Doing business in Australia

A Q&A guide to doing business in Australia.

This Q&A gives an overview of the legal system; foreign investment, including restrictions, currency regulations and incentives; and business vehicles and their relevant restrictions and liabilities. The article also summarises the laws regulating employment relationships, including redundancies and mass layoffs, and provides short overviews on competition law; data protection; and product liability and safety. In addition, there are comprehensive summaries on taxation and tax residency; and intellectual property rights over patents, trade marks, registered and unregistered designs.

To compare answers across multiple jurisdictions, visit the Doing business In... Country Q&A Tool.

This article is part of the multi-jurisdictional guide to doing business worldwide. For a full list of contents, please visit www.practicallaw.com/about/doingbusinessin-mjg.

Contents

Overview

1. What are the key recent developments affecting doing business in your jurisdiction?

A comprehensive review of Australia's competition law and policy will commence in 2014 with a review panel yet to be established. The review is expected to be completed within 12 months and will focus on the following principles:

  • No market participant should be able to engage in anti-competitive conduct within that market and its broader value chain.

  • Productivity boosting microeconomic reform should be identified, centred on the realisation of fair, transparent and open competition that drives productivity, stronger real wage growth and higher standards of living.

  • A preference for private sector operation as opposed to government intervention where markets are functioning or can function effectively.

  • The need to be mindful of removing wherever possible, the regulatory burden on business when assessing the costs and benefits of competition regulation.

 

Legal system

2. What is the legal system based on (for example, civil law, common law or a mixture of both)?

Australia is a federation of six states and two territories. It has a common law and statute-based legal system.

The Federal Parliament can make federal laws only on issues that are either:

  • Specified in the Australian Constitution.

  • Referred to them by the states and territories.

Valid federal laws prevail over those of the states and territories.

 

Foreign investment

3. Are there any restrictions on foreign investment (including authorisations required by central or local government)?

Foreign investment is actively encouraged, but authorisation is required for certain types of investments depending on:

  • The type of investor: For example, different rules apply for:

    • New Zealand investors;

    • US private investors (depending on whether the sector is sensitive);

    • US government investors.

  • The type of investment of other foreign investors: For example, specific types of business investments and real estate investments require notification to, and screening by, the Australian government.

  • The industry sector: Specific restrictions apply to sectors including banking, media, telecommunications, shipping, civil aviation and airports.

  • The value of the proposed investment: Investments below certain monetary thresholds (in non-sensitive sectors) do not need to be notified to, or screened by, the Australian government. Foreign investment in Australia is regulated by the Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA) and the Federal Government’s Foreign Investment Policy. The Foreign Investment Review Board (FIRB) is a non-statutory organisation formed in 1976 within the Federal Treasury to provide foreign investment policy advice to the Treasurer and the Australian federal government.

  • The nature of the proposal: The FIRB examines foreign investment proposals before making recommendations to the federal government. The Australian Treasurer is a federal government minister responsible for foreign investment decisions. The Treasurer can:

    • block proposals that are not in the national interest ; or

    • apply conditions to the implementation of proposals to ensure they are in the national interest.

Generally there are no restrictions on foreign shareholders, except in relation to foreign-controlled companies in certain regulated industries.

 
4. Are there any restrictions on doing business with certain countries or jurisdictions?

Australia follows United Nations Security Council sanctions with regards to imposing trade restrictions with certain countries. These are selected by the Minister for Foreign Affairs and implemented under the Autonomous Sanctions Act 2011 and the Autonomous Sanctions Regulations 2011.

See the website of the Australian Government Department of Foreign Affairs and Trade for more information (www.dfat.gov.au/un/unsc_sanctions/ ).

 
5. Are there any exchange control or currency regulations?

Exchange controls are regulated primarily under Part III of the Banking Act 1959 (Cth) and the Banking (Foreign Exchange) Regulations 1959 (Regulations). The Reserve Bank of Australia can make directions and give its authority in relation to, among others:

  • Foreign exchange deals.

  • Proceeds from exports.

  • Cross-border deals in securities.

The bank can also issue exemptions from the Regulations.

In addition, the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (2006 Act) requires that any cross-border cash movement (physical or electronic) of more than AUD$10,000 must be reported to any of the following:

  • The Australian Transaction Reports and Analysis Centre (AUSTRAC) CEO.

  • A customs officer.

  • A police officer.

In addition, persons that provide designated services have, among other things, reporting obligations (section 6, 2006 Act).

 
6. What grants or incentives are available to investors?

Invest Australia and the Australian Trade Commission (known as Austrade) can recommend various incentives, which are granted on a case-by-case basis.

Generally, to qualify, projects must:

  • Provide significant economic benefits and employment.

  • Boost Australia's research and development capacity.

  • Be unlikely to proceed without investment incentive.

State governments may also provide incentives, depending on the merits of each case.

 

Business vehicles

7. What are the most common forms of business vehicle used in your jurisdiction?

The most common forms of business entity used by foreign investors are either:

  • Branches of the foreign entity.

  • More commonly, a subsidiary company incorporated in Australia (a proprietary company or a private company).

 
8. In relation to the most common form of corporate business vehicle used by foreign companies in your jurisdiction, what are the main registration and reporting requirements?

Registration and formation

A company must submit an application for registration, together with certain information, to the Australian Securities & Investments Commission (ASIC). Company registration takes about 24 hours.

A proprietary company (or a private company):

  • Must have at least one director on its board who ordinarily resides in Australia.

  • Is not required to have a company secretary, but if it does, at least one of them must ordinarily reside in Australia.

