Revision

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Revision Summary

• Legal Principles for Engineers
• ELE 4EMT

George Alexander 1 June, 2007
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Please Note

• The exam is not limited to the materials
  presented in this revision lecture.
• Students are advised to go through all the
  lecture notes and past exam papers.

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The lectures covered

• The Australian Legal System
• Occupational Health Safety
• Intellectual Property
• Tenders
• Contracts
• Tort and Professional Negligence
• Industrial Relations, Insurance/Risk,
  Trade Practices Act

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1. The Australian Legal System
The Australian legal system is derived from the
English system, which is often referred to as the
Common Law system.
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Separation of Powers

• Legislative Power,
• Executive Power, and
• Judicial Power

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Common Law

• Judge-made law ( or case law)
• Relies heavily on precedents
• Developed and continues to evolve in courts
• Loosely used, the term common law describes the
  whole English legal system.
• In a technical sense, the term common law is
  used to distinguish between common law rules and
  equitable principles.

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The Judiciary

• Importance of independence of the Judiciary
• Separation from the Legislative and executive
  arms of the government
• Judges act independently from the government in
  interpreting and applying the law

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2. Occupational Health and Safety

• Occupational health and safety is an important
  area for a number of reasons
• First and foremost is the human suffering caused
  by industrial accidents
• Industrial accidents and health hazards are
  costly to both industry and the community in
  terms of lost production and the cost of
  treatment and rehabilitation.
• Industrial accidents also become a trigger for
  industrial actions by trade unions.

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As engineers

• Our responsibility to observe, enforce and insist
  on appropriate safety standards cannot be
  overstated.
• Occupational health and safety considerations are
  paramount. There can be no room for compromise.

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Occupational Health and Safety Act 2004 - Victoria

• Came into effect on 1 July 2005.
• Includes improvements to the regulator WorkSafe
  Victoria and modernisation of the 1985 Act.
• Increases in maximum financial penalties.
• New sentencing rules and options.
• Health now includes psychological as well as
  physical issues.
• Protects volunteers from liability.

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Key Concepts of the 2004 Act

• Imposes duties on employers, the self-employed,
  employees, designers, manufacturers, suppliers
  and others.
• Expectation to do what is reasonably practical
• Probability of incident
• Potential seriousness of injury or harm
• Knowledge of the risk
• Cost and availability of risk reducing measures
• Accountability of senior management
• No one may put another person at a workplace in
  danger.

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Victorian WorkCover Authority

• Inquires and reports to the Minister on matters
  relating to the occupational health and safety.
• Provides advice to and co-operates with
  Government departments, public authorities, trade
  unions, employer organisations, and other
  interested parties in relation to occupational
  health, safety, and welfare.
• Promotes education and training and approves
  courses in occupational health and safety.
• WorkSafe Victoria is VWA's prevention arm,
  striving for significant reductions in workplace
  death, injury and disease
• http//www.workcover.vic.gov.au/vwa/home.nsf/pages
  /worksafe_home

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Duties of employers

• The Act identifies the following key themes
• Protect the health and safety of people at
  workplace and the public
• Involve workplace parties.
• Deal with health and safety issues.

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Employer - Protect the health and safety of
people at workplace and the public

• Provide and maintain for employees a working
  environment that is safe and without risks to
  health.
• NB Includes provision of appropriate training
• Not recklessly endanger a person at the workplace
• Monitor the health of employees, keep records and
  get advice.
• Protect other people from risks arising from the
  employers business.
• Hold licences, registrations or permits as
  required

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Employer Involve workplace parties

• Covers such areas as
• Consultation with employees on health and safety
  issues
• Training for HSRs in OHS
• Access to information for HSRs
• Allow access for person assisting HSR
• Establish health and safety committee on request
• No discrimination against those involved in OHS

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Employer - Deal with health and safety issues.

