New financial year. New wage increases. Find out how the Annual Wage Review affects you.

New financial year. New wage increases. Find out how the Annual Wage Review affects you.

On 1 July 2015 everyone being paid the minimum wage or minimum award wage will receive a pay increase. This increase is determined at the Fair Work Commission’s (“FWC”) Annual Wage Review (“AWR”). Groups of employees traditionally paid minimum wage or minimum award wage include retail and hospitality staff, cleaners, childcare workers, farm labourers and factory workers. Over 1.8 million Australians are paid the minimum wage and are affected by the Annual Wage Review. This includes many lawgradinpink readers, who are studying at University find themselves working in retail or hospitality while they study.

What is the Annual Wage Review?

The Annual Wage Review is a determination made by the Fair Work Commission at the end of each financial year on the national minimum wage (s285(1) Fair Work Act 2009 (Cth)). The determination is made in the first week of June. The draft national minimum wage order is then released and finalised by the end of the financial year. The new minimum wage comes into effect on 1 July. The determination is made by an Expert Panel. The two main roles of the Expert Panel at the Annual Wage Review are to:

1.       Review and vary award minimum wages; and

2.       Review and vary national minimum wages (s285).

Who is on the Expert Panel?    

The Expert Panel is made up of seven Members of the Fair Work Commission. At least three Members must be “experts” in workplace relations, economics, social policy, business, industry or commerce (s620(1)). The Expert Panel follows any directions made by the FWC President on how to conduct the AWR (s582). Decisions on the minimum wage are made by majority (s620(4)). The 2014/2015 AWR Expert Panel consisted of:

1.        Justice Ross (President);

2.       Senior Deputy President Watson;

3.       Senior Deputy President Harrison;

4.       Commissioner Hampton;

5.       Mr Anthony Cole (member of the Board of the Commonwealth Superannuation Corporation, a member of the Advisory Board for the NT Treasury Corporation and a Director of Australian Ethical Investors);

6.       Professor Sue Richardson (Principal Research Fellow at the National Institute of Labour Studies); and

7.       Mr Stephen Gibbs (director for Hastings Funds Management Ltd and Ecosystems Investment Management Pty Ltd).

What will the increase be on 1 July 2015?

The new national minimum wage is $656.90 per week, calculated on the basis of a 38 hour working week. The minimum hourly rate is $17.29 per hour. This is an increase of 2.5% on the previous minimum wage, and increases the weekly rate by $16, and the hourly rate by 42 cents.

It should be noted that different minimums apply to junior employees, employees who are in a training arrangement such as trade apprentices, and employees with a disability. Junior employees must be paid a percentage rate of the minimum wage. For example, as of 1 July 2015, a 16 year old must be paid at least 47.3% and a 20 year old must be paid at least 97.7% of the minimum wage.

How did the FWC come to this decision?

The Expert Panel conduct extensive research and engage in a comprehensive consultation process in the months leading up to June. The objectives of the Fair Work Act, and in particular, the objectives of minimum wages in s284 must be taken into account:

a.  The performance and competitiveness of the national economy, including productivity, business competitiveness and viability, inflation and employment growth; and

b.    Promoting social inclusion through increased workforce participation; and

c.    Relative living standards and the needs of the low paid; and

d.    The principle of equal remuneration for work of equal or comparable value; and

e.  Providing a comprehensive range of fair minimum wages to junior employees, employees to whom training arrangements apply and employees with a disability.

Broadly, the Panel assesses changes in economic and social data from year to year and then determines how this informs the statutory criteria.

In the most recent AWR, the Panel considered the following economic factors:

1.       Real GDP growth remains below trend over the past two years;

2.       Labour productivity rose by over 1.6 per cent over the year;

3.       No evidence of particular corporate stress as bankruptcy rates fell, business entry rates rose, and business exit rates were lowered;

4.       Consumer Price Index increased by only 1.3 per cent over the year;

5.       Underlying inflation is at 2.4%, within RBA medium-term target band;

6.       There has been a continuous fall in aggregate wages growth. Real net disposable income has increased by less than GDP from the second half of 2011;

7.       GDP has continued to rise while real net disposable income has grown much more slowly;

8.       Employment growth remains subdued, growing 1.6 per cent over the year;

9.       Unemployment rate has steadily increased to 6.1 per cent in April 2015;

10.    There has been growth in unemployment, under-employment, long-term unemployment and youth unemployment, all of which are signs of under-utilisation of the workforce;

