thomson hall 02- 46255430 » Penalties

HR MANAGER PENALISED FOR THE EMPLOYER’S BREACHES

stephen — Mon, 12 Sep 2011 01:43:47 +0000

In a recent decision by the Federal Magistrates Court, a Human Resources Manager of a company was ordered to pay a penalty for being knowingly involved in breaches of workplace laws by his employer.

In the case of Fair Work Ombudsman v Centennial Financial Services Pty Ltd & Ors a company was found to have breached various sections of the then Workplace Relations Act 1996 (repealed and eventually replaced by the Fair Work Act 2009). The breaches included setting up sham arrangements and not paying statutory entitlements to employees.

The court proceedings named the sole director of the company as a defendant along with the Human Resources Manager who was not a director of the company.

The HR Manager submitted to the Court that he:“had merely been following the instructions of [the director] and had not had any input into the decisions which gave rise to the contraventions.” He submitted that his position as the human resources manager was “a mere title” and that he had no authority beyond what was approved by the director

.”However, in considering all the facts, the Court held that the HR Manager had knowledge of the essential facts of the breaches by the company and was knowingly concerned in and participated in the breaches.”

In the second judgment, the Court noted that the events:

“had a chilling effect on his career in human resources and that he has seen a significant decline in his income which would tend to increase the impact on him of any financial penalties imposed in these proceedings.…..The total penalty is $3,750. I am satisfied that these are just and appropriate amounts as aggregate figures.”

This decision by the Court is a reminder that Managers not just Directors of companies should ensure that the work they undertake complies with the relevant legislative requirements and they do not merely “follow instructions from the Company Directors”.

DIRECTOR PENALTY NOTICES TO INCLUDE UNPAID SUPERANNUATION

stephen — Tue, 05 Jul 2011 23:20:09 +0000

In the recent 2011 Federal Budget, the Government made its intentions clear in dealing with “phoenix activities” by Directors.

The term “phoenix activities” is commonly used to describe arrangements whereby a company incurs, but does not pay, various liabilities whilst carrying on business activities.

The amendments proposed are to extend the “Director Penalty Notice” provisions in the Taxation Administration Act 1953 (which currently apply in the main to unremitted PAYG deductions) to include unpaid superannuation guarantee amounts, a change which may result in Directors becoming personally liable for unpaid amounts of this type.

If the legislation is amended in accordance with the budget announcement, Directors may become personally liable for unpaid superannuation amounts merely because of an inability of the company to pay rather than any activity which might be considered to be fraudulent. This should be sufficient encouragement for Directors to ensure that arrangements are in place for the timely payment of superannuation guarantee obligations.

Director penalty notices – part 2

stephen — Mon, 21 Feb 2011 23:14:17 +0000

This is the second of a series of videos prepared by Insolvency Experts
Director penalty notices are notices that the Australian Taxation Office may send to directors of a company that has unpaid PAYG Withholding. The notice serves to make the directors personally liable for this debt of the company.
If the company makes payments to the ATO after receipt of a director penalty notice, but subsequently goes into liquidation, the personal liability of the directors may be revived. This video explains that trap.

Insolvency Experts have no connection with Thomson Hall. Apart from finding their newsletters and and videos quite useful, we know nothing of the quality of their work and offer no opinion on whether you should use them in preference to other insolvency practitioners.

Superannuation trustees penalised

stephen — Wed, 31 Oct 2007 04:50:23 +0000

The trustees of a self managed superannuation fund have been issued penalties of $30,000 and ordered to pay $32,500 in costs for breaching the rules relating to their fund.

On 15 October 2007 the Federal Court declared that the trustees for the Axent Group self managed superannuation fund (SMSF) had breached superannuation legislation by selling a property belonging to the fund and using the proceeds of nearly $150,000 to pay a private debt.

The couple had accessed assets in the superannuation fund before meeting any conditions of release such as retirement or reaching preservation age.

Deputy Commissioner Raelene Vivian said the action was part of an increased compliance focus on SMSFs by the Tax Office.

Ã¢â‚¬Å“The main purpose of SMSFs is to provide for retirement. Trustees who access their superannuation without meeting a condition of release are breaking the law and risking their retirement savings.

Ã¢â‚¬Å“The Tax Office provides a range of educational material to ensure trustees are aware of their roles and responsibilities.

Ã¢â‚¬Å“ItÃ¢â‚¬â„¢s vital SMSF trustees make sure they understand their legal and regulatory obligations as they are legally responsible for managing their fund.

Ã¢â‚¬Å“SMSFs which do not comply with the legislation are at risk of prosecution, penalties and additional tax,Ã¢â‚¬Å“ Ms Vivian said.

ATO press release
For more information about SMSFs, whether they are right for you and an SMSF checklist visit www.ato.gov.au or contact Stephen Hall or Gavin Thomson at Thomson Hall