Legal Updates

Changes have recently been legislated to allow companies registered under the Corporations Act 2001 (Cth) (“Companies”) to hold wholly virtual general meetings of members but these amendments do not apply to Companies that are charities registered by the Australian Charities and Not-for Profits Commission (“ACNC charitable companies”).

The changes also apply to the holding of directors’ meetings and those changes do apply to ACNC charitable companies.

We examine these amendments and consider:

• whether and how ACNC charitable companies with various legal structures could adopt similar measures for holding members’ meetings; and
• what changes ACNC charitable companies may need to make to their constitutions consistent with the new provisions for holding directors’ meetings.

This article focusses on the application of the changes to charitable companies. For information about the application of the changes to not-for-profit companies that are not ACNC registered charities please see out article ‘Can not-for-profit companies hold virtual meetings?’

What are the changes?

The Treasury Laws Amendment (2021 Measures No. 1) Bill 2021 was passed by both Houses of the Australian Parliament on 10 August 2021. The Bill amended the Corporations Actto allow (among other things) Companies to hold general meetings, provide notices relating to general meetings and keep minutes of general meetings, using electronic means or other alternative technologies, until 31 March 2022. The amendments replace temporary measures put in in the early stage of the COVID-19 pandemic.

The Government proposes that permanent reforms will be in place by 31 March 2022.

The relevant changes are made by amendments to Chapter 2G of the Corporations Act which relates to meetings of directors and members of companies, including the addition of a new Part 2G.5. This means that, to the extent the amendments relate to general meetings of members, they fall into the provisions that are “turned off” for ACNC charitable companies[1].

The position for ACNC charitable companies

While the previous and new provisions do not apply to ACNC charitable companies, most ACNC charitable companies have rules providing for the holding of general meetings, or an annual general meeting, of members and many may have meeting provisions similar to those in the Corporations Act, particularly if their constitution is based on the ACNC’s “Template constitution for a charitable purpose company limited by guarantee” (“ACNC template”). For example:

• Venues for general meetings
  
  Rule 25 of the ACNC template provides that the company may hold a general meeting at two or more venues using any technology that gives the members as a whole a reasonable opportunity to participate, including to hear and be heard. This rule means that the meeting must have at least one physical location.
  
  ACNC charities may wish to consider whether the ability to hold wholly virtual general meetings could be of practical assistance and if so, whether changes to their constitution is needed to allow, or better facilitate, such meetings.

• Notice of general meetings
  
  The previous requirement for Companies to send certain notices to members by post arises because the Electronic Transactions Act 1999 (Cth) (“ETA”) (which permits things which Commonwealth legislation requires to be done in writing (such as notices) to be done electronically) does not apply to things required to be done under the Corporations Act. However, the limitations of the Corporations Act do not apply to ACNC charitable companies in relation to general meetings so how ACNC charitable companies are permitted to send notices to members in relation to general meetings is solely governed by their constitution.
  
  The notice provision in rule 62.1 of the ACNC template is similar to the previous position for giving notices under the Corporations Act (ie, the member is not required to provide the Company with an address for electronic communications) so in effect, must opt-in to electronic communication of notices and other documents.
  
  ACNC charitable companies may wish to consider whether notice provisions that require members to opt-out of electronic notices (rather than opt-in) could be of practical assistance and if so, whether changes to their constitution are needed to allow this.

• Minutes of general meetings
  
  The issues previously facing Companies that are not ACNC charities regarding having to sign and keep minutes in hard copy arose because the ETA does not apply to Corporations Act requirements. In relation to minutes of general meetings and members’ written resolutions, this is not an issue for ACNC charities that are Companies.
  
  Rules in the constitutions of ACNC charities that are Companies which require minutes (or any other documents) relating to general meetings and members’ written resolutions to be “signed” and kept (such as rules 57.4 and 57.5 of the ACNC template) could be complied with using electronic signing and electronic records unless the rules specifically require otherwise (such as by defining “writing” to mean a physical document and/or “signing” to mean a physical signature).
  
  ACNC charities that are Companies may wish to consider whether the ability to sign and/or keep minutes (and other documents) of general meetings and members’ written resolutions electronically could be of practical assistance and if so, whether changes to their constitution are needed to allow, or better facilitate, this.

Director’s meetings - the new position for all Companies including ACNC charities

Before these amendments, under the Corporations Act, directors’ meetings could be called or held wholly virtually but any technology used to call or hold a meeting had to be consented to by all directors and a director could withdraw that consent[2].

Under the amendments, the provisions outlined above for general meetings also apply to directors’ meetings. This means that individual directors are no longer required to consent to the technology being used for a meeting. The decision of the board as a whole as to the technology to be used for their meetings binds all directors, provided the technology meets the legislative requirements outlined above.

Rule 62.1 of the ACNC template regarding using technology for directors’ meetings is similar to the previous position under the Corporations Act. ACNC charities that are Companies may wish to consider whether a provision allowing the board as a whole to determine the technology to be used for board meetings, without the need for each individual director’s consent, could be of practical assistance and if so, whether changes to their constitution are needed to allow this.

The position for ACNC charities that are not Companies

The amendments do not apply to ACNC charities that are not companies registered under the Corporations Act, such as incorporated associations, unincorporated associations and bodies corporate established under other Commonwealth, State or Territory legislation. Those types of ACNC charities will need to consider the requirements of their governing legislation and, to the extent they are not restricted from doing so, they may wish to consider making changes to their governing rules (if needed) to facilitate holding wholly virtual meetings and/or giving communications electronically.

Some States have already passed temporary or permanent amendments to their legislation governing incorporated associations, to permit holding virtual meetings and/or giving notices electronically. For example, the Associations Incorporation Act 1981 (Qld) was amended in 2021 to permit a Queensland incorporated association to hold general meetings and permit members to take part in those meetings, by using any technology that reasonably allows members to hear and take part in discussions as they happen (eg, teleconferencing). Previously, the use of technology for general meetings had to be expressly permitted by the association’s rules. A similar provision for holding committee meetings by technology has been in place in Queensland since 2007. Queensland associations therefore may already be able to hold virtual general meetings and committee meetings provided their rules do not expressly prohibit or limit the ability to do so.

What’s to come?

