Norman Waterhouse
   
Norman Waterhouse

Normans Briefly

In this issue

Welcome to the November issue of our Corporate and Commercial Briefly.

Christmas closure

Our office will close at 12 noon on Friday 20 December 2013 and reopen on Thursday 2 January 2014.

Walking the Talk – Industrial Relations in the Real World
Full Day Seminar
4th April 2014

Following our highly successful industrial relations conference earlier this year, the Norman Waterhouse Employment and Industrial Relations Team invites you to join them again for a full day of in-depth and interactive analysis of workplace issues.

Please click here to download a printable flyer.

Program available online early December.

>   Privacy Law Reforms
>   Employment – Intercourse not “in the course” of employment
>   Succession planning – Summer holidays - An opportunity for reflection
>   Future of the Australian Charities and Not-for-Profit Commission
>   Retail and Commercial Leases (Miscellaneous) Amendment Bill

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Privacy Law Reforms

On 12 March 2014, the Privacy Amendment (Enhancing Privacy Protection) Act 2012 will come into operation and amend the Privacy Act.  As part of these amendments, a single set of uniform Australian Privacy Principles (APPs) will replace the Information Privacy Principles (IPPs) and National Privacy Principles (NPPs) which currently apply to Commonwealth agencies and private sector businesses caught by the Privacy Act (APP entities).

Act now

Businesses caught by the Privacy Act should act now to ensure that they have in place privacy practices and procedures and a privacy policy which will comply with the APPs on their commencement in March 2014.

‘Permitted general situations and permitted health situations’

The amendments to the Privacy Act will introduce the concept of a ‘permitted general situation’ and a ‘permitted health situation’. They will also provide for seven permitted general situations where the collection, use or disclosure by an APP entity of personal information about an individual, or of a government related identifier, will not be in breach of certain APP obligations.

In addition, the amendments will set out five permitted health situations where the collection, use or disclosure of certain health information or genetic information will not be in breach of certain APP obligations.

Summary of differences between NPPs and APPs

Many of the proposed APPs are similar to the current NPPs which apply to businesses caught by the Privacy Act, but there are some important differences.

APP 1 (Open and transparent management of personal information)

APP 1 introduces more prescriptive requirements for privacy policies than the existing requirements in NPP 5.1. An organisation must have an APP privacy policy that contains specified information, including the kinds of personal information it collects, how an individual may complain about a breach of the APPs, and whether the organisation is likely to disclose information to overseas recipients. An organisation needs to take reasonable steps to make its APP privacy policy available free of charge and in appropriate form.

APP 2 (Anonymity and pseudonymity)

APP 2 sets out a new requirement that an organisation provide individuals with the option of dealing with it using a pseudonym. This obligation is in addition to the existing requirement that organisations provide individuals with the option of dealing with them anonymously.

APP 3 (Collection of solicited personal information)

APP 3 clarifies that, unless an exception applies, sensitive information (which includes health information and information about an individual’s racial or ethnic origin, religion, sexual orientation or criminal record) must only be collected with an individual’s consent and if the collection is also reasonably necessary for one or more of the organisation’s functions or activities.

APP 4 (Dealing with unsolicited personal information)

APP 4 creates new obligations in relation to the receipt of personal information which is not solicited.

Where an organisation receives unsolicited personal information, it must determine whether it would have been permitted to collect the information under APP 3. If so, APPs 5 to 13 will apply to that information.

If the information could not have been collected under APP 3, and the information is not contained in a Commonwealth record, the organisation must destroy or de-identify that information as soon as practicable, but only if it is lawful and reasonable to do so.

APP 5 (Notification of the collection of personal information)

APP 5 creates a new obligation that an organisation must generally make an individual aware of the rights to access and correct personal information held about that individual, the process for that individual to make a complaint about that individual’s privacy and also whether any personal information about that individual may be disclosed to overseas recipients and the likely location of those overseas recipients, at the time or as soon as practicable after, the organisation collects the personal information.

