Employers who do not have a well drafted Employment Contract put themselves at risk in relation to a range of claims that can be made by an employee. As such, Law Central recommends that it is important for all employees to have individually drafted Employment Contracts to minimise the risk of any disputes.

An Employment Contract is also important to provide protection to an employer in respect of a number of important matters not covered off by legislation, for example, protection of confidential information.

Law Central has developed a comprehensive Employment Contract which is appropriate to use for a wide range of employees.

Why do I need an Employment Contract?

We recommend that all employees have a written Employment Contract so the obligations on both the employer and employee are clear. It is important to remember that even if an employee does not have a written Employment Contract, they will still have an oral employment contract. The difficulty with an oral employment contract is that there can be disputes about the exact terms.

Having a written Employment Contract is also important so that, as an employer, you are adequately protected against the actions of your employees. While legislation such as the Fair Work Act 2009 will set out an employee’s minimum entitlements (such as hours of work, notice periods and leave entitlements), such legislation does not provide the necessary level of protection that employers require. The Law Central Employment Contract includes important clauses to protect, amongst other things, your business’ confidential information, moral rights, reputation and the relationship with your clients and other employees. The Employment Contract also contains clauses which clearly set out the obligations and responsibilities imposed on an employee.

What types of employees can the Employment Contract be used for?

The Law Central Employment Contract covers most employees who are:

• permanent full-time employees;
• permanent part-time employees;
• casual employees;
• fixed term employees; and
• fixed-project employees.

What makes the Law Central Employment Contract so great?

Preparing an Employment Contract can be complex and time consuming. Law Central has made it easy for employers by offering an Employment Contract that can be tailored to meet the individual needs of an employer. The Employment Contract is a sophisticated document which informs an employee of their obligations while providing the necessary protections for an employer.

The Employment Contract has also been prepared to incorporate the latest legislative changes including the Fair Work Act 2009 and National Employment Standards.

• Employment Contract

Important changes to trust laws may cost you thousands of dollars unless you act by the end of financial year.

The Tax Laws Amendment (2011 Measures No. 5) Act 2011 (The Act) amended the taxation of capital gains to ensure trustees can stream taxable capital gains and franked dividends to beneficiaries.

Streaming refers to the practice of allocating specific capital gains or franked dividends to specific beneficiaries.

If there is no streaming and the net income of the trust (which includes net capital gains) exceeds the trust income, the assessable income of a beneficiary may be more than they actually receive.

Platinum Members read on.

The ATO no longer allows an extension of time for trustees to resolve Trust Distributions after 30 June. In order to prevent a s 99A ITAA 1936 assessment arising to the trustee, a beneficiary’s present entitlement to trust income must be created prior to 30 June 2012.

In addition, for a beneficiary to be specifically entitled to a capital gain, the beneficiary’s share of the net financial benefit must be recorded in the accounts or records of the trust no later than 31 August 2012, and the trustee resolution should make the beneficiary specifically entitled to the capital gain by 31 August 2012.

The Explanatory Memorandum to the Act requires that trust deeds include a streaming power to undertake differential streaming. In addition, a flexible definition of income under an income equalisation clause or an income re-characterisation clause can assist to make a specific entitlement to a capital gain or franked distribution.

Platinum Members read on.

The drafting of Trust Distribution Minutes depends on how your Family Trust Deed defines income.

Family Trust Deeds need to be reviewed to make sure they have a streaming clause, an income equalisation clause or an income re-characterisation clause.

In addition, Family Trust Deeds should also have:

1. a clause giving the trustee power to separately record different categories of income and capital and to distribute from those categories income and capital with a particular characteristic to one beneficiary to the exclusion of other beneficiaries.
2. A clause permitting the trustee to allocate outgoings against categories of income with a particular tax characteristic.
3. A clause permitting the trustee to recoup losses either out of capital or out of profit in subsequent years.
4. A clause permitting the trustee to accumulate any of the income in a particular year instead of appointing that income to beneficiaries. 

Build your own Law Central Legal Documents online.

• Our Family Trust has streaming provisions, an income equalisation clause and an income re-characterisation clause.
• Our Trust Distribution Minutes 2011-12 allows for specific entitlement of capital gains to specified beneficiaries.

There is no extension of time to resolve Trust Distributions after 30 June 2012. If you have capital gains in your trust, then you need to act now. To ensure that any potential issues are resolved, any review of Trust Deeds and drafting of specific Trust Distribution Minutes should take place well before 30 June 2012. 

Civic Legal’s tax lawyers can assist in advising on, reviewing and amending Trust Deeds and drafting specific Trust Distribution Minutes to take advantage of the streaming amendments under the Act for a special fixed fee of $1,500 for each Trust.

It is important that specialist tax advice be obtained where the net income of the trust (which includes net capital gains) exceeds the trust income, because if there is no streaming the assessable income of a beneficiary may be more/less than the amount received from the trust by such beneficiary.

• Family Trust Deed
• Trust Distribution Minutes 2011-12
• Trust Distribution Minutes 2010-11

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