Q&A with Industrial Relations & Legal Adviser Malvin Khaira

Q: I am a sub-contractor. A principal contractor has been avoiding my prompts for payment for some time now. Can I issue him with a Statutory Demand?

A: Yes. A statutory demand is a document issued by a creditor. It requires a debtor company to pay a debt it owes within 21 days. If the debtor company fails to pay the debt (or come to a suitable arrangement with the creditor) or make an application to set it aside within that time period, then the company is presumed to be insolvent. Once there is a presumption of insolvency, then it is open to the creditor to commence proceedings to wind up the debtor company. These proceedings can be issued in the Federal Court or a State Supreme Court. You should note that there are legal costs involved when filing these proceedings. You should also note that if the debtor disputes the debt owed and ultimately is successful, you run the risk of bearing the debtor’s legal costs as well. 

A statutory demand can only be issued when a debt is over $2,000 and is due and payable and your statutory demand needs to be accompanied with an affidavit or a judgment. Although you do have the option of issuing a company that owes you money with a statutory demand, you should seek legal advice before doing so. It is important that you understand how to draft and issue a statutory demand and what is expected to accompany it. As mentioned above there are also risks involved with the process.

If you need to get in touch with a debt recovery lawyer, please feel free to contact me and I can provide you with a list of our Member Solicitors.

Q: An Employee was away for 6 days on Annual leave. She was meant to return 3 days ago. I’ve tried unsuccessfully to contact her on numerous occasions. What should I do?

A: It is possible that she has abandoned her employment which may constitute a repudiation of her employment contract. However, it needs to be apparent that the employee no longer wishes to be employed. Courts will not consider a repudiation has occurred if there is evidence to suggest otherwise. 

Firstly, you would need to contact her to determine the reason for her absence. Please ensure you keep records of your attempts to contact her.  If she is unreachable, you should then try contacting her next of kin as they may have information of her whereabouts. You should also request that her next of kin relay a message that she is to contact you as soon as possible. It could be that she has a valid reason for her absence from work, such as a medical emergency. If you still do not hear from the employee or their next of kin, the employee may be inferred to have abandoned her employment. If you face such a situation, please seek advice before treating the employment contract as terminated as each situation turns on its facts and you run the risk of an unfair dismissal or general protections claim if termination is not carried out properly.

Q: An Employee is currently on probation. He’s had performance and conduct issues and I’m seriously considering terminating his employment on the grounds of an unsuccessful probation. Can I do this?

A: The probationary period is an opportunity for an employer to assess an employee’s performance in their job and for the employee to decide whether the job suits them. If an employee’s performance or conduct is not satisfactory during their probationary period, you should attempt to address the issues. Performance and conduct issues often arise because employees do not understand what is expected of them. You should:

• Make sure the employee clearly understands their role, the expected level of performance, and the expected conduct at work, and
• Provide the employee with regular performance feedback during the probation period and inform them of any changes needed to their work or conduct.

If you have done the above and the employee’s performance is still not up to standard, you could potentially end the employee’s employment whilst it is still in the probation period. Remember to check your Enterprise Agreement or relevant Award for any provisions on notice periods. If not, the Notice period under the NES would apply. You should then provide the employee with the requisite notice and an unsuccessful probation letter and ensure that you keep this for your records. As always, you should always seek advice before terminating an employee as each situation turns on its facts.

If you are an MBA ACT member, please feel free to contact me for an assessment of your situation prior to making any decisions to end an employee’s employment. Please contact me at mkhaira@mba.org.au or 6175 5900.