The amendments will expire on 31 March 2022. The Explanatory Memorandum states that the Government proposes to pass reforms that will continue to allow Companies to send meeting related materials electronically, which will be in place when the amendments expire. Interestingly, the Explanatory Memorandum does not expressly state that the provisions for virtual meetings will be continued after the sunset date. However, even if those reforms are not extended in some form after 31 March 2022, ACNC charities that are Companies could adopt, or continue to have, provisions in their constitution to permit virtual general meetings.

[1] Under item 9 of section 111L(1) of the Corporations Act.

[2] Section 248D (now repealed)

Changes have recently been legislated to allow companies registered under the Corporations Act 2001 (Cth) (“Companies”) to hold wholly virtual general meetings of members. These amendments apply to not-for-profit companies but do not apply to Companies that are charities registered by the Australian Charities and Not-for Profits Commission (“ACNC charities”).

This article focusses on the application of the changes to not-for profit companies. For information about the application of the changes to ACNC charities please see out article ‘Can charitable companies hold virtual meetings?’

The changes also apply to the holding of directors' meetings.

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What are the changes?

The Treasury Laws Amendment (2021 Measures No. 1) Bill 2021 was passed by both Houses of the Australian Parliament on 10 August 2021. The Bill amended the Corporations Actto allow (among other things) Companies to hold general meetings, provide notices relating to general meetings and keep minutes of general meetings, using electronic means or other alternative technologies, until 31 March 2022. The amendments replace temporary measures put in in the early stage of the COVID-19 pandemic.

The Government proposes that permanent reforms will be in place by 31 March 2022.

The relevant changes are made by amendments to Chapter 2G of the Corporations Act which relates to meetings of directors and members of companies, including the addition of a new Part 2G.5.

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General meetings - the previous position for not-for-profit Companies

Before these amendments, under the Corporations Act:

• a meeting of a Company’s members had to be held at a reasonable time and place^[1] and at two or more venues using any technology that gives the members as a whole a reasonable opportunity to participate^[2] which meant that a general meeting had to have at least one physical location and could not be held wholly virtually;
• documents relating to members’ meetings had to be posted to members unless the member had agreed to the document being sent via email or fax and other specific requirements were met, and some documents could only be sent by post;
• documents relating to a meeting, such as minutes, generally had to be signed in hard copy; and
• generally, minutes had to be kept in hard copy.

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General meetings - the new position for not-for-profit Companies

The amendments to the Corporations Act apply to “Chapter 2G meetings”, that is, meetings of a Company’s members and meetings of a Company’s directors (including meetings of a committee of directors). Under the amendments:

• Companies now have the option to hold a Chapter 2G meeting wholly virtually, or at one or more physical locations, or using a combination of those methods (a “hybrid meeting”);
• there are new rules for:
• working out the place where the Chapter 2G meeting is taken to be held;
• the content of the notice of meeting;
• the giving of proxies electronically;
• how persons entitled to attend the meeting are to be given a reasonable opportunity to participate (including to exercise a right to speak) and the opportunity to vote; and
• how documents tabled at the meeting are made available to the persons entitled to attend;
• the meeting must be held at a time that is reasonable at the place where the meeting is taken to be held;
• the default method of voting at a virtual or hybrid meeting is voting by poll (rather than a show of hands) unless the Company’s constitution provides otherwise;
• documents relating to meetings and resolutions may be signed and given electronically, subject to conditions that:
• the document is readily accessible and useable for future reference; and
• a person may elect to opt out of receiving electronic notices (other than documents relating to directors’ meetings) and must be informed of this right; and
• technologies that can be used to provide a document electronically include email, SMS, apps and other technologies yet to come.

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Director’s meetings - the new position for not-for-profit Companies

Before these amendments, under the Corporations Act, directors’ meetings could be called or held wholly virtually but any technology used to call or hold a meeting had to be consented to by all directors and a director could withdraw that consent^[3].

Under the amendments, the provisions outlined above for general meetings also apply to directors’ meetings. This means that individual directors are no longer required to consent to the technology being used for a meeting. The decision of the board as a whole as to the technology to be used for their meetings binds all directors, provided the technology meets the legislative requirements outlined above.

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What’s to come?

The amendments will expire on 31 March 2022. The Explanatory Memorandum states that the Government proposes to pass reforms that will continue to allow Companies to send meeting related materials electronically, which will be in place when the amendments expire. Interestingly, the Explanatory Memorandum does not expressly state that the provisions for virtual meetings will be continued after the sunset date. However, even if those reforms are not extended in some form after 31 March 2022, ACNC charities that are Companies could adopt, or continue to have, provisions in their constitution to permit virtual general meetings.

The ‘new normal’ of COVID-19 appears to include acceptance that it is going to be with us for a while if not permanently. Recently, the subject of mandatory vaccinations has become a contentious issue for employers trying to manage their WHS risks. In this article, we look at the issues you should consider when determining if you can and should require employees to be vaccinated for COVID-19.

Contents

1. Practical considerations
2. Managing risks
3. Requiring vaccination
4. Test Case to watch

Practical considerations

When trying to determine how you can manage workplace health and safety, if you are not in an industry dealing with vulnerable people or high-risk situations, mandating vaccinations may not be considered reasonable, and you may need to consider alternatives like:

• consult with employees to understand their concerns and how you might overcome them to gain their cooperation;
• incentivise employees being vaccinated;
• offer practical support such as paid days after vaccination if an employee experiences after effects;
• use positive recognition of people who have been vaccinated to encourage the rest of your team;
• facilitate access to counselling for employees who have real concerns about being vaccinated.

Managing risks

For those employers who rely on face-to-face contact or ‘hands on’ work, controlling COVID-19 over the long term may be challenging. To manage your WHS obligations, “you must do all that is reasonably practicable to minimise this risk and vaccination should be considered as one way to do so in the context of a range of COVID-19 control measures’’[1]. Also, the current vaccines are not designed to stop transmission. They are intended to prevent people from getting seriously ill with the virus if they are infected.