11.   Stronger economic growth and CPI is predicted for the coming two years; and

12.   The outlook for the Australian economy remains generally positive.

The Panel also considered social factors including:

1.       Income inequality remains at relatively high levels compared with the past;

2.       The level of financial stress rose more for low-income paid households than for all employee households in the GFC aftermath;

3.       Limited data in recent years shows a small increase in financial stress for low-income households; and

4.       Overall, the relative living standards of minimum wage employees has improved slightly the past year or two as inequality among all employees has stabilised and indicators of unmet need among the low-paid have improved.

In weighing the economic and social factors with the relevant considerations under the Fair Work Act, the Panel acknowledge that there is often tension between economic, social and other considerations. The Panel had a particular focus on the low growth in consumer price and aggregate wages over the past year, as they have a direct relationship with relative living standards and the needs of the low-paid. A moderate increase of 2.5% was therefore considered appropriate. 

How does the wage increase affect you?

If you are an employee currently being paid minimum wage or minimum award wage, your employer should automatically increase the amount you are paid to the new minimum. Make sure you check your first new financial year pay slip to make sure you have been paid at the new minimum rate. The minimum wage is a National Employment Standard which cannot be altered by awards or enterprise agreements. An employer who fails to pay the minimum wage is committing an offence under section 293 of the Fair Work Act 2009 (Cth).

How the Matildas can get a pay rise and negotiate better pay from the FFA

The Matildas have made it through to the quarter finals of the Women’s World Cup. They are playing Japan, the reigning world champions, on June 28. To get there, the Matildas survived a draw from hell including world #2 the United States, African champions Nigeria, world #5 Sweden, and world #7 Brazil. The Matildas are no light weights, currently sitting at #10 on the FIFA World Rankings. FYI the Socceroos currently sit at #63 on the FIFA World Rankings. There has been growing public outcry at the pay disparity between our women’s national team and the men’s national team. Right now is a perfect time for the Matildas to be lobbying for better wages, as their current agreement expires on 31 July 2015. In this blog post, I compare the Matildas and Socceroos collective bargaining agreements and explain how the Matildas can achieve better conditions in their next round of collective bargaining.

Introduction to collective bargaining

Professional footballers in Australia are represented by a union/employee organisation called Professional Footballers Australia (“PFA”). The PFA represents both the Matildas and the Socceroos in collective bargaining. Quite a few players are actively involved in the PFA, and the current Matildas collective bargaining agreement was signed for the PFA by goalkeeping legend Melissa Barbieri, who is currently representing Australia at her fourth World Cup. Collective bargaining is a process governed by the Fair Work Act 2009 (Cth) where employers and employees negotiate a collective agreement that outlines aspects of the employment arrangement such as wages, leave, and categories of employment. The PFA represents players in negotiating collective agreements with Football Federation Australia, who engages players for Australia’s national teams. The Matildas and the Socceroos have separate collective agreements. The key provisions in the Matildas collective agreement include provisions on:

·         minimum and maximum player payments

·         medical minimum standards

·         injury payment requirements

·         distribution of prize money

·         grievance and complaint procedures

Why the current Matildas Collective Bargaining Agreement needs an overhaul

Apart from wage issues, there are a number of reasons the Matildas CBA is in need of an overhaul:

1.       Amendments to the original CBA make it difficult for players to identify what their rights are

The original CBA ran from 2010 to 2013. In 2013, instead of creating in a new CBA, the 2013 CBA was amended with a Term Sheet, running from 2013 to 2015. The original CBA continues to operate except to the extent it is inconsistent with a clause in the Term Sheet. This would be ok if all the Matildas players were lawyers and had half a day to work out which terms are displaced. This is not the reality. This form of amendment makes it extremely difficult for players to work out what their rights are. Amendment by Term Sheet may seem like the easier, more cost-effective option at the time, but it can lead to complications and legal disputes over whether a clause has been superseded or not.

2.       Three separate CBAs should be in one agreement

The Socceroos, Matildas and A-League all have separate CBAs. This does not make sense in an industrial relations environment where an employer usually negotiates one CBA or enterprise agreement for all related employees. As the Socceroos, Matildas and A-League players all undertake the same service, being to play soccer, they should all be covered by one agreement. The fact they are in separate agreements screams segregation and indicates an acceptance of different groups of players having different rights. Fortunately, the FFA and FPA have signed a Memorandum of Understanding that they will make one agreement covering the Socceroos, Matildas and A-League when the current CBAs expire on 31 July 2015.