• Attempt to resolve OHS issues with employees
• Direct that work is to cease.
• Report incidents to WorkSafe as required.
• Comply with PINs issued by HSRs and PINs affirmed
  by inspectors
• Display and bring notices to the attention of
  employees
• Co-operate with WorkSafe inspectors
• Co-operate with authorised representatives

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Duties of employees

• Same key themes
• Take reasonable care for self and others
• Not recklessly endanger a person at a workplace.
• In general co-operate with employer, WorkSafe
  inspectors and other authorised representatives
  with regard to OHS issues.
• Hold necessary licences, permits and
  qualifications.

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Health and Safety Representatives (HSRs)

• Represent members of their work group
• Monitor the measures taken by the employer to
  comply with OHS laws.
• Inspect and enquire into anything that may pose a
  threat to the health and safety of the employees
  they represent.
• Attempt to resolve OHS issues in the workplace.
• May direct work to cease

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Workplace Inspectors

• Powers and responsibilities include -
• Wide-ranging role with extensive powers
• Powers of entry if an immediate risk is suspected
• Power of seizure of evidence
• Issue notices improvement, prohibition
• Determine unresolved issues
• Provide advice

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3. Intellectual Property (IP)
IP represents the property of your mind or
intellect. For example

• An idea
• A new process
• A new tangible device
• A piece of original creativity
• An image

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Benefits of an IP strategy
From the researchers perspective working in a
University environment

• Inventor/researcher reaps the rewards of their
  hard work
• Enables further research to take place
• Inventor/researcher gets the credit for their
  idea
• Patents are published so the information is not
  locked up
• You and your idea become attractive to investors

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Patents
A patent is legally enforceable and gives the
owner the exclusive rights for the life of the
patent (20 years for a standard patent) - a
guaranteed monopoly. For example -

• Device hills hoist clothes line
• Substance slow release penicillin, or aspirin
• Method installing an artificial hip, gene
  shears
• Process making disposable nappies, refining
  metal ores

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What is a patent?

• An exclusive right granted by the government
• Prevents others from making, using or selling
  what's covered in the patent claims
• Can cover devices, substances, compositions,
  living organisms, methods or processes

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Requirements to obtain a patent
A successful patent application must

• Be new
• Involve an inventive step
• Be a 'manner of manufacture
• Be useful
• Be undisclosed

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How a patent protects your idea
With a patent you may

• Profit from it directly by manufacturing and
  selling the product yourself or by having others
  manufacture or market your product for you
• Sell or assign all or part of your rights to the
  patent
• License the patent to someone else which allows
  them to exploit it for a set price or royalties
  (or both) and for a set time

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Trade secrets

• Need to implement a method to stop co-researchers
  and people involved in your project from
  revealing your secret or findings during and
  after their involvement with your project
• Confidentiality agreements are the most common
  way of securing trade secrets
• Useful when you want to retain exclusive use
  beyond the term of the patent
• For example the formula for Coca Cola is a trade
  secret

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4. TENDERS

• Tendering is the traditional method for obtaining
  a competitive price for the supply of goods or
  services.
• Tendering process is also used in many instances
  to sell goods and services
• In general, governments and public companies must
  use the process of tendering when buying or
  selling.
• The tender document contains commercial terms and
  conditions and technical specification.

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SCOPE OF TENDER

• Some examples of tender requirements
• Supply only of equipment and/or materials
• Supply, installation, and commissioning of a
  system
• Design, supply, installation, and commissioning
  of a system (Turnkey)
• Build, Own, Operate, and Transfer (BOOT)
• It should be noted here that the scope of tender
  divides the responsibility of the implementation
  of the system between the principal and the
  supplier.

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TENDER PRICE

• Lump Sum Contract
• Firm (may not be fixed) price
• Tenderer will have to take some risks
• Allowance for price variations (additional work)
• Cost Plus Contract
• Cost (not price) of equipment and material
• An agreed system of mark-up
• Hourly rates for project management, design, etc.

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CALLING FOR TENDERS

• Depending on the nature of the project and
  situation on hand, there are three methods for
  calling for tenders
• By invitation
• By invitation after registration of interest
• Public tenders
• It should be noted here that a subsequent
  contract will be based on the outcome of the
  tendering process.

