Norman Waterhouse
   
Norman Waterhouse

 

 

Normans Briefly

In this issue

Welcome to the February edition of our Corporate and Commercial Briefly.

>   Walking the Talk – Less than 6 weeks to go – Don’t miss out!
>   Work Health and Safety – Is there a right to silence in investigations?
>   Abolition of the Australian charities and not-for-profit commission
>   Business Succession – Are you prepared?

Walking the Talk – Less than 6 weeks to go – Don’t miss out!

Walking the Talk
Industrial Relations in the Real World
4 April 2014
Crowne Plaza Adelaide

Seats are filling up quickly for Walking the Talk 2014, the annual full-day conference presented by the Norman Waterhouse Employment and Industrial Relations Team. This year’s conference follows our highly successful conferences in both 2012 and 2013, and will again comprise in-depth and interactive analysis of the contemporary workplace issues that matter most to our clientele. This is an invaluable learning experience for Chief Executive Officers, directors, human resource professionals and managers across the State and Federal industrial regimes.

Walking the Talk 2014 is a must-attend conference for anyone who employs anyone, regardless of the size of their business. Topics discussed will be of importance to all employment relationships. This year will also see the return of the ‘expert panel’, where you can ask the questions you have always wanted to ask.

The conference program and registration is online now! Book now to avoid disappointment. Contact us to see if our conference can help fulfil mandatory professional development obligations.


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Work Health and Safety – Is there a right to silence in investigations?

SafeWork SA, when investigating an alleged work health and safety (WHS) incident, has the power to compel persons to provide answers to questions and documentation. It is crucial for any person conducting a business or undertaking (PCBU) and its officers and workers to know what information must be provided, and by whom. An incorrect understanding of your rights during an investigation could significantly compromise your position in any subsequent prosecution.

Power of SafeWork SA to ask questions and require documentation

Under the Work Health and Safety Act 2012 (SA) (WHS Act), SafeWork SA inspectors may enter any workplace without notice. Inspectors are empowered to ask questions and to require an answer to any question.

In addition, inspectors may require the production of documentation. A requirement to produce documentation must be made with written notice, unless the circumstances require immediate access to the document.

Failure to answer a question or produce a document, without reasonable excuse, is an offence. The maximum penalty for this offence is $10,000 for an individual and $50,000 for a corporation.

Rights and obligations of persons and PCBUs regarding answering questions and producing documents

A person does not have to answer any question or produce a document unless the inspector invokes their power to require an answer, or their power to require a document, as the case may be.

Before invoking these powers, an inspector must identify themselves and must warn the person of the consequences for failure to answer a question or produce a document. The inspector must also inform the person about their privilege against self-incrimination and about legal professional privilege.

Privilege against self-incrimination

An individual does not have to answer a question or produce a document if it ‘may tend to incriminate’ that individual or expose them to some penalty. Note that this right is enjoyed only by individuals. Corporations do not have this right against self-incrimination.

However, if a person volunteers information which could have been withheld under the privilege against self-incrimination, that person waives this privilege. Accordingly, the information can be used in evidence against the person.

Legal professional privilege

Communications between a person and their legal representative are the subject of legal professional privilege if they are made for the ‘dominant purpose’ of seeking legal advice or in relation to existing or anticipated legal proceedings.

This long-established rule of law allows frank disclosure and discussions between a client and their lawyer without compromising a person’s legal position. Information the subject of legal professional privilege does not need to be provided to any inspector. However, freely volunteering information to an inspector will waive this privilege.

Right to privacy

If the power to require an answer to a question is invoked by an inspector, then the person being asked the question is considered as being ‘interviewed’. This is so even if the inspector is requiring an answer to just one question. Where such an ‘interview’ is commenced, the interviewee may demand that the interview be held in private (and indeed the inspector may require the same thing). This demand may be made at any stage of the interview. The interview must accordingly be moved to a suitably private location.

Tips for employers

It is important not to inadvertently waive the privilege against self-incrimination or legal professional privilege by volunteering to an inspector any information that would be covered by either form of privilege. SafeWork SA is able to use any voluntarily provided information in prosecution proceedings against a person.

Accordingly, persons being questioned should not simply volunteer information, but should ensure that the inspector actually invokes their power to require answers or documentation. When invoking these powers, the inspector will set out the obligations and rights of the person/interviewee. Providing answers or documentation only after an inspector has formally invoked their power under the WHS Act cannot be considered as non-cooperation. However, as a matter of common sense, any request for an inspector to formally invoke their power should be addressed reasonably, so as not to cause friction with the inspector.

Because the privilege against self-incrimination applies only to individuals and not corporations, persons employed by corporate PCBUs should ask whether any question is being directed to them as an individual or as a representative of the corporation. If the question is directed to the individual, then the privilege against self-incrimination may be relied upon, where appropriate.

If the question is directed to the person in their capacity as a representative of the PCBU, then that person should only respond to the question if they are an authorised representative of the PCBU. If a person does not have the authority to represent the PCBU, they should simply inform the inspector of this fact and not provide any response to the question. For this reason, PCBUs should ensure that it is made clear throughout their organisation who is and is not authorised to represent the PCBU in this way.

