Category: Company law

Employee who suffered psychiatric injury is awarded damages which resulted from an employer’s failure to follow its own disciplinary procedures. 

In the recent ruling of Elisha v Vision Australia Limited [2024] HCA 50, the High Court has allowed an appeal awarding AUD 1.4 million in damages to an employee who suffered a major depressive disorder, resulting from a breach of a disciplinary procedure which was incorporated within the employee’s contract of employment.

Background

  • Mr Elisha was employed by Vision Australia Limited (Vision Australia) from September 2006. Mr Elisha’s employment contract contained clauses in which Mr Elisha agreed to comply with all “Vision Australia Policies and Procedures” as well as “all other Company Policies and Procedures”.  
  • Accordingly, the High Court determined that a policy, known as the “2015 Disciplinary Procedure”, was incorporated into Mr Elisha’s employment contact. The High Court further noted that Mr Elisha and Vision Australia were both bound by this policy. 
  • In 2015, Mr Elisha was subject to a complaint made by the manager of a hotel, which he was staying at while travelling for work. The manager complained that Mr Elisha had been aggressive and intimidating when he phoned reception at 12:30am to make a noise complaint.  
  • The complaint eventuated in a disciplinary meeting between Mr Elisha, his manager at Vision Australia, and a member of the “People and Culture” department, to discuss what Vision Australia described as serious misconduct. 
  • Prior to the disciplinary meeting, and in accordance with the 2015 Disciplinary Procedure, Mr Elisha was given a written notice outlining the alleged misconduct.  
  • However, prior to the disciplinary meeting, Mr Elisha’s manager advised the People and Culture department, and senior management of Vision Australia, that Mr Elisha had a “pattern of aggressive behaviour”, although no evidence of this behaviour was ever provided.
  • Mr Elisha’s manager also accepted the hotel manager’s version of events without question, and advised senior management that his conduct was “gross misconduct and should be addressed accordingly”.
  • Importantly, the allegation that Mr Elisha had demonstrated a pattern of aggressive behaviour was never put into the written notice, nor was it discussed during the disciplinary meeting. Mr Elisha was never afforded the opportunity to respond to this allegation.  
  • Despite vehemently denying the allegations, Mr Elisha’s employment was terminated following the disciplinary meeting.
  • Mr Elisha subsequently suffered a major depressive disorder resulting in an inability to work for the foreseeable future.  

The Decision

  • By failing to allow Mr Elisha the opportunity to respond to the allegation, that he had demonstrated a pattern of aggressive behaviour, the High Court ruled that Vision Australia failed to follow the 2015 Disciplinary Procedure, which resulted in Vision Australia being in breach of the employment contract with Mr Elisha.  
  • It was determined that the “secret slurs” made by Mr Elisha’s manager prejudiced the conduct of the disciplinary meeting, and had those remarks not been made, then Mr Elisha’s employment would not have been terminated.  
  • Further, it was held that the psychiatric injury was caused by Vision Australia’s breach of contract, and that the liability for the injury was not too remote.
  • This is the first time the High Court has ruled that psychiatric injury is a type of injury that can result in damages being awarded to employees for a breach of contract. 

Key Take Aways

  • Employers must ensure strict compliance with all workplace policies, particularly when it concerns the possible termination of an employee’s employment.  
  • Consider whether it is necessary to incorporate workplace policies and procedures within your company’s employment contracts.  
  • Be mindful of the impact a workplace investigation and disciplinary procedure can have on your employees. 
  • Always ensure employees have the opportunity to respond to all allegations which may be considered when deciding whether their employment will be terminated.  

Please contact us if you require any advice or assistance concerning all matters relating to Australian employment law and workplace investigations.  

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If you’re looking to invest or establish operations in Australia, then feel free to let our London-based Australian qualified lawyers know and we can discuss how we can assist. 

Australian legal advice in the European time zone 

Did you know that Sheltons Group Legal provides Australian legal services from our London office through Sheltons’ own Australian incorporated law firm? 

