Norman Waterhouse
   
Norman Waterhouse

Normans Briefly

In this issue

Welcome to the October edition of the Normans Corporate and Commercial Briefly.

>   Migration – Exemptions for Permanent Employer Sponsored Program
>   Corporate and Commercial – Dealing with Business Contracts on a Sale of Business

article image

Migration – Exemptions for Permanent Employer Sponsored Program

In July this year we sent you an article regarding the new Permanent Employer Sponsored Program (PESP) which took effect on 1 July 2012.  Since implementation of the new PESP, we have received several inquiries about exemptions available for the age, skills and qualification and English language requirements.  This article provides the most updated information on this topic.

Age Exemption

At the time of application, applicants must be less than 50 years of age, except:

For Direct Entry and Temporary Residence Streams -

  • Minister of Religion nominated by a religious institution;
  • Researchers, scientists and technical specialists nominated by Australian government agencies;
  • Senior academics (University Lecturer or Faculty Head) nominated by universities in Australia.

For Temporary Residence Stream only -

  • Applicants working for the nominating employer as a 457 visa holder for at least 4 years prior to application and earned at least $123,300 (Fair Work High Income Threshold as at 1 July 2012) for each of the 4 years.

English Language Exemption

Applicants must have Vocational English (IELTS 5 in each component) for Temporary Residence Stream and Competent English (IELTS 6 in each component) for Direct Entry Stream, except:

For Direct Entry and Temporary Residence Streams -

  • Minister of Religion nominated by a religious institution;
  • Applicants’ earnings will be at least equivalent to the current Australian Tax Office (ATO) top individual income tax rate, which is $180,001 (as at 1 July 2012).

For Temporary Residence Stream only -

  • Applicant completed at least 5 years of full-time study in a secondary and/or higher education institution where all tuition was delivered in English.

Skills and Qualification Exemption

ENS Direct Entry applicants must obtain positive skills assessment and have 3 years working experience in the same occupation prior to lodgement of application.  RSMS Direct Entry applicants need to have positive skills assessment if they are working in trade occupations without a relevant Australian qualification.  For all other occupations, applicants must have Australian or equivalent overseas qualification or work experience as specified in the corresponding occupation standard (ANZSCO).

For ENS and RSMS Direct Entry Stream -

  • Applicant’s earnings will be at least equivalent to the current ATO top individual income tax rate, which is $180,001 (as at 1 July 2012)
  • Current 444 or 461 visa holders who have been working with their sponsoring employer in the nominated occupation for at least 2 years (excluding any period of unpaid leave) in the 3 years immediately prior to lodgement of application

For ENS Direct Entry Stream only -

  • Minister of Religion nominated by a religious institution;
  • Researchers, scientists and technical specialists nominated by Australian government agencies;
  • Academics (University Tutor, University Lecturer or Faculty Head) nominated by universities in Australia.

Applicants of Temporary Residence stream are deemed to have satisfied the skills requirement through having worked as a subclass 457 visa holder in the nominated position for at least 2 years.

For more specific information on any of the material contained in this article please contact Maria Ho on 08 8210 1274 or mho@normans.com.au or Angela Wang on 08 8210 1212 or awang@normans.com.au.


article image

Corporate and Commercial – Dealing with Business Contracts on a Sale of Business

Almost without exception, contracts for the sale and purchase of a business include provisions whereby the seller transfers its interests in ongoing business contracts to the buyer at completion.  In many of these cases, the provisions don’t differentiate between “assignments” and “novations” of business contracts or where they provide for an assignment, they don’t expressly deal with an assignment of the obligations under the transferring business contract and as a result, unintended consequences may arise.  In most cases, this is due to a misunderstanding as to the meaning of the terms “assignment” and “novation”.

In other cases, no consideration is given to whether the consent of the other party to the contract is required for the transfer of the contract from the seller to the buyer.

Assignment

“Assignment” refers to a party to a contract transferring all or part of its rights under the contract but not its obligations or liabilities under the contract to a third party.  It is important to note that the original contract remains valid and although the assignee (the buyer) will be entitled to the assignor’s (buyer’s) benefits under the contract, the assignor remains liable to discharge its obligations under the contract.

Novation

“Novation” refers to the parties to a contract agreeing to effectively terminate the contract and to enter into a new contract on the same terms with a new party standing in the place of one of the original contracting parties.  In that case, the party that has “novated” the contract (the seller) has effectively transferred its rights and its obligations under the contract to the new party (the buyer).

Requirement for Consent

It is important to note that the consent of the other party to the contract will always be required for a novation of a contract.  This is understandable given that the novation involves a transfer of the obligations and liabilities under the contract.  On the other hand, whether the consent of the other contracting party is required in the case of an assignment of a contract will depend upon the terms of the contract. Where such consent is required, failure to obtain the required consent for an assignment will in most cases entitle the other contracting party to terminate the contract and take action against the assignor for breach of contract.

Where the consent of the other party to an assignment is given and the assignment is separately documented, it is possible to effectively achieve a novation of the contract provided that all parties including the other party to the contract agree that the seller’s obligations under the contract are transferred to the buyer in addition to the transfer of the seller’s rights under the contract.

Drafting Transfer Provisions

In light of the above, the provisions dealing with the transfer of business contracts should:

  • Require the parties to obtain any necessary consent from the other party to a contract for the assignment of the benefit of that contract to the buyer;
  • Provide that subject to the above consent being obtained, the seller assigns and the buyer accepts both the benefit and the burden of the contract with effect from completion;
  • Provide that the seller may at its option, and subject to the other party to the contract agreeing, require the buyer to join the seller in a novation of the business contract with effect from completion.

It is also prudent to include a provision stating that where these assignments or novations cannot be made or are not made prior to completion, completion will not be delayed and the seller will hold all its interests in the contract for the benefit of the buyer who will assume responsibility for the performance of that contract as from completion.  Obviously this will not apply to critical contracts such as leases of business premises or key licences.  The assignment or novation of these contracts should be dealt with as a pre-condition to completion so that completion is delayed until such time as these contracts are assigned or novated or alternatively, the sale and purchase does not proceed at all.

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.


© Norman Waterhouse 2012. All Rights Reserved. You may not reproduce all or any part of this newsletter without our prior consent.
We respect your right to privacy. You can view our Privacy Information Notice on our website and our Privacy Policy is available
on request from our Privacy Officer at privacy@normans.com.au
The contents of this newsletter are for information only and
should not be taken as advice on the law

 

Forward this issue

Do you know someone who might be interested in receiving this monthly newsletter?

Forward

Unsubscribe

You're receiving this newsletter because you signed up on the Norman Waterhouse website or you signed the Normans terms of engagement.

Unsubscribe

Contact us

Level 15, 45 Pirie St
Adelaide SA 5000
+ 61 8 8210 1200
www.normans.com.au
normans@normans.com.au


You're receiving this newsletter because you signed up at normans.com.au or you signed the Normans terms of engagement.
Having trouble reading this email? View it in your browser. Not interested anymore? Unsubscribe Instantly.