Discuss about the Australian Partnership and Employment Law.
Jack, Jill and Max together were doing a business of selling trucks since last twelve months. But the problem was that they did not have a formal business structure. The business was doing very well and now they wanted a formal business structure. There are various options which they can opt for. In Australia one has several options like company, partnership, individual and trust. In this case these three cannot open a sole trading business since three persons are involved. For them the best option which is available is to start business in a partnership. Since three personas are involved in the business partnership will be the best option since they can share profits in the ratio which they want to.
As per Partnership Act 1963 Section 6 a partnership is a relation between people who carries out business in a common view of profit, it also includes limited liability partnership. If there is a relation between the members of a corporation then it would not be covered under this Act. (Partnership Act, 2016)
Partnership business structure will suite them very well because of the following reasons:
Liabilities of a partner are also explained in the Partnership Act 1963. As per Section 13 of the Partnership Act 1963, each and every single partner is jointly and severally liable for the debts and obligations of the firm. (Partership Act, 2016) If any one of the partners dies then the partner’s estate would be liable for debts and obligations. But a general partner would only be liable to the extent the partnership cannot satisfy the debts and obligations or as per the partnership agreement.
A very good example can be given of Red Cross Australia. Red Cross Australia is a very powerful partner for business. Hence in the given case of Jack, Jill and Max partnership would be the best business structure. Now they must have a partnership agreement among them and in that deed all the rules and regulations relating to partnership must be mentioned. The case study which can be referred for partnership is of NGV and Bank of Melbourne and Melbourne Theatre Company. These are the very two popular partnership firms which should be set as an example of partnership. (Creative Partnership Australia, 2016)
This case is about a company named as Child Toys Supreme Pty Ltd who makes and sells cheap children’s toys in Australia. News came out throughout Australia that the plastic chemical used to make the toys is very harmful. Betty was a salesperson of the company; he had promised to the retail customers that the toys don’t have any harmful plastic chemicals. But the news which had spread earlier was true and due to this retail customers were losing sales. Due to the harmful chemical a child was seriously injured and so appropriate action needs to be taken against the company. (Australian Government, 2016)
As per Competition and Consumer Act 2010 whenever a consumer buys a product then those products comes with automatic guarantee that they would work and do whatever they have been asked for. But if the product does not fulfil what is expected from it then consumer have consumer rights against the company. In Australia since 1st January 2011, following consumer guarantees must be given on all products and services: (Competition and Consumer Commission, 2016)
If all the above mentioned things are not therein the product then consumers have the right to get a refund if the product is unsafe. It is clearly said in the Competition Law that if the product does not comply with the customer guarantee then customers has the right to take action against the company. Customers also have the rights to claim compensation for damages and loss which was caused by the safety defect in the product which was supplied by the manufacturer. Generally in these cases manufacturers are liable but if it is difficult to identify the manufacturer then retailers would be held liable. They need to pay damages to the customers. (Competition and Consumer Commission, 2016) As per Section 133H of the Competition and Consumer Act 2010 if the court is satisfied that the goods are not safe or it is providing harm to customers then the court can give an order to the inspector to search the premises and such goods or even destroy it. Company must also pay damage charges to the persons who had suffered due to defective goods. (Commonwealth Consolidated Acts, 2016).
As per the laws discussed above the actions which was taken by Betty was not at all correct. He knew that the product was not safe and has some chemical elements which were harmful. One child also got hurt because of this chemical element in the toy. This means company has not fulfilled the Product Safety Law, and so customers have the right to take action against the company and claim compensation for the damage. Company first need to fire Betty and then company is liable to pay all the damage charges to the concerned person. In this case Betty’s act was intentional and so he must be fired.