3.       Annexures are outdated

The original CBA includes several annexures including a standard player contract. Some of the terms in the contract are very out of date and some key terms usually in an employment contract are not included.

Comparison of Matildas and Socceroos current CBAs

	Matildas	CBA reference	Socceroos	CBA reference
Minimum number of players contracted	20	2.1 (Term Sheet)	Players have strict contractual obligations to clubs. Players are employed on an Assembly basis by FFA. Clubs are provided written notice of the player’s selection for that Assembly.	6 (CBA)
Length of contract	6 months Two contract periods a year	2.2 (Term Sheet)
Notice if contract is not going to be renewed	1 month	2.2 (Term Sheet)
Minimum annual payment	$21,000 ($10,500 per 6 month contract)	3.1(a) (Term Sheet)	Socceroos are engaged on a complicated contractual basis and the pay they receive is calculated using a complicated combination of match payments, daily allowances, bonuses, prize money, and commercial payments. Most of a Socceroos earnings come from commercial payments.	7 CBA
Top up for contracted players	FFA can distribute an additional $75,000 to contracted players, but no contracted player can receive a top up of more than $14,000	3.1(c) (Term Sheet)
Match fee general1	$500	3.1(a)Term Sheet	$6,500	6.1 Term Sheet 1
Match fee	Group match $500 Round of 16 $600 Quarter Final $750 Semi Final $1,250 Finals $1,500	3.2 Term Sheet	Group $7,500 Round of 16 $8,500 Quarter Final $9,500 Semi Final $11,500 Final $17,000	6.1 Term Sheet 1
Daily fee for uncontracted players attending Assembly2	$150	3.1(b)Term Sheet	$240	7.1 Term Sheet 3
Bonuses and prize money	Paid in equal shares to relevant players	5.4 CBA	30% of gross prize money to be paid to players	5.1 Term Sheet 3
Licensing profits	Players receive in equal shares -50% of revenue from team based products -70% of revenue from player based products -50% of revenue from commemorative team produces	5.5 CBA	Similar distribution % to Matildas, but massive estimates of licensing profits, ie $1,056,000 to be distributed between players in 2013/14 FY and FFA guarantees profits ie  $700,000 for 2013/14.	3.2 Term Sheet 3
Provision of equipment	FFA will do its best to provide contracted players with Nike boots, shinguards and uniform	4.1 Term Sheet	FFA must supply all apparel and footwear	4.1(d) CBA
Provision of lounge facilities for travel	FFA will do its best to provide lounge facilities when team is travelling	4.3 Term Sheet	Travel to be business class.	4.1(c) CBA
Accommodation	No specifications		Players to be provided for single rooms at the World Cup and long tours. Accommodation to be five star.	8.1 Term Sheet 1 4.1(c) CBA

¹ This is the amount players receive for being listed on the official match sheet for a game. This fee is paid to contracted and uncontracted players.

²This is the fee uncontracted players receive when they are selected to play for the Matildas in an official match, tournament (official and invitational), training session and team meetings.

I haven’t put too much information in about the Socceroos because their payment system is quite different to the Matildas due to the Socceroos earning significant commercial payments. Socceroos are not contracted to the FFA for 6 month periods like the Matildas are. The data speaks for itself, but I would like to point out in particular:

1.       The general match fee for a Matilda is $500 V $6,500 for a Socceroo;

2.       A Socceroo is paid more to appear in a group match than a Matilda is to appear in a final. Almost seven times more.

3.       Socceroos must be provided with five star accommodation and provided with a single room each. There is no specification in the Matildas CBA about accommodation.

Why this is the opportunity the Matildas have been waiting for

The FFA and PFA have signed a Memorandum of Understanding that after the current CBAs expire on 31 July 2015, parties will negotiate a “whole of game” CBA. That is, the Matildas, Socceroos and A-League players will all be covered by one large CBA instead of having separate CBAs. This is a great opportunity for the Matildas, as their current rates of pay will appear ridiculous once directly alongside the Socceroos and A-League rates of pay. They will be able to lobby competitively for better conditions.