  • Is required to have an Australian registered address.

  • Is required to appoint a public officer who normally resides in Australia and is the company's representative to the Australian Taxation Office (ATO). The ATO must be informed of the appointment within three months of the company's continuing business or obtaining income.

  • Is required to set up and maintain the company register with details of the current members, shareholdings, directors and various other details.

  • Is required to notify ASIC of changes to the company details and the ATO of changes to the public officer.

Share capital

There are no minimum or maximum share capital requirements, but a company must have at least one shareholder. Private companies cannot raise funds through a public share issue.

Non-cash consideration

Shares can be issued for non-cash consideration, including assets and future services. No formal valuation process is required.

 
9. In relation to the most common form of corporate business vehicle used by foreign companies in your jurisdiction, outline the management structure and key liability issues.

Management structure

Companies are managed by a board of directors. A propriety company (or a private company) must have at least one director who must ordinarily reside in Australia. In comparison, public companies must have at least three directors, two of which must ordinarily reside in Australia.

Directors' and officers' liability

A director is personally liable under common law for the acts of a company if he fails to act honestly and with the knowledge, skill and experience which may reasonably be expected of him. The Corporations Act 2001 (Cth) imposes a number of duties on directors, the breach of which can result in:

  • Liability to pay compensation to the company.

  • A fine.

  • Disqualification from holding office or being engaged in a management capacity.

  • Where the breach is dishonest, a criminal conviction.

Personal liability arises under statute for fraud or for allowing the company to trade when the director knows (or ought to know) that the company is insolvent.

Criminal liability may also arise for breaching certain laws (for example, workplace, health and safety and environmental laws).

Parent company liability

Parent companies are not generally liable for subsidiaries unless the parent companies either:

  • Have given a guarantee.

  • Are aware (or ought to be aware) that the subsidiary is trading while insolvent.

 

Employment

Laws, contracts and permits

10. What are the main laws regulating employment relationships?

Employers and employees are subject to both federal and state laws regulating the employment relationship. The statutory obligations imposed in any Australian state (which includes both federal and that state's statutes) apply to a particular employee if there is a sufficient connection between that state and the employee's employment and if the particular issue is not overridden by federal legislation such as the Fair Work Act 2009 (FWA).

The employer and employee can also import the laws of other states or countries (but these will supplement rather than override the state's laws).

In addition, the statutes applying in a particular Australian state apply to an employee from that jurisdiction working outside that state, or to a foreign employee who is working in that jurisdiction, if there is sufficient connection between the jurisdiction and the employee's employment.

Furthermore, Australia has a system of awards and workplace agreements that operate under statute (industrial instruments). With the introduction of the FWA, modern awards have been introduced which are industry specific and apply to employees under specific classifications. Industrial instruments fix minimum employment terms. Not all employees are covered by an industrial instrument.

Enterprise agreements made under common law may also apply and fix minimum employment terms.

Common law also governs an employee's employment. An employer and employee may reach an express agreement about the terms of the employee's employment (subject to applicable statutes and industrial instruments). In the absence of an express agreement, terms may also be implied into a contract of employment by the parties' conduct or common law (see Question 7).

 
11. Is a written contract of employment required? If so, what main terms must be included in it? Do any implied terms and/or collective agreements apply to the employment relationship?

A written employment contract is not required. The terms of an employment contract may be written or oral, and express or implied. However, it is best practice for employment contracts to be written.

Terms implied by common law include:

  • The employer's duty to provide a safe workplace.

  • The employee's duties of:

    • fidelity and good faith; and

    • trust and confidence.

Recent case law suggests that:

  • Employers may have duties to act towards their employees in good faith and not in a manner likely to destroy or seriously damage the employer's relationship of trust and confidence with their employees.

  • Employer policies, codes of conduct and similar documents may be incorporated into an employee's employment contract and that, on incorporation, the employer may be liable in damages for any breach of these.

Legislation (for example, the National Employment Standards (NES) in the FWA) and industrial instruments also provide for minimum terms of employment (see Question 10).

 
12. Do foreign employees require work permits and/or residency permits?

There are a number of ways that foreign employees can enter Australia, but all are required to have a visa. All visa applicants are required to meet public interest criteria regarding health, character, national security and foreign relations. The duration of stay will determine how strictly the criteria is applied. The cost and duration of the application process depends on, among other things, the type of visa for which the foreign employee has applied.

A Business Long Stay visa (457 visa) requires an employee to fulfil the following requirements:

  • Be sponsored by an Australian employer.

  • Show English language proficiency (with limited exemptions).

  • Have relevant skills, qualifications, experience and employment background.

  • Pass certain health requirements.

  • Meet character requirements.

A range of further skilled visas are available with varying requirements.

Working holiday visas are available to people of certain nationalities, allowing them to undertake unskilled work under specified conditions.

Termination and redundancy

13. Are employees entitled to management representation and/or to be consulted in relation to corporate transactions (such as redundancies and disposals)?

Share transaction. Employees (and their unions) generally have no right to be consulted in relation to the sale and purchase of shares in a company, or to management representation. However, they may have a right under modern awards (if applicable) to be notified and consulted if, following the transaction, they are significantly affected.

Asset transaction. An asset transfer will generally significantly affect employees.

If employment is terminated (or is to be terminated) in connection with the completion of an asset sale (or a similar commercial transaction), obligations to notify and consult with employees and/or their unions may arise under statute or industrial instruments (particularly modern awards (if applicable)).

 
14. How is the termination of individual employment contracts regulated?

Termination of employees is principally governed by the NES and by industrial instruments such as modern awards and enterprise agreements.

