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Business news, business advice and information for Australian SMEs | SmartCompany

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    A Sydney-based software company which sacked an employee with cancer has been strongly advised by a federal court judge to settle the complex case and avoid trial.

    Elliot McGarva had been away from work for more than 10 months with a non-work related cancer when Enghouse Australia terminated his employment.

    During his 10 months absence, McGarva had continued to express a desire to work. But when he advised Enghouse he wished to start a return to work process, he received a notice of termination.

    Enghouse later suggested to the court the market and the demand for McGarva’s position had changed during his absence, suggesting the company should have looked at a redundancy.

    M+K Lawyers partner Andrew Douglas told SmartCompany the main issue in the complex case was the “temporary absence” provisions of the Fair Work Act, which prevents terminating a person’s employment if they are absent from work for a period less than three months.

    Based on that provision, Enghouse believed it was within its rights to terminate McGarva.

    But the judge said the mere fact that three months had passed did not automatically mean the termination was lawful under the adverse actions provisions of the Fair Work Act.

    According to Douglas, when an injury or illness is present, discrimination law applies.

    The judge said if McGarva had alleged he was dismissed unlawfully simply because of his illness and the leave he had taken, he would have been absent for a period in excess of 10 months and Enghouse would have been entitled to dismiss him after three months.

    However, under discrimination law, the court would need to consider whether McGarva was treated less favourably than a comparable employee without his disability or whether he was subjected to a condition or requirement which he could not meet and which a person without his disability could have met in the same circumstances.

    Douglas says the uncontested evidence suggests McGarva would have been fit for the inherent requirements of his job with reasonable adjustments in the foreseeable future and Enghouse had no evidence to the contrary.

    “This is somebody they thought was never going to come back,” says Douglas. “It was the wrong person and the wrong process.”

    Douglas says that while this is not a strong case, if it went to trial, there is the fair possibility McGarva could have won.

    “Terminating someone with cancer is a dumb thing to do. Every court is going to defend that person.”

    Douglas says the lessons that employers should take from this case are: to never use the three-month period to mask a redundancy; to never wait to the eleventh hour to move on a termination; and to use a process that acknowledges the risk of the attribute and the tests under discrimination law.

    He also says employers should always be mindful of the legal test regarding the capacity of a person to undertake the inherent requirements of their job with reasonable adjustments.

    Enghouse Australia was contacted by SmartCompany, but did not respond prior to publication.


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    Jonathan Moylan has been sentenced to one year and eight months in jail by the Supreme Court of NSW today, but will be released immediately on a $1000 good behaviour bond for two years.

    Moylan sent out a fake press release in January last year. The hoax temporarily wiped off more than $300 million from Whitehaven Coal’s share value by claiming the ANZ Bank had withdrawn a loan from the open-cut coal mine worth $1.2 billion.

    Moylan, who is an environmental activist, was subsequently charged under the Corporations Act for making false or misleading statements. He pleaded guilty and faced a maximum of 10 years in prison and a $765,000 fine.

    Supporters of Moylan gathered at the Supreme Court before the sentence was handed down, with the hashtag “standwithjono” trending on Twitter.

    Speaking to SmartCompany earlier this year Allens partner Matthew McLennan said it is important businesses react quickly to correct false or misleading statements. His advice comes in three simple but effective steps.

    “Number one: issue a corrective statement,” he says. “Number two: report the perpetrator to ASIC. Three: put people who are or might republish the false statement on notice that it is false.”

    Exposing the false press release as soon as possible is a good idea, said McLennan, because it draws attention to the person spreading false information.

     

     

    “Exposing it as a prank or hoax is effective because the story itself becomes that rather than ending up as a debate about what is and what isn’t true, which could give more airtime to the hoax.”


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    Small businesses around the country are being warned about doing businesses with a former radio DJ whose actions have reportedly short-changed individuals and businesses thousands of dollars.

    Fairfax reports Dene Broadbelt, who also goes by the name Harry O’Connor, has racked up more than $120,000 in debts over the past 18 months by entering into arrangements for goods and services but then skipping out on paying the bill.

    At various times Broadbelt has reportedly told vendors he was filming a charity cancer walk for Channel Seven, or was promoting a national touring musical festival. At other times he apparently recruited 11 unassuming DJs for his talent company, and told others he was the manager for Australian rock legend Jimmy Barnes.

    According to Fairfax, one audio visual company is out of pocket more than $25,000 after Broadbelt convinced it to freight $150,000 worth of equipment to Alice Springs so his business, Coleman Studios, could film a fundraising walk.

    Broadbelt reportedly sold tickets to a music festival, called Infinity Music Festival, which was never held, and left his previous employment at Eagle FM radio station in April 2013 after ordering $18,500 of equipment for another festival. 

    But it appears his stories were just that: stories. And some of the people who fell for the tall tales are taking to Facebook to warn others.