It is perfect timing that the Matildas have been very successful in the Womens World Cup. Their profile in Australia is growing and growing, attracting more sponsorship, which will give them more bargaining power. Some Socceroos including Tim Cahill have come forward to support better pay conditions for the Matildas. If the Matildas can get the support of more Socceroos to assist them with their lobbying efforts, they will be able to obtain better collective bargaining outcomes. The media has also jumped on board, covering the severe pay disparity between female and male soccer players.

While I am crossing my fingers and toes for the Matildas to win their quarter final on Saturday, I am also crossing my fingers and toes that the new CBA will bring the Matildas closer to pay equality.

Are Australian Uber drivers “employees”? Will the Californian case Berwick v Uber have a flow on effect in other jurisdictions? Is the Uber empire about to fall?

In a recent Californian case, Uber driver Ms Berwick was found to be an employee rather than a contractor. While the question of whether a person is an employee or contractor is assessed on a case by case basis, Uber is in trouble if more drivers are found to be employees, as their business structure centres on drivers being contractors. In Australia, the Fair Work Commission (“FWC”) has yet to consider the case of an Uber driver, but it is just a matter of time before a case comes before the FWC. Uber has 3,000 drivers in Sydney alone and is adding over a thousand new drivers across Australia to its network each month. In this blog post I consider whether a challenge to the contractor status of an Uber driver could be successful in Australia.

The employee and contractor distinction in Australia

The employee/contractor distinction is important. If a worker is characterised as a contractor, they are not entitled to a whole host of benefits and protections that employees are entitled to under the Fair Work Act 2009 (Cth) such as superannuation contributions, leave, statutory termination notice, and unfair dismissal protections.

The test in Australia used to be focused on control. Courts would look at the nature of the control and the degree of the control (Gould v Minister of National Insurance (1951) 1 KB 731, Ormerod J). Control is still an important factor but the test has changed to a multifactor test. All relevant matters must be considered in determining whether a person is an employee or a contractor. The key case is Stevens v Brodribb Sawmilling Co (1986) 160 CLR 16. Hollis v Vabu (2001) 207 CLR 21 is often cited as the key case. However the multi-factor test originated in Stevens v Broadribb. In Stevens v Brodribb, a worker was killed by a log when he climbed onto a log truck. The worker had been directed to climb onto the log truck by another worker. Brodribb would be vicariously liable if the worker who made the direction was found to be an employee. In making their determination, the High Court stated that all relevant factors, including control must be considered. In the subsequent case of Abdalla v Viewdaze (2003) 121 IR 215, it was clarified that control was an important consideration, but no clear guide was provided on the weight to give to other factors. A useful non-exhaustive list of indicia was provided:

1.       Control;

2.       Entitlement to work for others;

3.       Tools/equipment;

4.       Whether work can be delegated or subcontracted;

5.       Whether hirer can suspend or dismiss the worker;

6.       Whether worker is presented as an “emanation of the business” to the world;

7.       Whether income tax is deducted;

8.       Remuneration;

9.       Allowance for leave; and

10.   Portion of money the worker spends on business expenses.

The Californian Case – Berwick v Uber Technologies Inc. (2015) Labor Commissioner of California Case No. 11-46739EK

Ms Berwick was an Uber driver who brought action claiming she was an Uber employee and was therefore entitled to be reimbursed for expenses incurred as an Uber driver such as bridge tolls paid and fines incurred when stopping to pick up passengers. California has a Labor Code which requires employers to reimburse employees for expenses incurred in the course of employment. Ms Berwick was found to be an employee.

The matter was before the Labor Commissioner of California. Uber have appealed the decision. However, the Labor Commission did conduct a useful examination of the Uber contract, which is useful when considering whether an Uber driver in Australia would be considered an “employee”.

The relevant test in California as to whether a contractor relationship or employment relationship exists is whether “there is an inference of employment if personal services are performed as opposed to business services”. This test is different to the Australian test, so I am not going to go into it in detail.

In deciding that Ms Berwick was an employee, the Labor Commission considered the degree of control Uber exercised over Ms Berwick. The control does not have to be complete control to be sufficient to constitute an employment relationship. In particular, the Labor Commission stated that the fact Uber retains control over the operation as a whole by both obtaining passengers in need for the service and providing the workers to conduct the service. The Californian Labor Code has a presumption of employment, so Uber had the burden of proof of establishing a contractor relationship. The presumption of employment does not exist in Australia.