An employee whose wage is below the high income threshold or who is covered by an industrial instrument can challenge the termination of their employment on the basis that it is unfair (procedurally or substantively).

A range of exemptions apply under the relevant statutes.

The remedies available include:

  • Reinstatement with back-pay.

  • Compensation (generally capped at six months' pay).

In addition, an employee can claim against their employer if their employment is terminated in breach of their employment contract (for example, if the employer fails to give the requisite notice or pay in lieu). The employee can sue for damages equal to the remuneration and benefits they would have received had the breach of contract not occurred.

For many employees, a minimum period of notice (or payment in lieu) is required under statute (a maximum five weeks' pay determined by reference to an employee's age and length of service).

It is unlawful for employers to terminate employment for a range of grounds, including:

  • Sex.

  • Race.

  • Religion.

  • Age.

  • Disability.

Industrial instruments may also regulate the termination of employment, including in relation to redundancy. Failure to comply with an industrial instrument may result in a fine and recovery of money proceedings.

 
15. Are redundancies and mass layoffs regulated?

Redundancies may be regulated by:

  • Statute.

  • Industrial instruments.

  • Employment agreements.

  • Employer policies and practices.

Employees can often receive redundancy pay (in addition to notice of the termination of their employment or pay in lieu of notice) if their position has become redundant.

Under the NES, redundancy pay is usually calculated by reference to an employee's period of continuous service with the employer. The maximum amount of redundancy pay available is 16 weeks. Under the payment scale, only service after 1 January 2010 is taken into account in calculating redundancy payments, unless the affected employee had an entitlement to redundancy from another source before 1 January 2010.

In addition there may be exemptions from any obligation to pay redundancy pay, for example where:

  • The employer secures an offer of comparable alternative employment for the employee.

  • The employee's period of continuous service was less than 12 months.

  • The employer employs fewer than 15 staff.

Employers should also refer to the relevant award covering an employee to determine whether an employee is entitled to more generous redundancy pay and/or other entitlements. Some employees and/or their unions may have rights to be notified and consulted in relation to proposed redundancies.

Employers can also have other obligations, for example, to give an employee time off during their notice period to search for alternative employment, or to provide outplacement assistance.

There is an exclusion from certain unfair dismissal laws where the reason for the termination of an employee's employment is, in effect, a genuine redundancy, as this term is defined in the Fair Work Act 2009 (Cth).

 

Tax

Taxes on employment

16. In what circumstances is an employee taxed in your jurisdiction and what criteria are used?

An employee is taxed where they are considered to be tax resident. Generally, an employee is tax resident if any one of the following requirements is satisfied. The employee:

  • Is domiciled in Australia and does not have a permanent place of abode outside Australia.

  • Has resided in Australia, continuously or intermittently, during more than half of the year of income, unless the employee has a usual place of abode outside Australia and does not intend to reside in Australia.

  • Is a contributing member to certain superannuation funds or is the spouse or a child, under 16 of age, of the contributing member.

 
17. What income tax and social security contributions must be paid by the employee and the employer during the employment relationship?

Tax resident employees

Income is taxed according to a marginal rate scale of:

  • 0% on income up to AUD$18,200.

  • 19% on income between AUD$18,201 and AUD$37,000.

  • 32.5% on income between AUD$37,001 and AUD$80,000, in addition to a payment of AUD$3,572.

  • 37% on income between AUD$80,001 and AUD$180,000, in addition to a payment of AUD$17,547.

  • 45% on income over AUD$180,001.

The above rates are for 1 July 2013 to 30 June 2014 and do not include the 1.5% Medicare levy (2% from 1 July 2014) and 2% Medicare levy surcharge applicable to some taxpayers.

Non-tax resident employees

Income is taxed according to a marginal rate scale of:

  • 32.5% on income up to AUD$80,000.

  • 37% on income between AUD$80,001 and AUD$180,000, in addition to a payment of AUD$26,000.

  • 45% on income over AUD$180,001, in addition to a payment of AUD$63,000.

The above rates are for 1 July 2013 to 30 June 2014. The Medicare levy does not apply to non-residents.

Employers

Employers must pay:

  • Superannuation (pension) contributions of at least 9.25% of the employee’s ordinary time earnings (up to the maximum contributions base)gradually increasing to 12% by 1 July 2019.

  • Payroll tax (see Question 19, Payroll tax).

  • Insurance for workplace injuries (in some states, these take the form of statutory levies of up to 3% of base wage or salary).

  • Fringe benefits tax for non-monetary remuneration (see Question 19, Fringe benefits tax).

Business vehicles

18. When is a business vehicle subject to tax in your jurisdiction?

Tax resident business

A company is tax resident if it is either:

  • Incorporated in Australia.

  • Not incorporated in Australia but carries on business in Australia, and has either its:

    • central management and control in Australia; or

    • voting power controlled by shareholders who are residents of Australia.

Non-tax resident business

A non-tax resident company without protection from a double tax treaty is taxed on:

  • Any Australia source business income, profits and gains.

  • Gains realised from assets specified in a list of capital gains tax asset categories that are deemed to be connected with Australia. Shares held in Australian companies that do not predominantly hold land or land-related assets are not deemed to be connected.

A non-tax resident company with the protection of a double tax treaty, which has a branch or permanent establishment in Australia, is taxed on:

  • Business income, profits and gains attributable to the permanent establishment.

  • Depending on the provisions in the treaty, gains from capital gains tax assets connected with Australia. In limited cases, capital asset transactions may be protected.