    One such person is Noel Sadler, owner of Skip Film Productions, who was left with an unpaid invoice for $2500 after he spent two days with Broadbelt, filming a television commercial for Broadbelt’s photography operation, Aquaholic Photography, in Bathurst, NSW, in September last year.

    While Sadler told SmartCompany he did receive a deposit from Broadbelt before the filming took place, Broadbelt refused to pay the final bill, at first blaming the bank for Sadler not receiving the money, and then attempting to take Sadler to a tribunal after he said he was not happy with the commercial.

    But it wasn’t just Sadler who was left short-changed by the incident, with the local motel out of pocket around $3000 for Broadbelt’s stay, as well as hundreds of dollars in catering bills.

    Sadler doesn’t expect to see any money from Broadbelt, who he says “had no assets to start with”.

    Sadler says Broadbelt filed for bankruptcy earlier this year. But the outcome of the bankruptcy is unclear, with creditors like Sadler receiving a letter last month informing them the bankruptcy action had been cancelled after liquidators were not able to contact Broadbelt.

    Sadler says he is aware of up to five names used by Broadbelt, including Harry O’Connor. According to Fairfax, Broadbelt has at various times used the names Dean Mussillon, Nic Lloyd and Clay O’Connor.

    Sadler says the mistake he made was not doing enough research before agreeing to work with Broadbelt.

    “The one mistake I made when I received his phone call, was that I just Googled his business name,” says Sadler. “I didn’t know it was a fake business name and there were no red flags.”

    “I should have been smart enough to Google his actual name, and ask a few more questions, or take his money upfront,” he says.

    Sadler says if he had taken a larger deposit, it would have at least gone some way to pay the wages of his staff.

    “As a one man band, I employ people as I need them,” he says. “So I had to pay five crew members’ wages and it left me way out of pocket.”

    “I was quite a trusting person but I’m not as trusting in business now,” he says.

    SmartCompany was unable to find contact details for Dene Broadbelt and the website and Facebook page for his most recent venture, Paramount Agency & Touring, appear to have been deleted.


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    The NSW Civil and Administrative Tribunal has backed the suspension of a bus driver who returned a positive drug test after taking an ecstasy tablet.

    The bus driver failed an oral drug test in January this year and later admitted to taking ecstasy at a party five days before the test.

    Transport for NSW then suspended the bus driver’s driving authority on the basis she was unfit for work until she undertook a treatment program.

    The bus driver provided a form from a doctor stating she met the medical standards expected of a driver.

    She appealed to the NSW Civil and Administrative Tribunal arguing she did not have a substance abuse problem and the drug taking was an isolated incident. 

    The tribunal took into account the safety concerns raised by the bus driver's positive drug result, her resignation and the confirmed presence of amphetamines and methamphetamines.

    “Recreational illicit drug use may well be common within the community. It is clear from the quoted objects of the Passenger Transport Act and the capacity for Transport for New South Wales to impose criteria on the authority of passenger transport drivers that this is an area in which an authorised driver's private behaviour may be subject to public scrutiny,” the tribunal found

    A spokesperson for Roads and Maritime Services told SmartCompany the safety of all road users is the highest priority for the authority.

    “Public passenger vehicle drivers risk their driver's authority being suspended or cancelled if they return positive drug or alcohol tests, regardless of whether it is a first offence,” the spokesperson said. 

    “The suspension will remain in place until Roads and Maritime can be satisfied with medical evidence the applicant is eligible to drive a public passenger vehicle.”

    Employment lawyer Peter Vitale says the case highlights that it is still possible for conduct outside the workplace to be taken into account in assessing whether or not the employee has breached the requirements of their employment.

    “When people are driving vehicles on public roads normally a fairly dim view will be taken of doing this when impaired by drugs or alcohol,” he says.

    Vitale says a policy of drug testing employees needs to be reasonable and applied consistently.

    “Employers need to demonstrate such a policy is reasonable in the circumstances of their workplace, if they can get over that hurdle provided there is a policy which is clear, applied consistently and which implements testing standards and criteria that are reasonable and appropriate then courts and tribunals will enforce those policies,” he says.


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    The US-born executive fired from Myer over lying on his CV has today faced the Melbourne Magistrate’s Court on one charge of fraud.

    Fairfax reports Andrew Flanagan appeared in court for a filing hearing on one charge of obtaining a financial advantage by deception on June 6, 12 days before he was announced as the group general manager of strategy and business development at Myer.

    Flanagan did not even last one day in the role, after it was revealed he misled the retailer and recruitment agency Quest Personnel about his work experience, including a claim he spent time as managing director and vice-president of Inditex, the Spanish parent company of popular fashion retailer Zara.

    But the department stores was not the only organisation to be duped in this high-profile case of reference checks gone wrong, with Flanagan also working briefly for Specialty Fashion Group, the Australia Arab Chamber of Commerce and recruitment firm Carmichael Fisher, among others.

    And not only had Flanagan misled multiple organisations, reports in June suggested he may have done so under multiple names.

