BUSINESS MATTERS - IN THIS GUIDE:
Changes to Unfair Dismissal
Cloud Computing and Your Business
Paid Parental Leave Obligations
Do You Have to Pay the Flood Levy?
Carbon Tax and Your Business
The Cost of Illegal Software
Knowing the Rights of Your Customers
Women in the Workplace
Understanding Employment Contracts
Calendar Reminders
Changes to unfair dismissal
On 1 January 2011, the definition of what constitutes a small business changed. From that date, businesses must now have fifteen or less employees based on a head count of employees, rather than full-time equivalent employees, to be considered a small business. An employee headcount should include full time, part time and regular casual employees.
This change has the greatest impact on unfair dismissal qualifying periods. Businesses that are no longer regarded as small businesses will not be able to rely on the small business unfair dismissal exemption. This exemption stipulates that an employee must have been employed for at least 12 months before qualifying for unfair dismissal coverage.
Instead, employees will able to qualify for such coverage in six months. It is important to determine whether a business qualifies as a ‘small business’. If it does not, seek professional advice in order to come up with the best employment strategy. Be sure to review HR procedures and ensure that any decision to terminate an employee contract complies with any procedural fairness requirements.
Cloud computing and your business
Cloud computing is a rapidly growing technology service that may have many benefits for small businesses. There are a number of definitions of cloud computing. Using Gmail or Hotmail is arguably cloud computing, when a service is used externally to personal computer software. Increasingly, however, cloud computing is a utility whereby all telecommunication and computing services are supplied via the internet.
Such a service has many potential uses for small businesses, not least that a provider could manage all business software, communications and data storage. Cloud computing could take away the bother of maintaining business software and data. Businesses would not need to make any capital outlay to buy servers and software. Instead, using a cloud computing service would reduce investment in physical platforms and streamlines internal systems. It allows businesses to be more flexible, meaning that they can expand or contract their software capabilities as their business changes and grows. It increases capacity and capabilities without having to invest in new infrastructure, training new personnel or licensing new software.
See www.cloudcomputingguide.net if you want to learn more about “The Cloud” and IT Infrastructure as a service. It contains informative articles on applications, hosting and what you need to access the cloud.
Paid parental leave obligations
As of 1 January 2011, the new Federal Government changes to paid parental leave came in to effect. These changes will require most businesses to update their payroll systems and make sure they are fulfilling all relevant obligations.
Keep in mind that the receipt of government funds and paying them out to eligible employees is only voluntary until July 1 2011. It is worth making your pay systems compliant before that date. After 1 July 2011, failure to fulfil paid parental leave obligations will result in penalties imposed by the Fair Work Ombudsmen.
From 1 July 2011, businesses need to:
Do you have to pay the Flood Levy?
As of 1 July 2011, the government’s new flood levy (also known as the Temporary Flood and Cyclone Reconstruction Levy) was put in place and will be used to assist communities to recover from recent natural disasters.
The flood levy, which will apply for the 2011-12 income year and will be paid by all taxpayers earning over $50,000 who were not affected by a declared natural disaster, will help fund the rebuilding of essential infrastructure such as roads, bridges and schools.
If you’re an employer who has staff earning over $50,000, you will need to withhold an extra amount of tax from their regular pay. Tax levy amounts are shown in the table. For pay as you go instalment taxpayers, the Federal Government will increase instalment obligations to include the flood levy in 2011-12. If your business or any individual is eligible for an exemption from this levy, some steps will need to be taken to inform the ATO, depending on your circumstance. This exemption will need to be confirmed when lodging your 2012 tax return, so that the flood levy is not included in your income tax assessment.
Any flood levy amounts overpaid by you during the year will be credited in your 2012 income tax assessment. You should speak to your advisor for more information regarding the flood levy and for help installing new tax rates in your payroll system.
Carbon tax and your business
The Federal Government’s Carbon Tax Scheme will, provided that legislation is passed, come into effect from 1 July, 2012 and could hurt businesses nation-wide. Under the scheme, any facility that produces at least 25,000 tonnes of carbon dioxide equivalent per year will face a levy of $23 per tonne on emissions. Although aimed at the country’s top polluters, price increases passed on to consumers by large gas and electricity companies will mean that Australian businesses will suffer the hit.