There is no branch profits remittance tax in Australia.

A non-tax resident company with the protection of a double tax treaty, which has no branch or permanent establishment in Australia:

  • Does not pay tax on business income or Australian source profits and gains.

  • Pays tax on other income at restricted rates.

  • May pay tax on gains from capital assets connected with Australia, depending on the treaty's provisions.

 
19. What are the main taxes that potentially apply to a business vehicle subject to tax in your jurisdiction (including tax rates)?

A company must pay income tax on its worldwide profits and gains if it is incorporated or tax resident in Australia. The main taxes that potentially apply are:

  • Corporation income tax. Australian companies must pay 30% on their worldwide income and capital gains, unless a double tax treaty applies.

  • Goods and services tax (GST). GST is 10% on goods and services supplied by businesses in Australia and on imported goods. Some supplies are exempt from GST (for example, those relating to health and education, or financial services).

  • Stamp duty. Stamp duty is a state tax on certain property-related commercial transactions (such as sales, transfers, leases, mortgages and trusts). Applicable rates are set by each state but the average maximum rate of duty is approximately 5.6%.

  • Capital gains tax. The net capital gain from disposing capital assets is subject to tax at the general corporation income tax rate (see above, Corporation income tax).

  • Fringe benefits tax (FBT). Employers must pay tax 46.5% (47% from 1 July 2014) of the grossed-up value of fringe benefits given to employees. However, the costs of providing the benefit and the FBT are income tax deductible.

  • Payroll tax. This is a state tax payable by employers on their employees' annual salaries. Applicable rates are set by each state or territory and, where payable, range between 4.75% and 6.85%.

  • Customs duty. Customs duty must be paid on goods imported into Australia. Rates vary depending on the goods' classification.

Dividends, interest and IP royalties

20. How are the following taxed:
  • Dividends paid to foreign corporate shareholders?

  • Dividends received from foreign companies?

  • Interest paid to foreign corporate shareholders?

  • Intellectual property (IP) royalties paid to foreign corporate shareholders?

Dividends paid

If a dividend is fully or partially franked (that is, paid from profits that have already been taxed), the franked part of a dividend is not subject to withholding tax. Unfranked dividend payments are subject to a withholding tax of 30%, which may be reduced under a double tax treaty (usually to 15%, or lower in some cases). Non-resident shareholders are not entitled to any benefit or refund of the imputation credit in relation to franked dividends.

Dividends received

These are generally not taxed if the Australian corporate shareholder owns at least 10% of the voting shares of the foreign company.

Where a dividend exemption does not apply, the shareholder is taxed on the gross amount of the dividend and usually receives a tax credit for any foreign tax paid.

Interest paid

Generally, interest payments, or payments of the same nature as interest, are subject to a 10% withholding tax, unless further reduced by a double tax treaty.

IP royalties paid

Royalties from an Australian company to a foreign resident are subject to a withholding tax of 30%. This rate may be reduced under a double tax treaty (usually to 10% or 15%, or lower in some cases).

Groups, affiliates and related parties

21. Are there any thin capitalisation rules (restrictions on loans from foreign affiliates)?

If an Australian company is thinly capitalised, the amount of interest that can be deducted may be limited. Generally, the safe harbour debt amount is set at a debt-to-equity ratio of 3:1(1.5:1 from 1 July 2014).

 
22. Must the profits of a foreign subsidiary be imputed to a parent company that is tax resident in your jurisdiction (controlled foreign company rules)?

The profits of a foreign subsidiary can be imputed to a parent company that is tax resident in Australia. The profits that can be imputed depend on:

  • Where the subsidiary is based.

  • The nature of the income.

  • How the income is taxed in that country.

 
23. Are there any transfer pricing rules?

Transactions between an Australian company and any foreign affiliate are taxed at arm's length. Undervalue considerations are adjusted for tax purposes.

Customs duties

24. How are imports and exports taxed?

Imports

All imports are subject to customs duty and most are subject to GST (see Question 19). Other taxes may apply to certain goods, such as luxury car tax.

Exports

Exports are rarely subject to any form of tax in Australia.

Double tax treaties

25. Is there a wide network of double tax treaties?

Australia has double tax treaties with more than 45 countries, including the US and most of western Europe and Asia.

 

Competition

26. Are restrictive agreements and practices regulated by competition law? Is unilateral (or single-firm) conduct regulated by competition law?

Competition authority

Competition law is regulated under the Competition & Consumer Act 2010 (Cth) (CCA).

Restrictive agreements and practices

The following restrictive practices are prohibited under the CCA:

  • Cartel-type conduct (price fixing, collective boycotts, production or supply restraints and bid rigging).

  • Some forms of tying (third line forces).

  • Resale price maintenance.

  • Other vertical and horizontal conduct and mergers and acquisitions that have the purpose, effect or likely effect of substantially lessening competition.

Cartel-type conduct can give rise to criminal sanctions, including imprisonment for individuals.

Unilateral conduct

Unilateral conduct is regulated by the misuse of market power provisions contained in the CCA. A corporation with a substantial degree of market power must not take advantage of that power with the purpose of:

  • Eliminating or substantially damaging a competitor.

  • Preventing entry into a market.

  • Deterring or preventing a person from engaging in competitive conduct.

 
27. Are mergers and acquisitions subject to merger control?

Acquisitions of shares or assets which have the effect or likely effect of substantially lessening competition in a market in Australia are prohibited.

The prohibition can apply to foreign acquisitions if the acquisition will have the requisite effect on an Australian market. No value thresholds apply and there is no mandatory pre-merger notification.