Generally, the position is that employers can only require their employees to be vaccinated when:

• a specific law (i.e. a state or territory public health order) requires an employee to be vaccinated;
• the requirement is permitted by an enterprise agreement, registered agreement or employment contract applying policies; or
• it would be lawful and reasonable for an employer to give their employees a direction to be vaccinated, which is assessed on a case-by-case basis.[2]

Employers should also be mindful of how anti-discrimination laws or objections on medical grounds may affect their direction. If an employee has a documented medical condition that prevents them from being vaccinated, the employer cannot require the employee to comply with their direction. If an employee cannot be vaccinated because of medical reasons, it may be that their presence in the workplace also cannot be safely managed to avoid or minimise risk to them and others and their employment may not be sustainable, through no fault of theirs or the employer.

Requiring vaccination

It has long been the case that employers can mandate vaccinations where they can demonstrate that it is necessary to manage their workplace health and safety obligations to eliminate, or if that is not reasonably practicable, minimise the risk of injury or illness in the workplace. This includes the risk of exposure to COVID-19 in the workplace.

Whether a direction will be enforceable will depend on:

• the reasonableness of the direction;
• risks to the employees in complying;
• what other control measures can be implemented by the employer; and
• any costs to employees.

Safe Work Australia’s current position is that “it is unlikely that a requirement for workers to be vaccinated will be reasonably practicable.”[3] This is because, for example:

Ultimately whether you should require your workers to be vaccinated will depend on the circumstances specific to your organisation at the time you are undertaking your risk assessment. Some factors you should consider on an ongoing basis include:

Test Case to watch

SPC is the first Australian company to mandate the COVID-19 vaccine for all its onsite staff. SPC has implemented a six-week period for employees to book their first vaccination to avoid the risk of being barred from on-site work. SPC has also provided their employees with two additional days of personal leave should an employee becomes unwell after receiving the vaccine.

There have been objections raised to the direction and it is expected that the SPC direction to their staff will be the test case of what is reasonable. We may see some responses from employees and employee representatives soon.

Since SPC’s announcement, Qantas has also announced that they require all staff to be vaccinated, with frontline workers required to comply by mid-November and other workers by the end of March next year. The Qantas decision was released on the back of a staff survey in which more than three quarters of Qantas’ employees supported mandatory vaccination.

If you are considering implementing a vaccination policy in your workplace, we can assist you in forming an effective policy and advise on implementation and application. You can contact us at 07 3160 0010 or reception@nfplawyers.com.au.

If you are interested in reading more about this topic, here is a link to an extended version of this article.

[1] WorkSafe Australia website, COVID-19 Information for workplaces – Vaccination < https://www.safeworkaustralia.gov.au/covid-19-information-workplaces/industry-information/office/vaccination>

[2] COVID-19 vaccinations: workplace rights and obligations, Fair Work Ombudsman website.  https://coronavirus.fairwork.gov.au/coronavirus-and-australian-workplace-laws/covid-19-vaccinations-and-the-workplace/covid-19-vaccinations-workplace-rights-and-obligations#vaccination-requirement-anti-discrimination-laws

[3] WorkSafe Australia website, COVID-19 Information for workplaces – Vaccination.  <https://www.safeworkaustralia.gov.au/covid-19-information-workplaces/industry-information/office/vaccination>

The uniform defamation laws in Australia are currently undergoing a process of reform, with Stage 1 of the reform having largely been completed, where amendments to the Defamation Acts have now been passed in Queensland, New South Wales, Victoria, Australian Capital Territory, and South Australia, having commenced from 1 July 2021. 

Stage 2 of the reform, which deals with online defamation (including internet intermediary liability and social media, among other items), is still in review, and so this article has not contemplated the second stage of reform.  However, indicated throughout this article are some of the relevant new amendments as a result of the first stage of recent defamation law reform.

The purpose of this article is to provide some commentary as to:

1. what is defamation; and
2. the options available in the event you, your non-profit entity or small business have been defamed.

DEFAMATION

Defamation is the publication of information which damages a person, not-for-profit organisation, or small business’s reputation, without a lawful defence.

To successfully make a claim for defamation, the plaintiff must prove the following elements:

1. the material must have been published or communicated to a third party;
2. the material identifies or is about the plaintiff (i.e. person, not-for-profit organisation, or small business);
3. the material is defamatory (i.e. it damages the plaintiff’s reputation); and
4. (new element introduced per Stage 1 of reform) the publication of the material has or is likely to cause serious harm to the plaintiff’s reputation.

These elements are set out, and the available defences, in further detail below.

In summary, however, if the above elements are proven in court, and there is no applicable defence, then the court can make an award of damages (i.e. an order that the defendant pay a monetary sum to the plaintiff).  In making such an order, the court will seek to award damages that are proportionate to the harm caused to the plaintiff’s reputation.

WHEN CAN A CLAIM FOR DEFAMATION BE MADE, AND BY WHOM?

A person/entity seeking to make a claim of defamation must do so within a 12-month timeframe from the date of publication of the defamatory material.

Only individuals, not-for-profit corporations, and corporations with ten employees or less can sue for defamation. 

In this regard, it is noted that Stage 1 of the reform to the defamation laws has now introduced a definition of “employee”, being:

“any individual (whether or not a contractor) who is engaged in the day to day operations, other than as a volunteer, and is subject to the control and direction of the corporation.”

The effect of this new definition is that individual contractors could now be counted as part of those numbered as employees of a corporation.

SINGLE PUBLICATION RULE

Prior to Stage 1 of the reform of the uniform defamation laws, it was the case that when material was published online, every time a person downloaded the publication, it could be considered as being republished.  This created uncertainty as to when the 12-month period commenced when dealing with online publication or communication.

New amendments per Stage 1 of the reform of the defamation laws have introduced a single publication rule, so that:

1. the start date of the 12-month limitation period for each publication runs from the date of the first publication; and
2. for an electronic publication, the first publication occurs when it is uploaded for access or sent to the recipient (rather than when it is downloaded or received).

DEFENCES

Although it may be possible to prove the above elements, i.e. that defamatory material that identifies you/your not-for-profit organisation/small business has been published to a third party, there may be a number of defences that can be raised by the publisher of the defamatory material.

When raising a defence, the burden of proof is with the publisher of defamatory material, i.e. the defendant must prove that a defence applies.

There are a number of defences that may apply, and the most commonly used are set out below as follows:

Honest opinion

If the defendant can prove that the material they published was an expression of opinion (rather than a statement of fact), and that their opinion was a matter of public interest, and was based on proper material (i.e. material that is substantially true, or fell within/attracted certain other defences to defamation), then they may be able to rely on this defence.