The carbon tax scheme, designed to change Australia’s energy use and encourage investment in clean energy sources such as solar, gas and wind, will force small businesses to reduce their energy footprint to pay their future power bills.
Steps that you, as a business owner, can take to reduce energy consumption include:
The Cost of Illegal Software
Small business owners and entrepreneurs, who are running a company by the bootstraps, may be tempted to minimise their expenditures by utilising a pirated software.
While the cost of fully purchased software, particularly those in specialist niches, can be a lot and with the hassle involved when it comes to shipping, credit terms and licencing, downloading or purchasing a copy from a pirate may save you thousands of dollars and could keep your business running smoothly for decades. The cost of being caught, however, far outweighs this and the result could be civil or even criminal proceedings from the company who owns the software’s copyrights. This is a worrying issue for business owners as, a lot of the time, they may just simply be in accidental breach of their software licence and could, perhaps unjustly, end up with huge fines or criminal charges against them.
Companies can also be held liable for employees’ actions at work. If an associate is caught installing unauthorised software or downloading it off the Internet, a lawsuit can be brought against your company for copyright infringement – even if management is unaware of the offense.
Businesses should be wary of what’s going on their computers, they should always ensure that their software licences are paid for and are up-to-date and they should take appropriate, pre-emptive actions to combat any potential trouble they may land in. If you are unsure about your current licencing status, you should seek immediate assistance from an appropriate advisor. It could save you millions!
Knowing the rights of your customers
Australia’s $240 billion retail sector employs over 1.2 million people nation-wide, making it Australia’s largest employer. It accounts for about 19 percent of the GDP. At some point, every Australian is a retail customer but how many businesses out there understand the laws surrounding consumerism? Where do you and your customers stand when it comes to returns and refunds?
Under Australian consumer law, and as a basic premise, a customer has no automatic legal right to return goods to a retailer and seek a refund. They are entitled, however, to a refund on goods under the following circumstances:
Retailers should provide reasonable time limits for customers to return their goods and should be aware that they need not be returned in their original packaging. A receipt or proof of purchase should always be requested and the refund be given in the manner in which the original payment was made ie. credit card reimbursements.
Retailers are not obligated to use signage to explain their policy regarding returns but if they do, signs must clearly state what customers are entitled to. Retailers must not falsely represent the rights of the customer and signs such as ‘Please choose carefully as we don’t give a refund or credit note’ are illegal.
The Australian Competition and Consumer Commission endorses the following statement for the use of relevant signage for businesses:
‘Please choose carefully. We don’t normally give refunds if you simply change your mind or make a wrong decision. You can choose between a refund, exchange or credit note where goods are faulty, wrongly described, different from a sample shown to you or don’t do what they are supposed to do. Please retain your receipt for proof of purchase.’
Women in the Workplace
Are you supporting the women in your organisation to reach their potential so your company can reach its full potential? Women today make up over half of the population. There are more women than men being educated at secondary schools and universities, and more woman than men graduate with bachelor degrees.
Companies worldwide are beginning to realise the importance of having a gender balance in their workplace. Despite this however, women are often still not supported enough at work to reach senior positions and businesses are missing out on the opportunities that come with a balance of gender in senior leadership teams.
Studies show significant improvements in decision-making quality in more gender balanced leadership teams as women bring new perspectives and skills to the table. Having women on your senior team brings a more holistic approach to decision-making and success and can result in greater financial turnovers for your business.
So how can you, as an employer, help your female workers achieve their full potential?
Understanding Employment Contracts
Having succinct yet comprehensive employment contracts is an important consideration when starting or streamlining a business. A recent decision in the New South Wales Court of Appeal is a reminder for businesses throughout the country. It has emphasised the importance of ensuring that bonus provisions in contracts of employment properly reflect the intent of the parties. This issue would be worth considering in the context of employment contracts when developing an employment plan or thinking about the business year ahead. Employers should be vigilant in setting objectives for employees and examining performance against those objectives.
The recent outcome in Silverbrook Research Pty Ltd v Lindley highlighted a few key issues surrounding bonuses:
Calendar Reminders
JULY
28th - PAYG withholdings from payments made during June.
31st - Lodgment of 2009-10 franking account return, payment of franking deficit tax or over-franking tax and disclosure of benchmark franking variations.
