April 24

Claims in the Construction Industry – Subcontractors’ Charges Act 1974 (Qld)

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If you are a subcontractor owed money, there are industry-specific legal remedies available to you, and it is important to know your rights and to act promptly to ensure that those remedies are used effectively.

What are the options?

A payment claim under the Building and Construction Industry Payments Act 2004 (Qld) (BCIPA) is often the quickest, cheapest road to payment recovery. BCIPA creates a relatively fast dispute resolution process (adjudication), where industry-experienced adjudicators can make court-enforceable interim decisions about disputed payment claims usually within approx. 4 – 7 weeks. A normal court process can take years.

Strict time limits apply. People unfamiliar with the process should seek urgent legal advice because BCIPA adjudication is a powerful recovery tool that can easily be lost forever if any step is not made on time.

Subcontractors’ Charges Act 1974 (Qld) (SCA) is a preferable road to payment recovery only usually in limited circumstances: where the contractor is insolvent but is still owed money by someone ‘up-stream’ in the project supply chain.

SCA enables a subcontractor to issue a statutory charge (i.e. security) over monies owed (including retentions) for the project to the insolvent contractor direct to the Principal and/or other contracting parties ‘up-stream’ in the project. The statutory charge freezes those monies pending final resolution of the claim.

Unfortunately, SCA cannot be used with the fast-track BCIPA adjudication process. A subcontractor must choose.

Regular court proceedings must be issued to resolve SCA claims within one month of the charge notice, unless liability is conceded, otherwise the charge lapses and ceases to have any security effect.

How does SCA work?

A subcontractor can lodge a notice of claim of charge (form 1) on the ‘up-stream’ party. The form 1 must be certified by a prescribed person (i.e. registered architect or engineer or quantity surveyor) and must be supported by a statutory declaration declaring the debt is owing. It must also be served within three months of the completion of the works or (where the claim is for retention money only) within three months of the expiration of the defect liability period in the contract.

A subcontractor’s claim must only be for relevant work as defined under the Act, being work done or commenced upon land where the contract is performed. Note: there are exclusions, including the delivery of goods, supply of plant materials or equipment under a hire agreement (not to be incorporated in the work), domestic building work and work done in relation to testing or taking of measurements.

A subcontractor must also serve a notice (form 2) on the (usually insolvent) builder. Within 14 days of serving that form 2 the builder ought to respond with a form 4 notice either accepting liability, disputing the claim, or accepting partial liability. If liability is accepted, and there is money owing to the contractor, it will instead be paid direct to the claiming subcontractor. Otherwise, regular court proceedings must be filed within a month of the form 1 to maintain the charge. Regular court claims can be slow and expensive but at least recovery is possible despite the insolvency. Outside of the construction industry recovery in an insolvency is often hopeless.

For advice about payment recovery in the construction industry, or related topics, please contact:

Ben Warren – Director

M: 0402 003 364
E: bwarren@ellemwarren.com.au

© April 2017

March 6

High Court of Australia: No Implied Term of Mutual Trust and Confidence in Employment Contracts

In the recent case of Commonwealth Bank of Australia v Barker [2014] HCA 32 the High Court unanimously overturned the Full Court of the Federal Court, ruling Australian employment contracts do not provide for an implied mutual term of trust and confidence. This decision was a clear divergence from the current UK position.

What is an Implied Term of Mutual Trust and Confidence?
An implied term is one which the law will imply into a contract despite the parties not having referred to it or having considered its effect. A trust and confidence term is one that requires employee and employer alike to avoid engaging in conduct that may damage or destroy the employment relationship.

Specific examples of damaging or destructive conduct include those which are designed to force an employee to resign or are discriminatory in nature. The implied term however is very broad and as such has lead to confusion on several occasions.

The Facts
Mr. Barker held an executive position at Commonwealth Bank Australia when he was made redundant due to a corporate restructure. His employment contract contained a clause providing a redundancy payment if CBA’s effort to redeploy him within the company failed. Mr. Barker argued that CBA failed to make an adequate attempt to redeploy him, thus breaching an implied term of mutual trust and confidence between the parties.

The High Court’s Decision
The issue to be considered by the High Court was whether the relevant employment contract did in fact comprise an implied term of mutual trust and confidence between CBA and Mr Barker.

In a unanimous decision, the High Court reasoned that employment contracts do not impliedly require either employers or employees to conduct themselves in a manner unlikely to destroy or seriously damage the relationship of trust and confidence between them.

What does this mean for Employers?
The High Court’s decision in this case is considered a ‘win’ for employers and means employers are not subject to this additional implied duty.
Employers may rest assured that any employee or ex-employee will not be able to claim damages for an employer’s alleged breach of an implied duty of trust and confidence.