Justification/Truth

The defence of justification/truth requires the defendant to prove that the defamatory statements they made were true or substantially true.

Triviality

Stage 1 of the reform of the uniform defamation laws has now removed this defence, which provided that if the defendant could prove that the plaintiff was unlikely to sustain any harm as a result of the published material, then this would act as a defence to defamation.

Innocent dissemination

This defence is intended to protect those who publish material in the capacity of a subordinate distributor, i.e. by publishing material that was created by someone else.  In order to rely on this defence, the defendant must prove that they did not know, and would not have known with the exercise of reasonable care, that the publication was defamatory.

Publication of public documents

Another defence that may be available is on the basis that a publisher is free to publish reports of matters contained in public documents, or a fair summary or extract from a public document.  For reference, public documents include but are not limited to judgments of a court or parliamentary proceedings, reports published by a parliamentary body, or records that are open to inspection by the public.

Absolute privilege

The defence of absolute privilege may be available in circumstances where matters are published in the course of parliamentary proceedings, or proceedings of an Australian court or tribunal.

Qualified privilege

The defence of qualified privilege may protect defamatory statements made in circumstances where the publisher reasonably believed the statements made was true or the publisher had a legal, moral or social duty to make the publication, and where you as the recipient had an interest in receiving it.  This defence is not available if it can be proved that the defamatory material was published maliciously.

This defence may apply, for example, to communications with police or other relevant authorities in the course of making a complaint, or to employment references made by employers.

Public interest

Stage 1 of the reform to the uniform defamation laws has introduced a new defence, which essentially provides that a publisher will not be liable if:

1. the publication concerned an issue of public interest; and
2. the defendant reasonably believed that publication of the matter was in the public interest.

The defence differs from the defence of qualified privilege as it does not require a publisher to prove the recipients had a specific interest in receiving the material.  As a result, this defence may protect journalists and others whose work is published to a wide/potentially unlimited class of recipients.

WHAT OPTIONS ARE AVAILABLE?

In the event that you consider you have been defamed, it will be important to save copies of the defamatory material, and to consider whether the materials satisfy the elements of defamation, and whether the publisher may be able to raise any relevant defences.  Circumstances can differ on a case-by-case basis, and so it is recommended that you obtain specific legal advice prior to taking any actions in response to alleged defamatory material being published, including but not limited to the issuing of concerns notices.

Non-litigious dispute resolution

Concerns notice

Stage 1 of the reform of the uniform defamation laws has now introduced a requirement that the defamed party must first issue a Concerns Notice prior to filing proceedings for defamation.

As such, if you are satisfied that the published material meets the elements of defamation (i.e. that defamatory material identifies you and has been published to a third party), and that the publisher would not be able to rely on any relevant defence, then you may wish to consider issuing a ‘concerns notice’ to the publisher of the material. 

A concerns notice must be made in writing, include your details and those of the publisher, and must inform the publisher of the alleged defamatory imputations that you believe have been made, as well as details of how, where and when the defamatory material was published.  You may also wish to consider including a request for what you require the publisher do in response to the concerns notice.

Amendments to the uniform defamation laws also set out that the concerns notice must:

1. be in writing;
2. specify the location of the defamatory publication - i.e., where it can be accessed, such as a web page address;
3. inform the publisher of:
4. the defamatory imputations that are alleged to arise from the offending publication; and
5. the serious harm or serious financial loss that the publication is alleged to have caused or is likely to cause;
6. (if practicable) provide the publisher with a copy of the matter in question; and
7. provide the publisher with 28 days in which to provide an offer to make amends.

Offer to make amends

In response to receiving a concerns notice, a publisher then has 28 days to make an ‘offer to make amends’.  The publisher may also request further particulars, and you must then provide such reasonable further particulars within 14 days (or any further agreed period), in order for the concerns notice to remain effective.

The publisher’s offer to make amends must include, among other things:

1. An offer to publish a reasonable correction of the defamatory material;
2. An offer setting out the reasonable steps the publisher will take to tell the other people who have been given the publication that the publication may be defamatory to you; and
3. An offer to pay the expenses reasonably incurred by you before the offer was made, and the expenses reasonably incurred in considering the offer.

The offer to make amends may also include other measures to compensate the harm sustained by you including publishing an apology, paying compensation for economic or non-economic loss, or details of any corrections or apologies made or action taken before the date of the offer.

Effect of acceptance of offer

Importantly, if you accept an offer to make amends, then you will be prohibited from asserting, continuing or enforcing any action for defamation against the publisher in relation to the matter in question, even if the offer was limited to particular defamatory imputations.

Effect of failure to accept reasonable offer

If you fails to accept a reasonable offer to make amends, then this may act as a defence to an action for defamation.

Litigation

Timeframe for issuing defamation proceedings, and other considerations

As mentioned above, if you wish to commence proceedings in relation to a defamatory matter, then you must do so within a 12 month timeframe from the date of publication of the defamatory material.

Prior to commencing proceedings for defamation as against a publisher of defamatory material, you should give consideration to, among other things, what it would mean from a reputational point of view, if it were to issue such proceedings given that such proceedings would be a matter of public record.

Injunction

Another form of relief is an injunction (i.e. a court order to restrain the publication of defamatory material).  Injunctions are a discretionary remedy and will depend on the circumstances of each case.  Courts are usually reluctant to exercise this discretion.  However, relevant factors include:

1. the strength of the plaintiff’s case;
2. the balance of convenience must favour the granting of an injunction (this involves an evaluation of likely prejudice to each side if the injunction was granted); and
3. other factors such as the availability of alternative remedies to the plaintiff, the adequacy of damages as a remedy and any delay on the part of the plaintiff in bringing the application.

Criminal defamation

In certain cases, defamation may also be a criminal offence under the relevant State’s Criminal Code, Crimes Act or similar legislation.  Criminal proceedings may be initiated against a publisher if the publisher knew the defamatory statement was false at the time of publication, or had no regard at the time of publication for whether the statement was true or false.

However, criminal defamation will not be established if the defendant can show that he or she had a lawful excuse for publishing the defamatory material (e.g. if one of the civil defences would have been available, if the matter was a civil defamation case, this will be accepted as a lawful excuse).