 

Intellectual property

28. Outline the main IP rights in your jurisdiction.

Patents

Definition and legal requirements. A patentable invention or innovation (that is, an advance in knowledge with a lower inventive threshold than for an invention) has all of the following characteristics:

  • Novelty.

  • Usefulness.

  • Not specifically excluded from protection by legislation.

Two types of patent are available:

  • A standard patent, for inventions.

  • An innovation patent.

Patents give the exclusive right to exploit the invention or innovation.

Registration. A patent application must be filed with IP Australia.

Enforcement and remedies. Patents are enforced by actions under the Patents Act 1990. Claimants can claim any of the following remedies:

  • Damages.

  • An account of profits.

  • An injunction.

There are fewer circumstances in which claims can be made for breach of an innovation patent.

Length of protection. The length of protection depends on the type of patent:

  • Standard patent: five years from the date of filing. Protection must then be renewed every year, up to 20 years.

  • Innovation patent: two years from the date of filing. Protection must then be renewed every year, up to eight years.

Trade marks

Definition and legal requirements. To be registrable, a trade mark must be all of the following:

  • Be a "sign" which includes, without limitation:

    • a letter;

    • word;

    • name;

    • signature;

    • numeral;

    • device;

    • brand;

    • heading;

    • label;

    • ticket;

    • aspect of packaging;

    • shape;

    • colour;

    • sound; or

    • scent.

  • Be capable of being represented graphically.

  • Distinguish the applicant's goods or services.

  • Not be substantially identical or deceptively similar to an existing registered trade mark for the same, similar or closely related goods.

  • Not be scandalous or used illegally.

A registered trade mark gives the owner the exclusive right to use the sign in relation to the goods or services for which the sign is registered, provided that such use is not misleading or deceptive.

A mark that is not registered, but which has acquired goodwill or reputation, can also be protected under the common law tort of passing off, or under the Australian Consumer Law (ACL), which prohibits misleading or deceptive conduct.

Protection. A trade mark application must be filed with IP Australia. If there is no opposition, or any opposition is unsuccessful, the trade mark is registered on payment of the registration fee.

No formalities are required for unregistered marks, but an unregistered mark is more difficult to protect than a registered mark.

Enforcement and remedies. Protection is obtained by starting an action under:

  • The Trade Marks Act 1995, for registered trade marks.

  • The ACL.

  • The common law, for unregistered marks (for an action in passing off).

Length of protection and renewability. Protection for registered marks lasts for ten years from the date of filing, renewable indefinitely.

Registered designs

Definition. To be registered, a design must be new and distinctive (assessed against designs publicly used worldwide).

A registered design gives the exclusive right to:

  • Make a product, in relation to which the design is registered, which embodies the design.

  • Import such a product.

  • Sell, hire or otherwise dispose of the product.

  • Use the product for the purposes of trade or business.

  • Authorise another person to do any of the above.

Registration. An application for registration must be filed with IP Australia.

Enforcement and remedies. Registered designs are enforced under the Designs Act 2003. The same remedies are available as for patents (see above, Patents).

Length of protection and renewability. Initial registration lasts for five years and can be renewed once, for a further five years.

Unregistered designs

Unregistered designs may be protected under copyright law in some limited cases (see below, Copyright).

Copyright

Definition and legal requirements. Copyright subsists in the following works, provided they are original:

  • Literary works (including computer programs and certain types of database).

  • Artistic works (including photographs and buildings).

  • Musical works.

  • Dramatic works.

  • Television broadcasts.

  • Sound broadcasts.

  • Sound recordings.

  • Cinematograph films.

  • Published editions.

A copyright owner's rights depend on the work created but generally include the exclusive right to publish, reproduce or communicate the work to the public.

Protection. Copyright protection subsists in a work on creation without the need for registration.

Enforcement and remedies. Copyright is enforced under the Copyright Act 1968 by commencing proceedings. Remedies available to a copyright owner or exclusive licensee include an injunction to restrain the infringing conduct, damages (included punitive damages) or an account of profits, delivery up of the infringing goods and the plate from which the goods were manufactured and costs.

Length of protection and renewability. Copyright subsists in most works until 70 years after the death of the author, except for:

  • Sound recordings and cinematograph films, which are protected for 70 years after first publication.

  • Television and sound broadcasts, which are protected for 50 years after the first broadcast.

  • Copyright in published editions, which lasts for 25 years after first publication.

Confidential information

Definition and legal requirements. Information is confidential if it is not publicly available. However, if it is disclosed in circumstances importing an obligation of confidence on the recipient (by circumstance, agreement or otherwise) it does not lose its protection.

Protection. The owner of the confidential information may be able to start an action to restrain the dissemination or use of that information if the recipient of the confidential information has used, or threatens to use, the information without the licence of the owner, even if there is no confidentiality agreement. An action can also be made for breach of contract if there is a confidentiality agreement.

Enforcement and remedies. Confidentiality can be enforced using an action for breach of confidence (or breach of contract), usually seeking an injunction to prevent disclosure or use of the confidential information. Other potential remedies include damages, an account of profits, orders for delivery up and/or destruction and various ex parte orders for entry and seizure of evidence.

Length of protection. Confidential information is protected for as long as it is not publicly available.

Integrated circuits

Definition and legal requirements. Protection is given to an original circuit layout, either:

  • The maker of which was, at the time the layout was made, an eligible person.

  • That was first commercially exploited in Australia or another eligible foreign country.

During the protection period of the layout, an owner of an eligible layout right has exclusive rights to:

  • Copy the layout, directly or indirectly in a material form.