Nevertheless, employers should seek legal advice in regard to employment agreements, subcontractor engagement, workplace policies, employment claims, and in the appropriate handling of WH&S risks. Many of these employment-related obligations expose both the employer entity and, if the employer is a company, also directors personally to liability.

For further information about this decision or to check that your employment contracts are in line with legal obligations, please contact:

Ben Warren – Director
M: 0402 003 364
E: bwarren@ellemwarren.com.au

Richard Ellem – Director
M: 0403 464 875
E: rellem@ellemwarren.com.au

February 24

The Importance of a Social Media Policy in the Workplace

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Several recent unfair dismissal cases highlight the importance for businesses to establish clear policies regarding social media use, including the use of personal social media accounts outside work hours.

The Case and Outcome
In the case of Glen Stutsel v Linfox Australia Pty Ltd, an employee was dismissed on the basis of serious misconduct after using his personal Facebook account to criticise management in his workplace. He used language which was deemed inappropriate and offensive. According to the employee, to his knowledge the Facebook account settings were set to ‘private’, meaning the comments were only intended to be read by a select group of Facebook ‘friends’.

The Fair Work Australia tribunal ordered reinstatement of Mr Stutsel and back pay for the time he had not been working. Commissioner Roberts reasoned that although the comments were “foolish”, they were not intended for the public to read, and therefore, the termination was considered harsh, unjust or unreasonable.

How was the decision justified?
Linfox’s failure to implement a social media policy meant there were insufficient grounds for dismissal. The tribunal stated that in “the current electronic age”, employers must implement a social media code of conduct, or the business will face damaging their reputation.

The major points from the decision include the following:

• The company had no social media policy, which left it with no leg to stand on, so to speak;

• The comments didn’t contain any credible threats towards the employer and were intended for a private forum;

• Some of the adverse comments on Mr Stutsel’s Facebook page were made by other Linfox employees;

• Mr Stutsel displayed a genuine ignorance and lack of understanding about Facebook’s functions and its technicalities.

Implementing a social media policy
An effective social media policy can help to regulate employees’ activities outside the workplace. Such standards must reflect the business culture and be designed to mitigate risks involved with online social behaviours. In Pearson v Linfox Australia Pty Ltd, the Fair Work Commission provided direction as to when social media policies can validly regulate employee’s online behaviour, and how they could be enforced.

In this instance, the Commissioner accepted that a workplace social media policy could in fact apply outside of work hours, as “it is difficult to see how a social media policy designed to protect an employer’s reputation and security of the business could operate in an ‘at work’ context only”.
Employers who seek to enforce their social media policy outside the workplace must ensure such provisions go no further than to protect the reputation and security of the business. The business policy should clearly set out the expectations of the employees.

Balancing employee’s interests
It is important to develop a balanced policy whereby an individual’s right to privacy is respected. A comprehensive rule covering any and all use of social media, both during and outside of work hours, would be inappropriate and impractical.

Employees must be reminded that all comments and posts made on social media have the potential to be distributed and viewed by a much broader audience than initially intended.

Steps to implement a social media policy in the workplace
A clear social media policy can help to regulate employees’ social media activities regarding their employment outside the workplace. The policy must reflect the business culture and be designed to minimise risks such as ‘’bad mouthing’’ your employer or workplace online. Employers who seek to enforce their social media policy outside the workplace must ensure such provisions go no further than to protect the reputation and security of the business. The policy must be reasonable.

1. Define ‘social media’
Ensure the scope of your policy is not inadvertently narrowed; cover all types of social media including Facebook, LinkedIn, Twitter, YouTube, blogs and other channels which allow individuals to post images, comments, videos. Keep in mind social media is continually changing and new channels are introduced often.

2. List behaviours that are acceptable
Depending on the industry and workplace, appropriate decorum may involve limited or no access to social media during the work day. However, it would be fair if an employee logged in to their Facebook account during a lunch break, whether that be on their work computer or another personal device such as a phone or tablet.

3. Clearly define conduct that is unacceptable
Inappropriate behaviour may include comments which could be interpreted as offensive or critical, or those which result in damage to the employer’s reputation. Additionally, breaches of contract or fiduciary duties such as disclosure of confidential information and misuse of intellectual property.

4. State the consequences of breaching the policy
The disciplinary process of the business should be effective, regularly reviewed, and available in writing for all staff. If the policy is breached, such methods must be followed accordingly. Employees should also be reminded that if a serious breach occurs, termination of employment is a potential consequence.