CONCLUSION

Defamation law is a complex area of law that is currently in a state of reform across Australia, and while the above may assist as some introductory comments, it is recommended that if you consider that you may have been defamed, that you seek specific legal advice.

Should you have any questions as to whether certain material is defamatory and/or what options are available in the event you have been defamed, please do not hesitate to contact us.

It is a common scenario.  You have had a logo prepared for your company, and having been through several rounds of changes with your designer, you are finally happy with the design.  You are now looking to have a trade mark application filed in respect of the logo.

But wait… some key considerations when looking to file a trade mark (and particularly a logo trade mark), will be as follows:

1. Whom (or which entity) is to be the owner of the trade mark?
2. Is that person/entity eligible to be the applicant for the trade mark (and therefore the owner of the trade mark once registered)?
3. In terms of the provided logo, was this prepared:
4. in-house by your company, e.g. by an employee/contractor, whereby that employee/contractor has assigned intellectual property they create to your company under their employment/contractor agreement; or
5. by an external consultant/designer?
6. If an external consultant/designer was engaged to prepare the logo, did they provide an Assignment of Copyright in the prepared logo to your company?  This is sometimes contained within a designer’s terms and conditions/service agreement (or similar), or otherwise by way of a separate Deed or Agreement.

Applicant/Owner of Trade Mark

Let’s firstly look as to whom/which entity is eligible to be the applicant for a trade mark.

There are two main eligibility requirements for being an applicant for a trade mark application (and therefore the owner of the trade mark once registered) under the Trade Marks Act 1995 (Cth), and these are as follows:

1. The applicant must be the person (i.e. an individual, a company, an incorporated or unincorporated body of persons, or a political body) who claims to be the owner of the trade mark; AND
2. That person must, in relation to the goods and/or services in respect of which trade mark registration is sought, also either:
   
3. be the user or intended user of the trade mark (this is the most straightforward arrangement); OR
4. (i.e. where the trade mark is held by one party (e.g. an individual, or a holding company), and, e.g. an operating company or a third party); OR
5. have an intention to assign the trade mark to another company that is about to be formed, and that company will use the trade mark (e.g. in a start-up arrangement where the trade mark application is initially filed in an individual’s (e.g. founder’s) name, in circumstances where a company is to be established that will use the trade mark, and to which the trade mark is to be transferred).

Accordingly, unless you have established (or were seeking to establish) another entity, e.g. a holding company etc., in which you were looking to separately hold certain assets such as intellectual property, and then to enter into a licensing arrangement whereby that holding company licensed the operating company to use the trade mark, then the most straightforward arrangement will likely be where your operating company is the applicant/owner of the trade mark.

Copyright in a logo

But what about the logo itself.  Do you own it? 

By way of a brief background to copyright law in Australia:

• Generally speaking, if you are the original creator of a work, then you will own the copyright in that work;
• Works created by employees within the scope of employment are generally considered to be the intellectual property of the employer, whereas independent contractors are considered to own copyright unless they agree to assign copyright to the company that hired them; and
• In the context of a photo, for example, the photographer themselves will usually own the copyright in the work, and then have the exclusive right to use, sell, and licence the work, as well as to enforce their copyright as against an infringer.

Accordingly, in the case of a designer having created the logo, that designer will usually (absent any Terms & Conditions/Assignment etc. that state otherwise) own the copyright in the logo.

If there was no assignment of copyright or similar agreement, then you will need to procure an assignment of copyright in the logo from your designer to the trade mark applicant.

This will be important to obtain prior to filing a trade mark application, as when making a trade mark application (as mentioned above), the applicant is claiming to be the owner of the trade mark (which would not be the case unless the applicant had obtained ownership of the copyright).

Why is this important?

As above, the Trade Marks Act 1995 (Cth) essentially sets out that the trade mark applicant must be the person/entity who “claims to be the owner” of the trade mark. 

Therefore, while the Trade Marks Registrar is not obliged to make any enquiries as to ownership of the trade mark prior to accepting an application to register that trade mark, it is important that you do in fact own the trade mark (i.e. including the underlying copyright in the logo) prior to making an application for registration.  This will be in an effort to prevent your trade mark from being successfully challenged (i.e. opposed/revoked) on this basis at a later time.

The above is important, as one of the first things to occur in a lot of trade mark infringement/opposition matters, is that the other side will likely query the validity of the trade mark in question and request evidence of ownership, and/or this will otherwise be teased out through the “discovery” process if the matter proceeds to Court.

As your company grows and gains prominence, including through the use of its trade mark, it would not be ideal to have to deal with issues surrounding validity, ownership and/or queries about the continued use of the trade mark, as this can be difficult and costly.

As above, while the Registrar may indeed accept the trade mark application on its face if it is capable of being accepted, they would be doing so without determining whether the applicant is the legal owner of the trade mark (including the underlying copyright in the logo).  This may leave the trade mark at risk of being revoked/opposed if challenged, due to the applicant not owning the copyright in the logo.  Also, importantly, registration of the trade mark does not cure any defects as to the underlying ownership of the trade mark, as was held in the Australian Federal Court case of Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83.

Accordingly, such matters should be addressed appropriately at the outset, prior to any such validity or ownership issues arising at a later time.

Ok, understood – what do I need to do?

It is important that you have appropriate legal documentation in place to effect the ownership of your intellectual property, and so if you have any questions about trade mark and copyright ownership, or intellectual property arrangements with your staff or external designers – please do not hesitate to contact NFP Lawyers on (07) 3160 0010.

Disclaimer – Reliance on Content
The material distributed is general information only. The information supplied is not and is not intended to be, legal or other professional advice, nor should it be relied upon as such. You should seek legal or professional advice in relation to your specific situation.

The Fair Work Commission has today released its decision on the 2020/21 national wage case. They have decided that 'the prevailing economic circumstances and the uncertainty surrounding the pathway out of recession' requires a 'cautious approach to both the quantum and the timing of an adjustment to the National Minimum Wage (NMW) and modern award minimum wages.'

With some identified exceptions, still badly affected by COVID-19 (aviation, tourism and arts), most modern awards and the NMW will increase by 2.5% from 1 July 2021. The NMW will increase to $772.60 per week ($20.33 per hour) resulting in a $18.80 increase per week for full time adult employees.

