Risk is an inherent part of running a business. With pressures both internally and externally, businesses can be open to risk in a variety of areas ranging from market forces, to environmental factors, to technological developments. As a business owner, it’s essential that you have a good understanding of the risks associated with your business, and what can be done to minimise them if possible.
There are many instances in which your business may be exposed to legal action, either through public, private or government bodies. However, this can be mitigated. For this reason, forward-thinking corporations will enlist the help of legal firms to conduct risk audits as part of an overall risk management plan. In these instances, lawyers will not only look at risk management processes required by law (such as Australian Consumer Law or workplace health and safety (WHS) laws) but also risks from the private sector.
When engaging a lawyer to conduct a risk audit, businesses can expect particular focus on the following areas.
Work, Health & Safety
As a business owner, you are legally required to implement certain health and safety practices in your workplace before you can commence trading. Requirements include but are not limited to:
- The provision of insurance and workers’ compensation insurance for all staff
- Ensuring the safe use and handling of all goods and materials
- Providing a safe work premises and workplace
- Providing and maintaining safe machinery and materials
- Assessing the workplace layout and providing safe systems of work
Acts, regulations and practices will vary by state and territory, and your lawyer will be able to advise on what is necessary to remain legally compliant in your particular industry.
There are a number of areas which are incredibly open to risk when it comes to your workers. When conducting a risk audit, a key area your lawyer will investigate is the classification of your workers (volunteers, independent contractors, employees) and if you are meeting the varying obligations that come with each class.
This will include (but not be limited to) requirements from the Fair Work Act including National Employment Standards and Modern Awards, as well as Employee Payroll Tax and Superannuation, and cover specifics such as:
- Minimum wages and penalty rates
- Maximum weekly hours
- Amount of superannuation required and regularity of payments
- Provision of a minimum amount of leave (such as personal, carer’s, compassionate, or domestic violence leave) for employees
- Parental leave and related entitlements
- Notice of termination and redundancy pay
Regardless of the wording of your contracts, your employees will be entitled to certain minimum requirements as stipulated under Australian Law. Your lawyer will be able to advise you on this when conducting your risk audit.
Depending on your industry, your risk audit may include a section which focuses on your adherence to local environmental laws, which vary depending on your state or territory, and the Environment Protection and Biodiversity Conservation (EPBC) Act. The Act is administered by the Department of Environment, who also administer Acts that cover activities related to the sea, imports, heritage issues, hazardous waste, and quality of fuel. Again, your legal obligations will vary depending on your specific industry, so we advise working with a legal practitioner who is experienced with cases in your profession.
For example, it is unlawful for a business to make statements in trade or commerce that are either misleading/deceptive, or likely to mislead/deceive. This includes practices like failing to disclose important information, exaggerating claims, or making a promise on unreasonable grounds. Furthermore, the guide explicitly states that in most cases, “businesses cannot rely on small print and disclaimers as an excuse for misleading or deceptive conduct”.
Because of this, it is crucial to enlist an experienced lawyer to review your current terms and conditions, as well as any business contracts, to ensure you are protecting your business while remaining legally compliant.
There are a wide range of areas your lawyer will cover in your risk audit that are not included in this article, such as privacy policies, intellectual property, business structure, shareholder agreements, and more, all of which are necessary to protect your business against potential legal action. Contact the team at AV Lawyers today to arrange a free consultation.