APP 6 (Use and disclosure of personal information)

APP 6 introduces new exceptions to the general requirement that an organisation only uses or discloses personal information for the purposes for which the information was collected. These exceptions include where the use or disclosure is reasonably necessary:

  • to assist in locating a missing person;
  • to establish, exercise or define a legal or equitable claim; or
  • for the purposes of a confidential alternative dispute resolution.

APP 7 (Direct marketing)

The use and disclosure of personal information for direct marketing is now addressed in a discrete privacy principle (rather than as an exception in NPP 2).

Organisations may generally only use or disclose personal information for direct marketing purposes where the individual has either consented to their personal information being used for direct marketing, or has a reasonable expectation that their personal information will be used for this purpose, and conditions relating to opt-out mechanisms are met.

APP 8 (Cross-border disclosures)

APP 8 introduces an accountability approach to organisations’ cross-border disclosures of personal information.

Before an organisation discloses personal information to an overseas recipient, the organisation must take reasonable steps to ensure that the overseas recipient does not breach the APPs (other than APP 1) in relation to that information. In some circumstances an act done, or a practice engaged in, by the overseas recipient that would breach the APPs, is taken to be a breach of the APPs by the organisation. There are a number of exceptions to these requirements.

APP 9 (Adoption, use or disclosure of government related identifiers)

APP 9 includes some additions and amendments to the exceptions to the prohibition on an organisation adopting, using or disclosing a Commonwealth Government related identifier (ie a Tax File Number or Medicare Number).

APP 10 (Quality of personal information)

APP 10 requires an organisation to ensure that all personal information used or disclosed is relevant, as well as, accurate, up-to-date and complete, having regard to the purpose of the use or disclosure.

APP 11 (Security of personal information)

APP 11 requires an organisation to take reasonable steps to protect the personal information it holds from interference, in addition to misuse and loss, and unauthorised access, modification and disclosure.

It also introduces two exceptions to the requirement that an organisation take reasonable steps to destroy or de-identify personal information if the organisation no longer needs it:

  • where the personal information is contained in a Commonwealth record; or
  • where the organisation is required under an Australian law or a court/tribunal order to retain the information.

APP 12 (Access to personal information)

APP 12 introduced a new requirement for organisations to respond to requests by an individual for access to personal information it holds about that individual within a reasonable period. In addition, organisations must give access in the manner requested by the individual if it is reasonable to do so. If an organisation decides not to give an individual access, it must generally provide written reasons for the refusal and notify the individual of available complaint mechanisms.

APP 13 (Correction of personal information)

APP 13 removes the requirement for an individual to establish that their personal information is inaccurate, incomplete or is not up-to-date and should be corrected. Instead, it now requires an organisation to take reasonable steps to correct personal information to ensure that, having regard to a purpose for which it is held, it is accurate, up-to-date, complete, relevant and not misleading, if either:

  • the organisation is satisfied that it needs to be corrected; or
  • an individual requests that their personal information be corrected.

Organisations generally need to notify other APP entities that have been provided with the personal information of any correction if that notification is requested by the individual.

APP 13 also introduces requirements for an organisation to respond to a correction request or a request to associate a statement by the individual within a reasonable period after the request is made.
When refusing an individual’s correction request, an organisation must generally provide the individual with written reasons for the refusal and notify the individual of available complaint mechanisms.

Credit reporting changes

The Privacy Act provides safeguards for individuals in relation to consumer credit reporting.

Consumer credit is currently defined to mean credit to an individual where that individual intends to use the credit wholly or primarily for personal or household purposes. The above reforms will extend that definition so that the consumer credit reporting provisions will also apply to credit given to an individual where that credit is intended to be used to acquire, maintain, renovate or improve residential property or investment purposes, or to refinance such credit.

The reforms will also permit more comprehensive credit reporting which will allow the reporting of information about an individual’s current credit commitments and their repayment history information over the previous two years.