The data considered by the FWC showed that the Australian economy has transitioned from recovery to expansion earlier and with more momentum than previously anticipated, but there is an ongoing expectation of COVID related challenges because of the current rate of COVID vaccination take-up and localised outbreaks of the virus underpinning the conservative approach taken by the FWC.

Modern Awards will be updated, ready for 1 July but you can start to review your wages against your current award by adding a 2.5% to the relevant classifications. Payroll functions will need to be amended to take the pay rise into account in the pay cycle after 1 July 2021.

If you are unsure about whether a modern award applies to you, or how the NMW increase will affect you, we can assist you. Please do not hesitate to contact us.

A year on from the COVID-19 taking effect, the way people work has changed substantially. More and more people are working from home through online platforms. Meetings have continued as workers and managers become used to resources like Zoom, Microsoft Teams and others like them. But, are they getting too comfortable with these resources?

A series of recent stories from overseas act as a reminder that even though your team may continue to work from home, they must remember they are working and must act accordingly.

The most recent report is about a Canadian MP,  William Amos, who made an embarrassing apology after being caught naked during a parliamentary video call for the Canadian House of Commons question time. Luckily, he was hidden from the public stream while other members spoke.

Mr Amos apologised immediately after the event, explaining that he was changing into work clothes after going for a run and did not realise the camera was on. This is not the first time we have seen something in the news like this.

A link to the story is here: https://ia.acs.org.au/content/ia/article/2021/canadian-mp-caught-unawares-on-camera.html?ref=newsletter

This event comes soon after:

• a surgeon was chastised by an American Judge when he appeared at a virtual court hearing while working in the operating theatre;
• a lawyer participating in an online hearing could not turn off a cat filter while in court; and
• in preliminary hearings for a Twitter hacker, internet trolls repeatedly disrupted the court, ending in one of the trolls sharing a screen playing graphic pornography.

Responsibilities of employees

As employees continue to work from home by choice or necessity, it is imperative that employers remind their staff that during work time and work activities, they must adhere to reasonable standards of conduct. This will mean being clear about what is an appropriate standard of dress when they are visible, and the appropriate use of communication in what is otherwise a relaxed environment.

Employees must also understand any requirements for computer virus protection on their computers that they may use for work purposes, particularly if they are accessing work platforms and there is a risk they may expose the workplace to viruses and hacking.

Safeguarding your business (NFP organisation)

An issue that we have covered before, is the need to ensure workplace health and safety standards are maintained for employees working at home.

If you are going to allow your team to work from home, you have a right to, and really should, conduct an audit of their home work environment, to ensure it is safe and that confidential material belonging to your organisation is secure from visitors to the home.

Ideally, you should have a “Working from Home” policy and agreement. Your policy should set out the requirements for employees working from home, such as:

• communication with the workplace, other employees and management;
• level of supervision required;
• accessibility for clients;
• recording time and workflow;
• privacy considerations;
• compliance with workplace health and safety requirements;
• resources and equipment required; and
• responsibility for costs incurred.

If you direct employees to work from home, you will be responsible for covering the associated costs like the relevant component costs of:

• internet;
• telephone line rental/ mobile plan; and
• electricity.

Before you proceed with a “Working from Home” Agreement, we recommend that you direct the employee to conduct an audit of the home and workspace to ensure that:

• they have an ergonomically sound workstation that meets work requirements and minimise risk of injury;
• there is sufficient light for work to be performed safely;
• there is sufficient ventilation;
• noise levels are at acceptable levels so as not to distract the employee during work;
• they have access to any further equipment required to complete work tasks in an efficient manner;
• they have safety equipment like fire extinguishers and first aid kits, and they know how to use them;
• they have the appropriate telephone and data lines to access and complete work;
• they have a secure environment if they are working with information subject to privacy requirements; and
• they are appropriately insured to work from home.

As working from home is becoming more accepted, managing the associated risks is best achieved with good planning and preparation. Workplace policies and procedures, coupled with regular communication of the acceptable conduct standards in your workplace will help you to avoid some of the risks or even unnecessary embarrassment we have identified.

If you don’t have workplace policies in place or you need assistance in preparing policies and guidance that comply with relevant legislation, we can assist you. Please do not hesitate to contact us.

Your intellectual property (IP) assets are not only valuable in and of themselves, but they can also assist in securing investment, establishing new revenue streams, and minimising tax.

If IP is locked inside your operating company, you could be closing your eyes to a dual company structure that enables you to capitalise on, better manage, and better protect your IP.

This article covers:

• how a dual company structure works; and
• the advantages and disadvantages of an IP Holding Company.

Dual company structure

You may have come to realise that the world’s largest corporations often structure their businesses by having an operating company and a holding company.  This is known as a dual company structure.

The operating company will typically enter into the day-to-day agreements with customers, employees and suppliers, whereas the holding company (owning 100% of the shares in the subsidiary operating company) usually controls any assets and capital, acting to limit liability.

If a customer sues you, they will need to sue the company that they have contracted with, being the operating company; and in a dual company structure, an operating company will usually hold fewer assets.

How does this work in relation to IP?

The holding company (as licensor) controls and owns the IP assets (including patents, trademarks, copyright, and designs), and licenses these IP assets to the operating company (as licensee), ensuring the IP assets are shielded from the commercial activities of the operating company.

What are the advantages of an IP holding company?

Some advantages to holding your IP assets in a separate company to that of your operating company are:

• Centralising the management of your IP, leaving little room for uncertainty in regards to IP ownership;
• Capturing all of your IP assets through performing an IP audit, giving a clearer understanding of your IP and its management;
• Limiting liability in the event of insolvency, protecting your valuable IP from third parties, customers, creditors, and suppliers;
• Financial structuring is in place so that your IP assets can be made available more easily as security, sold or spun-off;
• Alluring investment by having a well-managed and sophisticated structure in place; and
• Tax effectiveness by delegating royalties/license revenue generated from licensing IP assets.

What are the disadvantages of an IP holding company?

Aside from the recognisable benefits to having an IP Holding Company, a disadvantage to such a structure is the establishment costs and any ongoing costs of the additional company.