  • Make an integrated circuit in accordance with the layout or a copy of the layout.

  • Exploit the layout commercially in Australia.

Protection. Eligible layouts are protected under the Circuit Layouts Act 1989 and exclusive rights automatically exist and registration is not required.

Enforcement and remedies. The rights owner can bring an action for breach and claim remedies including:

  • Injunctions.

  • Either damages or an account of profits.

However, damages are unavailable in certain cases of innocent infringement.

Length of protection. The period of protection for eligible layouts begins on the day on which the layout was made and ends:

  • If the layout is first commercially exploited within ten calendar years after the calendar year in which the layout was made: at the end of the tenth calendar year after the calendar year in which the layout was first commercially exploited.

  • In any other case: at the end of the period of ten calendar years after the calendar year in which the layout was made.

Plant breeder's rights

Definition and legal requirements. Plant breeder's rights in a plant variety are the exclusive rights to do, or to license another person to do (in relation to propagating material of the variety) the following:

  • Produce or reproduce the material.

  • Condition the material for the purpose of propagation.

  • Offer the material for sale.

  • Sell the material.

  • Import the material.

  • Export the material.

  • Stock the material for the purposes described above.

Protection. Plant breeder's rights are protected under the Plant Breeder's Rights Act 1994 and can be infringed by a person who does, or claims the right to do, an act within the scope of the breeder's right or misusing the name of the variety without a licence from the grantee of the right.

Enforcement and remedies. The grantee can start an action for breach of plant breeder's rights. The court can grant the same remedies as for breaching integrated circuit rights (see above, Integrated circuits: Enforcement). However, the defendant in the action can counterclaim for revocation of the claimant's plant breeder's rights. The court can also refuse to award damages or make an order for an account of profits for an innocent infringement.

Length of protection. Plant breeder's rights generally begin on the date the grant is made and, unless revoked, continues:

  • In the case of varieties of trees and vines for 25 years.

  • In other cases for 20 years.

There are different lengths of protection for a plant variety that is dependent on another plant variety, and where a plant variety is declared to be an essentially derived variety of another variety.

 

Marketing agreements

29. Are marketing agreements regulated?

Agency

Agency is governed by common law only.

Distribution

There is no specific legislation relating to distribution agreements. However, competition laws apply.

Franchising

A mandatory statutory Franchising Code of Conduct applies (imposed by the CCA), which:

  • Requires franchisers to give prospective franchisees disclosure documents.

  • Imposes a cooling off period.

  • Mandates alternate dispute resolution.

  • Prohibits a general disclaimer of liability by the franchiser.

  • Affects the transfer and termination rights of the franchiser.

 

E-commerce

30. Are there any laws regulating e-commerce (such as electronic signatures and distance selling)?

Electronic commerce in Australia is mainly regulated by Federal, State and Territory Electronic Transaction Acts. The Federal Act only applies to transactions where a federal law applies. The State and Territory Acts are similar to the Federal Act and apply in their respective jurisdictions.

The Electronic Transactions Acts do not apply to all legislation or transactions. Each Electronic Transactions Act lists legislation or types of transactions that are exempt from the rules set out in that Act or any Regulations under the Act.

The Regulations to the Federal Act were amended in 2013. This was an attempt to remain relevant among current and emerging digital channels and consumer preferences. However, the Regulations to the Federal Act provide that the Federal Act will continue to apply to electronic communications under the National Consumer Credit Protection Act 2009. It also facilitates the distribution of documents and the serving of notices by electronic communication in certain circumstances.

The Electronic Transaction Acts are based on the UNCITRAL Model Law on Electronic Commerce 1996 (Model Law). In 2005, the United Nations adopted the Convention on the use of Electronic Communications in International Contracts, as a means of updating some concepts contained in the Model Law. In April 2009, all Australian jurisdictions agreed to amend their Electronic Transactions Acts in order for Australia to accede to the Convention. The Convention applied to international business contracts only.

However, in 2011 the Federal, State and Territory Electronic Transaction Acts were amended to include personal, family and household contracts. The amending Acts clarified the traditional rules on contract formation to address the needs of electronic commerce, including:

  • Recognition of automated message systems.

  • Clarification of an invitation to treat.

  • Rules to determine the location of the parties.

  • Updates for the electronic signature provisions.

  • Default rules for time and place of dispatch and receipt.

 

Advertising

31. Outline the regulation of advertising in your jurisdiction.

Regulation

The Australian Consumer Law (ACL) is a uniform national law that prohibits making false or misleading representations in any business context (including advertising). For example, in relation to:

  • Pricing or price reductions.

  • Quality, style, model or history of a product or service.

  • Whether the goods are new.

  • Sponsorship, performance characteristics, accessories, benefits or the use of products and services.

  • The availability of repair facilities or spare parts.

  • The need for the goods or services.

  • Any exclusions on the goods or services.

Intention is irrelevant when determining if a business is misleading. If a business's advertising methods or other representation are misleading in terms of the price, value or quality of its goods and services, it is likely to breach the ACL.

Advertising methods

Advertising methods that include qualifications and 'fine print' to qualify or limit potential claims must convey the overall message in a reasonably clear manner, otherwise it can be misleading. For example, an advertisement is likely to be misleading if it states that a product is free but the fine print requests some form of payment.

Comparative advertising is permitted but can be misleading if the comparison is inaccurate or does not accurately compare products.

Bait advertising involves promoting certain (usually sale) prices on products that are not available or only available in limited quantity. It is not misleading if the business clearly discloses that the particular products on sale are in short supply or available for a limited time.

