7 Key Legal Business Musts

The short answer to the question “Why must you know these 7 things?” can be summed up by the words of Justice Spender, in TPC v British Building Society & Ors (1988) ATPR 40-880 at 49,545, when considering the need for a corporation to have an effective trade practices compliance program, he said:

“… (B)usiness men, particularly at senior levels, who remain in ignorance of the Competition and Consumer Act, 2010 1974 do so at their peril.”

The peril stems from the substantial criminal, pecuniary and other penalties that apply under various statutes that require businesses to comply with.

The key 7 areas of law to know are:

1. Competition and Consumer Laws (eg under the Competition and Consumer Act, 2001);

2. Environmental laws (eg Contaminated Land Management Act, 1997, and the Dangerous Goods (Road and Rail Transport) Act 2008;

3. Intellectual Property (eg Trade Marks Act, 1995, and the Copyright Act, 1968);

4. Asset Protection (Corporations Act, 2001, Succession Act, 2006 and theTrust Act, 1925);

5. Tax (Taxation Administration Act, 1953 and the Income Tax Assessment Acts of 1936 and 1997);

6. Industrial Relations (Fair Work Act, 2009, Anti-Discrimination Legislation and Employment Legislation, such as, Workers’ Compensation, Long Service Leave Act, and Holiday Pay Act);

7. Occupational Health & Safety Acts;

The penalties that spur businesses to adhere to the prescribed minimum standards of behaviour are various. For instance:

Breaches of the Australian Consumer Law can be as high as $1.1m for corporations and $220,000 for individuals. The penalties for competition breaches can be $10m.

Under Environmental legislation, the penalties involve criminal sanctions such as jail terms besides pecuniary fines.

There are various levels of liability to contend with. Breaches of the competition provisions are in the nature of strict liability. There is no due diligence defence for engaging in prohibited anti-competitive conduct under the Competition and Consumer Act, 2010.

Due diligence can be a defence for the purposes of the Environmental Protection Act.

Despite the strict liability or otherwise of particular legislation, effective compliance programs play a role. Hence, knowing what to not do is critical for business survival. The Courts have consistently said that a business that has an effective compliance program may raise this in mitigation of a penalty that can be imposed by a Court, either as a means of reducing a fine where there is strict liability or raising an outright defence, where due diligence operates as a defence. In TPC v CSR Limited (1991) ATPR 40-076, Justice French pointed to the need for corporations to have a training program to achieve compliance with the Trade Practices Act

Since a breach of an act may, in some instances, occur regardless of whether there was any intention to engage in prohibited conduct (eg under the Competition and Consumer Act, 2010), to demonstrate compliance with the requirements of legislation, Corporations need to show that they have instituted effective and efficient procedures of managerial control “designed in recognition of human frailties of a proportion of their employees”: Eva v Preston Motors Pty Limited (1977) ATPR 40-048.


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