Our lawyers are based in Sheltons’ London office to cover South Africa and all of Europe – simply to avoid the immense inconvenience of the time difference, an affliction that persists for the majority of the year. 

What can Sheltons Group Legal offer? 

Our qualified Australian solicitors (lawyers) are typically able to assist and provide advice in the following areas, amongst others: 

  • employment law 
  • intellectual property 
  • drafting and review of commercial agreements 
  • legal due diligence, and  
  • commercial and company law. 

Further details 

Please see here for further details: www.sheltonsgroup.com/australia/#Legal

Sheltons Group Legal – an Australian law firm based in London

Investing in Australia?

Know your obligations under the new Register of Foreign Ownership of Australian Assets

From 1 July 2023, foreign investors have been required to notify the newly established Register of Foreign Ownership of Australian Assets (the Register) if they acquire interests in particular Australian based assets. Notice must also be given if an Australian entity, that held an interest prior to 1 July 2023, becomes foreign owned after such date.

The information stored on the Register is not publicly available, and its purpose is to give the Australian government greater visibility of foreign ownership of Australian assets.

The following are some of the types of interests which will require a foreign investor to give notice to the Register:

  • an interest in Australian land which is a freehold interest, a long-term lease (where the term including any options exceeds 5 years), or an interest in an exploration tenement
  • an interest in a share or unit of an Australian land corporation or trust or an interest in a share of the trustee of an Australian land trust
  • a registerable water interest, and
  • an equitable interest in a long-term lease or licence of agricultural land.

Generally, a foreign investor must give notice to the Register within 30 days after they acquire an interest, or if there is a change of at least 5% in the interest of an entity.

Civil penalties will apply if an entity fails to give notice to the Register within the relevant timeframes. Additionally, foreign investors may have ongoing notification obligations depending on the nature of the asset.

What does this mean for your business?

The implementation of the Register increases regulatory compliance for foreign businesses that plan to invest and operate in Australia.

It will mean that your internal procedures will need to be updated, especially if you are a business that undertakes a broad range of commercial activities within Australia.

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If you’re looking to invest or establish operations in Australia, or if you’re an Australian entity looking to receive foreign investment, then feel free to let our London-based Australian qualified lawyers know and we can discuss how we can assist.

Courtney Gleeson
Lawyer
Sheltons Group Legal (London and Sydney)
C.Gleeson@SheltonsGroup.com

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Courtney Gleeson, Principal Lawyer of Sheltons Group Legal, joined the panel for the Australia-United Kingdom Free Trade Agreement seminar organised by the  Australia-United Kingdom Chamber of Commerce in London.

The event, held on 06 September 2023, was an opportunity for insightful discussions, valuable networking and the exploration of key provisions for the benefit of Small and Medium-sized Enterprises (SMEs).

Thank you to Australia-United Kingdom Chamber of Commerce for inviting Sheltons to be a part of such an insightful event.

 

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Sheltons Group Legal – an Australian law firm based in London

Entering the Australian market is a different ballgame – when you compare the corporate requirements of your head office or company location to that of Australia, there are likely to be considerable differences in how a company is required to operate!

Australian company law is an area our clients often have difficulty navigating, usually because they simply don’t have time to become well versed in it when their time is dedicated to running a business. However, corporate compliance is a really important area for company directors and businesses to be aware of. A lack of awareness can lead to liabilities, including personal liabilities, penalties, and generally compromising situations for businesses in the Australian marketplace.

What is corporate compliance?

The Corporations Act 2001 (Cth) (‘the Act’) is the primary Australian legislation that regulates compliance obligations and standards for both Australian companies and foreign companies that are trading in Australia. Among many matters, the Act prescribes the ongoing legal obligations required of all companies registered under it. Some key obligations include: maintenance of corporate registers; documenting various company decisions, and ensuring shareholder approval is obtained; annual declarations of solvency; filing financial reports; and notifying the public record keeper of particular changes to a company.

Many clients don’t realise that company directors have a duty to ensure that the company they are involved with complies with statutory requirements. Sheltons Group has been working with clients to ensure their company compliance for decades now. We’ve developed streamlined operations to help Australian companies easily meet company law requirements, every day. Sheltons Group Legal can take care of your corporate compliance, allowing you to maximise time concentrating on business activities.