When advertising prices, the total price must be clearly displayed. When advertising only part of a single price, the total price must be displayed just as clearly or it is unlawful.

The National Credit Code contained in Schedule 1 of the National Consumer Credit Protection Act 2009, applies to the advertising of credit.

Remedies

Remedies for breach include:

  • Recovery of any losses caused by reliance on the misleading claims.

  • Injunctions.

  • Corrective advertising.

  • Adverse publicity orders.

A business making a claim in advertising must be able to verify the claim. The Australian Competition and Consumer Commission (ACCC) has the power to issue notices requiring a party to provide information and or documents to verify any claims made (including advertising relating to the supply of goods and services).

 

Data protection

32. Are there specific statutory data protection laws? If not, are there laws providing equivalent protection?

Personal data is protected if the identity of the person concerned is apparent from the information held or can be reasonably established from the information held.

The Privacy Act 1988 (Cth) (PA) applies to federal government agencies and most of the private sector, including certain non-profit organisations. It requires compliance with the National Privacy Principles (NPPs) relating to the collection, use, storage and disclosure of personal information, subject to exceptions (such as employee records held by employers). Additional rules also apply to credit providers and credit reporting agencies. While most small businesses are exempt, the PA now also applies to the activities of small businesses that are carried on for the purpose of compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) or rules or regulations made under that Act, such as the reporting of suspicious transactions and cross-border movements of cash over A$10,000.

From 12 March 2014, the National Privacy Principles will be replaced by 13 Australian Privacy Principles (APPs) (once the Privacy Amendment (Enhancing Privacy Protection) Act 2012 comes into effect).

The APPs are a set of new, harmonised privacy principles that will regulate the handling of personal information by both Australian Government agencies and organisations. The APPs will impose additional obligations to those found under the existing NPPs. A number of the APPs are significantly different from the existing NPPs, including both:

  • APP 7 on the use and disclosure of personal information for direct marketing.

  • APP 8 on cross-border disclosure of personal information.

In addition to privacy laws, the Spam Act 2003 (Cth) prohibits the sending of unsolicited commercial electronic messages (spam) whilst the Telecommunications Act 1997 (Cth) regulates the interception of telecommunications.

 

Product liability

33. How is product liability and product safety regulated?

Australia's product liability laws are a mixture of the common law and legislation.

A person who claims to have been injured, or who has otherwise suffered loss or damage, may commence an action for compensation or damages on any of the following bases:

  • Negligence, which is fault based.

  • Contract.

  • Breach of provisions of the Australian Consumer Law (ACL), which contains consumer protection, product safety and quality provisions.

Typically, product liability claims for damage to persons, involve causes of action based on negligence and breaches of the ACL. Statutory defences are available for breaches of the ACL.

The ACL introduced a set of statutory "consumer guarantees", that attach to the goods or services themselves, and exist independently of any contract of supply. The consumer guarantees are implied into every transaction, and relate to:

  • Title and possession.

  • Quality and consistency issues.

  • The effect of express warranties.

The ACL regime creates a cause of action against both the supplier and the manufacturer if the goods or services fail to comply with a guarantee.

General product safety provisions (such as those relating to product recalls and bans) are contained in the ACL. The ACL also provides the regulator, the Australian Competition and Consumer Commission, with a range of enforcement powers. An important development was the introduction of a mandatory reporting obligation upon suppliers of consumer goods where they become aware that use or foreseeable misuse of the goods has caused, or may have caused, death or serious injury/illness (Part 3-3, Division 5, ACL).

Claims based on breach of contract are usually limited to parties to the contract. In most cases, the retailer has the contractual relationship with the purchaser. However, this does not prevent a retailer from consequently seeking contractual remedies from other parties.

 

Main business organisations

The Australian Competition and Consumer Commission (ACCC)

W www.accc.gov.au/

Main activities. The ACCC administers the Competition and Consumer Act 2010. The objectives of the ACCC are to promote competition and provide for consumer protection. It covers anti-competition and unfair market practice, company mergers and acquisitions, product safety and product liability, and third party access to facilities of national significance.

Australian Securities and Investments Commission (ASIC)

W www.asic.gov.au/

Main activities. ASIC is the sole regulator of Australian registered companies and one of three federal government bodies that regulate financial services. ASIC administers the Corporations Act 2001 (Cth), the law regulating the incorporation, operations and management of companies. ASIC is therefore primarily responsible for regulating the conduct of corporations in Australia, and is also responsible for supporting the integrity of and fairness in company affairs and in financial markets. ASIC’s consumer protection function extends to the financial system by regulating the advising, selling and disclosure of financial products and financial services to consumers.

Australian Taxation Office (ATO)

W www.ato.gov.au/

Main activities. The Commissioner of Taxation has the overall responsibility for administering the Australian income tax system. The ATO, under the Commissioner of Taxation, is the statutory authority responsible for administering Australia’s federal taxation system and is also the primary collection agency for the Australian government.

The Australian Prudential Regulation Authority (APRA)

W www.apra.gov.au/Pages/default.aspx

Main activities. APRA is a statutory authority which was formed in 1998 to promote the prudent management of financial institutions. Its regulatory function extends to the supervision of banks, life insurers, building societies, credit unions, friendly societies and superannuation funds. APRA has the power to require financial organisations to observe prudential standards, and may intervene, where necessary, to protect the interests of depositors, policy-holders or members. In addition, APRA has far-reaching powers of investigation, intervention and administration.