Also, the holding company may not be immune from liability where the operating company engages in fraud, or if the companies are not found to be under separate management in the event of liquidation.

An IP Holding Company may be presented with difficulties in pursuing patent infringers, as the only parties entitled to commence patent infringement proceedings are the patentee or their exclusive licensee, per section 120 of the Patents Act 1990 (Cth).

It is also important that the licence agreement between an IP Holding Company as the patentee and an exclusive licensee is properly drafted, otherwise the amount of damages which can be claimed for patent infringement may be reduced or nominal.  Where an exclusive licensee loses standing, its losses may not be claimed by the IP Holding Company / patentee, and this may have a significant impact if the exclusive licensee is the entity which exploits the invention on a day-to-day basis.  These issues were canvassed in the Australian Full Federal Court decision of Bristol-Myers Squibb Company v Apotex Pty Ltd [2015] FCAFC 2.  A similar position was reflected in the US Federal Circuit Court decision of Poly-America, LP v GSE Lining Technology, Inc. 383 F.3d 1303 (Fed Cir 2004).

What to consider when establishing an IP holding company?

If you are thinking about setting up an IP Holding Company, one of our lawyers can assist you in identifying the pertinent issues and the steps to be taken, including for example:

• Drafting appropriate Licence Agreements between the IP Holding Company (as licensor) and the operating company/subsidiaries (as licensee/s);
• What fees or royalties to charge to the subsidiaries for their licensed use of the IP;
• Confirming that the IP Holding Company holds no other assets; and
• Stamp duty and tax implications.

While large multinational companies have always had the resources and reach to restructure their IP assets in this manner, the rise of IP as the fundamental asset of many companies (irrespective of size and stage of development) means that such an approach to holding and exploiting IP is something that a growing number of companies can no longer afford to ignore.

To discuss setting up an IP Holding Company and preparing appropriate Licence Agreements, please do not hesitate to contact Jacob Bartels at NFP Lawyers.

Disclaimer – Reliance on Content
The material distributed is general information only. The information supplied is not and is not intended to be, legal or other professional advice, nor should it be relied upon as such. You should seek legal or professional advice in relation to your specific situation.

A new set of .au Domain Administration (.auDA) Rules have been announced affecting the eligibility, allocation, and terms and conditions for .au domain registration and renewal.  The new .auDA Rules will come into effect on 12 April 2021, and will apply to all .au country code Top Level Domains (.au ccTLD) registered, renewed or transferred on or after that date. 

Within the new .auDA Rules, there are some significant changes that will affect .org.au domains.  This will be particularly important for Australian NFPs, whom we know largely operate .org.au domains.

One of the key changes here will be that some NFPs that may have previously been eligible to hold .org.au domains, will no longer be eligible to do so.

.auDA Rule changes for .org.au domains

Changes to the eligibility rules for .org.au domains

Under the new .auDA Rules, an unincorporated association will not be eligible to hold a .org.au domain name unless it appears on the Australian Charities and Not for Profit Commission’s (ACNC) Register of Charities.  The only exception to this is where an unincorporated association falls under the definition of not-for-profit organisation in another of the 11 categories within the .auDA definition, as set out below.

To satisfy .auDA’s definition of not-for-profit organisation, an organisation must be:

1. an incorporated association under State or Territory legislation;
2. a company limited by guarantee under the Corporations Act 2001 (Cth);
3. a non-distributing co-operative registered under State or Territory legislation;
4. an indigenous corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) and which appears on the Register of Aboriginal and Torres Strait Islander Corporations;
5. a registered organisation that is:
   
   
6. an association of employers;
7. an association of employees (union); or
8. an enterprise association registered under the Fair Work (Registered Organisations) Act 2009 (Cth) and which appears on the Register of Organisations;
9. a charitable trust endorsed by the Australian Taxation Office (ATO) as a deductible gift recipient (DGR);
10. a non-trading cooperative under State or Territory legislation;
11. a public or private ancillary fund endorsed by the ATO as a DGR;
12. an unincorporated association that appears on the Register of Charities established under the Australian Charities and Not for Profit Commission Act 2012 (Cth);
13. a political party registered under the Commonwealth Electoral Act 1918 (Cth) or State or Territory Electoral Act and which appears on the Register of Political Parties or as otherwise named; or
14. government, being either the Crown or a Commonwealth, State or Territory statutory agency.

The impact of this change will primarily be felt by unincorporated associations such as sporting, social, recreational, and other clubs.

If an unincorporated association fails to meet .auDA’s new definition of not-for-profit organisation, they will need to consider either:

• becoming an incorporated association;
• becoming a company limited by guarantee; or
• registering for a .asn.au domain name.

Changes for .org.au allocation rules

Under the new .auDA Rules, the allocation rules (i.e. what name you can register, and how it must relate to you as a registrant), will broaden from requiring a ‘close and substantial connection’ between the not-for-profit organisation and its .org.au domain name, to requiring that a .org.au domain name must be:

1. a service that the organisation provides;
   
2. a program that the organisation administers;
3. an event that the organisation registers or sponsors;
4. an activity that the organisation facilitates, teaches or trains;
5. premises which the organisation operates;
6. an occupation that its members practise,

2. and which that organisation is providing at the time of the application;
3. a match of the organisation’s legal name, business or statutory name or the name of the unincorporated association;
4. an acronym of the organisation’s legal name, business name, or statutory name;
5. a match of the organisation’s Australian trade mark; or a match

Changes to the rules for State and Territory namespaces

There have also been exciting changes to the .auDA Rules regarding Australian State and Territory namespaces, e.g. qld.au, nsw.au, vic.au etc.  Previously, only community groups could register in these namespaces, however, under the new .auDA Rules, the eligibility criteria have been expanded to allow State and Territory peak bodies to register in these namespaces.

The .auDA Rules specify that peak State or Territory bodies means a not-for-profit entity that represents:

1. not for profit societies, associations or clubs, established for community service (but not political or lobbying) purposes;
2. not for profit societies, associations or clubs established for the encouragement of art, literature or music; or
3. not for profit societies, associations or clubs established for the encouragement of animal racing or a game or a sport or recreational activity.

