Fair Work Commission Review and Accident Pay/Annual Leave Variations
On Tuesday 18 August 2015, the Fair Work Commission (FWC) handed down a decision in which it approved trade union claims to include accident pay across 21 modern industry awards. The Timber Industry Award 2010 and the Joinery and Building Trades Award 2010 are affected by this decision.
The decision by the FWC is disappointing for the Timber Trade Industrial Association (TTIA) and many employers in the industry. It not only reinstates accident pay in a number of modern awards, where the earlier transitional accident pay had ended
in December 2014, but it now introduces accident pay provisions (where such obligations did not previously apply).
The decision is also disappointing as it rejects employer arguments that the new award accident pay provisions will operate in opposition to the “˜step down’ in pay arrangements, present in both state and Commonwealth worker’s compensation schemes. These schemes are designed to encourage employees to return to work.
For employers covered by the modern awards, and consequently affected by this decision, it means they will soon be required to “˜make up’ the difference in pay between the compensation originally received by a worker whilst on workers compensation, and their modern award wage. The difference will be for the period of compensation between 26 and 52 weeks, dependent on the particular award. The precise details of the claims are expected shortly, with the commencement date expected to be 15 October 2015.
Once the details of the variations are known, the TTIA will supply further information to all our members.
The review also resulted in variations to annual leave provisions in a number of modern awards, including the Timber Industry Award 2010. The changes will result in the introduction of a new provision, which allows for the cashing out of annual leave,
in addition to dealing with other matters relating to excessive annual leave, annual closedowns, granting annual leave in advance, and paid annual leave.
Members are encouraged to contact the TTIA to discuss these changes to annual leave in more detail on (02) 9264 0011.
Congratulations to TimberTrader News for achieving a 30-year publishing milestone, realised in large measure due to the enthusiasm and persistence of the magazine’s founding publisher, Greg King.
Universally regarded as a larger-than-life character (even though he has now lost a substantial amount of weight), Greg’s commitment to the industry – and to getting out and about to interact with industry companies – is one of his great strengths.
Of course, Greg remains involved with the publication today by holding a mentor-like role as the founding publisher, and supporting the new owner, Great Southern Press.
So, it is clearly congratulations all around on reaching such a major milestone, as part of the ongoing history of TimberTrader News.
Mid-Rise Wooden Buildings
Along with the Australian Forest Products Association (AFPA), ForestWorks and Forest and Wood Products Australia (FWPA), the Australian Timber Importers Federation (ATIF) hosted an industry symposium to discuss rapidly growing and fresh opportunities in the mid-rise apartment, hotel and office construction sectors.
The objective of the symposium was to provide an opportunity for the timber industry supply chain, both companies and groups, to explore possible market development approaches to the rapidly expanding mid-rise market for timber products and timber-based building solutions.
The symposium followed a formal submission to change the National Construction Code Volume 1, to make it easier to build mid-rise buildings (up to eight storeys) out of lightweight and significant timber construction systems.
There was unanimous agreement at the symposium that this new mid-rise and commercial market holds an opportunity for timber products and systems, and that the competition here is from the concrete and steel industries, rather than timber products.
There was also an agreement that these new markets could provide opportunities for all timber products, including local and imported, structural and appearance, sawn, engineered and panels, mass timber, and lightweight structural products.
The presentations, and a summary of the discussions at the symposium, are available on the FWPA website at fwpa.com.au.
Illegal logging compliance notices
The Department of Agriculture has published its first compliance advice notice. It can be viewed online at agriculture.gov.au/forestry/policies/illegal-logging/compliance/can/2015
This, and subsequent notices, are intended to provide advice on specific compliance issues and guidance on what is acceptable practice when carrying out illegal logging-related due diligence.
These notices assist timber product importers and domestic processors when it comes to understanding the steps required to comply with due diligence requirements.
Trade Credit Insurance Program
The Timber and Building Materials Association (TABMA) and National Credit Insurance Brokers (NCI) have partnered with QBE Trade Credit to offer an exclusive package to benefit members.
Timber, hardware, and construction sectors are ideally suitable candidates for credit insurance, however premiums can be above average due to the higher chance of a non-payment.
The TABMA Trade Credit Insurance Program has been able to fill this gap by offering a wide range of features and benefits that were previously unavailable in Australia.
NCI claims statistics from the first half of 2015 reveal that there were 88 trade credit insurance claims in the building, hardware and timber industries, with total values exceeding $4.1 million.
Statistics such as these highlight the need for a specialised trade credit insurance program.