These measures for more comprehensive credit reporting will be accompanied by greater privacy protection for individuals’ credit-related information.  These protections include:

  • a simplified and enhanced correction and complaints process;
  • a prohibition on the reporting of credit-related information about children;
  • a prohibition on the reporting of defaults of less than $150;
  • the introduction of specific rules to deal with pre-screening of credit offers;
  • the introduction of specific provisions that allow an individual to freeze access to their credit related personal information in cases of suspected identity or theft or fraud; and
  • the introduction of civil penalties for breaches of certain credit reporting provisions.

The above reforms will be supported by a credit reporting code which will apply to all credit reporting bodies and specified credit providers and other entities such as mortgage and trade insurers listed in the code.  The code will set out how the credit reporting requirements are to be applied or complied with by those entities.

Other changes

The above reforms will also see the introduction of civil penalties for breaches of certain credit-reporting provisions.
They will also see an extension of the Commissioner’s powers under the Privacy Act allowing the Commissioner to:

  • conduct investigations on his own initiative (ie without a complaint);
  • make determinations following an investigation which can be enforced by court proceedings;
  • accept court enforceable undertakings; and
  • seek civil penalties in the case of serious or repeated penalties.

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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Employment – Intercourse not “in the course” of employment

The recent majority decision handed down by the High Court of Australia (“High Court”) in the case of Comcare v PVYW [2013] HCA 41 overturned the decision of the Full Court of the Federal Court (“Full Federal Court”). In the judgment from the High Court it has been found an employer is not liable for compensation to an employee who suffered injuries during sexual intercourse in a motel while on a business trip. The Full Federal Court previously found it is sufficient for an employer to be liable for an employee if an injury occurred at a place the employer had required or encouraged the employee to attend. It was found to be unnecessary to show the activity through which the injury occurred was encouraged or required by the employee.

Facts

Ms PVYW (“PVYW”) was sent to a regional office of her employer for the purpose of conducting budget reviews and personnel training.

For this reason she was forced to stay overnight at a motel booked by her employer. It was here that she engaged in sexual relations with an individual she met. During this activity a glass light fitting was pulled from the wall mount and struck PVYW, resulting in physical injuries and a claimed subsequent psychological injury.

PVYW launched a claim for workers compensation on the basis that the injury was “arising out of, or in the course of the employees’ employment”. The claim was initially accepted by Comcare, before revoking it, leading to PVYW’s application to the Administrative Appeals Tribunal (“AAT”).

AAT delivered a verdict in favour of Comcare, this decision was overturned on appeal to the Federal Court, finding in favour of and awarding compensation to the employee. This was upheld by the Full Federal Court, but appealed again by Comcare to the High Court. 

Issues

The issue considered by the High Court was whether an injury was within the “course of employment” (no matter the causation) if the injury occurs:

  • during an interval or interlude in an overall work period; and
  • at a location the employer has induced or encouraged the employee to spend the interval or interlude; and
  • where there is no dissenting behaviour on behalf of the employee (gross misconduct).

In previous cases to satisfy “in the course of employment” aspect, all that was required was the injury had to have occurred at a place the employer encouraged the employee to be during an interval of actual periods of work. This has been replaced through the judgment delivered by the High Court, in which a new three-stage test has been established.

An employer is not necessarily liable for injury to an employee simply because they were authorised or encouraged to be at the particular place.

Take home message

While the decision handed down has provided some clarity in regards to the potential liability of an employer it, has not categorically defined the scope for situations of an employers’ liability. It has classified that an employer is not liable for injuries suffered during sexual relations while on a business trip as it was not encouraged by the employer, it does not help clarify the extent of a business’s liability if an injury occurs during ‘normal social activities’.

While some clarity has been expressed, there will always be arguments pertaining to whether particular behaviour and activities are encouraged by the employer. For a business to protect themselves and their employees risk assessment and risk mitigation should be conducted when travelling for work purposes or participating in social activities. Ways for this to occur include:

  • Choosing appropriate travel options for regional, interstate and international travel;
  • Providing acceptable accommodation;
  • If a work encouraged activity, observe the safety record of the provider;
  • If considered a risk, advise employees not to engage in the behaviour; and
  • Remind staff the business’s code of conduct or policy regarding appropriate workplace behaviour extends to locations away from the regular place of work if you are present at that location for the work purposes.

