EXECUTIVE DIRECTOR'S REPORT
On the 3rd February 2007, the 90th National Automobile Dealers Association (NADA) Convention and Exposition was held in Las Vagas. The conference attended by some 26,000 attendees including almost 400 making the trip from Australia, comprises of general sessions, workshops and over 600 exhibits showcasing the latest and greatest industry products and services.
Whilst the convention is specifically directed towards dealers, key note speakers sessions are always well attended as they continue to bring to the forefront thought provoking ideas that can apply to a variety of business both small and large. I’m sure you will agree that the following three key note speaker’s comments go directly to the basis of all good business.
Five-time World Boxing Champion, Sugar Ray Leonard
Reminded dealers that to be successful, to do their best, they must be determined fighters. Know your competitors, know your dreams but you need to do your road work to succeed. “It’s what separates champions from contenders,” Leonard said. “Always keep your composure – don’t get taken out of your game plan. Respond to setbacks – you can’t build success until you know failure.” Sugar Ray Leonard also encouraged dealers to “walk the walk of a champion, with confidence and self-worth – people will be drawn to you. Turning dreams into reality is victory.”
American Honda Executive Vice President – Richard Colliver
“Trust is the foundation of every relationship between manufacturers and dealers. Unfortunately, I don’t think that is the case today,” he said. “Dealers and automakers have to make a choice to work together and communicate openly, not through lawyers or the media, but through our own initiative.” In his 45 years in the industry, Colliver said his real teachers were dealers. The small dealers are some of the best in the business because the dealer principal has to do it all.
Jack Welsh, Former CEO for 25 years of General Electric
Get better players and keep them with candor, face to face meetings, and by letting employees know where they stand. Leadership, according to Welch, is composes of energy, the ability to energise others, keeping the edge, and having the ability to execute and the passion to succeed. Staffers need to be nurtured because turnover is a killer. He advised dealers to get the best employees, keep them happy, and have excellent working conditions. Happy employees equals success, productivity and profitability. Product, he added, is only 15% of the mix; service is 85%. “You will Win” he predicted if you can demonstrate that your employees are your most important asset and make your business the place of choice for both employees and customers.
Key note speaker comments courtesy of Auswild & Co accountants
Smash Repairer - Code of Conduct
The Motor Vehicle Insurance and Repair Industry Code of Conduct will be fully implemented on the 30th March when the final two clauses of the code take effect.
A complete list of insurance companies that are signatories to the code is available from www.abrcode.com.au
OZSAFE
Gary Willcox continues to develop OzSafe products appropriate to all business. Just launched
OzSafe Lite.
This product is specifically designed for business employing less than 7 employees and only cost $940.00.
Gary will be coming to Canberra on Thursday 29th March to discuss either the professional or lite OzSafe products on a one on one basis.
Please contact Gary directly 0404 888685 or gw@ozsafe.net.au to make an appointment.
ACT WORKCOVER UPDATE
Company Fined for Failing to Maintain a Workers Compensation Policy in the ACT
A photographic retailer in the ACT has been fined $1250 and could face further charges for offences under the Workers Compensation Act 1951.
The company engaged a number of individuals to perform regular and systematic work for the business over a substantial period of time and it wasn't until one of the workers was injured on the way to work that it was found that the business did not have appropriate cover for their workers.
A personal injury received by a worker on an employment related journey is an injury arising out of, or in the course of, the worker's employment and therefore can be claimed as workers compensation.
When a worker is injured during the course of employment and the employer is not covered by a compulsory workers compensation insurance policy in the ACT, the worker can make a claim to the Default Insurance Fund (DI fund) - the safety net to met costs of workers compensation claims. When a claim is made to the DI fund and an amount of compensation has been paid to the claimant by the fund, the DI fund may claim an amount equal to 3 times the amount of the payment that is a debt owing by the employer to the DI fund.
Further information on workers compensation matters can be obtained from the ACT WorkCover website at http://www.workcover.act.gov.au/ or by contacting the workers compensation hotline (02) 6205 0200.
Safety Signs Audit
ACT WorkCover recently received a complaint about a person attending workplaces to conduct safety sign audits. The complaint alleged that the person was doing the audits on behalf of ACT WorkCover, and that failure to purchase and place the safety signs could lead to regulatory action by ACT WorkCover.