August
14th - PAYG withholding payment summary annual report due.
21st - Monthly activity statement for July 2011.
25th - Quarterly activity statement for quarter 4, 2010-11 is due.
28th - Superannuation guarantee charge (SGC) statement - quarterly for quarter 4, 2010-11 (if required contributions were not made by the due date).
31st - TFN report for closely held trusts.
September
21st - Monthly activity statement for August 2011.
30th - PAYG withholding payment summary annual report due for a payer who has an agent.
30th - 2011 Annual TFN Withholding report - due date for lodgment where a trustee of a closely held trust has been required to withhold amounts from payments to beneficiaries
Changes to Unfair Dismissal Cloud Computing and Your Business Paid Parental Leave Obligations Do You Have to Pay the Flood Levy? Carbon Tax and Your Business The Cost of Illegal Software Knowing the Rights of Your Customers Women in the Workplace Understanding Employment Contracts Calendar RemindersChanges to unfair dismissal
On 1 January 2011, the definition of what constitutes a small business changed. From that date, businesses must now have fifteen or less employees based on a head count of employees, rather than full-time equivalent employees, to be considered a small business. An employee headcount should include full time, part time and regular casual employees.
This change has the greatest impact on unfair dismissal qualifying periods. Businesses that are no longer regarded as small businesses will not be able to rely on the small business unfair dismissal exemption. This exemption stipulates that an employee must have been employed for at least 12 months before qualifying for unfair dismissal coverage.
Instead, employees will able to qualify for such coverage in six months. It is important to determine whether a business qualifies as a ‘small business’. If it does not, seek professional advice in order to come up with the best employment strategy. Be sure to review HR procedures and ensure that any decision to terminate an employee contract complies with any procedural fairness requirements.
Cloud computing and your business
Cloud computing is a rapidly growing technology service that may have many benefits for small businesses. There are a number of definitions of cloud computing. Using Gmail or Hotmail is arguably cloud computing, when a service is used externally to personal computer software. Increasingly, however, cloud computing is a utility whereby all telecommunication and computing services are supplied via the internet.
Such a service has many potential uses for small businesses, not least that a provider could manage all business software, communications and data storage. Cloud computing could take away the bother of maintaining business software and data. Businesses would not need to make any capital outlay to buy servers and software. Instead, using a cloud computing service would reduce investment in physical platforms and streamlines internal systems. It allows businesses to be more flexible, meaning that they can expand or contract their software capabilities as their business changes and grows. It increases capacity and capabilities without having to invest in new infrastructure, training new personnel or licensing new software.
See www.cloudcomputingguide.net if you want to learn more about “The Cloud” and IT Infrastructure as a service. It contains informative articles on applications, hosting and what you need to access the cloud.
Paid parental leave obligations
As of 1 January 2011, the new Federal Government changes to paid parental leave came in to effect. These changes will require most businesses to update their payroll systems and make sure they are fulfilling all relevant obligations.
Keep in mind that the receipt of government funds and paying them out to eligible employees is only voluntary until July 1 2011. It is worth making your pay systems compliant before that date. After 1 July 2011, failure to fulfil paid parental leave obligations will result in penalties imposed by the Fair Work Ombudsmen.
From 1 July 2011, businesses need to:
- Withhold tax from Parental Leave Pay under the usual PAYG withholding arrangements
- Include Parental Leave Pay in the total amounts on the employee’s annual payment summary
- Provide bank details, employee’s usual pay cycle and pay cut off details to the Department of Human Services Family Assistance Office so that you can receive the Paid Parental Leave funds.
Do you have to pay the Flood Levy?
As of 1 July 2011, the government’s new flood levy (also known as the Temporary Flood and Cyclone Reconstruction Levy) was put in place and will be used to assist communities to recover from recent natural disasters.
The flood levy, which will apply for the 2011-12 income year and will be paid by all taxpayers earning over $50,000 who were not affected by a declared natural disaster, will help fund the rebuilding of essential infrastructure such as roads, bridges and schools.
If you’re an employer who has staff earning over $50,000, you will need to withhold an extra amount of tax from their regular pay. Tax levy amounts are shown in the table. For pay as you go instalment taxpayers, the Federal Government will increase instalment obligations to include the flood levy in 2011-12. If your business or any individual is eligible for an exemption from this levy, some steps will need to be taken to inform the ATO, depending on your circumstance. This exemption will need to be confirmed when lodging your 2012 tax return, so that the flood levy is not included in your income tax assessment.