    Lorraine Tribe, managing director of Quest Personnel, told SmartCompany in a statement in June her agency had contacted the police in relation to Flanagan, who she said provided Quest Personnel with “incorrect and misleading information”.

    Fairfax reports Flanagan is accused of “using a resume and providing verbal employment history and references falsely stating he had held a number of senior executive positions”.

    Flanagan was released on bail on the condition he lives permanently at an address in the Melbourne suburb of Glen Waverley. He is scheduled to appear before the court for a committal mention on October 20.

    SmartCompany contacted Flanagan’s lawyers, Doogue O’Brien George, but no one was available to comment.

    A spokesperson for Victoria Police told SmartCompany the police are unable to comment on matters currently before the courts. 


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    An unnamed recruitment firm in Melbourne has paid $11,190 to settle a copyright breach claim with industry advocacy group the Software Alliance (BSA), for the use of unlicensed Microsoft Office software.

    The BSA has previously said software piracy is rife in Australia, with recent estimates putting the figure of unlicensed software in the county at 21%.

    In addition to the damages, the recruitment firm must purchase legitimate software licenses.

    BSA Australia committee chair Clayton Noble told SmartCompany the organisation was tipped off by a person who knew about the unlicensed software use, via its web reporting form.

    Noble said quite a lot of cases are reported to the BSA by those who know about privacy within a company.

    The BSA believes the recruitment company had been using the unlicensed software since about 2010.

    Noble says the using software without a licence is a copyright breach and the process the BSA goes through when someone reports a breach is to gather information into an affidavit and thoroughly check the veracity of the case.

    “We then reach out to business using the software without a licence and let them know what has been alleged,” say Noble. “We then give opportunity to provide proof of licences.”

    The next step, as was taken in this case, is to issue the business with a copyright infringement and negotiate a settlement of the matter.

    Noble says the case highlights the financial risks businesses take if they use unlicensed, non-genuine software.

    “The message is, if you’re using software without a licence, you are taking all sorts of risks. Not just legal, reputational and financial risks, but security risks.”

    Noble says most counterfeit software is embedded with malware that will open your systems up to the risk of losing data or falling victim to cybercrime.

    He recommended business look at BSA’s website to help them prepare a software asset management procedure. He says the benefit of this can be finding software licences you didn’t know you had.


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    The Queensland Industrial Relations Commission has found a Dan Murphy’s employee was “on a frolic of her own” when she suffered fatal injuries at a work Christmas party. 

    Jukes Campbell was a fine wine manager at Dan Murphy’s in Noosa when she dived into shallow water during a picnic on Good Friday last year.

    The Dan Murphy’s store Christmas party was held in March because staff were too busy to hold it earlier and Good Friday was the only other day the store closed its doors.

    The store manager supported the event as it was “likely to improve staff cohesion and morale”.

    The manager and assistant manager purchased food, drinks and ice for the function with money raised through fundraising undertaken by staff for that purpose. 

    Around mid-afternoon, Campell and another worker asked the manager if he would take photographs of them running into the Noosa River. 

    Campbell suffered head and neck injuries diving into the river and died in hospital two days later.

    Her husband applied for workers’ compensation benefits but the claim was rejected by Dan Murphy’s self insurer WOW care.

    This decision was upheld by the QIRC which found while the Christmas party itself was a work activity, the particular activity of diving into the river was not.

    The commission also rejected a claim that Dan Murphy’s, through its store manager, induced or encouraged Campbell to dive into the river by agreeing to take photographs of her. 

    Ultimately, QIRC found Campbell’s injuries were sustained because of her own behaviour and while she was “on a frolic of her own”. 

    “The employee makes a wholly private choice to engage in an activity which falls outside the ambit of the employer’s requirement that the employee be away from the usual ‘place’ of work. Such choices will carry their own benefits, risks and consequences which the employer is not required to be an insurer against”.

    Nicole Lythall, senior associate at BTLawyers, says the decision provides further clarity for employers in determining applications for compensation for injuries sustained at social work functions. 

    “Importantly, the decision shows an employer will not be responsible for injuries sustained at such events where, notwithstanding the worker was encouraged or induced to attend the event, they were not encouraged or induced to engage in the particular activity resulting in the injury.” 

    Campbell’s husband is appealing the decision. 

    Dan Murphy’s declined to comment.


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    The Melbourne Magistrates Court has ordered an air conditioning and heating business to pay the maximum possible penalty for breaches of the Australian Consumer Law.

    In a civil case brought by Consumer Affairs Victoria, Australia Heating and Air Conditioning was ordered to pay $20,000 in costs and $100,000 in compensation to customers.

    The case is similar to a lawsuit from July 2013, in which a refrigeration installer was fined $10,000 by the Dandenong Magistrates Court for taking deposits, but failing to do any work.

