Business Law

Case Scenario/ Task Introduction Not-for-profit organisations (NFPs) are major investors in Australia’s social welfare. The Productivity Commission found that NFPs, aside from providing essential services, also help promote change in economic, cultural, social and environmental issues; assist in expanding the social network of individuals within the community; and invest in assets for the benefit of future generations (Productivity Commission, 2010). Beyond their social contributions, NFPs also comprise a significant portion of the Australian economy. In 2010, NFPs contributed $43 billion to the economy, approximately 4% of Australia’s GDP, and employed 4.6 billion workers. An additional 5 million volunteers contributed a further $14.6 billion in unpaid work (Productivity Commission, 2010). It should not come as a surprise then that NFPs are subjected to a similar regulatory framework as for-profit businesses, including the necessity of integrating employment law policies and practices. But for many NFPs, the majority of which are small, unincorporated associations (Productivity Commission, 2010), the law may appear complex and unclear. Add to this the specific challenges of interpreting the law as it applies to NFP’s, complex fundraising rules, and burgeoning reporting requirements, and the central requirement of the law – that it be known and understood by its constituents – nears impossibility. This paper will outline some of the difficulties faced by NFPs in interpreting the law, specifically in relation to employment law policies and practices, and put forth an argument for reform to make the law more accessible to the 600,000 economically significant not-for-profits operating within Australia’s borders (Productivity Commission, 2010). 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 not for-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 Award 2011 (Brown, 2011). 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 Bethany Smith a151115 3 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: “Over 15.5 million words on nearly 50,000 pages have been generated from government enquiries and legislation” on the subject 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. The ACNC is particularly significant for NFPs as it aims to simplify and improve the regulatory framework, cut red tape, and assist in educating organisations as to their legal rights and responsibilities (Weinert, 2013). While the ACNC is a step in the right direction, critics have noted the focus remains on regulation, rather than collaboration or innovation within the industry (O'Connell, Martin, & Chia, 2013) (Weinert, 2013). Concern also remains as to the future of the reform agenda. In 2014, the Abbott Government attempted to introduce a bill to repeal the ACNC, one of several indications the Coalition Government is unwilling to continue to pursue reform in the third sector (Murray, 2014). For NFPs, the regulatory environment remains complex and difficult to navigate (McGregor-Lowndes OAM, 2014). Conclusion The need for regulation of the not-for-profit sector is inarguable, not simply for the protection of the public, but for the benefit of not-for-profit workers themselves. Social and welfare work has long been undervalued and the road to industry recognition and award coverage for the sector has been long (Briggs, Meagher, & Healy, 2007). Increasing costs and limited government support have put a strain on NFPs, however, and a complex regulatory environment is an additional burden. The need for reform has been established by academics and government reports alike, and while change is happening, the focus needs to be on the future sustainability of the industry. Clarity in the legal framework, and collaboration between the not-for-profit sector and government bodies, would benefit the economy, social welfare, and not-for-profit workers alike.

Introduction

The small businesses have existed on the periphery of Australia’s economy since long. Whether it was independent small-time suppliers of goods and services on a very small scale or it could be the several ancillary units that are an essential part of the larger manufacturing and industrial units. In 2011, the Australian Consumer Laws (ACC) commenced to be applied as a singular legislation that was framed for the protection of consumers in the Commonwealth of Australia. This law has since been applied to all the states and territories of Australia. This one law, called the Australian Consumer Law or the ACL was a consolidated form of at least twenty other laws and legislations operational all over Australia in different regions and in different capacities (Griggs, 2011). The ACL has had agreement and acceptance granted by the Council of Australian Governments. Thus, the Australian Consumer Law can be said to consolidate almost all the provisions of the consumer protection strictures pertaining to fair trade in all the states and territories of Australia. How the ACL impacts upon the development, survival and sustenance of small businesses is significant. This is discussed further in the light of the requirements of the small businesses vis-à-vis the provisions of the Australian Consumer Law or the ACL (Griggs, 2011). Small Businesses and Working with the Australian Consumer Law The Australian Consumer Law or the ACL clearly defines who the consumer is. The consumer is broadly defined as:

