Beijing Bound

Tomorrow, glistening with Australian minerals, China will for the first time host the opening ceremony of an Olympic games. Over the last few weeks athletes, media and fans have descended on Beijing for the ultimate contest across nations and we now wait for, what some believe to be the greatest show on earth - the games of 29^th Olympiad - to begin.

The modern Olympic movement was formed on 23rd June 1894, when Pierre de Coubertin founded the International Olympic Committee in a ceremony held at the University of Sorbonne in Paris. Two years later the first Olympic Games of the modern era were held in Athens and Coubertin remained president of the IOC until 1925.

Coubertin followed his own calling to vocation renouncing promising careers in the military and politics to devote his life to the reformation of the French education system, which he considered old fashioned and uninspiring. Coubertin was an accomplished athlete and practiced the sports of boxing, fencing, horse-riding and rowing. He was convinced that sport was the springboard for moral energy and all of his projects, including the Games, had the same aim in mind: to make men.

His definition of “Olympism” had four principles that established an ethos far from a simple sports competition:

1. To be a religion - to "adhere to an ideal of a higher life, to strive for perfection".
2. To represent an elite "whose origins are completely egalitarian" and at the same time embrace "chivalry" with its moral qualities
3. To create a truce "a four-yearly festival of the springtime of mankind"
4. To glorify beauty by the "involvement of the philosophic arts in the Games".

While events like the Olympics celebrate winners, they can also show human spirit at its most generous. During the 1956 National Mile Championship in Melbourne, John Landy was set to break another world record when Ron Clarke and Alec Henderson collided in front of him. As he tried to avoid the fallen runners, Landy’s spikes cut into Clarke’s shoulder. The crowd, already shocked by the fall, was stunned into silence as Landy stopped to help Clarke. When Landy was certain Clarke was OK, they both set off again and sprinted the last quarter mile in one of the most powerful finishes ever seen. Landy left the other competitors behind and ended up winning the Australian championship.

Coubertin died in 1937 but had he witnessed this amazing event, I am sure he would have leapt from his seat and, with fists pumping the air, screamed, in perfect polished French, “now that’s what I’m talkin’ about”. It is a sad fact that the spirit of the Olympic movement has been compromised by big business, corporate sponsorship and endorsements paving the way for a life of riches for those elite athletes who win gold for their countries. I doubt very much that should someone falter at these Olympics we would witness the gallantry of John Landy again - and he won without the aid of performance enhancing substances either.

Not that any of this matters because all of the gold, silver and bronze medals struck for these games have been made from Australian minerals gifted to the Chinese Government by BHP Billiton ensuring that as Australians, we are all winners!

Aussie, Aussie, Aussie – oi, oi, oi

In our featured article this week we remind readers that Work Choices legislation still applies in determining Which Pay Table Applies to Your Organisation. We also introduce two new "Employee Hot Prospects", which can be accessed from the “hot chilli” link at right and, announce the winner of our Round 18 Footy Tipping Competition.

Now that the salary review season has begun it is timely to remind subscribers about the need to determine whether or not your organisation is a constitutional [trading] corporation. If you use an award to set pay rates, you need to know this in order to identify which pay table you should use to pay your employees.

Since the introduction of the “Work Choices” legislation by the Howard Government back in March 2006, many Australian employers became subject to federal legislation where previously they were covered by State Awards. Because the Rudd Government is not planning to change the constitutional basis of the legislation, all employers need to determine whether they are a constitutional [trading] corporation in order to determine which pay table to use. Whether an employer is a “federal system employer” will generally depend on whether it can be classed as a constitutional corporation. If not a constitutional corporation then either the state system continues to apply, [if previously in the state system], or transitional federal arrangements will apply for up to 5 years [if previously in the federal system].

A constitutional corporation is defined as a foreign corporation, or a trading or financial corporation formed within Australia. So there are two questions that must be answered to determine whether an employer is a constitutional corporation:

1. Is it a corporation?
2. If it is, is it a foreign, trading or financial corporation?

If the answer to both questions is yes, then the organisation is a constitutional corporation.

It should be noted that some organisations operate through a series of related bodies or entities. In each case, what matters for this purpose is the nature of the particular entity that employs staff to perform work for the organisation. If a trust has been established to engage in certain activities on behalf of someone else, it is usually the trustee who employs any staff. If so, the question becomes whether that trustee is or is not a constitutional corporation. A corporation for this purpose includes:

• a proprietary company [often indicated by “Pty Ltd” at the end of the organisation’s name]
• a not-for-profit association incorporated under State or Territory incorporated associations legislation [usually indicated by “Inc” at the end of the organisation’s name]
• a statutory authority incorporated under special legislation.

An individual person is not a corporation. Nor is a partnership between two or more persons.

As the name suggests, a foreign corporation is any body that has been incorporated overseas.

For bodies incorporated within Australia to be a constitutional corporation, they must either be a trading or a financial corporation. A financial corporation is a corporation that engages in a significant number of financial activities. In practice though, almost every financial corporation would also be a trading corporation. So for an Australian entity, the key question is generally whether it can be regarded as a trading corporation.

Under the approach currently adopted by the courts, a trading corporation is any corporation that engages in trading activities to a significant extent. It does not matter that the predominant purpose of the organisation may not be to engage in trade or to make a profit.

If more than 20% of annual revenue comes from trading activities, it would be reasonable to assume that the organisation is a trading corporation, even if those trading activities would not be regarded as central or “core” to what the organisation does. An exception might be where total revenue is small and the trading activities have little significance to the organisation.

If you are in doubt, it would usually be sensible to seek legal advice. This cannot guarantee you a “correct” answer, but would at least give you a firmer basis on which to decide whether or not you are a “federal system employer” for the purpose of the Workplace Relations Act.

Andy Wall
with Status’ Business Development Consultant-
Trish Hage