    Australia Heating and Air Conditioning advertised “over 36 years’ experience” in installing and serving a range of brands, including Mitsubishi Electric, Daikin, Panasonic, Lennox, Carrier, Temperzone, LG and Fujitsu.

    However, the court found the company had accepted money from customers, but had failed to supply those goods and services.

    It also found the company breached the terms of a 2012 enforceable undertaking, which required the company to repay money to certain consumers.

    Australia Heating and Air Conditioning was also found to have engaged in misleading and deceptive conduct by requesting payments when it was restrained from the court from doing so.

    Aside from the fine, company officer Mardi Angela Tovey has been disqualified from managing a company until July 2024, while complaints manager Richard Francis Luke Tovey is barred until July 2018.

    The company has also been ordered by the court to maintain a notice on its website until July 1, 2015, stating the company “had accepted payments for the supply of goods and services but not supplied the contracted goods and services”.

    In addition, the Toveys have been restrained from accepting any payments for installing heating or air-conditioning systems before they complete the work.

    In a statement, Consumer Affairs Victoria said this was not the first investigation involving a company linked to the Toveys.

    “The Toveys have a history of poor conduct. In 2012, they operated a company called Worldwide Heating and Air Conditioning Pty Ltd, which was also the subject of complaints to Consumer Affairs Victoria. It went into liquidation before Australia Heating and Air Conditioning began to trade,” said the watchdog.

    “Consumer Affairs Victoria took legal action against Australia Heating and Air Conditioning and the Toveys in March 2012, and they were restrained from taking payments before supplying goods and services. They later breached those court orders, causing further losses to several consumers.”

    Dan Simpson from the Consumer Action Law Centre told SmartCompany the Australian Consumer Law, which came into action at the start of 2011, provides strong protections for consumers.

    "First and foremost, products and services must be fit for purpose, that is to say they should do what they’re meant to do," Simpson says.

    "Services must also be carried out with due care and skill. The person undertaking the work is required to do so competently, and take reasonable steps to avoid causing loss or damage."

    Simpson says that the law also mandates that services must be delivered within a reasonable timeframe.

    "That timeframe may be agreed to from the outset, or it could vary depending on factors such as products availability or weather," Simpson says.

    "The Australian Consumer Law also covers ownership of the goods. Once the customer pays for the product the ownership is transferred to them.

    "If you’re concerned about a product or service you should raise it with the retailer in the first instance. If their response is unsatisfactory, you should contact the consumer affairs or fair trade office in your state."

    SmartCompany attempted to contact Australia Heating and Air Conditioning. However, no one at the company was available for comment.


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    All is fair in love and war, according to online dating service OKCupid, which this week owned up to “experimenting” on its users.

    Just weeks after a research project involving Facebook’s manipulation of users’ news feeds caused a stir, the US-based service, which is also available in Australia, said it regularly uses user experiments to update and improve its service, going as far as telling some users who recorded “bad matches” of around 30% compatibility that in fact they were 90% compatible.

    What’s more, co-founder Christian Rudder said in a blog post in the digital age, we’re all online lab rats.

    “We noticed recently that people didn’t like it when Facebook ‘experimented’ with their news feed,” said Rudder. “Even the FTC is getting involved.”

    “But guess what, everybody: if you use the internet, you’re the subject of hundreds of experiments at any given time, on every site. That’s how websites work.”

    While OKCupid users sign an agreement when they register for the site which specifies “personal data may be used in research and analysis”, Ben Neville, a senior lecturer in management and marketing at Melbourne University, told SmartCompany consumers will decide if companies are ethical based on their motivations, how they undertake an action, and the outcome.

    “It could well be that their motivations were fine, even if they did not go about it the right way, if they were motivated to improve the computational algorithm they use for their site so that, ultimately, the outcome was to improve the service,” says Neville.

    But Neville says the way in which OKCupid revealed the experiments was “a little bit flippant”.

    “They should recognise that although there might be an excuse because the motivation was fine, it is ethical and polite to be upfront with your customers,” he says.

    “They could so easily have a notice on their website that says, ‘from time to time, we will run experiments to improve our service”.

    Neville says if businesses are seen “not to care about their users’ consent, then the users will start to question if they care about the outcomes”.

    “They’ll ask: is this just another money-making venture?” he says. “Could it be that if they provide users with matches that don’t work, does it keep these people in the system longer and make them more money?”

    Neville says the revelation also highlights “quite an interesting generational divide” in terms of the information consumers share online and what they expect companies to do with that information.

    While he says Gen X and older generations have some scepticism about the use of their personal data by social media giants like Facebook, Gen Y are more willing to “trade off” the ability to use the platforms with the knowledge that the companies will use their data for commercial purposes.

    However, Neville says it’s important for businesses to understand the importance of trust “as a commodity” with consumers.

    “It is something that is lost so quickly, but it’s such an easy driver of repeat business,” he says.

    While Neville says there will always be companies such as Facebook and OKCupid which “push the boundaries” of what is acceptable, the better option is to “take into account the wellbeing of your customers”.