• Those individuals who purchase or acquire goods and services that can cost no more than forty thousand Australian dollars.
• In case the goods and services that have been acquired are obtained at a price greater than that imposed ceiling of forty thousand Australian dollars, it should be clearly defined that the goods and services that have been acquired are usually for the personal, household or domestic consumption or use of the individual and their family (Latimer, 2012).
• The purchase of high cost vehicles, transport or luxury which is to be used primarily for the personal use of the person purchasing the vehicle. The individual may also own such a vehicle for the transport of goods and personal effects on public roads. There is a strict stipulation, however, that such a vehicle is not to be used by the purchaser for re-supply or use in business in any form (Latimer, 2012).
• It extends its protection to businesses and small entrepreneurs linked with farms and farm products especially pertaining to business behavior, quality of business product quality and product safety. While the definitions of the consumer have been clearly delineated there is every need to understand the implications these stipulations have on the small businesses and micro-enterprises (Latimer, 2012).

While the smaller businesses may not be buying in large volumes, nor would the total volume of the transactions be of a sizable magnitude it can be said that these small businesses come well within the prescribed definitions of the consumer as per the ACL (Solomon, Russell-Bennett, & Previte, 2012). It is necessary here to also understand the basic premises of the small business. How does the small business come into being? What are some of the basic premises of the small business? Why does the small business exist and since it has grown why is it replaced by other small businesses? The answer to these questions lies in the analysis of the Australian ethos, its populations and its diverse ethnicity. Most of the people who have chosen to settle in Australia, the new world of opportunity, have originated from South East Asian countries, middle eastern countries, the Indian sub-continent and the African nations as well as several island nations that dot the Pacific Ocean. Besides these immigrants there are the original inhabitants of Australia, the aborigines (Hogarth, Javitt, & Melzer, 2008). Thus, the Commonwealth is a coming together of a number of cultures and socio-religious backgrounds. They have their own range of rituals, ceremonies and traditions. Their identity, as translated in their means of communication or languages, their cuisine and their dressing mode as well as their behavior all add to the overall richness of the Australian life. Once this is understood it is easy to know about the range and extent of the participation in the overall economy these communities have. While a large number are absorbed in the services industry the others serve in industrial units that are focused on manufacturing and production. There is, however, a large number of the population that is concentrating on providing goods and services for these very ethnic groups (Steinwell, & Griggs, 2015). The groups are concentrated on maintaining their identity while being a significant part of the larger Australian picture. To support these sentiments there has been a mushrooming of several small and micro enterprises that have been self-financed and set up on a very tiny scale. These small businesses are being conducted on lines of the traditionally laid down rules that govern their transactions. Most of the business owners have little education and as such cannot have a total comprehension of the Australian Consumer Laws (ACL). They are not aware whether they were consumers as per the definitions of this law or were they small or micro businesses. They are unaware of the fact that they are violating the ACL with impunity while purchasing stock and materials for their business (usually within the limit of forty thousand Australian dollars) (Stowe, 2013). Conclusion It can be seen, therefore, that the Australian Consumer Law (ACL) favors small businesses in many ways. Yet, it should also be understood that there is a great gap between the awareness levels of the holders of small businesses regarding the stipulations of the ACL as pertaining to consumers and commercial establishments. To a large part many of the small businesses fall within the stated definitions of the consumer. There are several directives in the ACL that uphold the small businesses probably because the Australian government is concerned for the survival and sustenance of the small businesses. This is evident from the fact that in December 2014 there had been a case wherein pecuniary penalty was imposed upon a supermarket chain that had taken a threatening stance against small time suppliers of goods. Thus, the overall focus of the ACL has been to uphold the smaller businesses no matter how tiny a scale they were at or the stage of development and progress they were undergoing while also safeguarding the interests of the consumers.