Understanding constructive dismissal

Constructive dismissal, in effect forced resignation, occurs when the behaviour or conduct of an employer is so harmful, adverse or unfriendly to their employment relationship with an employee that the employee cannot be expected to deal with it.

Examples include an employer:

• expressly suggesting that an employee resign

• actively making it difficult or impossible for an employee to fulfil their role

• failing to provide a safe or healthy working environment

• imposing unauthorised and detrimental changes to the employee’s contract, such as a demotion, change of working hours or relocation

Employees must be able to prove that their employer’s actions were the primary contributing factor that resulted in their resignation and that the employee would have remained employed if the alleged conduct did not take place.

The employee’s resignation must occur immediately after the conduct complained of. Otherwise, the employee could be said to have accepted the continued existence of the employment contract.

Constructive dismissal often creates the basis of dismissal-related claims in Australia and New Zealand, such as unfair dismissal or a breach of the Fair Work Act.

Considerations for purchasing a property through an SMSF

It is vital for those with a self-managed super fund (SMSF) to carry out all the necessary checks before purchasing a property in their SMSF, especially when borrowing is involved.

Investment strategy
The SMSF’s investment strategy must be considered. If the purchase of a property will cause the fund’s other investments to be out of alignment, trustees should consider amending the investment strategy before purchasing a property.

Resources
Trustees need to consider whether the fund will have the resources to purchase the property. For example, will the SMSF purchase the property using its available resources or would it be wiser to purchase a property of greater value using borrowed funds.

Structure
Once trustees have decided on the property to be purchased, the next step is to consider the structure in which the property will be owned. For example, SMSF trustees can own the property or organise to for their SMSF to own units in a unit trust that will own the property.

Borrowing
After deciding on the structure in which the SMSF trustee will own the property, the next decision is often whether the fund will enter into an SMSF limited recourse borrowing arrangement (LRBA). Trustees should determine whether the borrowing will be from a bank, another financial institution or a related party. The amount available for purchase under the borrowing also needs to be determined.

Management
Once the SMSF has purchased an asset like property, trustees need to consider what would happen in the event of the death of a member. For example, the property may need to be sold or transferred to beneficiaries. Or, if a surviving spouse is to be the recipient of the death benefits, then the funds could remain in the SMSF to provide a pension to the surviving spouse.

Liquidity
When determining what would happen in the event of the death of a member, trustees should also consider other events, such as the disability of a member. Planning for this should take place at the time of purchase, as SMSFs can incur significant financial difficulties if a member becomes disabled.

Transferring the seniors and pensioners tax offset

The Seniors and Pensioners Tax Offset (SAPTO) is a tax offset for retirees who are at the Service Pension age or the Age Pension age or older.

Those who have received SAPTO may be eligible to transfer unused portions of their offset to their spouse.

When transferring unused SAPTO, both the receiving individual and their spouse must be eligible to claim the offset and be an eligible couple either:

• living apart due to illness with a rebate amount of $2,040 each

• living together with a rebate amount of $1,602 each

If an individual receiving SAPTO has a spouse with a taxable income greater than $6,000, the ATO calculates their unused SAPTO amount with the formula:

The spouse’s rebate amount for the year – ((The spouse’s taxable income for the year – $6,000) x 0.15).

If an individual receiving SAPTO has a spouse who is a foreign resident and their taxable income is greater than zero, the ATO calculates the spouse’s unused SAPTO amount with the following formula:

The spouse’s rebate amount for the year – (The spouse’s taxable income for the year x marginal tax rate).

If a spouse is a foreign resident and has received an Australian government pension or allowance, the ATO calculates the spouse’s unused SAPTO amount as if they were a resident.

Social media and employee termination

Terminating an employee over inappropriate social media use may seem like appropriate action; however, employers need to be mindful of the legal minefields that can occur if the termination is unfair.

Social media blurs the boundaries between public and private, and employers are often worried that an employee’s “private” posts on social media can have a negative impact on their business. It is no surprise that the Fair Work Commission has had to rule the lawfulness of an employer terminating an employee’s employment over a “private” post on social media.