    SmartCompany contacted OKCupid but did not receive a response prior to publication.


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    A safety equipment company has been forced to compensate an employee with a heart condition after it told him to look for alternative work.

    The Federal Circuit Court found Melbourne-based Sayfa Systems had taken an adverse action against employee David Heriot when it dismissed him due to his heart condition, rejecting the company’s claim Heriot left his job by “mutual agreement”.

    Judge Michael Jarrett ordered the company to pay a total of $5500 to compensate Heriot.

    Sayfa had employed Heriot to install safety products at significant heights but in June last year, he fell ill at work and was hospitalised.

    After he returned to work nine days later, Heriot was called to a meeting with two company managers who gave him a letter telling him to, "stop and reprogram your life so that this condition does not re-occur nor have any detrimental effect on your family or future physical performance."

    "Due to the fact that your job with us involves strenuous climbing and often high risk work, we are unable to let you continue this function for OH&S reasons and feel that it would be in our mutual interest for you to get work that is less strenuous and not likely to cause a repeat of the problem," the letter said.

    “With this in mind, and having no immediate alternative to offer you, we would reluctantly ask you to look for alternative employment.”

    Sayfa offered Heriot two months’ salary in lieu of notice, his annual leave entitlements and a $2000 car allowance if he agreed to the conditions. Heriot was also required to not work for another height safety company for two years.

    While Heriot initially accepted the offer, he later brought the adverse action claim against the company believing the dismissal contravened discrimination and temporary absence provisions of the Fair Work Act.

    Sayfa argued that it had not taken adverse action against Heriot because there was no dismissal, as Heriot had agreed to accept his resignation.

    However, Judge Jarrett found Heriot’s dismissal was a "fait accompli" when managers called to the meeting.

    "He had no choice,” said Judge Jarrett in the judgement. “He was presented with a letter in the course of the meeting which he was asked to sign. It is certainly the case that he may have refused to sign the letter, but his evidence was that if he did so, he thought he would get nothing". 

    "Terminating an employee's employment, whether it be by mutual agreement or not, is the taking of adverse action against the employee," the judge said.

    The judge ordered the company to pay Heriot $2200 for lost earnings and interest, plus a $3300 penalty.

    M+K Lawyers partner Andrew Douglas told SmartCompany while an employer can terminate an employee who is not fit for the inherent requirements of a job with reasonable adjustments, Sayfa breached the adverse action because it failed to have an appropriate legal basis to terminate Heriot.

    “The way they went about it was poor,” says Douglas. “They did everything you wouldn’t do.”

    Douglas says the lesson for all employers around injured workers is they must get advice and set up a process relying on appropriate medical evidence, while also considering reasonable adjustments to an employee’s role.

    Douglas says while the compensation in this case was low, the legal expenses of defending an adverse action in court are enormous, and in this case, it was likely to have come straight out of Sayfa’s profit.

    “If they’d done the right thing when dismissing [Heriot], no one would have given him advice for an adverse action. If they let him down in a gentle way… but they didn’t and he got his back up,” he says.

    “Had they had handled it appropriately, without these triggers, they would have avoided litigation.”

    Sayfa was contacted for comment but SmartCompany did not receive a response prior to publication.


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    A former employee of the Whitehouse Institute of Design has filed a legal claim following the fallout over the award of a scholarship to the Prime Minister’s daughter.

    The ex-employee of the school was the subject of an internal investigation after media reports Frances Abbott was awarded a $60,000 ‘chairman’s scholarship’ to the school.

    The school is now the subject of an adverse action claim in the Fair Work Commission.   

    SmartCompany understands a confidential hearing will be held to attempt to resolve the claim.

    Fairfax reports the former employee was subject to an internal disciplinary review and resigned before that review was complete.

    “The Whitehouse Institute is confident that the adverse action case is without merit and has no prospect of success,” Ian Tudor, head of the Whitehouse Institute, told the media organisation.

    Tudor told SmartCompany in a statement the institute is "confident that the adverse action case is without merit and has no prospect of success". 

    "The former employee concerned was subject to an internal disciplinary review and resigned before that review was complete. Given that the matter is currently before the Fair Work Commission, we will be making no further comment,” Tudor said in the statement.

    Workplace law expert Peter Vitale told SmartCompany it is most likely the former employee’s claim is based on the way the disciplinary review was carried out.

    “But in respect of the leak itself it is difficult to see how an adverse action claim could arise out of that,” he says. 

    Vitale says to establish an adverse action claim the adverse action must have been engaged in for a prohibited purpose. 

    “Identifying the prohibited purpose is the tricky part,” he says.

    Vitale says the reason the former employee may have chosen to pursue an adverse action claim is because the onus of proof shifts to the employer and it is up to the employer to prove the adverse action was not taken for the reasons alleged.

    “This makes it a more effective negotiating position than an unfair dismissal claim,” he says.