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PUBLIC TENDERS

• Often used by public authorities to satisfy
  statutory obligations.
• Any contractor/supplier is entitled to submit a
  tender response to the advertised tender request.
• The obvious disadvantage of this method is that
  the process of checking the credentials of the
  tenderers will be deferred until the receipt of
  tender responses.

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THE TENDER DOCUMENT

• Instructions to Tenderers
• Commercial Terms Conditions
• Price basis (e.g. Tax, FOB, materials/service,
  etc.)
• Terms of payment
• Legal clauses
• Basis for contract
• Technical Specifications
• Functional requirements
• Performance requirements
• Operational and maintenance requirements, etc.
• Appendices (Drawing, Data, etc.)

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TENDERING COSTS MONEY

• Preparation of the tender document
• Identification of needs
• Requirements formulation
• Technical specification writing
• Commercial terms and conditions
• Responding to a tender (bidding)
• Analysing the document
• Systems design and costing
• Evaluation of responses and follow up

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BIDDING PROCESS

• Bidding Team
• Sales and Marketing (Commercial)
• Engineering/Project Management
• Tender Analysis (clause by clause response)
• Bid/No Bid Decision (SWOT analysis)
• System Planning and Design
• Costing and Price Formulation
• Tender Response Submission
• Follow up

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TENDER ASSESSMENT

• Commercial Compliance
• Price too low (buying the job, inexperience,
  etc.)
• New information about the tenderer
• Unacceptable conditions included with tender
• Construction time
• Unbalanced bid (lump sum/rate for additional
  work)
• Technical Compliance
• Full compliance / Partial compliance
• Meets and exceeds requirements

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AWARD OF CONTRACT

• The principal and the successful tenderer
  (bidder) enter into a contract.
• The tender document, along with any amendments
  during the bidding process, will be the basis of
  the contract.
• A project manager on each side (principal
  tenderer) will be assigned to the project.
• Project review meetings and progress monitoring

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Advantages of tendering!

• If the goods or services offered are exactly the
  same, tendering can yield the best price
• Promotes competitiveness amongst all suppliers of
  goods and services
• Can lead to improvement in the efficiency of the
  industry and the quality of goods and services

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Disadvantages of tendering!

• Can be very costly and time consuming process for
  both the organisation issuing the tender and
  suppliers responding to the tender
• Price could be a major deciding factor, or a
  distorting element, resulting in the buying of an
  inferior product or service

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5. Contracts

• No intention to create a legal relations and/or
• No agreement and/or
• No capacity and/or
• No consideration or form and/or
• No legal objective

A contract is invalid if
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SIMPLE CONTRACT

• A contract is a legally binding agreement.
• For a contract to come into existence, certain
  technical requirements must be satisfied.
• For a so called Simple Contract, there must be
• an Offer by A to do something for B
• in exchange for a valuable Consideration (e.g.
  money), and
• an Acceptance by B of As offer
• A simple contract need not be in writing.

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Oral Contracts
If the contract is oral, each party in dispute
will be faced with the possibly onerous task of
establishing that its version of the terms of the
agreement is correct.
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Written Contracts
If the terms of the agreement are written down
(in other words reduced to writing) then in
principle the intentions of the parties to the
contract are established by reading the words
they chose to use.
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Contracts Partly in Writing
From a legal viewpoint, written contracts are
strongly assumed to be a complete record of the
terms of the agreement. It is possible to have a
contract which is partly oral and partly in
writing. The evidentiary problems presented by
the such agreements in the event of a dispute are
similar to those of entirely oral contract.
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DISCHARGE OF THE CONTRACT
A contract may be terminated or discharged in a
number of ways

• by full performance,
• by agreement of parties,
• by breach of contract by either parties, or
• by frustration

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6. LAW OF TORT

• Terminology
• Plaintiff
• person who brings an action at law
• Defendant
• person against whom an action is brought

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Duty to Take Care

• A person owes a duty by law to take care not to
  cause harm to other persons in certain
  circumstances.
• The question of whether or not a duty to take
  care rests on a particular person is a legal one.
• Where a breach of any such duty occurs the person
  responsible for the breach may be found, by law,
  to have been negligent.
• There is a need to understand what is meant by
  the term negligence in the general sense.