Any flood levy amounts overpaid by you during the year will be credited in your 2012 income tax assessment. You should speak to your advisor for more information regarding the flood levy and for help installing new tax rates in your payroll system.
| Taxable Income | Flood Levy | |
| $0 - $50,000 | Nil | |
| $50,001 - $100,000 | 0.5c for each $1 over $50,000 | |
| Over $100,000 | $250 plus 1c for each $1 over $100,000 |
Carbon tax and your business
The Federal Government’s Carbon Tax Scheme will, provided that legislation is passed, come into effect from 1 July, 2012 and could hurt businesses nation-wide. Under the scheme, any facility that produces at least 25,000 tonnes of carbon dioxide equivalent per year will face a levy of $23 per tonne on emissions. Although aimed at the country’s top polluters, price increases passed on to consumers by large gas and electricity companies will mean that Australian businesses will suffer the hit.
The carbon tax scheme, designed to change Australia’s energy use and encourage investment in clean energy sources such as solar, gas and wind, will force small businesses to reduce their energy footprint to pay their future power bills.
Steps that you, as a business owner, can take to reduce energy consumption include:
- Installing sensor-based lighting in low traffic areas such as bathrooms.
- Implementing software to automatically power down computers when they are not being used.
- Consider restructuring shifts to take advantage of off-peak energy - energy prices peak between 2pm - 8pm, when charges of around 36.4 cents per kilowatt hour apply, compared to a shoulder rate of 13.5 cents per kilowatt hour.
- Check buildings for possible ventilation leaks through window fittings.
- Make use of outside air cycles for air-conditioning - some air-conditioning systems can be used to automatically flush cool air through a building with outside air when the outside air is cooler than inside.
- Use thermo-scan switchboards that look for and identify hotspots within an electrical switchboard to identify electrical overloading.
The Cost of Illegal Software
Small business owners and entrepreneurs, who are running a company by the bootstraps, may be tempted to minimise their expenditures by utilising a pirated software.
While the cost of fully purchased software, particularly those in specialist niches, can be a lot and with the hassle involved when it comes to shipping, credit terms and licencing, downloading or purchasing a copy from a pirate may save you thousands of dollars and could keep your business running smoothly for decades. The cost of being caught, however, far outweighs this and the result could be civil or even criminal proceedings from the company who owns the software’s copyrights. This is a worrying issue for business owners as, a lot of the time, they may just simply be in accidental breach of their software licence and could, perhaps unjustly, end up with huge fines or criminal charges against them.
Companies can also be held liable for employees’ actions at work. If an associate is caught installing unauthorised software or downloading it off the Internet, a lawsuit can be brought against your company for copyright infringement – even if management is unaware of the offense.
Businesses should be wary of what’s going on their computers, they should always ensure that their software licences are paid for and are up-to-date and they should take appropriate, pre-emptive actions to combat any potential trouble they may land in. If you are unsure about your current licencing status, you should seek immediate assistance from an appropriate advisor. It could save you millions!
Knowing the rights of your customers
Australia’s $240 billion retail sector employs over 1.2 million people nation-wide, making it Australia’s largest employer. It accounts for about 19 percent of the GDP. At some point, every Australian is a retail customer but how many businesses out there understand the laws surrounding consumerism? Where do you and your customers stand when it comes to returns and refunds?
Under Australian consumer law, and as a basic premise, a customer has no automatic legal right to return goods to a retailer and seek a refund. They are entitled, however, to a refund on goods under the following circumstances:
- If they were induced into making a purchase through misrepresentation.
- If the goods were faulty or defected and they were not informed so at the time of purchase.
- If the goods do not reach a basic and reasonable level of quality and performance.
- If the goods do not perform in the way that the customer was led to believe.
- If the goods do not match the description given when ordered or if they do not match the sample shown at the time of order.
Retailers should provide reasonable time limits for customers to return their goods and should be aware that they need not be returned in their original packaging. A receipt or proof of purchase should always be requested and the refund be given in the manner in which the original payment was made ie. credit card reimbursements.