Together, TABMA and NCI have achieved this, with exclusive benefits to TABMA members as outlined below:
- Very competitive 12 month policy premiums from $6,850
- A low shared claims excess amongst all insured members on the same insured buyer
- Exclusion of part of turnover, therefore saving on premium cost;
- 90 per cent indemnity
- All limit administration charges and discretionary limit report costs managed centrally by NCI
- 100 per cent reimbursement of collection and legal costs for insured buyers
- A pay by instalments plan.
What would be the impact if one of your largest debtors failed to pay you? The TABMA Trade Credit Insurance Program is there so you don’t have to find out the hard way.
For more information on TABMA and NCI’s partnership, contact Graham Crozier on (02) 9458 2622.
The NCI’s three big Ps of trade credit
Exposure is present in all aspects of business, and more often than not these risks can be minimised or removed. The NCI highlight the need to address three areas, including the Personal Property Securities Act – 2009 (PPSA), privacy,
When combined, these three areas ensure that compliance is met, meaning you remain better protected as a business owner.
The PPSA (2009) relates to any instance in which property (other than real estate property) is used as collateral in a security arrangement:
- It establishes rules for determining the relative priority of competing security arrangements
- It creates a national register for recording and viewing those security interests.
The PPSA do not just apply to those who take a more traditional security over other assets (such as a bank securitising a loan).
In the case that a supplier has any sort of claim to an Australian buyer’s assets, and in order to ensure they will honour their payment obligations, then the PPSA will – most likely – apply the following:
- Selling goods on retention of title terms
- Supplying goods to a retailer to be sold on the supplier’s behalf.
Privacy law reform applies to most businesses supplying on credit. Businesses that turnover more than $3 million per annum, and access personal information of individuals (including sole traders, company directors and personal guarantors), are required to comply with the Australian Privacy Principles.
Non-compliance can see maximum penalties of $1.7 million, so clearly the consequences are very real. Additional issues include wasted time, money, and energy in dealing with a complaint.
To make a successful preference claim, the liquidator must prove that payments were received in respect of an unsecured debt.
Creditors who have a perfected security interest, such as a purchase money security interest (PMSI) claim, or a retention of title creditor (or hirer of goods), are usually entitled to claim the status of a secured creditor.
Getting on the front foot early produces the best results when responding to a preference claim.
When creditors receive a preference claim, broadly speaking, there are three ways to deal with it:
- Write a cheque
- Do nothing and hope that it goes away
- Get on the front foot and actively work to make the liquidator go away.
In our experience, getting on the front foot early almost always produces the best net results. Be sure to use a specialist solicitor, because the first response needs to be handled effectively.
The NCI can help in all of these areas, for more information visit nci.com.au or email Gary Coates on Gary.Coates@nci.com.au or call (02) 9458 2626.
As many in the timber merchant sector know, the rise of the “˜big box’ stores across Australia created a major category change, and saw many businesses close, while forcing others to find new directions to compete in the market. The concern the industry has when it comes to some of the “˜big players’ was that, even though their behaviour seemed anti-competitive, there was little that could be done.
Now, with the Competition Policy Review that independent consultant, Professor Ian Harper, and an expert panel completed earlier this year, it seems that finally the opportunity to defend the independent merchant’s position can be taken.
This opportunity is available by supporting the proposed changes to Section 46 of the Competition and Consumer Act.
The current rules that guide the Australian Competition and Consumer Commission (ACCC) make it difficult to assess and, in turn, challenge the behaviour of companies that are large and deliberately using their size to push out smaller competitors.
The independent merchants add a great deal of value to the timber industry by building strong relationships with builders that service the renovation market. These relationships deliver significant results by providing builders with the flexibility to meet the customer’s, and bank’s, demands.
More often than not, the banking demands trump those of the customers. And because the big players entering the market sector come from a “˜grocery background’, they fail to understand and support the needs of the sector.
It can be argued that by using market force to enter the sector, they continue to weaken the ability of the market to respond to individual customer needs.
So what can be done about this?
The completion of the Harper Review offers the merchant sector a method to challenge the activities of the big box stores by pushing for an effects test, which the Review defines as follows:
“An effects test is a shorthand way of referring to whether conduct has the purpose or likely effect of substantially lessening of competition. This test appears in a number of other provisions of the Competition and Consumer Act, and is perhaps best known
in the context of mergers.”
The Timber Merchants Association (TMA) has been active in supporting the implementation of an effects test by lobbying the government, together with other industry associations. We feel it is important that all merchants contact their local MP and support the implementation of the effects test into Section 46 of the Competition and Consumer Act.
Please contact the TMA on (03) 9875 5000 should you like more information regarding this very important activity.