Executive summary
From the study, it is realized that the major legal issues affecting restaurants as form of business organizations in Australia relate to the payment of hefty fines and payouts when the owners breach the excessive laws formulated by the government. Basically, throughout this report, the Australian Occupational Health and Safety Act 2004, Australian Consumer Law, the Compliance Law, and the Australia’s Trade Practices Act 1974 have been identified as some the laws that affect restaurant operators in Australia. Also, such legislations as Superannuation guarantee levy, Fair work Australia, OHS, and carbon tax are identified.
Generally, there is excessive regulation of restaurant businesses in Australia.
Introduction
In every economy, business organizations are required to comply with the set rules and regulations. In Australia, there are different government regulations and sanctions affecting both private limited companies and privately owned small and medium business organizations. For instance, the outlined laws affect the small and medium restaurant operators who employ between five and ten employees. The businesses’ activities are controlled by the government directly or indirectly. Directly, the Australian government controls what business organizations should produce, it enacts employee protection laws as well as the consumer protection laws. Besides, the operational and occupational laws greatly affect the organizations’ performance. In one way or another, the legal laws influence business organizations performance.
The Australian Occupational Health and Safety Act 2004
This law is a stumbling block to the performance of many business organizations in Australia. Many business owners interviewed do admit that the law negatively influences the operation of their businesses. The risks associated with operating against the law constitute high compensation payout and harsh fines. Business owners confess that the laws are strongly upheld and thus have to constantly expect workplace inspectors who carry out daily work site inspections even without prior notification. Business operators thus have to pay dearly incase their businesses are found not to comply with the guidelines stipulated in the Occupational Health and Safety Act 2004 (Lawandtax-News.Com 2012).
The government’s legislation for health and employees safety at the workplace in effect make business organizations incur extra costs while ensuring that employees are provide with safety equipments and clothing, and that employees are given adequate breaks in between the shifts. Also, businesses are required to provide and maintain realistic workforce temperature. The business owners interviewed admitted that failure of compliance results in high compensation payout which hampers business performance and expansion in both the short term and in the long term (Australian Trade Commission. Legal issues 2012). Restaurant operators also have to pay taxes that relate carbon emission. This in effect hampers their performance.
The Superannuation Guarantee (Administration) Act 1992
The Australian government formulates The Superannuation Guarantee (SG) that forces employers to offer support their employees. It is governed by Australian federal legislation, that is, Australian Taxation Office (ATO) tax rulings. Restaurant operators have to pay 9% of the ordinary time earnings of their workers. This basically influences the level of performance of restaurant businesses with smaller amount capital outlay.
Fair Work Act 2009
This legislation came to effect in 2009 and has badly affected the performance of restaurant businesses in Australia. The owners have to pay workers the minimum wage as well as the employment conditions. Setting the safety minimum wages in effect make restaurant operators pay additional wages even in situations that it the wage is not worth. This influences business expansion and profitability.
Australian Consumer Law
The business owners interviewed as well mentioned the Australian Consumer Law as one of the laws which influences their performance. Since the year 2011, the law has championed for fair trading and better consumer protection. In particular, business owners mentioned the new penalties, consumer redress and enforcement power contained in the law as the major article that affects the business negatively. Also, most business organizations find it impossible to comply with the law due to the fact that the law contains a clause that is guaranteeing consumer rights when purchasing services and goods (Lawandtax-News.Com 2012).
Similarly, the Australian Consumer Law constitutes a national law for voluntary consumer agreements that cover both telephone and door-to-door sales. The law also defines unfair terms of contract and outlines standardized form of consumer contacts. Business owners have thus fall victims of misleading and deceptive conduct which eventually make their businesses incur hefty fines. A good number of businesses provide consumers with misleading information about the product. With a guarantee of consumer rights, business organizations are forced to pay compensation payouts (The Trade Practices Act 1974).
