Cert IV - M. S. Martin March 2012

Apply Legal Requirements & Manage Small Business Finances

(Also incorporates some contracts)

Lesson 11

Cert IV - M. S. Martin January 2012

Todays Lesson

• Chapter 7 - Comply with insurance and regulatory requirements for housing construction.

• Chapter 6 - Industrial Relations Law• OFT recent changes in legislation

Cert IV - M. S. Martin January 2012

Risk

• Builders take out insurance to provide funds to cover costs when there is claim made against them in a court or tribunal.

• ‘premium’ (how much you pay), is based on an insurance company’s assessment of how risky your type of work is.

Cert IV - M. S. Martin January 2012

Exercise One

• Think of the type of work your doing now, or the type of work you would like to do and “circle which level of risk” you think it falls into.

• Extreme• High• Medium• Low

Cert IV - M. S. Martin January 2012

Insurance Law

• Insurance Act 1973• Insurance Contracts Act 1984• Home Building Act 1989• Covers items on home

warrantee insurance and clauses on insolvency

• Common Law can also be applicable

Cert IV - M. S. Martin January 2012

Types of Insurance

• Construction Works Insurance

• Public Liability• Income protection • Home Warranty• Tools of Trade• Professional Indemnity

Cert IV - M. S. Martin January 2012

Contracts

• Home Warranty insurance becomes part of any formal contract

• OFT example here

Cert IV - M. S. Martin January 2012

Industrial Relations

Ref: Chapter 6

Cert IV - M. S. Martin January 2012

Overview

• Federal Government overarches this area and the introduction of Acts

• It can change quite quickly from time to time• But it is an area we need to keep informed of as

Builders or Contractors

• A group called the Australian Building and Construction Commission was created to enforce these building and construction workplace laws.

• http://www.abcc.gov.au/

Cert IV - M. S. Martin January 2012

Legal Rights and Responsibilities• The Fair Work Act 2009 (FW Act) provides federal right of entry

permit holders with a right to enter sites for particular purposes• employees and contractors have the right to choose whether or

not to join a union or industrial association (Fair Work Act 2009)• It is illegal to organise or take action, or threaten to take action, to

coerce someone to make a decision on workplace issues• Industrial action is unlawful if it is 'industrially-motivated’,

‘constitutionally-connected’ and not ‘excluded action’• In the building industry, it is illegal for employers to pay

employees, and employees to accept payment, for taking unlawful strike action.

Cert IV - M. S. Martin January 2012

Wages and Entitlements

• Most workers in the Australian building and construction industry will be covered by agreements or awards that set out their payment and conditions

• The Building and Construction General On-site Award 2010 covers most employees and employers in the building and construction industry

• http://www.fwa.gov.au/documents/modern_awards/award/MA000020/default.htm

• PayCheck Plus - stay up-to-date and informed about employee entitlements and calculate minimum rates of pay, allowances, penalty rates and overtime.http://paycheck.fwo.gov.au/PaycheckPlus.aspx

Cert IV - M. S. Martin January 2012

Independent Contractors

• The Independent Contractors Act 2006 (IC Act) and s.357-359 of the Fair Work Act 2009 (FW Act) clarify the status of independent contractors and offer protection from:

• ‘sham arrangements’, which misrepresent an employment relationship as an independent contracting relationship

• unfair services contracts.• Contraventions of independent contractor laws can

incur penalties of up to $33,000.

Cert IV - M. S. Martin January 2012

Independent Contractor

• Handout

Cert IV - M. S. Martin January 2012

Insolvency and phoenix activities

• Phoenix activity is the fraudulent act of transferring the assets of an indebted company into a new company to avoid paying creditors, tax or employee entitlements. The new company, usually operated by the same director, continues the business under a new structure to avoid their responsibilities to their creditors.

• ASIC administers the Assetless Administration Fund which has a particular focus on curbing fraudulent phoenix activity

Cert IV - M. S. Martin January 2012

New rules for home building employers - OFT link

• Did you know that there have been changes to workers' allowances in the home building industry?

• http://www.industrialrelations.nsw.gov.au/Home.html• Australia now has a national workplace relations system.

This means that there is only one set of rules when it comes to things like wages, leave, entitlements and conditions of employment.

• the ten National Employment Standards (NES) which cover all workers in NSW. The NES outline the minimum employment conditions which must be met by all employers.

Cert IV - M. S. Martin January 2012

National Employment StandardsNational employment standards (NES)• The NES outlines 10 minimum standards of employment which apply to all employees in

the Fair Work system. However, only certain entitlements in the NES apply to casual employees.

1. Maximum weekly hours of work - 38 hours per week, plus reasonable additional hours.

2. Requests for flexible working arrangements - allows parents or carers of a child under school age or of a child under 18 with a disability, to request a change in working arrangements to assist with the child’s care.

3. Parental leave and related entitlements - up to 12 months unpaid leave for every employee, plus a right to request an additional 12 months unpaid leave, and other forms of maternity, paternity and adoption related leave.

4. Annual leave - four weeks paid leave per year, plus an additional week for certain shift workers.

5. Personal / carer’s leave and compassionate leave - 10 days paid personal / carer’s leave, two days unpaid carer’s leave as required, and two days compassionate leave (unpaid for casuals) as required.

Cert IV - M. S. Martin January 2012

National Employment Standards6. Community service leave - unpaid leave for voluntary emergency activities and leave for jury

service, with an entitlement to be paid for up to 10 days for jury service.

7. Long service leave - a transitional entitlement for employees who had certain LSL entitlements before 1/1/10 pending the development of a uniform national long service leave standard.

8. Public holidays - a paid day off on a public holiday, except where reasonably requested to work.

9. Notice of termination and redundancy pay - up to 4 weeks’ notice of termination (5 weeks if the employee is over 45 and has at least 2 years of continuous service) and up to 16 weeks redundancy pay, both based on length of service.

10. Provision of a Fair Work Information Statement - employers must provide this statement to all new employees. It contains information about the NES, modern awards, agreement-making, the right to freedom of association, termination of employment, individual flexibility arrangements, right of entry, transfer of business, and the respective roles of Fair Work Australia and the Fair Work Ombudsman.

Cert IV - M. S. Martin January 2012

References

• Competency reference text for ‘Apply Legal Requirements & Manage Small Business Finances’

• Web sites as listed below:• http://www.fairtrading.nsw.gov.au/default.html • http://www.austlii.com/• http://www.abcc.gov.au/Pages/Default.aspx• http://www.industrialrelations.nsw.gov.au/Indu

stries/Home_building_industry.html