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    One of the major players in the Australian solar industry has collapsed into administration, the latest victim of a “roller coaster” market.

    ASIC documents show Queensland based Ingenero had administrators appointed last week.

    Chris MacDonnell from Restructuring Solutions is now managing the business.

    The collapse follows the liquidation of family business the Solar Guys earlier this year and an earlier spate of collapses in the solar industry.

    Ingenero was founded in 2008 and became one of the largest solar installers in Australia with a focus on commercial solar installations and leasing solar systems.

    The company was well respected in the industry and was involved in many major contracts including with Woolworths Caltex.

    Ingenero’s collapse calls into question the $23 million solar plus storage facility at Rio Tinto’s Weipa operations in North Queensland which Ingenero was working on with First Solar. 

    SmartCompany understands many smaller suppliers and contractors have been left without payment. 

    One supplier told SmartCompany he had lost “a fair bit of money” in the collapse.

    The supplier became suspicious a few weeks ago after his calls to Ingenero went unanswered and the company’s switchboard just went through to a strange answering service. 

    “I had a gut feeling,” he says.

    “We rocked up on [Ingenero’s] doorstop to say ‘Where’s our money?’”

    That’s when the supplier was told Ingenero was in administration. 

    He was told “you go in the queue” and that one investor had lost $3 million.

    “There will be more of this in the industry,” the supplier predicts.

    “It’s very risky for the big players with big overheads as it is a rollercoaster ride, particularly with the uncertainty with the renewable energy targets.” 

    He says there will be even more uncertainty if the government removes the small scale renewable energy scheme.

    “If that scheme is abolished you will see a lot more companies go to the wall. It will probably halve the industry.”

    SmartCompany contacted Restructuring Solutions for comment but did not receive a response prior to publication.


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    A Western Australian pearl company has been charged by Worksafe with one count of failing to provide and maintain a safe working environment, two years after the death of one of its divers.

    The family-owned company, Paspaley Pearling, has been criminally charged by Worksafe WA for the workplace death and faces a maximum penalty of $200,000 under the Occupational Safety and Health Act.

    Twenty-two-year-old Jarrod Hampton drowned on his second day working for Paspaley Pearling as a drift diver off Western Australia's Kimberley coast in April 2012.

    Hampton was collecting shells from the sea bed while being towed underwater, but made an emergency ascent to the surface on April 14. Crew members attempted to help Hampton, but he died at the scene.

    An investigation found his death was consistent with drowning.

    The Darwin-based company was charged by Worksafe WA yesterday and the case is expected to be heard in the Broome Magistrates Court later this year.

    While SmartCompany could not reach the company for comment before publication, at the time of the incident Paspaley released a statement saying Hampton’s death was a terrible tragedy and that safety was its highest priority.

    Hampton’s parents have told the ABC they were “gutted” that Paspaley had not been charged with a more serious offence as they hoped it would lead to increased safety in the industry.

    “We want Jarrod back, you know, and we're not going to get that,” Tony Hampton told ABC radio.

    “We don't want him to have died for nothing. We want some sort of justice.”

    Last year, the Maritime Union criticised the length of time the investigation was taking, suggesting other divers were being put at risk by a lack of action.

    But Andrew Douglas, lawyer at M&K Lawyers, told SmartCompany an attack on the process of the investigation would be misconceived.

    “Far too often these issues are industrialised,” says Douglas. He says investigations usually last around a year, especially in complex cases such as this, because investigators need to collect and analyse a substantial amount of evidence.

    “The regulator isn’t trying to slow it down,” he says. “These investigations take as long as they take.”

    Douglas says the greater issue in this case is Western Australia’s lax workplace penalties, which are different and considerably less than the rest of the country.

    He says it is likely a greater charge would have been brought against Paspaley if the case happened outside of WA.

    “The person that does the worst act in WA has a lesser liability than someone in Victoria who commits a medium offence,” says Douglas.

    Douglas says WA does not have a reckless endangerment change at all and the laws it does have are difficult to prove and rarely prosected.

    “It is out of alignment with the rest of the country,” he says.

    Douglas says the Western Australian government is unlikely to adopt the reforms other state and territories have in recent years, despite the state having the highest concentration of high risk workplace activities.

    “What this shows is how much better it would be if Western Australia joined the reformed legislation… how much simpler and more predictable it will be for Australian industry,” he says.


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    An importer of hair care products has been found by the Federal Court to have made false and misleading representations about one of its hair straightening products.

     Dateline Imports said its Keratin Complex Smoothing Therapy product was made up of at least 35% natural keratin, however the court found it contained less than 7% in proceedings brought forward by the Australian Competition and Consumer Commission.

     ACCC Commissioner Sarah Court said consumers should not be misled by manufacturers.

     “It is important for consumers to be able to reply on representations by manufacturers about the composition and benefits of their products,” she said. “Especially personal products where the consumer is unable to assess these claims.”

