BUS101 : Report - Legal Issue Briefing Note - Assessment Answer

Report Writing help

Case Scenario/ Task

Employment Law Policies and Practices Employment law is complex, involving overlapping jurisdictions, numerous regulatory bodies, federal and state statutes and common law practices. For example, while most notfor-profit

organisations in Australia are covered by the Fair Work Act 2009, in Western

Australia, the Act only applies to trading and financial corporations. Unincorporated

associations must look to the Minimum Conditions of Employment Act 1993 (WA) and the

Industrial Relations Act 1979 (WA) for employment standards. NFPs may also be covered by

federal awards, such as the Social, Community, Home Care and Disability Services Industry

Award 2010, or state awards such as the Social and Community Services – WA Interim

Another challenge for NFPs in understanding which laws they are covered by is determining whether their workers qualify as employees, contractors or volunteers. While this is an issue faced by all businesses, the employment conditions of workers in the third sector may blur the lines between categories. In order to make a proper determination, NFPs must

look to tests developed under case law: the Control Test, as seen in Zuijs v Wirth Bros Pty Ltd (1995) 93 CLR 561; the Whole Relationship Test, as detailed in Stevens v Brodribbs Sawmilling Co Pty Ltd (1986) 160 CLR 16; and the Multi-Facet Test, developed in Hollis v

Vabu Pty Ltd (2002) 207 CLR. If NFP workers are categorised as employees, they will be covered by the National

Employment Standards of the Fair Work Act 2009 (in all states but WA, as detailed above), while contractors are protected by the Independent Contractors Act 2006. Volunteers, on the other hand, are not covered by the National Employment Standards, but are entitled to general protections under the Fair Work Act 2009.

In addition to the above statutes, there are other laws NFPs must be aware of. Some statues have broadened the definition of “employee” to include contractors and volunteers. The Superannuation Guarantee (Administration) Act 1992 (Cth), defines an employee a person who is paid under contract for the hours they work, rather than for work performed. This means an organisation may be required to pay superannuation for workers they otherwise would consider to be independent contractors (Justice Connect, 2014). Under the Model Health and Safety (WHS) Act, the definition of “worker” is expanded to include volunteers and contractors. The act determined that “any person conducting a business or undertaking” must provide safe working conditions for their workers (Eburn, 2011). Federal

and state anti-discrimination laws, such as the Australian Human Rights Commission Act 1986, protect all workers, whether employees, contractors or volunteers.A Case for Reform The need for reform in the regulation of NFPs is well documented. Medal of the Order of Australia winner Myles McGregor-Lowndes notes:

in the last two decades (2014). One such report, the Productivity Commission’s Contribution of the Not-for-Profit Sector, found the current regulatory framework for the sector is complex, lacks coherence and sufficient transparency, and is costly to NFPs (Productivity Commission,

2010). Despite this, progress has been limited and relatively recent. Reforms enacted include the Australian Charities and Not-for-profits Commission Act 2012 (Cth), which established a new regulatory framework and national regulator for charities and NFPs, the Australian Charities and Not-for-Profits Commission (ACNC), and the Charities Act 2013 (Cth), which introduced a statutory definition of charity for the first time in Australia.

Not-for-Profits organizations play a vital role in the welfare of the contemporary society as a whole. By engaging in selfless acts, these organizations offer essential services which in turn champion economic, cultural and environmental concerns that not only assist today but help in securing the life of future generations. NFP’s do so by procuring funds and acting as a publicity medium for bringing awareness to urgent concerns in the community. Paul Lindwall, Assistant Commissioner of the Productivity Commission of Australia, reports that the 600,000 NFP’S contribute to 43 million to Australia’s annual GDP. Which is a 7.7% increase between 2000 and 2007 and employed 4.6 billion workers, putting more emphasis on the role of Not for Profit Organizations (Productivity Commission, 2010).

Though profit organizations and NFP’s have different legal structures subjected to an analogous regulatory constitution, which includes the stipulation of assimilating employment law policies and practices. Of challenge to many incorporated NFP’s is the deduction of the intricate guidelines set as a legal framework for the workings of NFP’s. Hence, the aim of this paper is to highlight some of the challenges faced in inferring the Employment law policies and practices, and an argument for reforms that will enhance the accessibility of the law countrywide.

