Legal pitfalls of a BDBN

Despite its significance, there can be quite a few pitfalls that have the power to override the wishes in a binding death benefit nomination (BDBN) and render it invalid.

A BDBN is a member’s written direction to their super fund’s trustee that outlines who the trustee is to pay the member’s death benefit to upon the member’s death. BDBNs are a relatively new legal instrument, and as such, the laws regarding them continue to develop and change, which is why many pitfalls can exist to those who are unaware of changes. Getting a BDBN right is no easy tasks, as there are numerous risk areas including:

Careless wording
Many BDBNs can be easily challenged due to poor wording such as ‘the BDBN is only binding if it is to the trustee’s satisfaction’. This type of wording can easily give rise to argument if, for example, the trustee decides to reject the BDBN when the member dies.

Prior deed history
Most SMSF deeds are varied without proper checks on the prior document trail, including conditions and consents that must be satisfied. If an SMSF has existed for some time and undergone variations,  a deed history review may be warranted. Such a review should encompass:

– the original deed of establishment

– any subsequent deed of variation

– any deeds of change of trustee

It may be best for an experienced professional to conduct the review. Attending to any issues promptly can be far more cost effective than being exposed to future legal challenge.

Poor quality documents
Ineffective documents may result in a member’s super proceeds being paid to the wrong people. In quite a number of recent disputes, this has happened after an expensive and drawn out legal battle. While it can be tempting to save some money upfront by using a cheaper option, high-quality will always pay off in the long run.

Employment law myths

Employment law is an ever-changing landscape that most businesses struggle to navigate. Here is the truth behind four common employment law myths:

– An employee must be given three warnings before dismissal
There is no specific requirement under employment legislation that employers must give 3 warnings before dismissal. A series of warnings is likely to be appropriate when the disciplinary action relates to poor performance. Ultimately, the appropriate sanction depends upon the circumstances, and any policies or procedures that are in place.

– No contract in writing means no contract
Although a written contract is required by law, even a verbal agreement contract is binding. However, often it can be hard to prove what was agreed upon unless it is in writing.

– Serious misconduct allows for an immediate dismissal
Serious misconduct will often result in summary dismissal; however, employers must comply with the usual disciplinary procedures. This requires employers to invite the employee to a disciplinary hearing, allowing the employee an opportunity to respond.

– Deductions can be made from an employee’s wages for things such as lack of notice or covering business losses
The employee must consent to the deductions and are able to withdraw consent by giving notice in writing at any time.

Dispute resolution

When drafted properly, expert determination clauses can result in cost-effective resolutions for business disputes and avoid delays in court proceedings.

Expert determination involves hiring someone who has the expertise required to determine the outcome of a dispute when a business relationship goes south. It is a kind of alternative dispute resolution (ADR) which involves appointing an independent third party to decide a dispute’s outcome.

Unlike arbitration, courts have limited control over the activities of the expert. And although some uncertainty can arise surrounding the expert determination, the advantage of hiring an expert is that the determination can be short and relatively cost-effective. The earlier a dispute is resolved, the cheaper the outcome for both parties in the long run.

Expert determinations are binding unless the contract clause states otherwise, or it is found that the determination does not follow the requirements of the contract.

Tips to consider before signing a contract

A contract is a formal document between two or more parties that is legally enforceable, so it is important that all parties be aware of what they are signing. All individuals who sign a written contract should also take the time to ensure they understand what is outlined.

Here are some tips to follow when signing a written contract:

Read the entire contract
All parties should read the entire contract- from start to finish. The contract should be consistent with any negotiations that were discussed between parties.

Do not rush
Individuals should not feel pressured to sign a contract on the spot. It is a good idea to take the contract away and read it again, ensuring they fully understand everything listed in the contract.

Negotiate
If a party is unhappy, or does not agree with any clause in the contract, it is important that they negotiate the necessary changes with the parties involved.

Ensure the contract is complete
Never sign an incomplete contract as this could run the risk that other parties will insert a clause in the contract that has not been discussed.

Consider help
Contracts are often complex and written in legal jargon, which can make it difficult to interpret. A professional can assist in explaining the issues of the contract, ensuring that the individual is aware of what they are signing.

Tips for avoiding unfair dismissal claims

An unfair dismissal claim is a costly and time-consuming issue that many employers face each year. Under the Unfair Work Act, unfair dismissal actions are available to employees working for a business with more than 15 employees (whereas, the fair dismissal code applies for small businesses with under 15 employees). Employees who are dismissed in an unjust manner may receive up to six month’s pay. Below are five steps employers may want to consider to minimise the possibility of unfair dismissal claims.