Is your Australian company legally compliant?

If you have any questions about how to ensure your Australian company and business operations maintain good standing in Australia – we welcome you to contact us! We are glad to discuss matters which relate to your company specifically, or in general, and will work with you to ensure your company is legally compliant.

Courtney Gleeson
Lawyer
Sheltons Group Legal (London and Sydney)
C.Gleeson@SheltonsGroup.com

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Sheltons Group Legal – an Australian law firm based in London

Under recently introduced legislation, ‘casual’ employees in Australia have been granted a right to request the conversion of their employment to an ‘ongoing’ or permanent position – subject to certain criteria. This enables employees to take advantage of more extensive entitlements that have previously only been provided to ‘ongoing’ or permanent employees.

The difference between ‘casual’ & ‘ongoing’ employment

For the first time, casual employment has been specifically defined in Australian employment legislation as: an employee whose employer makes “no firm advance commitment to continuing and indefinite work according to an agreed pattern”.

In Australia, employment on a ‘casual’ basis carries different legal rights for the employee as compared to ‘ongoing’ employment: a term describing both part-time and full-time workers, i.e. those employed on a permanent basis.

A common example of a ‘casual’ employee might be a warehouse worker whose hours are not consistent or defined by a continued ongoing rota or roster. Conversely, an ‘ongoing’ employee might be administration or payroll staff who work the same agreed pattern of hours or days each week, with an expectation of continued work.

Distinguishing whether someone is a casual or ongoing employee can be blurry in some cases and will often depend on the factual circumstances of the arrangements.

Employers are now legally obliged to offer casual employees conversion to an ongoing position.

The measures introduced essentially focus on job security for employees. Where a casual employee has worked a certain period of time for the same employer, the employer must offer a conversion of their employment from casual to ongoing.

Why is the distinction of employees important?

Failure to classify an employee appropriately can leave employers vulnerable to ‘double-dipping’ claims. For example, where an employee who has already been paid casual loading under an agreement for casual employment later seeks compensation for unpaid leave and other entitlements owed to them as if they were a part-time or full-time employee on the basis that their employer had made an incorrect classification.

Incorrect employee classifications can also lead Australian Government regulators to impose penalties against the employer, and fines to backpay unpaid wages can easily bankrupt small businesses. So, if in doubt, now is a good time to assess the classification of employees in your business.

Sheltons Group Legal can assist you in ensuring your business has the ‘casual’ v ‘ongoing’ employment distinction correct and we would be glad to hear from you!

Courtney Gleeson
Lawyer
Sheltons Group Legal (London and Sydney)
C.Gleeson@SheltonsGroup.com

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Sheltons Group Legal – an Australian law firm based in London

The Australian Fair Work Commission has determined there will be Australia-wide increases to the national minimum wage as well as to Modern Award minimum wages. The increases take effect from 1 July 2023.

Each year, the Fair Work Commission (‘FWC’) makes an order that covers subjects including the national minimum wage after considering factors relevant to the economy, employers and employees.

In the face of persistent high inflation, the Government’s federal budget earlier this year urged the FWC to ensure the Australian workforce to which the minimum wage applies does not suffer a wage-price spiral backwards.

Accordingly, the FWC’s Annual Wage Review 2022-23 announced that the national minimum wage would be increased by 8.6% and Modern Award minimum wages increased by 5.75%.

As a result, the national minimum wage has increased from AUD 812.60 to AUD 882.80 per week for full time employees (i.e. employees who work an average of 38 hours each week) – meaning the hourly minimum wage is now AUD 23.23. The Modern Award minimum wage increase means that pay rates above AUD 882.80 per week will increase by 5.75% per week.

Modern Awards are industry or occupation specific and apply to those performing work covered by the Award. As such, it is important to be aware that different minimum wage rates apply across different Modern Awards. 