Where documentation is required pursuant to written notice, PCBUs should consider obtaining legal advice regarding what documentation is and is not required to be produced pursuant to the notice. It may also be that redaction of documentation is appropriate.

Honesty and cooperation are of course the best course of action in relation to any investigation of a WHS incident. However, a clear understanding of your rights when a SafeWork SA inspector attends at your workplace is crucial in avoiding the unnecessary compromising of the legal position of a PCBU or you as an individual in relation to any such incident.

For more specific information on any of the material contained in this article or about WHS obligations generally, please contact Sathish Dasan on 08 8210 1253 or sdasan@normans.com.au.



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Abolition of the Australian charities and not-for-profit commission

In November last year we reported on media reports about the coalition Government’s intention to dismantle the Australian Charities and Not-for-Profit Commission (ACNC) and wind back various reforms made by the previous Government in the charities and not-for-profit sector.

Official confirmation of abolition of ACNC

At an Australian Institute of Company Directors’ lunch on 29 January, Kevin Andrews, the Minister for Social Services, confirmed that the ACNC will be abolished and that regulatory responsibility for charities will be returned to the Australian Securities and Investments Commission (ASIC) and the Australian Taxation Office (ATO).

Other reforms not proceeding

Confirmation of the abolition of the ACNC is in addition to the Government’s announcements late last year that various tax measures of the previous Government will now either proceed with amendment, or not proceed at all.  Of relevance to charities, the Government will not proceed with the proposed statutory definition of “not for profit” and more importantly, nor will it proceed with the proposed imposition of tax on income from unrelated commercial activity of charities.

As yet, there is no indication that the Government intends to reverse the universal, uniform statutory definition of “charity” for Federal Government purposes which came into effect on 1 January 2014.  As previously reported, this definition essentially reflected relevant case law
and on that basis, it is likely that this definition will remain.

In the meantime...

As we have previously reported, despite these now official announcements, legislation for the abolition of the ACNC and the return of regulatory power to ASIC and the ATO has not yet been introduced into Parliament so it is likely to be some time before these changes are effected.  In the meantime, charities established after 3 December 2012 must be registered with the ACNC to access charity tax concessions from the ATO and all registered charities must continue to comply with their obligations to report to the ACNC.

Annual information statements

Although the date for lodgement of the first Annual Information Statement (AIS) to the ACNC has been extended to 31 March 2014 for registered charities using the standard reporting period (1 July to 30 June), there has been no extension to the date for lodgement of the first AIS for charities using a January to December reporting period.  Accordingly, the first AIS for these registered charities must be lodged by 30 June 2014.

Annual financial reporting

There has been no change to the time frames for lodgement with the ACNC of financial reports for registered charities.  For charities using a standard reporting period, the first financial report will be due on 31 December 2014 and for those using a January to December reporting period, the first financial report will be due on 30 June 2015.

Registered charities which are companies must continue to submit financial statements to ASIC in respect of the financial year ending 30 June 2013 and 31 December 2013, so that there is no gap in the financial information collected by ASIC and the ACNC.

Other reporting to ACNC

In addition to the above periodic reporting, a registered charity must continue to report to the ACNC on changes to its constitution, name, address for service and directors (responsible persons).

For more specific information on any of the material contained in this article, please contact Johanna Churchill on 8210 1236 or jchurchill@normans.com.au.



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Business Succession – Are you prepared?

Many people start thinking about business succession as they approach retirement. Unfortunately, this may be too late to effectively deal with all the issues.

There are many issues which could impact on your ability to effectively manage the transitioning out of owners of a business, whether due to catastrophic events, such as death, trauma or total permanent disablement, or other events which require some forethought and planning to manage effectively, such as retirement or dismissal.

You may think that your shareholders’ agreement, partnership agreement or other document which establishes your business, is sufficient to deal with these issues. Unfortunately, in the majority of cases, this document will not deal with all of the issues. A common result of such an assumption is that upon the death of an owner, the surviving owner needs to find capital to buy out a spouse who inherits the deceased owner’s interest in the business and may not be able to do so, resulting in the spouse being involved in the running of the business. In most cases, this is not a situation which is conducive to a thriving business.

Other situations which may not be dealt with in such a document include the retirement of an owner, or the winding down of an owner’s involvement in the business but continuing their participation in the profits of the business.

An effective business succession plan, supported by an appropriate buy-sell agreement will help to make a transition in such circumstances, and any others that may be relevant to your business, simpler and smoother. This will enable all parties to deal with the transition without the stress and tension of trying to agree terms, including valuation methodologies for the business at a time when at least one of those parties will be at a disadvantage.

We work with accountants, financial advisors and valuers to assist clients to achieve an outcome that gives them piece of mind that they know what will happen when they or their business partners want or need to transition out of the business. In many cases, there may also be an insurance solution which can ease the financial burden on the parties as well.

For more specific information on any of the material contained in this article please contact Mark Henderson on 08 82101220 or mhenderson@normans.com.au.



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