The Compliance Law
The Compliance Law formulated in 2010 also negatively affects the performance of business organizations in Australia. The law enhances the capability of the Australian Prudential Regulation Authority (APRA) to effectively carry out the regulation of different institutions in the country’s financial sector. However, restaurant operators argue that since the law gives the Australian Prudential Regulation Authority the power to establish the rate of interest, business organizations are negatively being affected by the unstable interest rates established by APRA. Also, since its inception, the body has used gross assets as the major measure in determining the business financial claim schemes (Lawandtax-News.Com 2012).
Larger business organizations have been nonetheless negatively affected with the move since the owners mention that employing assets as the only valuation technique is against fair trading. Small and medium business enterprise owners thus argue that they have to pay higher levy than larger organizations which holds minimum assets and thus pays minimum levy. The compliance law has greatly affected the performance of small and medium enterprises in Australia.
The Australia’s Trade Practices Act 1974
The Australia’s Trade Practices Act 1974 is also identified as a major threat to the performance of the business organizations in Australia. Even though it offers fair trading across all market aspects, protects consumers (The Trade Practices Act 1974), suppliers and manufacturers, business organizations often fall tainted of the Act. In particular, they fall victims of deceptive and misleading conduct. Business organizations promotional and advertising material often makes them be considered as having a deceptive and misleading conduct.
Businesses negatively get affected since whether the conduct is deceptive or misleading hardly depends on whether the business organization intends to deceive or mislead or whether the act was indeed malicious. Most business organization thus always realizes that business activity they engage in may result in a violation of the Act. This hinders full exploitation of desired performance.
In fact, business owners assert that Australia’s Trade Practices Act 1974 fail to specify who should be deceived or misled. In effect, it gives a party an opportunity to sue another business organization even if the other business purportedly deceived or misled another business organization unrelated to the parties. This exposes business organizations to the breach of Trade Practices Act 1974.
There is excessive regulation of business in Australia. Business organizations have to pay hefty fees to the council for a mere entertainment of customers. Business owners believe that such fees make them incur extra costs which simply transform to lower profitability. They believe that such charges are unbelievable since customer entertainment does not negatively affect any individual or the council themselves.
Australia Income Tax Rates
The performance of restaurants is negatively affected due to law established that makes corporate entities pay 30% of their income. Small and medium operators find this rate high. There is no alternative minimum tax All businesses have to pay 30% of their income as tax.
Conclusion
Generally, In Australia, the government preserves the sanctions put down by the United Nations Security Council. The sanctions demand business organizations as well as business owners to demonstrate compliance with diverse measures while running their businesses. For instance, the Australian government has formulated import and export restrictions, financial sanctions, financing and training sanctions, travel sanctions and the prohibition of technical assistance against particular entities through its various laws. These sanctions prohibit businesses’ fullest expansion and performance.
Recommendation
For the private small and medium businesses to flourish, the Australian government need to eliminate the laws that restrict import and export, that relate to financial sanctions, financing and training sanctions, travel sanctions and the prohibition of technical assistance. Also, too much regulation of businesses should be moderated. For example, business owners do not need to pay to hefty fees to the council for entertaining the customers. Similarly, the amount of fines and payouts should be moderated to small and medium business operators.
Work cited
Australian Trade Commission. Legal issues. 2012. Web. November 4, 2012. http://www.austrade.gov.au/Legal-issues/default.aspx
Lawandtax-News.Com. Current Australian Business Law Developments. 2012. Web. November 4, 2012. http://www.lawandtax-news.com/html/australia/jozlatlegtour.html#compliance
TT Club. The Trade Practices Act 1974 – Australia. 2012. Web. November 4, 2012. http://www.ttclub.com/publications/stop-loss/article/stop-loss-5-the-trade-practices-act-1974-australia-600/
NSW Business Chamber. Superannuation Guarantee (SG). 2012. Web. November 8, 2012. http://www.workplaceinfo.com.au/resources/employment-topics-a-z/superannuation-guarantee-sg
Australia: Domestic Corporate Taxes
