Employment lawyers Sydney

Our employment lawyers include lawyers who have acted as in house legal counsel and human resource managers and we therefore understand the practical realities and difficulties faced by employers and employees.  We can advise you appropriately as to your rights and obligations and provide strategic advice to achieve your desired outcomes. 

It is important to get advice early before minor issues become major problems.  This can often occur very quickly in the workplace and it is therefore important to ensure you have put in place mechanisms to mitigate the risk of them occuring whether you are an employer, or an employee.  There are also strict timeframes in which employment related claims must be filed and therefore it is important to obtain advice and know what these deadlines are immediately.

Our employment lawyers regularly assist both employers and employees in relation to:

  • Dismissal
  • Redundancy
  • Unfair dismissal
  • Discrimination
  • Bullying and harassment
  • General protections claims & adverse action claims
  • Industrial action
  • Wages and entitlements
  • Awards and compliance
  • Employment contracts and internal policies
  • Work health and safety

Contact us.

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Australian business structures – choosing the right structure for your business

In this issue we examine the key types of business structures through which business can legally be conducted in Australia as follows: 1.     Sole proprietors: individuals who are liable for the business. 2.     Partnerships / limited partnerships: two or more persons or entities who are jointly and individually liable for the business (unless it is a limited partnership in which case the limited partner can enjoy limited liability). 3.     Joint ventures: contractual arrangements between two or more persons entities usually for a limited time or specific project whereby the rights and obligations are governed primarily by the contract. 4.     Companies: separate legal entities which basically have the same rights as natural persons and which can provide limited liability to their owners (i.e. shareholders). This can also include startups. 5.     Trusts: a person or entity that holds assets or income for the benefit of others. Sole proprietors: Sole proprietors or sole traders conduct business as individuals i.e. in their personal capacity. Sole proprietorship is the simplest business structure, but provides no protection to the sole proprietor from debts or other liabilities. A different trading name for the business is often used (formally referred to as a “business name”). If so, the name must be registered in the name of the individual with the Australian Securities and Investments Commission (ASIC). Please refer to the business names section at the end of this paper which applies to all persons and entities wishing to trade under a different name to their own name for additional information. Aside from the usual laws which regulate all businesses in Australia, there are significantly fewer regulatory requirements imposed upon sole proprietors in comparison with other business structures. There is for example no need to publish financial information. Business income is declared separately to the Australian Taxation Office (ATO) but is taxed at the same rate as individual Australian residents for tax purposes. There is a tax free threshold available for individuals of $18,200. The rates of tax for income above $18,200 are as follows: $18,201 – $37,000 = 19% $37,001 – $87,000 = 32.5% $87,001 – $180,000 = 37% $180,001 + = 45% Tax offsets, levies, and deductions may apply depending on individual circumstances. Specific financial / tax advice should be sought from an accountant. Partnerships: A partnership is a relationship between two or more individuals or companies who carry on business in common with a view to profit. The relationship is primarily governed by a written partnership agreement entered into between the partners, as well as the Partnership Acts in each state and territory. Partners (other than limited partners discussed below) are jointly and severally liable for liabilities of the partnership. They also share the profits. As is the case with sole proprietors, there is no need to publish financial information relating to the partnership. The partnership does not pay tax on its income; it is the individual partners who must declare their individual share of the partnership’s net income or loss. The partnership must however lodge a partnership return with the ATO declaring total income less deductible expenses. Individual partners also account for capital gains tax in proportion to their share of each CGT asset, not the partnership itself. Limited partnerships are a species of partnership which need to be registered involving at least one general partner and one limited partner. Limited partners have different rights and obligations and liability is limited to an extent. Limited Partnerships are generally taxed in the same manner as companies. Joint ventures: Joint ventures are essentially contractual arrangements whereby two or more individuals or companies enter into a negotiated agreement to work together to achieve specific goals, usually for a finite amount of time, or the agreement is otherwise terminated. Joint ventures are typically used for specific projects, and are not usually appropriate for ongoing business commitments. Joint ventures are commonly established where each party has different assets / resources which, when combined, can provide advantages / synergies / efficiencies to all parties. The rights of each party primarily depend on the contractual terms of the relevant joint venture agreement that has been negotiated between them. Joint ventures can be incorporated (e.g. where the parties establish a new company as the vehicle for the joint venture), or unincorporated. The tax implications for joint ventures depend upon the parameters of the arrangement. Australian Companies: A company incorporated under the Corporations Act 2001 (Cth) (Corporations Act) is a separate legal entity and has the same rights as a natural person. The company must be registered with ASIC, and ASIC administers the Corporations Act and regulates companies. Australian companies typically provide limited liability for their owners (i.e. shareholders). The directors are responsible for the day to day management of the company. There are numerous obligations and reporting requirements prescribed under the Corporations Act. Companies can either be private (known as proprietary companies) or public (the capital of which is raised from the public e.g. those listed on the Australian Stock Exchange). The different types of company are as follows: company limited by guarantee: liability is limited to a guaranteed amount. This is often used by entities that do not trade. company limited by shares: liability is limited to the relevant amount which is unpaid for the shares held by the particular shareholder unlimited company: liability is unlimited. no liability company: only available to mining companies.  The unpaid amount for shares cannot be called upon. The most common type of company is a company limited by shares. There are different requirements depending on the size of the company. Small business entities pay tax at a rate of 28.5% otherwise most companies pay tax at a rate of 30%. Foreign Companies: Companies that are incorporated in countries other than Australia must register with ASIC if they wish to carry on business in Australia. Trusts: Trusts can carry on business in Australia. The trustee owns and manages the business for the beneficiaries of the trust. Generally, the beneficiaries pay tax on their share of the

