantees the services will be fit for a particular or disclosed purpose; and
The supplier guarantees the services will be supplied within a reasonable time.
A consumer is defined in the ACL as a person who acquires goods and services for $40,000 or less, or for personal, domestic or household use or consumption, or for a vehicle or trailer acquired for use principally in the transport of goods on public roads. A person is not considered to be a consumer if they acquire goods for re-supply, to use or transform as part of a business in a process of production or manufacture, or repairing or treating other goods.
Under the ACL, consumers have a right to ask for a repair, replacement, refund or other remedy if a business has failed to satisfy its obligations in relation to the Consumer Guarantees. Further, a consumer will be able to seek damages from a manufacturer in the instance where the manufacture fails to satisfy its guarantee obligations. If this is the case, the business from which the consumer purchased the good or service will be entitled to be indemnified by the manufacturer for its costs in remedying the issue.
It is important to note that consumers are not entitled to a remedy in every circumstance. For example, businesses are not obligated to offer a remedy under the ACL where the consumer simply changes their mind. However, for various reasons some businesses have a “change of mind” policy which allows consumers to return goods under certain terms if they change their mind. If this is the case, the business must abide by the policy.
Rights and Responsibilities
Industry Legal Group have developed a guide for businesses to use when a consumer asks for a repair, replacement, refund or other remedy for goods or services acquired form the business.
Download Industry Legal Group’s full article to view.
Other issues
The Australian Competition and Consumer Commission (ACCC) has a number of powers under the ACL including the power to issue significant infringement notices for alleged contraventions.
Further, if a business limits or attempts to exclude Consumer Guarantees or otherwise avoid its obligations it could receive a significant penalty for breaching the ACL, up to $1.1 million for a body corporate and $220,000 for an individual. Criminal penalties may also be imposed. An example of a breach includes “no refund” signs or statements are unlawful except where they are expressly limited to refunds or returns for change of mind.
Trading Terms and Return Policy
It is important that all businesses have well drafted trading terms and a returns policy which is clear and compliant with the legislation.
If drafted properly, these documents will provide a necessary level of protection for businesses against avoidable claims. They will also assist to educate consumers on the relevant terms and conditions as well inform the business of its rights and responsibilities.
Need assistance?
Industry Legal Group can provide clients with information and advice on consumer law matters, including preparation of trading terms, warranties and returns policies which are compliant with the ACL. Please contact Industry Legal Group on 1300 736 435 or info@industrylegalgroup.com.au if you have any question relating to this article or to discuss any consumer law issues that arise in your business.
This article is intended for information purposes only and should not be regarded as legal advice. Please contact Industry Legal Group for specific legal advice before taking any action.
Brisbane-based employment and commercial law firm, Indigo Legal announced their rebrand as Industry Legal Group and unveiled their new brand identity in December 2016.
Industry Legal Group’s new name and identity will better position the firm to grow their client base across a broader range of industries.
Emma Dalley, Principal Laywer of Industry Legal Group is excited about the change and what this means for the business:
With our new name and look comes a refreshed focus. However, members can expect to deal with the same dedicated people and receive the same high level of service and advice.
The long standing Employer Assist member service provided by Industry Legal Group will keep its name, however this sub-brand has also been refreshed in line with the new Industry Legal Group identity.
Industry Legal Group will be launching their new corporate website and an Employer Assist hub in early 2017, offering clients more accessible advice and resources.
The Employer Assist hub will serve as an exciting new feature for members in addition to the current hotline service. On the new hub, members will be able to easily access essential resources such as templates, policies and contracts as well as an online chat feature, FAQs, fact sheets, articles and other industry specific information.