A social media policy should be implemented to provide employees with guidelines on what is (and is not) considered appropriate use of social media. Social media policies are the best way hold employees accountable for their social media conduct and can help protect employers from legal claims such as unfair dismissal.

Here are three things employers need to keep in mind when deciding whether to terminate an employee over a social media post:

• Employers must ensure that their social media policy specifies that employees must make a disclaimer when expressing their own personal opinions, or take steps to ensure that there is no link to their employer at all, when posting or tweeting to personal social media pages.

• Ensure that the conduct complained of is conduct that an employer is entitled to regulate, before deciding on termination. If you are entitled to regulate the conduct, ensure that the social media post is of such gravity as to justify termination.

• If termination of employment is justified, make sure that you have taken all relevant facts into account to ensure that the termination is not harsh, unjust or unreasonable. Consider the personal circumstances, the impact the termination might have on the employee and whether the employee has shown remorse before deciding to terminate an employee. Employers need to be reminded that termination is not the only remedy for misconduct, so consider other alternatives prior to dismissing an employee.

Ensuring remote workers remain accountable

Providing the flexibility to employees to be able to work remotely has become quite popular in the working world and can be a win-win for both employers and employees. It provides employees with the opportunity to adjust work obligations around other personal and home responsibilities and also gives business owners a great way of attracting new talent to the company.

However, not working with your employees in the office can make it hard to monitor whether they are performing and getting everything done promptly. Here are three ways employers can keep track of their remote employees to make sure they are getting the job done:

Set clear expectations
While you want to give remote workers the freedom to finish their tasks from their home offices, it is also important to be clear about your expectations as their employer. Creating a company policy for remote workers that outlines expectations like their availability during work hours and the importance of completing projects on time is one way to do this.

Provide mobile devices
Business owners will want to check in with their remote workers regularly, so it is important that these workers have the tools necessary to stay in touch. Providing a mobile device and outlining how remote workers can use it for work and personal purposes can ensure that you will always have a means of contacting them.

Make transparency a priority
A great deal of transparency is required to make a relationship between an employer and remote employee work. Remaining transparent can help ensure that everyone is held accountable and that no one misses important deadlines.

Speed up customer payments

Managing debtors is often a cause of frustration for many small business owners.

Unpaid invoices can seriously disrupt cash flow. Between chasing late payments and keeping track of invoices, debt collection can be a headache.

Fortunately, there are ways to speed up your payments with a few simple adjustments to your invoicing system you can increase your chances of getting paid promptly. Here are five ways to speed up your customer payments:

Check contact details
Ensure the location and contact details are accurate and up-to-date so your invoices reach the right person. Be sure to quote any relevant customer reference number they have provided to you, or you have provided to them. Asking your customers what they require on their invoice will save time and prevent you from re-invoicing due to amendments.

Set payment terms
Set standard payment terms for when you expect to be paid after the invoice is sent out, for example, payment within 30 days. When setting your payment terms consider types of payments, credit limits and early payment incentives to encourage customers to pay early or on time.

Respond to invoice queries immediately
Great communication with your customers can make all the difference when it comes to getting paid on time. Address invoice queries immediately and keep your customers informed of any changes in billing or status on their work etc.

Provide multiple payment options
Providing customers with a range of payment options, such as online and phone payments, will increase your chances of getting paid quickly. Be sure to include step-by-step instructions on the invoice to make it simple for your customers to pay you.

Charge late fees
Late payments should be discouraged by charging a late fee to increase your customer’s urgency to pay on time. The invoice should clearly state your right to set a late fee for overdue invoices and state exactly what the fee percentage is and when it applies.

Dealing with unhappy customers

Dealing with unhappy customers can be challenging but with the right approach you may be able to resolve the situation and improve your overall relationship with them.

Here are five tips for dealing with dissatisfied customers:

Don’t take it personally
When dealing with an unhappy customer, set aside your own feelings and do not take their criticism personally. Remember the customer is displeased with the performance or quality of your product or service, not you.