Retailers are not obligated to use signage to explain their policy regarding returns but if they do, signs must clearly state what customers are entitled to. Retailers must not falsely represent the rights of the customer and signs such as ‘Please choose carefully as we don’t give a refund or credit note’ are illegal.
The Australian Competition and Consumer Commission endorses the following statement for the use of relevant signage for businesses:
‘Please choose carefully. We don’t normally give refunds if you simply change your mind or make a wrong decision. You can choose between a refund, exchange or credit note where goods are faulty, wrongly described, different from a sample shown to you or don’t do what they are supposed to do. Please retain your receipt for proof of purchase.’
Women in the Workplace
Are you supporting the women in your organisation to reach their potential so your company can reach its full potential? Women today make up over half of the population. There are more women than men being educated at secondary schools and universities, and more woman than men graduate with bachelor degrees.
Companies worldwide are beginning to realise the importance of having a gender balance in their workplace. Despite this however, women are often still not supported enough at work to reach senior positions and businesses are missing out on the opportunities that come with a balance of gender in senior leadership teams.
Studies show significant improvements in decision-making quality in more gender balanced leadership teams as women bring new perspectives and skills to the table. Having women on your senior team brings a more holistic approach to decision-making and success and can result in greater financial turnovers for your business.
So how can you, as an employer, help your female workers achieve their full potential?
- Take time to understand the factors which women consider important in feeling successful. Women use holistic measures for success rather than one dimensional factors like financial security and academic or work related achievements. Such measures include: a passion for what they do, hard work and determination and the ability to get along with others.
- Women often want management skills training, coaching and flexible working environments, and these are the sort of things employers should take into consideration.
- Understand how women like to be remunerated. Recognition, acknowledgement and flexibility tend to be the preferred currencies over money.
- Identify the talented women in your organisation and the roles in which they currently work. Women will typically undersell their abilities but it is important that they take equal time to look at their strengths rather than focusing solely on their deficiencies.
- Provide opportunities which enable women to continue to develop their leadership skills. Identify where they sabotage their success and work out ways to manage this.
- Ensure that the culture of your organisation is one in which both men and women are encouraged equally.
- Provide senior mentors both internally and externally and take time to understand what drives and motivates the women in your company.
Understanding Employment Contracts
Having succinct yet comprehensive employment contracts is an important consideration when starting or streamlining a business. A recent decision in the New South Wales Court of Appeal is a reminder for businesses throughout the country. It has emphasised the importance of ensuring that bonus provisions in contracts of employment properly reflect the intent of the parties. This issue would be worth considering in the context of employment contracts when developing an employment plan or thinking about the business year ahead. Employers should be vigilant in setting objectives for employees and examining performance against those objectives.
The recent outcome in Silverbrook Research Pty Ltd v Lindley highlighted a few key issues surrounding bonuses:
- It may now be considered a breach of contract to not set performance criteria and assess employee performance, when a contract states that you will do so.
- Making a bonus ‘discretionary’ will not excuse an employer from other obligations to consider how a bonus might be assessed.
- If a bonus is able to be withheld at the discretion of the employer, even if the performance objectives have been achieved, the contract must clearly state that as the case.
- As well as personal details and pay information, consider including:
- Key job duties and standards of performance
- Uniforms or dress standards
- Training and development
- Safety issues
- Customer service requirements
- Confidentiality
- Company policies and rules
- Use of work equipment
- Board/travel arrangements
- Leave without pay
Calendar Reminders
JULY
28th - PAYG withholdings from payments made during June.
31st - Lodgment of 2009-10 franking account return, payment of franking deficit tax or over-franking tax and disclosure of benchmark franking variations.
August
14th - PAYG withholding payment summary annual report due.
21st - Monthly activity statement for July 2011.
25th - Quarterly activity statement for quarter 4, 2010-11 is due.
28th - Superannuation guarantee charge (SGC) statement - quarterly for quarter 4, 2010-11 (if required contributions were not made by the due date).
31st - TFN report for closely held trusts.
September
21st - Monthly activity statement for August 2011.
30th - PAYG withholding payment summary annual report due for a payer who has an agent.
30th - 2011 Annual TFN Withholding report - due date for lodgment where a trustee of a closely held trust has been required to withhold amounts from payments to beneficiaries
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