1. Probation period
Provide the under-performing employee with some constructive criticism and a chance to improve their work ethic. This gives them time to assess what they have done wrong and correct their performance. Employers should ensure they arrange a meeting with the employee to discuss the problem and find possible solutions.

2. Give the employee a chance to respond
The employee must be clearly aware of any allegations made against them and given the opportunity to respond. Employers can spell out allegations in writing and then arrange a later date to discuss the employee’s poor performance, which gives them time to consider their response.

3. Clearly communicate business policies and procedures
Ensure all policies and procedures are known to all staff, including termination of employment provisions. Regularly referring to these policies will help to prevent any behaviour that could constitute as a serious breach to an employment contract.

4. Do not abuse the process
Dismissing an employee for personality reasons can have negative repercussions for a business. Some employees abuse the complaints system just to get rid of people who are not liked, so it is important for employers to be aware of this issue and the correct way to dismiss an employee.

5. Avoid on the spot dismissals
If an employee commits a gross breach of their employment contract, implement a procedure where another manager becomes involved. The event should be recorded and a decision reached after all parties have had a chance to respond.

Misconceptions surrounding property law

When a marriage or de facto relationship breaks down, the distribution of property is important for both parties. While some property settlements are reasonably straightforward, sometimes it can be difficult to determine the entitlements of each party.

A common mistaken belief is that a couple must be divorced to finalise their property with their estranged spouse. Both parties can conduct a property settlement as soon as they separate from one another.

Some individuals believe their inheritance is protected from the asset pool available for distribution. However, this issue is assessed on the circumstances of a particular case. The Courts will take into consideration:

– when the inheritance was received.

– the impact the inheritance has on the size of the asset pool.

– the length of the marriage or de facto relationship.

An inheritance received by a party prior to the relationship will be considered a contribution  to the asset pool. However, the impact of the inheritance may recede if the partner received contributions during the relationship.

An inheritance received after the separation may be exempt from the balance of the asset pool. The Court’s discretion usually relies on the distribution of the asset pool and the assets of both parties.

The importance of Landlord insurance

It is vital for property investors to have Landlord insurance to protect their investment in case something unfavourable occurs.

It not only allows investors to rest assured that their investment property will be kept in top-notch condition, but that they will be able to redeem their losses when their property has been badly damaged and abandoned by its tenants.

Property investors should consult with their insurance provider to confirm they are covered for all types of destruction. Most standard building and landlord insurance policies will not account for malign acts or theft by tenants, loss of rent and legal expenses incurred from loss of rent. Though, some insurance providers will cover these costs as an optional extra.

To assist with the claim process in certain circumstances, it is worth having a rental agreement with your tenants to be able to use as backup evidence. Ensure it cites the lease terms, the amount of the rent payment and the bond.

A guide to confidentiality agreements

A guide to confidentiality agreements

Confidentiality agreements, also known as non-disclosure agreements, are an important legal consideration for many business owners at some point in their career. A non-disclosure agreement is a binding legal document that prevents individuals or institutions from revealing information that is not yet public.
Confidentiality agreements can be extremely important during product development as they ensure that your competitors will not become aware of your work.
There are two types of confidentiality agreements: mutual and unilateral. In a mutual confidentiality agreement, both parties receive information and agree no to disclose it. This would typically occur in the case of a collaborative project.
In a unilateral agreement, one party becomes privy to sensitive information and aggress to keep it secret. For example, if you hire someone to work on a new product that your business in developing.
If you do not ensure that new product and business development ideas are covered by non-disclosure agreements, it can become extremely difficult to get the idea patented.

Avoiding fake advertising

Any advert that contains misleading information or a statement that is untrue can lead your business into serious legal problems. There are both federal and state laws in place to regulate false advertising, and the penalties can be severe. Businesses can be held responsible for false advertising, regardless of whether or not they were aware that the information they presented was incorrect and/or misleading.

Commercial leases

There are several issues that you should always be addressed before signing a commercial lease. If there is a right or obligation that is not detailed in the lease then it may lead to conflict between your business and your landlord. Some checkpoints include:
-How much signage you’re allowed to put up and where
-Use of facilities such as toilets that may be shared with other businesses (if your lease is in a complex)
-Car parking for both staff and visitors
-Access to the premises outside of business hours
-An exclusivity of trade clause. This will protect you against having a direct competitor set up within your immediate vicinity.
-An option for renewal at the end of your commercial lease