ACT WorkCover is not conducting safety sign audits. All ACT WorkCover Inspectors carry photographic ID that identifies themselves as Inspectors. While during the conduct of an inspection and Inspector may identify the need for particular signage within a workplace, ACT WorkCover does not sell such signage and does not suggest a preferred supplier of safety signs.
Suppliers of safety signs can be found in the ACT Yellow Pages or on the internet. Where applicable signs should comply with relevant Australian Standards.
If you feel that you have been pressured into purchasing safety signage please contact ACT WorkCover on 6205 0200.
Improved Safety Checks at Coles Express Sevice Stations
During an inspection at an ACT service station, ACT WorkCover Inspectors identified the need for improvement to safety checks on their compressor unit and the documentation associated with the checks being undertaken.
How can an air receiver tank explode? During operation, deposits of lubricating oil tend to build up in the line supplying compressed air from the compressor cylinder to the air receiver. As the diameter of the supply line decreases, the already high temperature of the compressed air rises further to a point where it is possible for the contaminant to ignite.
Sparks are then carried into the air receiver where oil from the compressor, which is often present as a mixture with air in the air receiver, burns explosively. As the pressure relief valve is not designed for such an event, rupture of the air receiver vessel is likely to occur. In other air compressor accidents, static electricity sparks have also been identified as a source of fires and explosions.
Prevention measures
To avoid such incidents and damage, all air compressor equipment should be maintained in a safe operational condition and be regularly inspected. A good maintenance program for compressor equipment should include checking its condition and operation. The Australian Standard AS/NZS 3788 should be used for guidance on conducting an inspection.
As a result of ACT WorkCover's intervention, the employer has improved the inspection regime for the compressor and the documentation related to these inspection. In addition, the national company is implementing the improved procedures into all of its wokrplaces throughout Australia.
REPAIRER'S LIEN & FINANCED VEHICLES
What rights do repairers have when refusing to release a vehicle pursuant to a Repairer’s Lien for an unpaid account or accounts due by the customer? Can repairers take on finance companies if the company steps in and demands return of the vehicle to the financier? It’s a “David and Goliath” scenario.
Essentially a Repairer’s Lien is the right that a repairer has in respect to a vehicle in the repairer’s possession to withhold the vehicle from release until such time as the repair costs have been paid by the customer.
Your intention to rely upon your right to the lien should be detailed in your Terms of Trade and Repair Order Forms to ensure that the right to exercise the lien is brought to the attention of the customer.
Vehicles secured by mortgage
Where a vehicle is under finance subject to a mortgage in favour of the finance company, the owner of the vehicle is the customer seeking the repairs to be undertaken.
However, a repairer will have no lawful right to possession of the vehicle in the event that the owner of that vehicle is already in breach of the loan contract, or if the owner defaults under the terms of the loan contract while the vehicle is in the possession of the repairer.
Pursuant to the terms of the loan contract and mortgage, the finance company has a right to immediate possession of the vehicle in such circumstances.
Standard loan contracts and vehicle mortgages provide a requirement that the owner (or mortgagor) keep the vehicle in good condition and thereby have repairs undertaken to the vehicle as necessary.
Clearly this is an express authorisation given to the owner by the finance company to repair the vehicle as necessary and also a requirement that the owner is to ensure that the vehicle is maintained in good condition at all times.
This gives rise to the repairers’ right to lawful possession of the vehicle. However, although there might be a lawful right for the repairer to take possession of the vehicle, standard finance company loan documentation prescribes that the owner of the vehicle must not have repairs or other work undertaken on the vehicle upon terms, which give rise to a lien in favour of the repairer.
There is an express exclusion of any authority upon the part of the owner to create any lien over the vehicle in favour of the repairer without obtaining the prior consent of the financier.
There is no legislation which provides rights to a repairer to maintain a lien in these circumstances. Accordingly, it is clear that a Repairer’s Lien cannot be maintained against a financier who holds a mortgage over the vehicle.
Leased vehicles
Vehicles which are leased to an individual, merely give the right to the lessee to utilise the vehicle for a fixed period in accordance with the terms and conditions of the lease. There is no ultimate right of ownership in favour of the lessee. At the expiration of the lease period, the lessee must return the vehicle to either the dealer or the relevant financier.
A standard lease agreement will require a lessee to maintain the vehicle to a certain standard during the term of the lease. This will permit the lessee to request a repairer to undertake repairs as necessary.
However, as in vehicles subject to a mortgage, a lessee is prohibited from creating any form of Repairer’s Lien over the vehicle.