A closer look at the contract

While the Uber driver contracts in Australia are likely not identical to the Uber driver contracts in California, we can use characteristics of the Californian agreement for the purposes of this hypothetical exercise.

Key components of the agreement that could indicate a contractor relationship:

1.       Driver can accept, reject and select among requests for rides;

2.       Driver has no obligation to accept a request;

3.       Driver selects and maintains vehicle to be used; and

4.       If a Driver accepts a request and fails to follow through or complete the request as directed by the passenger, the Driver may have to pay Uber damages.

Key components of the agreement that could indicate an employment relationship:

5.       Uber provides iPhone which is required to access the application (but only if the driver does not already have a compatible phone);

6.       Uber must approve the vehicle used;

7.       Driver must maintain the vehicle used in accordance with Uber standards;

8.       Driver must notify Uber of any changes in vehicle or fleet;

9.       Drivers are encouraged not to accept tips;

10.   Driver is not paid directly by passengers. Driver is paid by electronic funds transfer by Uber according to Uber rate of pay scales;

11.   If a passenger is a “no show”, Uber has complete discretion as to whether to charge the passenger the cancellation fee, and complete discretion as to whether the Driver will be paid their cut of the cancellation fee;

12.   Uber issues Drivers with identification and password keys for the use of the Driver only – ie the Driver cannot subcontract to a third party to do the work with their Uber application;

13.   Drivers can be required to undergo a screening process and attend the Uber information session regarding the use of its devices.

A closer look at the reality of the relationship

In Australia, the Fair Work Commission usually starts the multi-factor test by considering control, followed by detailed analysis of other relevant factors. Traditionally, courts have found ownership of large vehicles an important indication of a contractor relationship. For example, truck drivers who own their trucks are more readily classified as contractors. There seems to be a fixation on this asset ownership, even in light of other factors which would appear to outweigh the vehicle ownership. Given that a car is a much smaller asset than a truck, Uber drivers may not face the difficulty of getting around the traditional fixation of the FWC and predecessors on large vehicle ownership. However, the relationship is assessed on a case by case basis, and Uber drivers who own larger vehicles such as limousines or luxury vehicles may find it more difficult to establish an employment relationship.

At first glance, an analysis of control makes Uber drivers appear to be independent contractors, as Drivers can choose their work hours, choose the vehicle they use, and choose which requests to accept. However, a closer look shows Uber does exert some control over Drivers. Drivers do not have complete control over the hours worked. In the Californian case, Uber could deactivate a driver if they were inactive for 180 days. Drivers had to make a formal application to be reactivated. Uber also maintains significant quality control, encouraging passengers to rate their Uber trips. Uber drivers must maintain a passenger review star rating of 4.6 or greater. If the rating is below 4.6 Uber turns the driver’s application off. Uber also maintains quality control in other ways, by vetting potential drivers who must provide personal information and pass background tests. Uber also control the tools the drivers use by providing iPhones with the pre-loaded application, requiring cars to be registered with Uber and having requirements such as that the cars cannot be more than 10 years old. Uber also controls the fee drivers receive from passengers. Drivers cannot negotiate fees from passengers and are encouraged not to accept tips. Drivers are not paid directly by passengers, but by Uber.

Likely Fair Work Commission outcome

Despite the presence of some factors indicating a contractor relationship, it is unlikely an Uber driver would be considered an employee by the Fair Work Commission. The Californian case of Berwick v Uber is unique. In California, the “presumption of employment” and the low threshold of control to constitute an employment relationship meant that Ms Berwick was successful at first instance. Uber has appealed, and the decision could be overturned on appeal.

The Australian test for whether a worker is an employee or contractor is different. The multi-factor approach involves identifying factors for and factors against the existence of an employment relationship, followed by a weighing of these factors. Control is an important factor. Uber describes itself as having no control over drivers, as drivers can work when they want to, manage their own schedules and can refuse work. In practice, Uber does exert some control, as discussed above. In considering the other factors for and against the existence of an employment relationship, the Fair Work Commission will likely focus on the fact Uber provides the application, that drivers  are paid by Uber rather than directly by passengers, and the fact Uber can withdraw the driver’s access to the application in certain  circumstances. While there are some factors indicative of an employment relationship, overall the factors weigh more heavily towards a contractor relationship. In saying this, the worker’s relationship to the hirer is assessed on a case by case basis, and due to the flexible nature of the test, it would not be impossible for the Fair Work Commission to make a contrary finding.

