Direct Selling Legal Update – June 2018

Welcome to the latest issue of the Addisons Direct Selling Legal Update.

There have been a number of significant issues affecting the direct selling sector which have occurred since our last newsletter. Some of these issues are addressed in this newsletter.

Draft legislation amending the Australian Consumer Law introduced into Parliament – What does this mean for direct sellers?

In late March 2018, the Treasury Laws Amendment (Australian Consumer Law Review) Bill (the ACL Review Bill) was introduced into the House of Representatives. The ACL Review Bill includes amendments which will impact upon the way direct selling organisations and their independent distributors conduct their businesses. A second Bill, if passed, will significantly increase penalties for breaches of the Australian Consumer Law.

We summarise the proposed amendments and the manner in which they will affect the direct selling industry in this Focus Paper.

Federal Court orders Thermomix to pay a $4.6 million penalty – Don’t get burnt! Lessons to be learnt from the ACCC v Thermomix proceedings

On 11 April 2018, the Federal Court ordered Thermomix to pay penalties of $4.6 million for making false or misleading representations and breaching the product safety obligations contained in the Australian Consumer Law (ACL). What should your business be doing to ensure that it complies with its obligations regarding product safety?

Shedding light on the murky distinction between employees and independent contractors

The distinction between who is an employee and who is an independent contractor has always been unclear. This is well-accepted, even at the judicial level. In the hope of providing some clarity to this murky area of the law, the courts have continually adapted their approach to solving questions of “employee or independent contractor” by, among other things, expanding the criteria for the two categories of workers.

This Focus Paper will provide a short summary of each criterion which has been considered by the courts in application of their “multifactorial” approach to questions of “employee or independent contractor”.

Important changes to the regulation of complementary medicines in Australia

Some very significant changes have been made recently to the Therapeutics Goods Act 1989 which affect materially the regulation of complementary medicines in Australia. We provide an outline of the changes and, in the coming weeks, will follow up with separate Focus Papers providing a more detailed analysis of some of the material changes.

Does your business need to comply with the EU General Data Protection Regulation?

On 25 May 2018, the EU General Data Protection Regulation (GDPR) commenced. The implementation of the GDPR has been reported widely in the Australian media and, while an EU-specific regulation, will apply to many Australian businesses. We consider in this Focus Paper the circumstances in which an Australian business must comply with the GDPR.

News Alert

Since our last Direct Selling Legal Update (which addressed data breach notification and GST changes), two important developments have occurred in these areas:

  • Australia’s mandatory Data Breach Notification Scheme has commenced – are you ready to deal with a data breach?

    On 22 February 2018, the mandatory data breach notification scheme commenced. What has your business done to ensure that it is able to respond promptly to a data breach and to determine quickly whether notification to the affected individuals and the Australian Information Commissioner is required?
  • GST threshold for low value goods will be removed with effect from 1 July 2018

    Overseas-based retailers, including offshore direct selling companies selling directly to Australian-based consumers, will be required to register for GST, comply with GST reporting requirements and remit GST to the Australian Taxation Office (ATO) if they meet the registration turnover threshold. What, in particular, do you need to do?

We trust that you enjoy this edition of our Addisons Direct Selling Legal Update. If you have any queries or wish to discuss, please do not hesitate to contact any of Addisons’ Direct Selling team.

Cate Sendall

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