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The Victorian Court of Appeal recognised earlier this month in the case ofScott-Mackenzie v Bailthat stepchildren of a de facto couple have the same rights as of married couples for the purposes of Family Provision Applications. The effect of this case is significant (at least in Victoria, for now) as it overturns the common law principal that a stepchild/step-parent relationship is created and recognised only when the parties are married.
The case concerned a claim brought by a stepchild pursuant to Part IV of the Administration and Probate Act 1958 (Vic). Part IV of the Act allows an “eligible person” to bring a claim for provision (or further provision) from the estate of a deceased person. The definition of eligible person, contained in section 90 of the Act includes the following:
(c) a stepchild of the deceased who, at the time of the deceased’s death, was—
(i) under the age of 18 years; or
(ii) a full-time student aged between 18 years and 25 years; or
(iii) a stepchild with a disability;
In this case, the applicant’s mother was in a domestic relationship with the deceased for 40 years until the applicant’s mother died in 2001. Following the death of the applicant’s mother, the deceased commenced a domestic relationship with another woman and when he died, left his entire estate to her. The estate was worth just under $1 million.
The Court stated the following in relation to the word “stepchild”:
“In modern life, domestic partnerships are no longer uncommon. They have become considerably more common than they were, say, 30 years ago. Domestic partnerships can, and frequently do, have all of the appearances of partnerships that are marriages and have been recognised by the Parliament as a legitimate alternative to marriage. The fact that the word ‘stepchild’ came into existence at a time before domestic partnerships became more common explains why definitions have previously referred to either an original marriage and a subsequent marriage, or merely a subsequent marriage”.
It is important to note that the Court found the stepchild/ step-parent relationship of de facto couples is broken by separation of the couple, not by death of one of the partners. Therefore, if the deceased and the applicant’s mother had separated before her death, the stepchild/ step-parent relationship would have been broken.
It is important to note that this is a Victorian case and therefore, Victorian law. It is uncertain whether the ACT or NSW Supreme Courts will apply this case should a similar situation arise. In Queensland, section 40A of the Succession Act continues to refer to a stepchild/step-parent relationship as one arising only by way of marriage.
The takeaway from this case is that you may need to carefully consider children from a de facto partner when writing your Will or, if you are the child of such a relationship, to take considered advice in relation to any potential family provision claim.
To make sure that your will and estate plan takes care of your loved ones, please contact us.
Whether you are moving to Canberra as an employee or employer, your future employment relationships are likely to be at the forefront of your mind. In 2009, significant changes were made to Australia’s industrial relations law which will affect those relationships. Given strong penalties are awarded for non-compliance, it is important that you are familiar with your rights and obligations under Australian employment law.
Here are five things you need to know:
1. National Employment Standards
With very few exceptions, workplaces in Australia are governed by the Fair Work Act 2009 (Cth). Therefore, it is likely your future employment in Australia will be subject to the National Employment Standards (NES) contained in that Act. Covering areas from maximum working hours to leave, these 10 entitlements represent a minimum standard that no employment contract can fall below. Failure to comply with these standards can leave contractual terms voidable and result in considerable penalties being awarded against the employer.
Pay is central to every employment relationship and Australia has a famously generous national minimum wage – $17.70 per hour in 2017. But this is not the end of the story. Under the 2009 changes, the wages received by many employees are determined by industry awards. These set base pay rates for an industry according to the nature of work undertaken and frequently exceed the national minimum. Award rates are updated regularly (every six months in some industries), so it is essential to regularly check the applicable award.
3. Unfair Dismissal
Employers should be cautious of, and employees familiar with, the right of a recently dismissed employee to make an application to the Fair Work Commission arguing that their dismissal was harsh, unjust or unreasonable. If the Commission agrees, employers may be required to reinstate the employee or pay them compensation. What constitutes a harsh, unjust or unreasonable dismissal will depend on the circumstances. Employers can also be found liable under these rules if they handle a dismissal in an improper manner, even if there is a valid underlying reason for the dismissal.
4. Adverse Action
In keeping with Australia’s strong stance against discrimination, Australian employees are protected from the “adverse actions” of their employer if those actions were taken due to certain protected attributes possessed by the employee. In other words, an employer is liable for discrimination on the basis of a protected attribute – including gender, sexuality, disability and race – even when those actions would otherwise be legal (for example, terminating employment contracts). As with unfair dismissal, employers may face severe penalties from the Fair Work Commission for breaching these protections.
Due to Australia’s federal structure, many employment relationships attract obligations under Commonwealth (or federal) legislation as well as state/territory statutes. In many instances, these obligations are concurrent. Under Australian industrial law, rights and obligations can even arise for employment contracts executed overseas. Employers (and their employees) should be aware of these jurisdictional traps.