The status of Uber drivers as contractor or employees is important. Many of the 3,000 plus Uber drivers in Sydney could be classified as “vulnerable” as most come from Sydney’s 30 postcodes with the highest unemployment rates such as Lakemba, Bankstown and Auburn. Ensuring workers are afforded the correct status and receive appropriate entitlements is important, particularly for Australia’s vulnerable workers, and will no doubt be considered very carefully when a case eventually comes before the Fair Work Commission.

The new Legal Profession Uniform Law takes effect from 1 July 2015. Be prepared.

The Legal Profession Uniform Law (“Uniform Law”) is a new statutory and regulatory framework which will apply to solicitors and barristers across NSW and Victoria from 1 July 2015. The Uniform Law is the result of years of negotiations at an intergovernmental level, and years of work by the National Legal Profession Reform Taskforce. At this initial stage, only NSW and Victoria are participating in the harmonisation, though it is expected other jurisdictions will adopt the Uniform Law after it has been implemented in NSW and Victoria. Almost three quarters of Australia’s lawyers work in NSW and Victoria, so this is a solid start to harmonisation. The Uniform Law standardises areas including practicing certificates, billing practices, complaints procedures, and continued professional development.

What is the purpose of the Uniform Law?

A main purpose behind the Uniform Law is to cut costs for law firms and clients. The harmonisation of laws is meant to make it easier and simpler for lawyers and firms practising across the Eastern states. The current system is particularly challenging for small firms operating in NSW and Victoria and the Uniform Law attempts to encourage the growth of smaller law firms and businesses. Section 3 of the Legal Profession Uniform Law (NSW) outlines the objects of the legislation as promoting the administration of justice and an efficient and effective Australian legal profession by:

a.       Providing interjurisdictional consistency in law applying to the legal profession;

b.      Ensuring high ethical and professional standards in the provision of legal services;

c.       Protecting clients and the general public;

d.      Empowering clients to make informed choices about services and costs involved;

e.      Promoting efficient, effective, targeted and proportionate regulation of the legal profession; and

f.        Providing a framework where the legal profession has an appropriate level of independence from the executive arm of government.

Outline of the new statutory regime

1.       Legal Profession Uniform Law

The Uniform Law is incorporated into the law of NSW by the Legal Profession Uniform Law Application Act 2014 (NSW). It covers areas including admission to practice, legal practice, practising certificates, business practice and professional conduct, costs agreements, costs disclosure, billing, costs assessment, professional indemnity insurance and fidelity cover. The Uniform Law will replace the Legal Profession Act 2004 (NSW).

2.       Legal Profession Uniform General Rules (“Uniform Rules”)

The Uniform Rules replace the Legal Profession Regulation 2005 (NSW), and “flesh out” in detail requirements under the Uniform Law, such as the threshold requirements for legal practice, trust accounting, legal costs, and business management.

3.       Legal Profession Uniform Admission Rules (“Admission Rules”)

Under the new regime, admission to practice rules have been separated into their own separate delegated legislation.

4.       Legal Profession Uniform Law Australian Solicitors’ Conduct Rules (“Solicitors Rules”)

The new Solicitors Rules replace the Professional Conduct and Practice Rules 2013 (NSW).

5.       Legal Profession Uniform Legal Practice (Solicitors) Rules (“Legal Practice Rules”)

The new regime also has a short set of Legal Practice rules dealing with transfer of a solicitors practice, debt collection, conducting another business, litigation lending, and loan and security documents.

Uniform Law timeline

February 2009	COAG appoints the National Legal Profession Reform Taskforce to propose draft uniform legislation and in the process enhance the clarity and accessibility of client/consumer protection.
May 2010	The Taskforce release a draft National Law and National Rules. The three month public consultation period began.
December 2010	The Taskforce release the amended draft National Law.
19 October 2011	The Attorney General of NSW and the Attorney General of Victoria commit their respective states to the implementation of the Uniform Law.
3 October 2012	Queensland withdraw from the harmonisation talks. NSW and Victoria continue reform discussions.
5 December 2013	NSW and Victoria sign an Intergovernmental Agreement and formalise their participation.
10 December 2013	Legal Profession Uniform Law Application Bill (Vic) is introduced into Victorian parliament.
25 March 2014	The Victorian Bill receives assent.
27 March 2014	NSW introduce legislation applying the Legal Profession Uniform Law.
20 May 2014	Legal Profession Uniform Law receives assent in NSW.
1 July 2015	The new Legal Profession Uniform Law and Rules will come into effect.

