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Business owners make business deals every day, many of which have legal implications. Dynamic Business discusses with Chiara Rawlins and Tim McDonald, directors of McCabe Curwood, the most important ways business owners can protect themselves against legal risks.
Perform a general legal health check
Ms. Rawlins believes that being proactive is essential for businesses. Like doctor visits, businesses should perform regular legal health checks to ensure they are not unwittingly exposed to legal risks. At the very least, a legal health check is essential at the start of the year.
“Businesses of all shapes and sizes can suffer from hidden risks and areas of potential legal exposure that often go unnoticed. These risks can stem from legislative requirements and changes, from business practices, to the way an agreement has been drafted, ”she said.
“Given the level of complexity of the legal requirements, it is not surprising that these risks are not taken into account.”
To perform a legal health assessment, businesses can use the free online “MC Health Check” application developed by McCabe Curwood, accessible here.
Review your standard contracts
Earlier this year, changes were made to the unfair contract terms regime, which extended unfair terms in standard contracts to more businesses.
“The Commonwealth government is also currently reviewing proposals for reform of the regime, including the introduction of civil penalties for offending companies. Companies must verify that their standard contracts comply with the changes to avoid any legal risk, ”explains Ms. Rawlins.
In general, there are four unfair contract terms that companies should be aware of:
- Allowing one party to unilaterally avoid, modify, assign or terminate the contract without the consent of the other party
- Allowing one party to unilaterally change the price of goods or services (without giving the other party the right to terminate)
- Restrict the right of a party to withdraw from the contract
- Suspension or termination of services provided to the consumer
‘MC Act’ is a free tool that helps businesses identify unfair contract terms in their standard contracts.
Review your compliance with workplace laws, especially regarding super
Mr McDonald said companies should regularly check their compliance with workplace laws and update their employment contracts and policies.
“With the minimum wage now increased by 2.5%, a slew of updated modern rewards released last year, and casual employment reforms, it’s time to verify that you are sticking to your rewards and agreements.
“Employers must issue information statements on casual jobs and check their casual contracts and occasional conversion obligations. “
Changes to retirement pensions also come into force.
“The mandatory retirement rate will drop to 10% on July 1, so review the wording of your employment contracts to see how the company fulfills these obligations. When an employee’s compensation is expressed as base salary excluding superannuation, increasing the superannuation guarantee will come at a cost to employers, ”said McDonald.
“Failure to pay the increased super amount may result in an investigation by the Australian Business Tax Office, so getting this in order now is critical. “
Review “work from home” policies
Many businesses were forced to quickly implement work-from-home arrangements in early 2020 in response to the COVID-19 outbreak. With this trend here to stay, employers need to be more sophisticated in managing employees working remotely.
“Changes to workplace laws that provided greater flexibility during the height of the pandemic have now largely expired,” McDonald said.
“When working from home arrangements are to continue, consideration should be given to the types of policies and contractual conditions to be put in place., and whether they comply with employment and occupational health and safety (OSH) regulations.
One area that employers should not overlook is ensuring the physical safety of an employee working from home and managing psychological risks.
Mr McDonald said: “It could mean communicating with them frequently and providing resources to support their mental health and well-being.”
Take the necessary steps to avoid personal liability
Directors and managers are increasingly at risk of becoming personally responsible for workplace incidents.
Last month, an employer in Western Australia was convicted of gross negligence and sentenced to two years in prison after the death of a 25-year-old worker.
Mr McDonald said: “This case highlights that directors and managers are increasingly at risk of being held accountable in matters of employment and WHS. Investing in the processes and training necessary to protect against liability is essential.
In addition to reputational damage, failure to take reasonable steps to eliminate sexual harassment and other risks can result in employer liability.
“Brittany Higgins and other high-profile sexual harassment complaints, along with high damages, have prompted more attention to be paid to how Australian workplaces respond to reports of sexual harassment and assault. Employers need to look at their culture, training, policies and processes.
Read more: Let’s Talk – The Legal Support Your Business Needs
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