John Wilsonis the managing legal director at Bradley Allen Love Lawyers and an accredited specialist in industrial relations and employment law. He thanks Robert Allen for his help in preparing this article.
The Federal Government has announced changes to superannuation from 1 July 2017 that will affect many individuals. As we draw closer to 1 July, more and more people are seeking advice on how the changes will affect them and specifically, what the changes mean to their existing wills and estate plans.
The Federal Government has imposed a $1.6 million balance cap on the total amount that a member can transfer into a tax-free pension phase account from 1 July 2017. This will mean that from 1 July, many members will need to transfer a significant portion of their superannuation benefits into accumulation phase, which will attract the superannuation 15% tax on income generated within the fund, including capital gains.
How will the member’s family and their estate be impacted when the member dies? Consider the situation where a husband and wife each have $2 million in pension phase. The husband and wife each execute binding death benefit nominations to leave their super to the other. The husband subsequently dies.
Traditionally, the wife could maintain the benefits within the superannuation environment by commencing a death benefit pension and subsequently commuting the pension (after the relevant period of time, known as the 3 month/6 month rule, and provided the super fund deed permitted this to take place).
From 1 July however, things will need to change. The following would need to occur:
During their lifetimes, the husband and wife would each need to wind back $400,000 from their pension accounts into their accumulation accounts, thereby holding no more than $1.6million within the pension phase
On the death of the husband:
The wife would need to wind back $1.6 million from her own pension account into accumulation, thereby holding $2 million in accumulation phase;
The wife could then commence (or receive a reversionary pension) from the deceased husbands pension account to the value of $1.6 million; and
The husbands remaining $400,000 held in his accumulation would need to be withdrawn or “cashed out” from the superannuation environment
Once the funds are out of the superannuation environment, contribution limits and the “work test” may prevent the wife’s ability to recontribute funds back into superannuation.
Auto-reversionary pensions offer some relief and flexibility by not causing a debit to the recipients transfer balance account until 12 months after the death of the member. As a result, a reversionary pensioner has 12 months decide whether to cash out their pension or retain it.
The estate planning issue is then where should this lump sum withdrawal be paid. It will be necessary to review and update estate plans including Wills and binding death benefit nominations in light of these changes:
if funds are required to be cashed out from the superannuation environment, this might impact a family’s overall distribution of their estate and undo estate planning strategies previously put in place;
binding death benefit nominations may need to be reviewed and amended as they may no longer be appropriate in light of the recent changes;
binding death benefit nominations may need to be limited to ensure the surviving spouse’s transfer balance cap is not affected. Particular care needs to be taken when drafting binding death benefit nominations in light of recent case law;
In the case of second marriages where superannuation may have been used as an estate planning tool to provide for the spouse, this arrangement may need to be unwound and an alternate arrangement considered;
Superannuation trust deeds may require review and amendment to ensure there is maximum flexibility including the ability to execute (non-lapsing) binding death benefit nominations, and auto-reversionary pensions.
Make sure you get your estate affairs in order before the changes arrive on 1 July 2017.
Workplaces of all shapes and sizes need employees to pull their weight, so why do so many organisations tolerate underperformance?
Dealing with underperformance and performance management is not easy. For an organisation to succeed, employees need to be meeting and exceeding performance expectations. Yet too often unsatisfactory performance is ignored and placed in the ‘too hard’ basket.
The video below illustrates a case study about managing performance, and how easily it can go wrong.
The reasons for this are twofold. At a human level it can be challenging to tell a colleague that their work is substandard. Add in the perceived legal complexities surrounding performance management, including the potential for allegations of bullying or victimisation in response, and it is unsurprising that many underperforming staff are simply left to their own devices or quietly shuffled elsewhere.
But given the financial, human and workplace culture consequences of ignoring underperformance, it is imperative that management adopt a ‘can do’ mindset in this area. Minor or aberrant instances of underperformance should be courteously nipped in the bud, and not escalated unnecessarily. For more serious or longer term underperformance, let me give you an outline of key steps in any ‘defensible’ performance management process.
The first step is to identify whether a genuine performance problem exists. Information gathering is essential. In addition to obtaining any quantitative data, holding regular performance reviews and keeping written notes allows underperformance to be identified with more certainty than relying on the ‘feeling’ of a direct supervisor. Ensure that the performance expectations are aligned with the relevant duty statement or employment agreement, the resources the employee has to work with, and how much they are being paid.
The second step after a genuine gap in performance is identified is to find out if the organisation has a performance management policy. If they do, this should be followed to the letter to avoid claims of unfair dismissal, breach of contract or procedural fairness. [If the policy is hard to apply because it is poorly drafted – a common occurrence – it should be followed as best as possible in the instant case, and then later rewritten to make it work for the organisation]. If the organisation doesn’t have a policy, then a sound framework to follow is summarised as follows: Identify the gap in performance with specificity, and identify reasonable measures to fill the gap within a reasonable time frame. Inform the employee in writing of these matters, as well as the consequences of non-improvement. ‘Reasonableness’ is an objective test, so getting a second manager’s opinion on the contents of the letter would be a good idea.