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Automation, artificial intelligence and legal issues

By Newyorka Musabelliu and Chris Chang – January 2020 It is not surprising that the law cannot keep up with the growth in artificial intelligence.  Patent applications have already been filed on behalf of and in the name of a machine called Dabus that used AI to design two products[1].  Nevertheless, progress is being made regarding law reform in this space. In December 2019 the Australian Law Reform Commission released a report for law reform in connection with artificial intelligence over the next five years[2] and the World Intellectual Property Organization (WIPO) announced a public consultation process on artificial intelligence and intellectual property policy[3]. Below are some of the associated legal issues[4]. Table of Contents Key takeaways The implementation of different types of permanent controls, checks and balances on the AI which cannot be overridden is important given the different types of risks. The ALRC report notes recent commentary and states “appropriate design choices are crucial for automated systems to achieve consistency with concepts such as transparency and accountability; predictability and consistency; and equality before the law” and calls for effective regulation of technological developments. There are doubts as to whether mere principle based regulation will suffice and therefore the task of drafting such legislation will be both challenging and interesting. IP Law There are a multitude of issues to consider in view of the current landscape but, in summary, it is important to ensure the retention of personal control over the creative process and provide the input to at least a substantial part of the end result. Otherwise the risk is that you will lose rights in works authored by AI or jointly authored with AI unless reform addresses this. Reform debate primarily focuses on ownership where the work has been created by AI. Who should own the intellectual property rights (1) no-one (2) the AI, or (3) an interested party such as the producer.  The latter is in our opinion the preferred option.  In any other scenario this would be unsatisfactory to many businesses who have invested in AI and the fruits of the AI’s labour, including adaptations and compilations etc of those works.  If left unaddressed, questions as to whether inventions presently created by AI can be registered as patents by persons other than the AI[5], or whether future applications based on such inventions are in fact already part of the prior art base and do not constitute inventive steps may also arise, and so forth. Who should be responsible for infringement by AI? We suggest the principles of agency law should apply. This question also opens the doors to liability for other positive acts of AI and questions concerning torts to the person for example which, given current advances in AI, is a possibility. Admin Law Even when automated systems are deployed carefully and effectively by government agencies, questions remain as to their compatibility with core administrative law principles and the rule of law.  In particular, it is not yet clear whether (or how) such systems can be said to act with procedural fairness.  The legality of actions and decisions by public bodies is called into question as is transparency and accountability of government decisions (in particular, whether automated decision-making software can provide adequate reasons that would in turn facilitate access to judicial and merits review where appropriate)[6].  The independent scrutiny of automated systems prior to implementation is already envisaged by the ALRC e.g. by way of algorithmic impact assessment[7] and therefore creators of AI are no doubt already focusing upon how to demonstrate compliance such tests if they havnt already done so. Privacy Law Information handled about individuals may not satisfy the definition of personal information under the Privacy Act 1988 (Cth) if the relevant person is for example allocated a code and is therefore not identifiable. Collection by AI may also occur without knowledge or consent (both of the public and the owner of the AI).  Permanent checks and balances are likely to already be in place. Directors’ duties and defences It is important for directors to understand the technology upon which they place any reliance, and any limitations if they intend to rely on the safe harbor provisions contained in s.189 of the Corporations Act 2001 (Cth). Discrimination Studies have shown that inadvertent discrimination may occur in the AI’s implementation of its algorithms. Misuse of big data Other issues raised include the propensity for improper use of big data in the financial sector, and consumer law. The WIPO statement of issues goes into greater detail[8]. Discussion BACKGROUND AND STATUS OF AI As the phrase suggests, “artificial intelligence” (AI) is designed with the objective of imitating human intelligence artificially (and as has been proven, exceeding human intelligence in many ways, in the same way traditional computers have served us for so many years). Human intelligence includes accurate perception, analysis, logic / rationale, the ability to make calculated decisions based on objectives and, ultimately, solve problems.  It also includes creativity.  Machine learning has been available for years (e.g. for the purposes of electronic discovery in litigation).  Algorithms are programmed in machines designed to learn both from large amounts of historic data and through their own, “personal”, experience and evolution, to make accurate predictions. Aside from significant advances in the use of artificial intelligence in the legal sector, we note some other examples of developments in recent times: The advanced use of AI as applied to gastrointestinal diagnostics. In particular, AI has been used in the “automated detection of disease and differentiation of pathology subtypes and disease severity[9]”; In October 2011, Takahiro Yamaguchi and So Kanno explored the link between the machine and art. The “Senseless Drawing Bot” is an autonomous device that sits on a skateboard which draws abstract lines using many colors. The robot moves from side to side, riding the wave of today’s modern graffiti. The lines drawn are complex and create abstract modern graffiti and one would have a difficult time arguing that the same work, if originally created by a human,