For more specific information on any of the material contained in this article please contact Lincoln Smith on 08 8210 1203 or lsmith@normans.com.au.


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Succession planning – Summer holidays - An opportunity for reflection

By now I hope that you have had a chance to plan some time for reflection over the summer, either in the form of a trip away or some time at home with the family to do the jobs around the house that pile up through the year. Either before you go away or during that time, it might be useful to think about whether your affairs are in order.

Here are some questions to get you started:

  • If you are away and out of contact, or incapacitated, is there a person who is able to handle your affairs if necessary?
  • If you suffer an injury or an illness, do you have someone who knows your wishes and is authorised to manage your treatment?
  • If the worst happens, do you know what will happen to your assets, including your interest in any business or control of any trusts?

If you don’t know the answers to these questions, you may need to consider giving your succession planning some thought. This is relevant both in relation to your personal affairs and to your business affairs and can form part of a full succession planning discussion. There are many issues to consider, including insurance coverage, superannuation, real property, personal effects and business interests which need to be dealt with appropriately to take into account tax and other issues which could impact on the wealth that you have accumulated over your lifetime.

At Norman Waterhouse we are able to assist in relation to both personal and business succession planning and would be happy to discuss this with you, in consultation with your accountant and financial advisor as appropriate.

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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Future of the Australian Charities and Not-for-Profit Commission

In previous editions of our Corporate and Commercial Briefly we reported on Federal law reforms in the charities and not-for-profit sector and the establishment of the Australian Charities and Not-for-Profit Commission (ACNC).

The ACNC was established on 3 December 2012 to replace the Australian Securities and Investments Commission (ASIC) and the Australian Taxation Office (ATO) as the Federal regulator of charities. Charities that received endorsement to access charity tax concessions from the ATO before that date were automatically registered on the ACNC. Any charity established after that date must be registered with the ACNC to access charity tax concessions from the ATO.

Although much has been said in the media about the dismantling of the ACNC, both in the lead up to and immediately following the election of the coalition Government, as yet there has been no official announcement of the wind back of the above law reforms or the dismantling of the ACNC. Given this, and given that it will take some time for the new Government to prepare let alone pass the relevant legislation to make these changes, the ACNC is here to stay, at least for the immediately foreseeable future.

Accordingly, charities which are registered with the ACNC must continue to comply with their obligations to report to the ACNC.

Annual information statements

In addition to providing information to the ACNC upon registration, registered charities are required to provide annual information statements to the ACNC from 1 July 2013. These statements will include information about the charity (such as governance structures, purposes and activities) that will be publicly available in order to facilitate greater accountability and transparency within the sector.

The first annual information statement required from charities currently registered will not need to contain any financial information.

Most charities will operate on a 1 July to 30 June reporting period for the purposes of these annual information statements.

These annual information statements must be lodged with the ACNC within sic months of the end of the charity’s relevant information reporting period. This means for charities whose reporting period ends on 30 June, the first statement will be due on 31 December 2013.  For charities whose reporting period ends on 31 December, the first statement will be due on 30 June 2014.

Annual financial reporting

Registered charities will be required to lodge financial reports in addition to their annual information statements. These financial reports must be lodged with the ACNC from 1 July 2014. 

A medium registered entity can choose to have its financial reports audited or reviewed, but a large registered entity must have its financial reports audited.

A charity will be:

  • a small registered charity if its revenue is less than $250,000 a year;
  • a medium registered charity if its revenue is more than $250,000, but less that $1 million a year;
  • a large registered charity if its revenue is more than $1 million a year.

Whether a charity is endorsed as a deductible gift recipient does not affect its classification as a small, medium or large registered charity.

Most charities will operate on a 1 July to 30 June financial reporting period for the purposes of these annual financial reports.  Any charity which seeks to depart from this reporting period will need to obtain consent from the ACNC before 30 June 2014.