.auDA provides some examples of peak State or Territory bodies around Australia, including:

• Football Federation Victoria – being a peak Victorian body for sport and recreation;
• Carers NSW – being a peak New South Wales body for community service organisations; and
• Propel Youth Arts WA – being a peak Western Australia body for the arts.

The effect of this change will be that peak State or Territory bodies will have an opportunity to attain enhanced recognition of their status.

Recommendations

These changes, together with a number of other changes to the .au ccTLD , will come into effect on 12 April 2021.  It would be prudent for NFPs to review their domain name portfolios to ensure compliance with the new .auDA Rules going forwards.

If you operate a not-for-profit entity, and are unsure as to whether you will continue to be eligible for your .org.au domain name after 12 April 2021, the team at NFP Lawyers would be more than happy to assist. 

If you otherwise have any questions about any of the above, your eligibility for a .org.au domain, registrability as a charity with the ACNC, or whether any alternative structures may be appropriate, please do not hesitate to contact us.

Disclaimer – Reliance on Content
The material distributed is general information only. The information supplied is not and is not intended to be, legal or other professional advice, nor should it be relied upon as such. You should seek legal or professional advice in relation to your specific situation.

With the introduction of time and wage recording for award covered employees on annualised wage arrangements (commonly referred to as salaries) occurring 12 months ago, as of 1 March 2021 affected employers must audit the time and wages records for employees working under annualised arrangements, to ensure they have been paid for all the hours they have worked in the last 12 months.

The changes introduced last year were a result of the Fair Work Ombudsman’s ongoing investigations and reports on underpayment of employee entitlements. In recent years, some of the country’s biggest employers have gotten it wrong. These cautionary reports suggest that it is well worth every employer having their employment arrangements reviewed, to ensure they do not fall foul of the Fair Work Act 2009 and related industrial instruments.

Organisations like Disability Services Australia, BaptistCare NSW & ACT, Uniting Aged Care, Activ Foundation Inc. (a WA disability enterprise) and home-care services organisation Lifestyle Solutions Ltd have had their employment misdeeds documented in the media, and the list goes on. Even some top tier law firms that advise organisations on their employment obligations got it terribly wrong by paying graduates salaries that did not cover the excessive amounts of overtime they required those employees to work.

The Fair Work Ombudsman’s 2019-20 Annual Report revealed the depth of the underpayment problem across all sectors, identifying that an astounding $123.5 million was recovered for over 25,000 employees, including $90 million in underpayments that were self-reported by employers over that financial year.

Addressing the issue

In early 2020, because of the ever-increasing reports of wage and salary underpayments, the Fair Work Commission added new rules about annualised wage arrangements  to a range of modern awards. The rules started from the first full pay period on or after 1 March 2020 and now that 12 months has passed, employers must reconcile the time and wage records they have (or should have) kept, to ensure they are paying their employees properly. It is critical that employers are keeping time and wages records for all salaried award covered employees who earn under the high-income threshold (which is currently $153,600).

Employers must now carry out an annual reconciliation of their employees' salaries, for relevant employees who were working for the employer 12 months ago. Employers must ensure there is no gap between the annualised wage agreement and what the employee would have earned under the modern award.

Who does it affect?

The rules affect full-time employees who are paid an annual wage under one of the awards that allow for annualised wage arrangements. Award covered part-time and casual employees cannot have annual wage arrangements.

Employers must make sure their employee’s annual wage is high enough to cover the award entitlements that have been included in an arrangement. An employee's annual wage cannot be less than the amount they would have been paid over the year if they were paid all their award entitlements for their work.

As each award is slightly different, it is important that you read the annual wage arrangement clause in the modern award that applies to your workforce. Social, Community, Home Care and Disability Services Industry Award 2010 does allow for salary arrangements.

What is required for an annual wage agreement?

Annual wage agreements provided to employees must include:

• the annual wage that will be paid;
• which award entitlements are included in the annual wage;
• how the annual wage has been calculated, including any assumptions used in the calculation; and
• the maximum (or ‘outer limit’) number of penalty hours and overtime hours the employee can work in a pay period or roster cycle without extra payment.

Additionally, employers must keep a record of start and finish times, as well as unpaid breaks taken for their employees on annualised wage arrangements. These records must be signed off by the worker at the end of each pay cycle. Many organisations have brought in technology for employees to log into electronic timesheets, to maintain payroll efficiency and make it easier to comply with the recording obligations.

The rules effectively require employers to keep two sets of calculations: one data set to capture the amount paid under an annualised wage agreement; and another to show the amount required under the modern award. Maintaining and regularly reviewing these records enables employers to identify gaps between the two and adjust an employee’s pay if necessary. If employers have not prepared for the changes, they are at risk of accumulating underpayments and possibly penalties for breaching their obligations.

When do the annual reconciliations happen?

Employers must undertake a reconciliation of their employees' annual wages:

• every 12 months after the arrangement starts;
• when the arrangement ends; or
• when the employment ends.

Employers must make sure their employees have been paid at least the same amount they would have been paid under the award if they were not on an annual wage, for all the hours they worked. If an employee's annual wage is less than the award payments that they would have received, their employer must pay them the difference within 14 days.

Common award payment errors

In addition to the changes in time and wage recording for salaried employees, there are some other issues that commonly arise in payroll non-compliance, such as:

• incorrectly classifying employees as Modern Award free;
• applying the wrong Modern Award to employees;
• misclassifying employees under a Modern Award or Enterprise Agreement;
• applying annualised salaries that are not sufficient to cover all entitlements arising under the award, especially over time where they do not keep up with increased award rates;
• relying on the BOOT and not documenting annualised arrangements;
• including incentives (food, gift cards, etc.) in lieu of payment;
• incorrectly calculating overtime and penalty rates; and
• poor time and recording keeping.

Regardless of any discussions taking place in the media about industrial relations changes, the modern award terms must be complied with. It is safer to assume that your employees are covered by a modern award because the 121 Modern Awards were created to cover the vast majority of Australia’s workforce.

We recommend that payroll audits should be conducted generally to ensure all staff are paid under the correct award and classification for all their hours worked, unless they have a ‘time off in lieu’ agreement documented for overtime worked.

Do not risk penalties and unnecessary legal costs for non-compliance. If you are unsure whether your organisation complies with its wage and salary obligations, NFP Lawyers can audit your payroll and employee records to ensure you are paying your employees properly.