Foreign Investment Review Board (FIRB)

W www.firb.gov.au/content/default.asp

Main activities. The FIRB is a non-statutory organisation formed in 1976 within the Federal Treasury to provide foreign investment policy advice to the Treasurer and the Australian Federal Government. The FIRB’s function is to assess investment proposals submitted by foreign interests and to make recommendations to the Treasurer on the compatibility of those proposals with government policy and the Foreign Acquisitions and Takeovers Act 1975 (Cth). FIRB also provides information on the government’s policies to prospective foreign investors and potential investors alike.



Online resources

ComLaw

W www.comlaw.gov.au/

Description. Australian Government website containing up to date, Commonwealth (Federal) and Territory Legislation.

NSW Legislation

W www.legislation.nsw.gov.au

Description. New South Wales Government website containing up to date NSW (State) Legislation.

QLD Legislation

W www.legislation.qld.gov.au/OQPChome.htm/

Description. Queensland Government website containing up to date QLD (State) Legislation.

VIC Legislation

W www.legislation.vic.gov.au//

Description. Victorian Government website containing up to date VIC (State) Legislation.

TAS Legislation

W www.thelaw.tas.gov.au/index.w3p

Description. Tasmanian Government website containing up to date TAS (State) Legislation

SA Legislation

W www.legislation.sa.gov.au/index.aspx

Description. South Australian Government website containing up to date SA (State) Legislation

ACT Legislation

W www.legislation.act.gov.au/a/default.asp/

Description. Australian Capital Territory Government website containing up to date ACT Legislation.

WA Legislation

W www.slp.wa.gov.au/legislation/statutes.nsf/main_actsif.html

Description. Western Australian Government website containing up to date WA Legislation

NT Legislation

W [http://notes.nt.gov.au/dcm/legislat/Acts.nsf/830a91a0fb6c1fed6925649e0009c237?OpenView&ExpandView/]

Description. Northern Territory Government website containing up to date NT Legislation



Contributor profiles

Simon Truskett, Partner

Clayton Utz

T +61 2 9353 4179
F +61 2 8220 6700
E struskett@claytonutz.com
W www.claytonutz.com/people/truskett_simon/home.page

Professional qualifications. Admitted to Practice New South Wales,1986; Western Australia, 2001

Areas of practice. M&A; private equity transactions; joint ventures; foreign investment; major infrastructure projects; privatisation and government enterprise restructuring.

Robbie Walker, Partner

Clayton Utz

T +61 2 9353 4208
F +61 2 8220 6700
E rwalker@claytonutz.com
W www.claytonutz.com/people/walker_robbie/home.page

Professional qualifications. Admitted to Practice New South Wales, 1988; High Court of Australia, 1989

Areas of practice. Workplace relations; employment and safety & investigations and crisis management.

Mark Friezer, Partner

Clayton Utz

T +61 2 9353 4227
F +61 2 8220 6700
E mfriezer@claytonutz.com
W www.claytonutz.com/people/friezer_mark/home.page

Professional qualifications. Admitted to Practice New South Wales, 1984; Western Australia, 2001; High Court of Australia, 2010

Areas of practice. Taxation; taxation disputes; securitisation; mergers and acquisitions.

Bruce Lloyd, Partner

Clayton Utz

T +61 2 9353 4219
F +61 2 8220 6700
E blloyd@claytonutz.com
W www.claytonutz.com/people/lloyd_bruce/home.page

Professional qualifications. Admitted to Practice New South Wales, 1980; High Court of Australia, 1980; Federal Court of Australia, 1980; Victoria, 1991

Areas of practice. Competition; Australian consumer law; enforcement and cartels; infrastructure access and regulation; merger and acquisition clearance; telecommunications; media and technology; international trade; anti-dumping and importation.

Mary Still, Partner

Clayton Utz

T +61 2 9353 4149
F +61 2 8220 6700
E mstill@claytonutz.com
W www.claytonutz.com/people/still_mary/home.page

Professional qualifications. Admitted to Practice New South Wales, 1977; Victoria, 1986; High Court of Australia, 1986; Australian Capital Territory, 1988; Western Australia, 1999

Areas of practice. Intellectual property; telecommunications; media and technology; litigation and dispute resolution; commercial litigation; patents; advertising and marketing; trade marks; copyright; investigations and crisis management.

Steven Klimt, Partner

Clayton Utz

T +61 2 9353 4133
F +61 2 8220 6700
E sklimt@claytonutz.com
W www.claytonutz.com/people/klimt_steven/home.page

Areas of practice. Major projects with an emphasis on IT procurements and services contracts; retail banking and financial services regulations.

Michael Corrigan, Partner

Clayton Utz

T +61 2 9353 4187
F +61 2 8220 6700
Emcorrigan@claytonutz.com
W www.claytonutz.com/people/corrigan_michael/home.page

Professional qualifications. Admitted to Practice High Court of Australia, 1983; New South Wales, 1983; Australian Capital Territory, 1983; Victoria, 1990; South Australia, 1995

Areas of practice. Trade practices and competition law advice; ACCC; mergers and acquisitions; regulatory investigations; litigation; cartels and commercial supply and distribution arrangements.

Colin Loveday, Partner

Clayton Utz

T +61 2 9353 4193
F +61 2 8220 6700
E cloveday@claytonutz.com
W www.claytonutz.com/people/loveday_colin/home.page

Professional qualifications. Admitted to Practice New South Wales, 1980; High Court of Australia, 1980; Federal Court of Australia, 1980; Victoria, 1991

Areas of practice. Product liability; litigation and dispute resolution; defence of class actions.


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