Listen actively
Listening to your customers’ grievances is crucial. Instead of jumping to conclusions or trying to solve the situation straight away, give the customer a chance to tell their story and vent. Pay close attention to their problem and summarise their compliant when they are finished talking to show you were listening and acknowledge their concerns.

Empathise
Expressing empathy for their problem will go a long way in demonstrating your understanding and care for their issues. Body language is especially important here; maintain eye contact, good posture and keep your arms uncrossed. It is important to apologise for the problem regardless of whether the complaint is legitimate or irrelevant.

Offer a solution
Present your customer with a solution; if they resist your proposed solution ask them what would make them happy instead. In most cases, customers will be happy you have tried to correct the problem.

Follow up
Once the problem has been resolved, follow up over the next few days to ensure they are still happy with the resolution.

Work-related items that are exempt from FBT

There are a number of employee benefits that are exempt from fringe benefits tax (FBT). They include the following work-related items:
– portable electronic devices (mobile phones, laptops, tablets, portable printers and GPS   navigation receivers)
– computer software
– protective clothing
– briefcases
– tools of trade

The FBT exemption is limited to items that are primarily for use in the employee’s employment or one item per FBT year for items that have an identical function (unless the item is a replacement item).

From 1 April 2016, the exemption extends to all small businesses that give employees more than one work-related portable device in an FBT year, even if the devices have substantially identical functions.

To be eligible for the exemption, small businesses must be in operation for at least one income year that starts or ends in the relevant FBT year.

Hiring the right person

Finding the right workers can be a challenge. Since much of a small business’s success depends on the quality of the people they hire, this is a crucial task.

Here are five things to consider when hiring that should increase your chances of success:

Write a clear job description
It is difficult to recruit the right person if you are not sure what job you want them to do. Start by writing down all the tasks you need done. Next, think about the attributes, skills and experience needed. Be realistic. It is unlikely that you will find a great salesperson and bookkeeper in a single person.

Allow adequate time
Start the candidate-hunting process as early as possible. The more time you have, the less you will feel pressured to hire an unqualified candidate just to fill a position. Generally, it is better to leave a job open than to hire the wrong person.

During interviews, don’t do all the talking
It is appropriate to explain the job, and in many cases, to try and sell the job to the candidate, but most of the time the candidate should be talking. Most candidates will be a little nervous so have a few questions prepared in advance that ease the candidate. Consider asking what about the job appealed to them, what particular skills they have, and what they did not like about their last job.

Understand the person
Ask questions that help you get a feel for the applicant’s personality and attitude. Be careful not to ask questions that are or may be illegal, for instance, asking whether a candidate is planning on having a child or asking their age. It is acceptable to ask about hobbies, interests, where they grew up and what their long-term goals are. Diverse interests usually mean a candidate brings more life experiences to a job.

Check references
Even if you have no reason to doubt the honesty of an applicant, you can learn a lot by checking references. Use the reference check as a way to learn how to work more effectively with your new employee. Do not just ask about how hard they worked. Try questions like: What kind of training would you suggest to make the applicant an even better employee? What type of tasks required greater supervision? What duties did the candidate particularly enjoy or do well?

Reducing the risk of refund fraud

Refund fraud occurs where tax returns, activity statements and other documents are deliberately falsified in order to claim a tax refund a taxpayer is not entitled to.

Fraudulent claims can be lodged by individuals on their own account or third parties on behalf of others. Often, this can involve identity crime, where taxpayer identities are used by third parties to make fraudulent claims for personal gain.

Some examples of refund fraud are deliberately over-claiming deductions, offsets, or expenses by providing false or misleading information, understating income and/or providing fictitious payment summary details, providing false information in a business activity statement and making claims through fraudulent registrations or using false or stolen identities.

The ATO have a range of controls and systems in place to detect potential refund fraud, these include:

• analytical models that use behaviour and statistical algorithms to analyse information on income tax returns, business activity statements and other tax forms lodged

• sharing data and intelligence with their partner agencies

• obtaining information about suspected fraud from the community and other government agencies