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Protecting your brand & trade mark registration

Before choosing your brand: We have previously discussed important considerations when choosing the name of your business.  Before you decide upon your brand (which may consist of a letter, word, name, number, logo, aspect of packaging, shape, colour, sound or scent) and launch it (including before you register your domain name) a trade mark availability search should be conducted by a professional to determine whether there are any existing registered or unregistered rights which may exist in similar brands. Benefits of trade mark registration: The mere registration of your company name or business name with the Australian Securities and Investments Commission (ASIC) does not protect your brand identity, or provide registered trade mark rights in your brand.  Registration with ASIC is a legal obligation.  However, registration as a trade mark with the Australian Trade Marks Office can provide your business with: an exclusive statutory monopoly to use your registered brand identity in respect of the goods and/or services for which it is registered in Australia; an easy way to prevent cybersquatting (the registration of a domain name which incorporates your brand by others); much easier and cheaper enforcement of your rights in your brand if someone else infringes your rights, for example, by using a brand which is either substantially identical or deceptively similar to your brand in respect of the same or similar goods and/or services; and a registered “asset” which can be licensed, assigned, and monetised. Only registered trade marks can apply the ® symbol.  This puts others on notice that your brand is registered, and that you are likely to prosecute infringement. Costs: Your brand is your identity.  It is valuable property to which your goodwill and reputation are attached.  People who infringe your brand may derive benefits from your hard work or diminish your brand’s value through their actions (e.g. by selling inferior goods or services). Registration as a trade mark is typically a fairly inexpensive exercise if your brand does not currently infringe the rights of others (please refer to our earlier article here for further information).  Goods and services are divided into “classes”.  It is possible to obtain protection with IP Australia in one class for $330.  This is a drop in the ocean when compared to the potential costs to your business of non-registration.  Registration lasts for 10 years and is renewable. We provide trade mark registration advice and assistance at cost effective fixed fee rates.