     The ACCC also alleged Dateline Imports made false representations when it stated the Keratin Complex Smoothing Therapy hair straightening product did not contain formaldehyde, however the court did not hold up these allegations.

     The ACCC said it was disappointed due to safety concerns for consumers and would be considering the judgement.

     Aussie app economy booming: report

     Australia’s ‘app economy’ of mobile app developers and other supporting staff is one of Australia’s fastest growing employment sectors, according to a report from the Progressive Policy Institute.

     The report shows Australia has 140,000 people employed in the app economy, with employment in the Australian computer systems design industry rising by more than 38% since 2008.

     The top state for app employment was New South Wales, with 77,000 App Economy jobs, but every state had some App Economy employment.

     The report also found Australia stacks up well against the US and the UK when it comes to App Economy employment per capita.

     Shares down on open

     The S&PASX200 benchmark was down 81.3 points to 5551.6 points at 12:19 AEST. On Thursday, the Dow Jones closed down 1.88%, falling 317.06 points to 16,563.30 points.


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    A broker who allegedly blew the whistle on insider trading at the Australian Bureau of Statistics and NAB has launched a legal claim against his former employer in the Federal Court.

    Joel Murphy was head of sales at Pepperstone Financial when he says he became aware of suspicious trading by two clients, NAB employee Lukas Kamay and ABS employee Christopher Hill.

    Murphy filed an unfair dismissal claim last month in the Federal Court against Pepperstone and its directors Owen Kerr and Joe Davenport.

    Murphy claims he was fired shortly after alerting the Australian Securities and Investments Commission to the $7 million scandal.

    Fairfaxreports Murphy’s contract was terminated on the same day news broke of the scandal.

    Documents show Kerr told Murphy his contract was terminated due to "global FX market volatility being at record lows ... and the entire FX trading market contracting".

    "Regrettably this means your employment will terminate," a letter dated May 9 said.

    Murphy is seeking damages of $904,779 based on bonuses he says he was owed for the period.

    A directions hearing is listed for August 26.

    Fairfax reports Murphy claims his complaint to ASIC falls under whistleblower protection rules in the Corporations Law, which forbid an employee from being sacked on the basis of a disclosure.

    Ian Ramsay, professor of commercial law at the University of Melbourne, told SmartCompany at this stage Murphy’s claims are just an allegation.

    “There’s not a great deal of these sort of claims in Australia, that’s not to say it doesn’t have merit,” he says. 

    Ramsay says the recent Senate committee report on the performance of ASIC included a number of recommendations for boosting whistleblower protection which had “broad support”.

    The Senate committee report recommended expanding protections to make it a criminal offence to threaten or to take reprisals against whistleblowers.

    “If those protections were enacted it would be likely that we would see more of these types of claim,” Ramsay says.

    He says there is “modest protection” in Australia for whistleblowers.

    “The laws in other countries provide greater protection for whistleblowers than we see in Australia so there is a growing sense that our laws need an overhaul to provide protection for whistleblowers,” he says.    

    Pepperstone declined to comment.  SmartCompany contacted Murphy’s lawyers but did not receive a response prior to publication.


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    Businesses employing overseas workers on 417 Working Holiday visas are being put on warning by the Fair Work Ombudsman, which is cracking down on wages and conditions for visa-holders.

    The 417 temporary visa is issued to young foreigners who want to holiday and work in Australia for up to two years. To be eligible for the visa, workers must undertake 88 days specified work in a designated regional area and in certain industries in their first year.

    The Fair Work Ombudsman has launched a review of these industries, saying it believes the 88-day requirement is being exploited by some unscrupulous operators to attract free labour.

    More than 128,000 417 working holiday visas were issued in the first half of the 2013-14 financial year, according to the Fair Work Ombudsman.

    There have been more than 50 legal cases commenced against businesses employing overseas workers since July 2009, with restaurants accounting for the highest number of litigations.

    Of these, the watchdog alleges underpayment of overseas workers totalled more than $3.8 million and included 10 cases involving 417 visa-holders.

    It says one in three 417 visa-holders have requested help from the Ombudsman in the last five years.

    The largest penalty awarded by the was $343,860, in a case involving a Perth cleaning company that deliberately underpaid six cleaners, including five overseas workers from Taiwan, Hong Kong, New Zealand and Ireland.

    The Ombudsman said it will be cracking down on issues including non-payment of wages, underpayment of wages, employees making payments to employers and third parties in return for documentation supporting their second visa application and exploitation of employees in exchange for accommodation programs.


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    Supermarket giant Coles has taken an unusual step to improve relationships with its suppliers after it was accused of bullying, enlisting the help of one of its biggest critics.

    Jeff Kennett, who has previously dobbed Coles into the Australian Competition and Consumer Commission for making misleading claims over the nature of its “freshly baked” bread, has signed on as the ‘independent arbiter’ of the supermarket giant.

    The former Victorian premier tells SmartCompany the main role of the job will be resolving supplier disputes with quicker and fairer resolutions.