The third step is to keep the process on track during the assessment phase. Again, follow any policy, but if there isn’t one, monitor and give feedback against the notified performance measures. This means the assessment manager needs to be present during this period. That manager’s communications should be constructive, courteous and on-task, regardless of how the employee conducts themselves during this stressful phase. A common de-railer at this point is often an allegation by the employee that their manager is ‘bullying’ them. But ‘reasonable performance management’ carried out in a ‘reasonable manner’ is not bullying at law, nor in most Australian jurisdictions, is it grounds for workers’ compensation for any resultant stress injury.
The fourth step is decision-making at the conclusion of the assessment period. If, on objective assessment, performance has satisfactorily improved over the period, then mission accomplished. However, where genuine underperformance remains, this is generally a valid reason for termination of employment, in both the public and private sectors. The employee should be notified of any intention to terminate in writing, giving opportunity to respond ahead of any decision being recorded in writing. Transfer should only be considered where the transfer is to a role that will not be affected by the identified performance deficit.
Finally, there is nothing wrong with offering an employee up-front the opportunity to resign (with or without an incentive), as an alternative to going through the performance management process.
Underperformance affects an entire organisation. Individual instances can and should be managed by common sense, fairness, and following any policies to the letter. Remember: the standard we walk past is the standard we set.
Episode one of Pushing the Boundaries aired in Canberra on Saturday 6 and 13 May.
If you missed out, you can watch it below:
Pushing the Boundaries Episode one:
Pushing the Boundaries Episode two:
Mark Love was chosen as a guest panelist, and had the pleasure of reviewing the Kim Harvey School of Dance by Clarke Keller Architects. This particular building also won the Art in Architecture Award at the 2016 Australian Capital Territory (ACT) Architecture Awards.
Internships are becoming increasingly prevalent in the legal sector and elsewhere. While internships can be beneficial for intern and host organisation alike, these atypical workplace arrangements pose several thorny employment law questions. When, as is commonplace, interns are unpaid or only receive a modest ‘stipend’, these dilemmas become particularly pressing.
The foremost question concerns the legal status of the intern. ‘Internship’ is not a legal term of art – it has no meaning at common law or under the industrial relations regulatory landscape created by the Fair Work Act 2009 (Cth). An intern is therefore either an employee, or has no legal relationship whatsoever with the host organisation. There is no middle ground. This article will not consider the status of ‘volunteers’ in this context, although that topic is perhaps deserving of a separate contribution.
Where an intern is objectively considered to be an employee, they are entitled to the minimum wage and basic entitlements as set out in the Fair Work Act, National Employment Standards contained therein and any applicable award or enterprise agreement. Accordingly, organisations who use interns without providing them with the requisite wages and conditions risk exposure to considerable liability – through litigation initiated by either interns themselves or the Fair Work Ombudsman – for non-compliance with the Fair Work Act. This risk has been exacerbated by recent developments.
The Fair Work Ombudsman’s crackdown Concerned by the apparent increase in unpaid work arrangements across the country and perhaps inspired by highprofile internship-related lawsuits in the United States, in 2012 the Fair Work Ombudsman commissioned a report into the phenomenon. In Experience or Exploitation: The Nature, Prevalence and Regulation of Unpaid Work Experience, Internships and Trial Periods in Australia, academics Andrew Stewart and Rosemary Owens found that – despite a dearth of official data – internships are undeniably on the rise. They observed that ‘unpaid work exists on a scale substantial enough to warrant attention as a serious legal, practical and policy challenge in Australia’.
The Ombudsman was quick to respond, and has successfully prosecuted three companies in recent years for utilising unpaid or underpaid interns. In the first case to be determined, Fair Work Ombudsman v Crocmedia Pty Ltd  FCCA 140, Judge Riethmuller penalised a Melbourne-based sports media company $24,000 for an ‘exploitative’ arrangement where two individuals undertook work in return for modest ‘expenses’ payments.
Similarly, in Fair Work Ombudsman v Aldred  FCCA 220, the respondent was ordered to pay $17,500. While these sums may seem modest, Judge Riethmuller sounded an ominous warning at the end of his Crocmedia judgment. There can be little doubt, he noted, ‘that the penalties are likely to increase significantly over time as public exposure of the issues in the press will result in respondents not being in the position of being able to claim that a genuine error of categorisation was made’ (at ). This prediction came to fruition in mid-2016, when the Federal Circuit Court imposed a penalty of almost $300,000 on a media company that had failed to pay an intern for 180 hours of work and committed various other breaches of the Fair Work Act (see Fair Work Ombudsman v AIMG BQ Pty Ltd  FCCA 1024).