Challenges in Integration of Employment Law Policies and Practices

Due to the complexity of the employment law policies and practices, it's hard for NFP’s to decipher some of the stipulated requirements. A case in point is the distinction of whether one serves as an employee, contractor or a volunteer in an NFP. As illustrated in the 1995 case of Zuijs v Wirth Bros Pty Ltd 93 CLR 561, and the 1949 case of Humberstone v Northern Timber Mills defines a worker by the common law and the control test. The common law describes an employee as any individual under a given contract of service. Conventionally, the control test defines an employee by analysing the extent of control that an employer exercises over an employee (Powe, R. 1986).

Therefore, for an NFP worker to gain the classification of being an employee, they are to be protected by the Employment, Standards of the Fair Work Act of 2009 (Creighton, 2011) (applicable in all states West Australia). The workers classified as contractors are covered by the Independent Contractors Act of 2006 (Glauser, 2004). Those who volunteer, however, are not covered by either of the laws, but are however privy to the general terms of the Fair Work Act of 2009. Nonetheless, acts such as the Australian Human Rights Commission Act of 1986, a national and anti-discrimination law, protects all workers be it an employee, a contractor or volunteer. The overlapping jurisdictions also prove to be another challenge, as illustrated above. For instance, several NFP’s in Australia have the knowledge that they are fully protected by the Fair Work Act of 2009. However, in Western Australia, this act solely applies to financial organizations. Unincorporated agencies such as NFP’s are under the coverage of the Minimum Conditions of Employment Act of 1993 and the Industrial Relations Act 1979 for employment standards.

The Superannuation Guarantee (Administration) Act of 1992 (Cth) serves as another decree that (Paatsch, & Smith1992) describes an employee as any person paid under the contract for the amount of time worked, as opposed to the work performed. It then factors in the aspect that organizations may be obligated to recompense superannuation for workers that otherwise seen as independent contractors. This act, then broadens the spectrum of the definition of a worker in any NFP’s.

Reforms

It is indisputable that there is a dire need for reforms in the laws that govern NFP’s. Act reform made by the federal government so far in the areas of areas of taxation, fundraisers, regulation and financial reports is through the establishment of a statutory regulating body called the Australian Charities and Not-for-Profit Commission. ACNC was created to ensure transparency and liability within the NFP’s so as to increase the public’s credence in the sector (Weinert, 2013). The two primary roles of ACNC are registering NFP’s under the ACNC Act and monitoring their workings through the submission of annual reports. The ACNC also serves as a body that stipulates regulations to be adhered by the NFP’s and also the penalty for not adhering to the said rules (Charities, 2012).

Critical evaluation of reforms

Since its creation, ACNC has been proactive in enhancing the operations of NFP’s there is still need for improvement. David Crosbie, the member of the Not-for-profit Sector Reform Council,poses the questions “are we there yet?” after several parliamentary debates concerning the ACNC. Numerous concerns remain on the future of the reform agenda. The government should offer more support to the regulatory body ACNC to reduce red tape (McGregor-Lowndes, 2014).

Conclusion

It is inarguable that there is a great need for reform in the Not for Profit organizations for the benefit of the public, employees, contractors, and volunteers. Clarity in the overall legal framework that governs the sector is also crucial so as to enhance the relationship between NFP’s and the federal government. Even though the need for reforms has received the championing of the many complexities of the current regulatory body is an additional strain on the workings NFP’s and the.Relationship with the government. Hence, there is still a great need for the government to come up with better reforms that will ensure the sustainability of NFP’s for the future.

Cases listed

1995 case of Zuijs v Wirth Bros Pty Ltd 93 CLR 561,

1949 case of Humberstone v Northern Timber Mills

Legislations

Australian Charities and Not-for-profits Commission Act 2012 (Cth)

Australian Human Rights Commission Act 1986 (Cth)

Fair Work Act 2009 (Cth)

Industrial Relations Act 1979

Independent Contractors Act 2006 (Cth)

Minimum Conditions of Employment Act 1993 (WA)

Superannuation Guarantee (Administration) Act 1992 (Cth)