New bodies are created

The Law Society of NSW will continue having the same regulatory functions such as monitoring trust accounting and licensing. The Uniform Law creates the following new bodies:

1.       Standing Committee

The Standing Committee has a general supervisory role, supervising the functions and duties of the Council, Commissioner and local authorities such as the NSW Law Society (s391 Uniform Law).

2.       Legal Services Council (“LSC”)

The Legal Services Council is established by section 394 of the Uniform Law. Each Council is appointed for a 3 year term (s394). The LSC undertakes a number of functions including:

·         Rule making in accordance with the  Uniform Law (s419);

·         Monitoring the implementation of the Uniform Law to ensure consistent application in jurisdictions (s394);

·         Ensuring the framework remains efficient, targeted and effective at promoting the maintenance of professional standards (s394);

·         Ensuring the framework appropriately protects clients (s394);

·         Monitoring and reviewing the exercise of the Commissioner’s functions (s396);

·         Examining the Commissioner’s annual report (s396); and

·         Recommending to the Standing Committee any changes to the role of Commissioner (s396).

3.       The Commissioner for Uniform Legal Services Regulation (“Commissioner”)

The Commissioner has a range of functions including promoting compliance with Uniform Laws and Rules, making guidelines for dispute resolution and professional discipline, and raising awareness about the Uniform Law and its objectives (s398). The Commissioner is to act independently of the Council (s401).

4.       Admissions Committee

The primary function of the Admissions Committee is to develop and maintain Admission Rules. The Admissions Committee also has the role of advising the council about guidelines and directions relating to admission (s402).

What are some of the changes?

1.       Changes to cost disclosure protocols

There is a new “fundamental billing principle” in section 172 that a legal practice must not charge more than what is “fair and reasonable in all the circumstances”. In particular, the costs must be proportionately and reasonably incurred and proportionate and reasonable in amount (s172). The Uniform Law also introduces categories of disclosure:

a.       No formal notification of costs is required where the estimate is less than $750;

b.      “Short disclosure” is required where estimate of costs is between $750 and $3,000;

c.       “Full disclosure” is required where estimated costs exceed $3,000.

The system is still based on estimates, and law firms will not be required to provide a binding fixed fee at the beginning of the matter.

2.       Changes to complaint time limits

There is a reduction in the time limits for complaints processes. Clients must make the complaint within 60 days after the costs become payable or 30 days after receipt of the itemised bill (itemised bills must be requested within 30 days of the costs becoming payable). The time period can be extended by an additional 4 months.  The purpose of these changes is to encourage the quick resolution of matters at a lower cost to the client and the lawyer.

3.       New costs complaints vetting procedure

The relevant Regulator must conduct a preliminary assessment of the complaint and has powers to close the complaint if it is vexatious, misconceived, or lacking substance.

4.       Firms can now advertise their personal injury services

In NSW, legislation was introduced in 2005 prohibiting the advertising of personal injury services. This prohibition is not present in the Uniform Law. However, restrictions on false and misleading advertising still apply.

5.       Liability of principals

There has been a subtle but important change in the liability of principals. Under the current system a principal is deemed liable unless they can prove otherwise under a legislative exception. The Uniform Law has changed the onus of proof. Under the Uniform Law a principal will only be liable for contravention by their law practice if:

·         The principal knowingly authorised/per mitted the contravention; or

·         The principal was in or reasonably ought to have been in a position to influence the conduct of the law practice relevant to the contravention and failed to take reasonable steps to prevent it.

6.       Exemptions for government and corporate (in-house lawyers)

Under the Uniform Law, government and corporate lawyers will not have to contribute to the fidelity fund. This makes sense, as they do not handle trust money. Government and corporate lawyers will also be exempt from professional indemnity insurance requirements. These lawyers may need professional indemnity insurance however if they participate in pro-bono work or volunteer legal work.

This blog post is a short overview of the new Uniform Law. The changes are substantial. For further information, the Law Society of NSW website is a great starting point.