Charles was the operation manager of the Child Toys Supreme Pty Ltd. He knew about the identity and requirements of all the major clients since he was in the senior position. He wanted to retire in the month of March. As per the employment contract he had agreed that he would not compete against the company for two years. But within two months of his retirement he started his own company with his wife May. His company was also doing the same business as his previous company. Charles and his wife are the sole shareholders of the company and then they had also offered customers of Child Toys Pty Ltd to sell their own toys. This shows that Charles had violated the employment agreement. (CoolJagron, 2016)
As per Australian Employment Law when an employee joins a company then many companies make its employee to sign an employment contract. The terms and conditions of the contract can by anything but it should not be against the Labour Laws in Australia. Contracts can either be in the form of written document or entirely oral. In Australia generally company enter into employment contract with its employees who provides for benefits in excess of the minimum terms and conditions of employment. If an employee has signed a contract with the company that he cannot carry out the same business after he resigns then he cannot do the business as per the terms mentioned in the contract. But if he does the same then he has to cease the operations of the business immediately. But if the contract was signed after his joining then this contract would not be applicable. This contract would only be applicable when it was signed before his joining. (K&L Gates, 2016)
In this case Charles has signed a contract with the company that he would not compete against the company for two years. There was nothing mentioned that when the contract was signed. It is assumed that the contract was signed before his joining. Now since contract was signed before his joining, he needs to seize the operations of his business. If he did not seize its operations then company can take legal action against him and his new company. Company has the right to go to the court and court’s decision would also be in the favour of the company.
The case is very similar to the case of Nikolich v Goldman Sachs (2006) where the Court held that the company policy which was sent to the employee at the time of letter of appointment formed part of the employment contract with the employee. At the end court had awarded Mr. Nikolich over a half million dollars in compensation. (Maurice Blackburn, 2016) .
Anon., 2016. Austii.edu.au. [Online]
Available at: https://www.austlii.edu.au/au/legis/act/consol_act/pa1963154/s6.html
[Accessed 29th August 2016].
Australian Government, 2016. Autsrlian Consumer Law. [Online]
Available at: https://www.cbs.sa.gov.au/assets/files/product_safety_guide.pdf
[Accessed 29th August 2016].
Commonwealth Consolidated Acts, 2016. Competition and Consumer Act 2010. [Online]
Available at: https://www.austlii.edu.au/au/legis/cth/consol_act/caca2010265/s133h.html
[Accessed 29th August 2016].
Competition and Consumer Commission, 2016. Consumer Guarantees. [Online]
Available at: https://www.accc.gov.au/consumers/consumer-rights-guarantees/consumer-guarantees
[Accessed 29th August 2016].
Competition and Consumer Commission, 2016. Product Safety. [Online]
Available at: https://www.accc.gov.au/business/treating-customers-fairly/product-safety
[Accessed 29th August 2016].
CoolJagron, 2016. Employement Contracts. [Online]
Available at: https://www.lawhandbook.org.au/11_05_03_employment_contracts/
[Accessed 29th August 2016].
Creative Partnership Australia, 2016. Creativepartnershipsaustralia. [Online]
Available at: https://www.creativepartnershipsaustralia.org.au/news/the-top-10-case-studies
[Accessed 29th August 2016].
How-to-start-a-business-guide.com, 2016. how-to-start-a-business-guide.com. [Online]
Available at: https://www.how-to-start-a-business-guide.com/partnership-advantages.html
[Accessed 29th August 2016].
K&L Gates, 2016. Employment Law. [Online]
Available at: https://www.klgates.com/files/Upload/DoingBusinessInAustralia_Employment_Law.PDF
[Accessed 29th August 2016].
Maurice Blackburn, 2016. Breach of employment contract. [Online]
Available at: https://www.mauriceblackburn.com.au/employment-contracts/breach-of-employment-contract/
[Accessed 29th August 2016].
Partership Act, 2016. Austii.edu.au. [Online]
Available at: https://www.austlii.edu.au/au/legis/act/consol_act/pa1963154/s13.html
[Accessed 2016 August 2016].
Partnership Act, 2016. Austii.edu.au. [Online]
Available at: https://www.austlii.edu.au/au/legis/act/consol_act/pa1963154/s6.html
[Accessed 29th August 2016].
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