Parts and labour
A question that often arises in the context of a vehicle under finance sought to be reclaimed by the finance company is, whether the parts affixed to the vehicle or replaced, as part of the repair work, may be removed by the repairer in the event of non-payment.
Again, the finance companies appear to have cleverly covered this aspect in their finance documentation. The vehicle which is the subject of the finance is generally defined as the initial vehicle purchased, together with any accessories and replacement parts fitted to the vehicle.
Unless the vehicle is subject to a hire purchase arrangement, it is apparent that any parts fitted to the vehicle in question cannot later be removed by the repairer, when payment is not made and the finance company demands return of the vehicle.
Similarly, a repairer cannot maintain a Repairer’s Lien against a financier solely for labour expenses, unless the vehicle is subject to hire purchase.
Vehicles Security Register
A financier will generally register its interest in a vehicle with the Vehicles Security Register.
If the Repairer’s Lien exists prior to the customer entering into a finance arrangement and any registration of finance with the Vehicles Security Register then, in our view, the Repairer’s Lien can be maintained.
This situation, however, is unlikely to arise unless a re-financing of the vehicle takes place after a Repairer’s Lien is created.
Anyone entering into a contract with a finance company is usually required to provide a warranty that the vehicle is unencumbered (Repairer’s Liens are a form of encumbrance) as at the date of entering into the finance contract.
Article courtesy MTA.NSW
EMPLOYMENT RELATIONS UPDATE
TRANSMISSION OF BUSINESS
Transmission of business may include various types of transactions. Selling a business is the most common type of transmission and the following information is specifically focused on this aspect. It is vital that employers are aware of their obligations to employees. To determine these obligations, vendors need to confirm what arrangements the purchaser has decided to take prior to the transmission of the business with respect to the retention of existing staff. The following guidelines attempts to address these different scenarios:
- Where the business is sold and the purchaser wishes to retain existing employees
- Where the business is sold and the purchaser does not wish to retain all or some of the existing employees
Where the business is sold and the purchaser wishes to retain existing employees
If a business operation is being sold, the employees who are retained by the purchaser with the sale of the business have their entitlements protected under Industrial Awards and Acts. All service with the vendor is deemed to be service with the purchaser. In other words their employment does not end and begin again with the purchaser. Therefore if an employee who has served 3 years with the vendor and continues employment with the purchaser, the total service period with the purchaser a day after the sale is deemed to be 3 years and 1 day. As part of the sale transaction, the vendor may make monetary allowances for accrued Long Service Leave, Annual Leave for the employees who are entitled or are imminent to becoming entitled to such paymeny at the time of transfer. These payments may include the following accruals:
- Annual Leave;
- Long Service Leave;
- Sick Leave.
Whilst continuing employees are entitled to access their sick leave provisions when transferred, ordinarily on the termination of an employee, there would be no entitlement for the payment of unused sick leave. It is therefore reasonably foreseeable that if an employee leaves employment subsequently to the transmission of business and does not utilise all of their sick leave, any monies that may have been transferred may prove difficult to recover.
The above scenario may apply to other forms of leave provisions. A possible solution for such provisions that have the potential to be under utilised, is to make arrangements for a trust account. When such provisions are used the respective amounts can then be reimbursed to the purchaser. It is important to remember that outstanding leave provisions are paid at current rates of pay. The obligation of the previous employer is limited to providing provisions at the rate effective at the time of the sale. Therefore, the purchaser would be liable to make up the difference of what is then due.
If an employee leaves without becoming eligible, the vendor retains ownership of the relevant funds. All interest earned on the account(s) belongs to the vendor. Part II of the Workplace Relations Act 1996 provides the requirements in relation to the transfer of employee entitlements to the new owner and the obligations on the new owner in relation to existing employees.
Where the business is sold and the purchaser does not wish to retain all or some of the existing employees
Where the purchaser makes a decision prior to the sale of the business that he does not wish to retain all or some of the existing staff, such employees will become redundant at the time of the sale and the vendor is obliged to terminate the employee on this basis.
It is important to act prior to the transfer of the title otherwise their employment will be considered transferred and temination of their employment may become complicated.
TIPS
Information for Employers
Apprentices and Trainees are an effective way for your business to develop the skilled staff you need.
Apprentices and Trainees make a contribution to your business from day one, and the benefits are continuous.