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Negligence

• The term negligence is used in law in two ways
• a mental element of indifference, and
• a specific tort
• A contrast to the specific tort of negligence
  would be in a situation where personal injury has
  been inflicted intentionally by a person. This is
  a criminal law case.
• A situation involving negligence and where the
  injury is regarded as extremely gross and results
  in death, a charge of criminal negligence may be
  brought.

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Tort

• A Tort is a wrong inflicted on one person by
  another which is not a crime and for which the
  wronged person has a reasonable claim for
  damages.
• Torts constitute a miscellaneous collection of
  actions, one of them being the tort of
  negligence.
• The negligence act or omission may be in the form
  of either physical action or advice or the lack
  of either.
• The consequence of such negligence action, advice
  or omission is that someone suffers damages.

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Proof of Negligence

• There are four matters requiring proof in any
  action of negligence
• ensure that a duty of care does exist, and
• that a breach of that duty of care has occurred,
  and
• that damage has actually occurred, and
• proximity between the act or omission of the
  defendant and the damage.

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Professional Liability

• A contract by its nature gives rise to a set of
  rights and duties, one of which is the duty to
  exercise reasonable care and skill.
• The contract between the professional engineer
  and his or her client will have express and
  implied terms.
• Express terms are those to which the parties
  specifically agree. Implied terms are those which
  the courts imply into the contract.
• These terms if breached, regardless of the
  application by the professional engineer of
  reasonable care and skill, will give rise to
  liability.

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7. Some other important legal aspects

• Industrial Relations
• Need to be aware of employer/employee
  entitlements under the new Workplace Relations
  Act
• https//www.workchoices.gov.au/
• Risk Management/Insurance
• The Trade Practices Act/ACCC
• The Australian Competition and Consumer
  Association

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The Regulatory Framework

• Australia New Zealand, long history of
  government support for union involvement
• Since early 1990s, major shift toward enterprise
  agreements
• Growth of regulation relating to human rights,
  discrimination, OHS, environmental matters
• More recently, especially with a more
  casualised workforce, there is a major trend
  towards individual agreements Australian
  Workplace Agreements AWBs.
• WorkChoices legislation effective 27.03.06

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WorkChoiceshttps//www.workchoices.gov.au/ourplan
/

• A single, national IR system to replace all state
  systems
• Workers in firms with fewer than 100 employees
  lose unfair dismissal protection.
• Minimum wage fixing to be transferred from AIRC
  to a new Fair Pay commission.
• Legislating of five minimum work conditions
• Award conditions cut from 20 to 16
• Small businesses allowed five years to become
  incorporated
• Streamlining of AWAs
• The Age 22.10 05

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Risk Management/Business insurance (from
BusinessVictoria - http//www.business.vic.gov.au/
)

• Some types of business insurance to consider are
• buildings and contents insurance
• public liability insurance
• product liability insurance
• equipment insurance, including protection against
  IT system failures
• legal expenses insurance for facing court
  proceedings
• health and life insurance for the owner/manager
• transit insurance for goods
• travel insurance for any trips
• business income insurance
• credit insurance for unpaid debts
• industrial special risk (ISR) insurance

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The Trade Practices Act 1974(from
BusinessVictoria - http//www.business.vic.gov.au/
)

• prohibits unfair, unconscionable, misleading or
  deceptive conduct
• gives consumers certain implied guarantees and
  warranties, and the right to buy goods of
  acceptable quality
• allows consumers injured by defective goods to
  seek compensation for their injuries
• allows the Commonwealth minister responsible for
  consumer affairs to set product safety and
  information standards
• allows the minister to ban the supply of unsafe
  products or order their recall

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ACCC(http//www.accc.gov.au/)

• The ACCC promotes competition and fair trade in
  the market place to benefit consumers, business
  and the community.
• Its primary responsibility is to ensure that
  individuals and businesses comply with the
  Commonwealth competition, fair trading and
  consumer protection laws.
• As well as education and information the ACCC
  recommends dispute resolution when possible as an
  alternative to litigation, can authorise some
  anti-competitive conduct, and will take legal
  action when necessary.

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Good luck