What next?
Once a workplace policy has been developed, it is important to periodically review and update this policy in order to adapt to the ever-changing social media landscape. Training employees is essential, to keep them up-to-date with workplace policies will help to manage risks and will also offer the employer an avenue of recourse where employees fail to meet behavioural standards.
For further information about employment matters, including workplace policies, please contact:

Ben Warren – Director

M: 0402 003 364
E: bwarren@ellemwarren.com.au

Richard Ellem – Director

M: 0403 464 875
E: rellem@ellemwarren.com.au

© February 2015

January 5

Accept No Imitations: Trade Mark Protection

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For small and large businesses alike, registered trade marks protect a very valuable asset: the identity of your business. They help to distinguish your business from that of your competitors.

Existing clients may recognise your logo but what happens if a competitor uses a similar logo? What if that competitor imitates your product packaging, or trades under a similar name?

This article provides an overview of trade marks in Australia, and securing your trade marks to protect your business.

Maximising protection

In Australia, the best protection is afforded by registering your trade mark with the Trade Marks Office.

Registration entitles the trade mark owner to exclusive use of that trade mark for the goods or services specified. This is not only valuable for the business’ identity, but is an asset that can be traded or licenced.

It is important for businesses to remember that trade marks are not limited to the stereotypical business name or logo. Less tangible features are also registrable, including shape and colour. A notable example of this is ‘Cadbury Purple’ (Reg. No. 1120614). Even sounds and scents can be registered.

In order to be registered, a trade mark must be ‘unique’. This means it is capable of being used to distinguish your goods or services from those of others.

Registration will usually not be granted for a trade mark that is too similar to another trade mark, particularly if they are within the same market.

This is usually the key issue when a trade mark is opposed: that the trade mark is not distinctive enough.

The Golden Rule: Register first

Generally, the trade mark that is first in time will have the best rights to use it. This is demonstrated by a number of recent cases involving iconic brands, where a ‘big brand’ was the first-registered trade mark.

In 2014, Facebook successfully challenged the registration of the mark “FriendBook” in Australia under the Trade Marks Act 1995 (Cth). It was found that the registered “Facebook” trade mark had acquired a reputation in Australia and “FriendBook” was likely to deceive or create confusion, particularly as it provided similar services to Facebook.

Similarly, McDonalds successfully challenged registration of a trade mark “McSlider” to a small food outlet. It was held that McDonalds’ strong reputation for usage of “Mc” trade marks, the new trade mark was likely to cause confusion in that it suggested a relation to the McDonalds franchise.

Not just for big business

Trade marks do not just protect big businesses – they also provide valuable protection to small and medium businesses.

This is perhaps illustrated best by a recent Mexican case where technology giant Apple unsuccessfully challenged the ‘iFone’ trade mark used by a Mexican phone company. The trade mark had existed as a registered trade mark before Apple’s iconic “iPhone” trade mark.

In a recent local decision, Australia Post unsuccessfully challenged the trade mark “Digital Post Australia”. It was determined that the public would not be likely to associate this brand with Australia Post.

Unregistered trade marks?

Although the registered owner of a trade mark is the person in whose name the trade mark is registered, unregistered trade marks are afforded some protection. This will usually require that the company has accrued a reputation and goodwill in the trading name in a particular jurisdiction.

The owner of an unregistered trade mark may be able to enforce unregistered trade mark rights against a registered trade mark holder. However, as these rights do not specifically arise under the legislation, they are more vulnerable to defeat by a later registered trade mark owner.

As a recent example of circumstances where an unregistered interest was protected, two companies had both used a ‘Nappy Land’ logo. One was registered and the other was not – the unregistered logo predated the registered trade mark.

It was held that the registered trade mark could not be used in the same jurisdiction as the unregistered trade mark. Nevertheless, the protection afforded to the unregistered logo was more limited in its nature to that granted to a registered trade mark. It did not grant the owner of the unregistered logo exclusive ownership rights, but limited the rights of the registered trade mark holder to use only the registered version of the ‘Nappy Land’ logo. The registered owner retained the right to use its registered trade marks in most Australian states.

Accordingly, reputation and goodwill should not alone be relied upon to protect a trade mark. Registration should always be preferred to offer full protection.

Key recommendations

• Businesses should formally register trade marks, to obtain the greatest protection available and to minimise the potential for litigation;

• Trade marks should be registered at the earliest possible stage, as the earliest in time usually has the best claim to use that mark;

• Businesses should seek legal advice prior to registering a trade mark to minimise the potential for it to be challenged;

• Small business owners should not be discouraged from pursuing trade mark infringement – protections extend to small and large companies alike.


Regardless of the size of your business, registering your trade marks provides valuable protection against others who attempt to leverage the goodwill built up in your business to lure clients. If it is worth your time and money to invest in your brand then it is worth protecting that investment with registration. A distinctive and earlier registered trade mark will help protect the brand value in your business.

For further information about registering and protecting trade marks, please contact:

Ben Warren – Director

M: 0402 003 364
E: bwarren@ellemwarren.com.au