These financial reports must be lodged with the ACNC within six months of the end of the charity’s relevant financial reporting period. For charities whose financial reporting period ends 30 June, the first financial report will be due on 31 December 2014.  For charities whose financial reporting period ends on 31 December, the first financial report will be due on 30 June 2015.

For most charities, this means that after the annual information report period ending 30 June 2013, a registered charity may lodge their annual information statement and annual financial reports with the ACNC at the same time.

Other reporting to ACNC

In addition to the above periodic reporting, a registered charity must report to the ACNC on changes to:

  • the charity’s name;
  • the charity’s address for service;
  • the charity’s directors (responsible persons); and
  • changes to the charity’s constitution.

Small charities must notify the ACNC of the relevant changes within 60 days of the relevant change.  Medium and large charities only have 28 days in which to notify the ACNC of the relevant change.

Reporting to ASIC

A charity which is a company under the Corporations Act, such as a company limited by guarantee, must continue to report to ASIC in respect of changes to the company’s name and the company’s auditors.  In addition, it will need to apply to ASIC in respect of the incorporation of the company and any steps to wind up the company.

Charities which are companies will no longer be required to report to ASIC in respect of the registered office or principal place of business of the charity or in respect of any changes to any office holder’s residential address.  However, if ASIC or the ACNC need such information from a charity for their own purposes, they can require such information to be provided.

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.

Reporting to other regulators

The obligations to report to the ACNC are in addition to any other obligations that a registered charity may have under other laws.  For example, if a charity is an incorporated association, it will still have to report to its State or Territory regulator for incorporated associations. Although the South Australian Government has proposed legislation aimed at removing duplication of reporting to the Office of Consumer and Business Affairs for incorporated associations which report to the ACNC, this legislation has not yet been passed.

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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Retail and Commercial Leases (Miscellaneous) Amendment Bill

The Retail and Commercial Leases (Miscellaneous) Amendment Bill 2013 (SA) (Bill) was introduced into the Legislative Council by the Honourable John Darley MLC on 13 November 2013.  The Bill proposes to alter the current position under the Retail and Commercial Leases Act 1995 (SA) (Act) in relation to landlords recovering land tax from their tenants.  The Bill also makes a minor amendment to the section of the Act that prescribes when the Act applies to a lease. 

Currently section 30 of the Act prohibits a retail shop lease from requiring a tenant to pay land tax to a landlord.  The Bill, if passed, will change this position and will provide that:

  • a landlord may require a tenant under a retail shop lease to pay an amount of land tax to the landlord provided that the amount does not exceed the ‘single holding rate’ for the premises;
  • where the premises are the only premises owned by the landlord then the ‘single holding rate’ is an amount equal to the amount of land tax payable under the Land Tax Act 1936 (SA) in relation to the premises;
  • where the landlord owns more than one premises, the ‘single holding rate’ will not be based on the aggregated land tax payable for all of the landlord’s premises, but rather will be an amount equal to the amount that would have been payable under the Land Tax Act 1936 (SA) had the premises been the only premises owned by the landlord.

Leases which are entered into on or after the commencement of this Bill will be subject to the new land tax recovery provisions. All existing leases will not be affected by the Bill and the current legislative provisions will apply.

The Bill also provides that the monetary threshold set for the purpose of determining whether the Act applies to a retail shop lease (where the threshold is currently $400,000) may be indexed in accordance with a schedule prescribed by regulation.

As the Bill has been introduced by a private member rather than the Government, and given that there are only a handful of Parliamentary sitting days left this year, it is unlikely that the Bill will progress far in the near future.  Unfortunately, the Bill fails to address some of the more pressing concerns of landlords and tenants in relation to the operation of the Act. Hopefully, we will see more wide ranging Government legislation introduced shortly to address these concerns.

For more specific information on any of the material contained in this article please contact Lisa Hubbard on 8217 1369 or lhubbard@normans.com.au.


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