Approximately 2.6 million employees across Australia are expected to receive the minimum wage increases. It is therefore essential that all employers take note of the increases to ensure each employee is being paid at or above the new minimum rates. Annualised salaries must be sufficient to absorb all statutory entitlements. 

If you would like further information about the Australian wage increases, or assistance in determining which Modern Award applies to your employees – please contact us.

Courtney Gleeson
Lawyer
Sheltons Group Legal (London and Sydney)
C.Gleeson@SheltonsGroup.com

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Sheltons Group Legal – an Australian law firm based in London

Is your business about to enter into an agreement or contract governed by Australian law?

It is really imperative that you are aware of the key terms and obligations that you’re committing to – and that you understand if what you are agreeing to is standard practice.

It is often the case that laws governing certain commercial arrangements in Australia are significantly different from those ordinary in the jurisdiction you are familiar with. Standard agreements that you may regularly adapt and use for business in other countries may not be suitable or enforceable in Australia.

Australian shareholder agreements, business acquisition or sale documentation, commercial property leases and agreements relating to the supply of products or services with others may be governed by national legislation, or by state-based laws and regulations depending on where the contracting parties might physically be located or where services are generated.

Sheltons Group Legal can review and advise on agreement terms before you proceed with any commitments.

Typically, most commercial contracts and agreements are favourable to the party that has prepared the governing document. It is important not to simply assume the terms and obligations have been included in a fair and equal manner.

Businesses caught in a litigious event usually find themselves in such situations by failing to record the terms of an agreement correctly or because of a laid back approach to entering into an agreement. Having a clear and concise written agreement in place should not just be a business consideration – it’s a must!

Sheltons Group Legal is able to assist with the preparation or review of any commercial agreements or contracts that your business might require. Having a written agreement in place documents the arrangements between the parties and ensures clarity for all. Clear articulation of the terms and obligations is crucial to avoid ambiguity and disagreements at a later date.

Courtney Gleeson
Lawyer
Sheltons Group Legal (London and Sydney)
C.Gleeson@SheltonsGroup.com

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Sheltons Group Legal – an Australian law firm based in London

Until recent legislative changes to the Corporations Act 2001 (Cth), a director’s resignation was taken to be effective from the date confirmed in a relevant resolution, or simply when the director provided written notice of their resignation.

The ‘date of effect’ might not be what the individual director OR company understands it to be

Previously, the date included on a notice of resignation automatically meant the end of liability, the end of director duties being owed to the company by that individual, and the end of that individual having authority to represent the company. However, a change in the legislation means that carrying out the correct steps with respect to a resignation are now more important than ever. Not following the necessary steps can cause burdensome complications for both the company and the individual seeking to resign from their director post.

Where notification of a director resignation is not received by ASIC (Australia’s corporate regulator) within 28 days from the date that the resignation is proposed to have effect from, the legal and actual date of effect will be the date on which ASIC is notified and NOT the date specified in a notice of resignation or company resolution.

Significance of the ‘date of effect’

What is the date of effect? The date of effect refers to the date on which an individual is legally ceased from their role as director.

If ASIC is not correctly notified within the prescribed timeframe, the individual who purports to have resigned from the position of director will legally still be a director of the company until such time as ASIC is notified. Any attempt to significantly back date the date of effect recorded with ASIC is terribly complicated and can also require a Court Order, which will only be granted in exceptional circumstances.

The importance of correct director resignations

If a company is of the view that a director has resigned, or the company has removed a director, but ASIC has not been duly informed within the 28 day time period – that individual is legally still a company director until ASIC is notified. At all times when an individual is a company director, they are not only bound to directors’ duties and may in instances be held personally liable, but they have authority to represent the company, enter into contracts/agreements and make other important decisions representing the company. As you might imagine, this can cause concern and confusion for many parties and doesn’t serve your business’ reputation well from a customer’s perspective.

To avoid unnecessary stress and expense in rectifying a failed director resignation or removal, please contact us to assist whenever there is a change in your company’s directorship.

Courtney Gleeson
Lawyer
Sheltons Group Legal (London and Sydney)
C.Gleeson@SheltonsGroup.com

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