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Unenforceable Penalty Clauses & Agreed Damages in Contracts

Table of Contents When negotiating a contract the parties commonly think about what should happen in the event that the other party breaches a term of the contract. They may also wish to stipulate what should happen upon the occurrence of a certain event (which may not technically constitute a “breach” of the contract). The other party might be required to pay an amount of money or provide some other non-monetary benefit as a result under the contract. Often it is difficult at the time the contract is made for a party to anticipate or foresee exactly what the damage or loss will be in the future if specified event(s) occur. Nevertheless, many contracts do specify what should happen upon the occurrence of certain events. Breach of contract If the parties agree on what will happen in the event of a breach of the contract, then the clause will either be (1) enforceable because it is a liquidated damages clause or (2) unenforceable because the clause is deemed to be a penalty. Primary contractual stipulations with secondary collateral stipulations Where a technical breach of the contract does not trigger what will happen but rather it is some other contractual stipulation / event which triggers payment, the question is “whether the party is restricted by covenant from doing the particular act [by] … payment”.  This might occur for example through the imposition of a collateral contractual stipulation which imposes an additional detriment to the benefit of a party and acts as security for the performance of the primary obligation, or acts as a deterrent to non-performance of the primary obligation. Such a stipulation would be a penalty. Alternatively, the question is “whether according to the true construction of the contract, its meaning is, that the one party shall have the right to do the act, on payment of what is agreed upon as an equivalent[1]” it which case it would be enforceable. Enforceable agreed damages or liquidated damages clauses Generally, the law will enforce a clause which provides for the payment to a party of an amount (or benefit) which is a “genuine covenanted pre-estimate of damage[2]”. Unenforceable penalty clauses In summary, clauses which are in the nature of a punishment for breach of the contract or to deter non-performance of a contractual term can be characterised as penalties and therefore unenforceable. Factors which indicate an unenforceable penalty clause include where[3]: The agreed sum is “extravagant and unconscionable in amount in comparison with the greatest loss that could conceivably be proved to have followed from the breach”. The sum needs to be out of all proportion to the damage that would normally be awarded by a Court in the absence of the clause (i.e. it is “in terrorem”). This is the most important test and merely because no pre-estimate was made at the time the contract is entered into does not determine that the clause a penalty[4]; or The breach consists only in not paying a sum of money, and the agreed damages are more than what should be paid as a result; or A single lump sum is made payable by way of compensation on the occurrence of one or more events, some of which may occasion serious damage but others insignificant damage. General principles It is important to keep in mind the following: The circumstances and the terms of the contract as at the time the contract was made are relevant, not the circumstances at the time of the breach of contract; The fact that it was difficult or impossible to precisely estimate the likely damage at the time the contract was made does not determine that it is a penalty clause[5]; The substance and effect of the clause must be considered (not merely the way the clause has been described in the contract); and The burden of proving that the clause is a penalty and unenforceable is on the defendant (i.e. the breaching / paying party). Special rules apply where payment is accelerated and damages for loss of bargain are payable (for example which often appear in hire purchase agreements).  These are treated differently and specific legal advice should be sought[6]. A party seeking to rely upon an agreed damages clause would be best advised to draft the clause with the above in mind and to keep a note of the basis for the calculation and estimate of the damages. …………………………….. [1] See Andrews v Australia and New Zealand Banking Group Limited [2012] HCA 30 and Paciocco v Australia and New Zealand Banking Group Limited [2016] HCA 28 (27 July 2016) [2] Clydebank Engineering and Shipbuilding Co. v. Don Jose Ramos Yzquierdo y Castaneda [1905] A C 6. [3] See Amev-Udc Finance Ltd v Austin (1986) 162 CLR 170 and Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79 [4] Paciocco v Australia and New Zealand Banking Group Limited [2016] HCA 28 (27 July 2016) [5] This was the fourth “test” from Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79 [6] See Melbourne Linh Son Buddhist Society Inc v Gippsreal Ltd (No 2) [2017] VSCA 198 (4 August 2017) for a recent application of the principles. contact us Contact our contract lawyers for assistance in relation to the above. Our commercial lawyers, business lawyers, and disputes lawyers provide expertise in corporate and commercial advisory services as well as litigation and dispute resolution. HEATHFIELD GROSVENOR Level 21, 133 Castlereagh Street Sydney NSW 2000 Australia T: +61 2 8005 7388 E: contact@hglaw.com.au www.hglaw.com.au The information provided in this article is provided by way of general information only. It does not constitute legal advice, and should not be relied upon as such. Specific independent legal advice should be obtained before deciding to act, or not to act, upon the views expressed or information contained in this article.

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