Apprentices and Trainees learn while they are working,
so their knowledge is up to date, and the skills they gain
are ideal for your business.
UPDATE FROM OUR LAWYERS
WORKCHOICES – A YEAR LATER
The first year of the Federal Government’s new WorkChoices legislation has had a dramatic effect on the structure of employment relationships in our economy.
Over 800,000 employees are now covered by Workplace Agreements (AWAs) lodged since the commencement of WorkChoices in March 2006. This represents over 12,000 distinct employers who have made AWAs.
By far the most popular agreements are Australian Workplace Agreements where parties negotiate one-to-one for terms and conditions particularly suited to that employee’s position. No longer are parties hamstrung by complex and often overlapping awards, which often contain terms and conditions not essential to the effective operation of the particular job.
Motor trades were the fourth largest sector adopting AWAs – coming behind retail trade, accommodation, cafes and restaurants, and manufacturing.
Our experience in developing AWAs for many Canberra businesses indicate that significant savings are being achieved by reducing administrative costs in the implementation of complex awards, while at the same time, employees like the flexibility of a simplified leave regime, and a more understandable pay structure.
The new record keeping requirements of the WorkChoices legislation are yet to bite. If you need advice or assistance in understanding WorkChoices, do not hesitate to contact your Association’s lawyers, Snedden Hall & Gallop (Bill Andrews, (02) 6201 8987).
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Fees and charges may apply. Terms and conditions are available on application.
General Advice Warning: In providing you with this information you should consider the appropriateness of this advice with regards to your partiular financial situation and needs. You should consult the Financial Services Guide before making a decision to apply for products with mecu.
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Fees and charges may apply. Terms and conditions are available on application.
MTAA SUPERANNUATION
Financial planners dedicated to MTAA Super members
Whether you have a question about your investment strategy or you’re looking for a full financial plan, MTAA Super now has dedicated financial planners based in all capital cities and available to all members.
MTAA Super provides access to commission-free financial planning advice through our relationship with Industry Fund Financial Planning (IFFP).
MTAA Super and IFFP conduct free retirement and investment planning seminars for members throughout the year, to help you plan for your retirement. Find out how to arrange your savings now and your pensions in the future to minimize tax, maximize benefits, and take your lifestyle up a gear in retirement.
You can also choose to seek personalised advice from an IFFP adviser. The first step in the financial planning process is to gather all the relevant information. The amount and type of information will depend on the advice you require, so let’s look at the information a financial planner needs and why.
When preparing a comprehensive financial plan an adviser will need to know about:
• Assets- the things you own, particularly investment assets such as superannuation, savings accounts, shares and property.
• Liabilities- what you owe, including mortgages, credit cards and personal loans.
• Income- such as salary and wages, Centrelink benefits, investment income and superannuation pensions.
• Expenditure- your total yearly spending. This can be difficult for many people to calculate, particularly if they have a number of bank accounts. It may be possible to come up with a good estimate by looking at total withdrawals from bank accounts over a year.
Protection Measures
Your financial planner will want to check that your insurance cover is appropriate and adequate, so will need to know about the type of cover you have, the premiums you pay, and specific policy details. He or she may also want to know about the existence and validity of your Will, if you have one, and to make sure it reflects your current wishes.
Goals
It helps to think about what you want to achieve, whether you want to financially assist any members of your family, where you want to live in retirement and the kind of car you want to drive. A planner can help you fill in the numbers, but only if they know what your real goals are.
Attitudes and Expectations
Your financial planner will want to know how you view the risk of different types of investment, what you expect from your investments, and what level of risk you are comfortable with. Without this knowledge they will be unable to design the appropriate investment portfolio for you.
Getting to Know Each Other
Successful financial plans result from a true partnership between planner and client.
This information was supplied by Industry Fund Financial Planning (IFFP)
Talk to a financial planner about your retirement
Did you know: The Government has introduced streamlined super rules that will make it easier to save for your retirement and even to receive your lump sum or pension tax-free.
Yes, that’s right. Tax free! Even if you take a lump sum-as long as you’re in a fund that has already paid tax on its earnings, such as MTAA Super. You will also be able to leave your super in the fund and continue to contribute after you’ve stopped working full time (subject to certain qualifying conditions).
Previously you would have had to withdraw your super at a certain age. Now it’s a savings plan for life.
Call our customer service centre on 1300 362 415 to be put in touch with an IFFP financial planner.
DISASTER WARNING
Silicone wristbands are causing the latest outbreak of paint film contamination but there are plenty of other potential catastrophes waiting to ruin your day.
Reports have been coming in recently to PPG field staff, both in Australasia and in the U.S., of incidents of contamination problems in refinish paintwork. Initially, there didn't seem to be an obvious cause until it was realised that many people, including paint technicians, were following the trend of wearing wristbands. They've become popular as fashion accessories and are often sold to raise money for charities such as Lance Armstrong Livestrong, Tsunami Relief and Cancer Awareness.
Unfortunately, the downside for the refinish industry is that these wristbands are not only made of silicone material, there's also a silcone release agent used during their manufacture. It's the latter that has the greatest potential to cause paint contamination. Over time, microscopic particles are shaken free to drift around in the air and, potentially, settle in places where silicone is definitely not wanted, such as any surfaces in the paint booth, mixing room or anywhere else involved in the refinish process.
It's a recipe for disaster and the best way to prevent it is to ban those types of wristbands from anywhere near your paint shop process. It's recommended that paint technicians not wear them at all but those who choose to wear them out of working hours should remove them and thoroughly wash before putting on work clothes.
Disaster zones
Fish eyes, craters or cissing are just some of the names for the frustrating and costly flaws that can seem to suddenly appear in your newly applied paint film. Most are caused by some part of contaminant causing a difference in surface tension - the energy with which liquid molecules cling to each other. A liquid (the paint) will tend to spread evenly over a solid surface (like a panel) when its surface tension is lower than that of the solid. Where there is a difference in surface tension, material will flow from the area of lowsurface tension to the area of high surface tension.
Therefore, if a contaminant with a low surface tension (silicone for example) gets into the paint or onto the surface to be painted, the paint will 'crawl' away from it and leave a crater or fish eye. They usually appear during or shortly after the spray application and can vary in size (about 1mm to 4mm) and depth - from a slight depression to a crater-like hollow that shows the previous layer of paint. There may be a small particle in the centre but often it's only visible with a magnifying glass or microscope.
Crime scene investigation
The only cure for craters and fish eyes is to identify the source of the contamination and eliminate it. When tracking down the culprit absolutely every aspect of the painting process is suspect until it has been checked and cleared as OK.
It's here that a logical ongoing quality control procedure is critical to saving time. "One off" defects will arise from time-to-time but they should be tracked and records kept of the circumstances. Any trends that appear will indicate where changes or improvements need to be made and can help to more swiftly pinpoint a contamination source if you have a more severe outbreak.
Remain vigilant
Nearly every paint shop veteran will have a horror story to tell about paint contamination disasters and there are plenty of pieces and products from which they can originate. Here's a list of tips from PPG's Australasian field staff to help you eradicate potential contamination disasters.
Don't use cheap coloured shop rags - the colour has been known to leach out and behave like silicone.
Don't allow wax and grease remover to dry on the surface - wipe it on and wipe it off before it evaporates and ensure you turn the rag. It's designed to lift contaminants to the surface where they can to wiped off but letting it dry can actually lock them in.
Check products before you use them. Silicones are one of the biggest bug bears and they can come from a variety of sources including oil, grease and wax, as well as some hand cremes and sprays such as WD-40 and Armor All.
Reports from the U.S. indicate that diesel exhaust could cause fish eyes so it maybe one to keep a watch for.
Compressor oil and moisture can leak past worn seals in the air system so it's important to check and maintain the system regularly. This is also a reason why a premium filter system is well worthwhile.
Don't allow silicone containing materials anywhere near the compressors fresh air inlet - the filters in the air system are generally not able to stop it reaching the spray booth.
All work in the paint room and spray booth should be as clean as possible.
Keep spray booth door closed to prevent the entry of airborne contaminants such as pollen, dust and sanding residue.
Ensure that booth filters and seals are properly maintained.
Wear a specialised spray suit when working in the spray booth or mixing room. Remove it and store it in an airtight container before leaving.
Don't allow visitors into the booth.
This article courtesy of PPG Industries New Zealand Limited.
A LITTLE BIT OF HUMOUR
While I was watching the Australia/England cricket test last weekend, my wife and I got into a conversation about life and death, and the need for living wills. During the course of the conversation I told her that I never wanted to exist in a vegetative state, dependent on some machine and taking fluids from a bottle. She got up, unplugged the television, and threw out all my beer.
Sometimes it's tough being married to a smart ar$$.
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