    Kennett will also oversee the creation of the supermarket’s new Supplier Charter in his role, which is expected to continue for the next three years.

    “It’s a new challenge for me,” says Kennett, pointing at his desire to change career directions every six or eight years.

    Kennett says he has had every indication from suppliers they will feel comfortable approaching him, but says anything currently before the courts regarding previous allegations of bullying is not his concern.

    “I do not have any say and I don’t want any say. I don’t work retrospectively,” says Kennett.

    In a statement, Coles managing director John Durkan said, “A key measure to strengthen confidence is to establish a rigorous, independent third party process to resolve disputes, and to ensure Coles is held accountable.”

    “We accept he has articulated strong views about Coles’ conduct in the past, and that he will do so when and where necessary into the future,” said Durkan, who said Coles believes the former politician’s “reputation as an independent voice will stand any test”.

    “Mr Kennett will make recommendations directly to me on proposals to resolve disputes. Should there continue to be disagreements, Mr Kennett’s final recommendations will be binding on Coles.”

    Durkan also said Coles has given Kennett the power to publish his decisions or raise any concerns through the media and the ACCC.

    Kennett rejects the idea that the move is a public relations “stunt” by Coles, saying the supermarket in fact risks a “PR disaster” if the process fails.

    “They have every reason to make it work,” he says.

    Kennett had previously blown the whistle on Coles’ claims its bread was baked freshly in store, when in fact it was partially baked and frozen in Ireland then transported to Coles stores and "finished" in store.

    Coles was found guilty of making misleading claims about the bread in June, but that was not the first round of legal trouble the supermarket major faced this year.

    The ACCC launched court proceedings against Coles in May alleging the supermarket chain had engaged in unconscionable conduct and had misused its market power, following a lengthy investigation that saw suppliers confidentially allege they had been forced to take part in a program that required additional and ongoing rebates.

    Last month Coles defended its ‘Active Retail Collaboration’ program, lodging a 34-page defence in the Federal Court that said supplier participation in the program was at all times voluntary.

    While the suppliers involved in the initial claims of bullying have remained tight-lipped and largely anonymous, vegetable growers association AUSVEG – who recently launched a campaign against Woolworths over supplier bullying – has said it cautiously welcomed Kennett’s appointment.

    “Any attempts by supermarkets to improve relationships with their suppliers are welcome however we will be closely monitoring the implementation of the proposed framework, to ensure that it is delivering effective outcomes for growers,” said AUSVEG spokesperson Andrew White in a statement provided to SmartCompany.

    “Integrity in dealings between suppliers and major retailers is incredibly important to ensuring successful business relationships,” said White.

    “Coles is a major distributor of vegetables to Australian consumers so it is vital that there are long-term strategies in place to deal with potential disputes between retailers and their suppliers.”

    Kennett says while his main focus will be supplier negotiations, the opportunity will give him the platform to introduce a national food policy –to address agricultural importing and exporting issue.


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    Professor Ian Harper, the chair of the competition policy review, told an audience of small business people at the 12th COSBOA National Small Business Summit in Melbourne yesterday: “I hear your pain.”

    Harper is heading up the federal government’s “root and branch” review of competition policy in Australia. 

    The panel was appointed on March 27, produced an issues paper in April and since then has received more than 300 submissions.

    The review promises to be the first major overhaul of competition laws since the Hilmer inquiry more than 20 years ago. 

    Harper says the review will include areas not touched by Hilmer, including health, education and intellectual property.

    “All of the issues that surround the rapid development of the digital economy are on our agenda,” he says. 

    Harper says the review will be “no holds barred” and the voice of small business is “extremely important” in the competition review.   

    As the son of a butcher, he says: “I have grown up with a fear of large supermarkets.”

    To date Harper has heard from small businesses about a number of concerns including “the exercise of market power by large players” and “being squeezed as suppliers to large businesses”.

    Harper says competitive neutrality—“when the government decides to set up in business in competition with you”—is also an issue of concern, along with planning and zoning rules and access to justice for small business. 

    “People need to know that they can get redress for the solutions that concern them,” he says.

    Harper says the review will look at three key questions: does the law need to change and if so how; does the regulator need to change and if so how; and does the government need to change the way it conducts its own operations, at a federal, state and local level. 

    Harper says the panel is in the process of preparing a draft report which will be available by the end of September.

    The report will include a number of draft recommendations and then the panel will take responses before preparing a final report for the government in March 2015.

    But Paul Nielsen, deputy chair of COSBOA, told the audience there was a fear amongst small business that increased competition equals lower margins.

    “A lot of us don’t make much now to start with so we are worried about making less,” he says.


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    A Sydney car wash has been fined $90,000 in the Federal Court in Sydney after a Fair Work Ombudsman investigation found it had underpaid hundreds of its workers.

    The court found Crystal Carwash Café, which operates 14 outlets across Sydney, underpaid more than 350 young workers, mostly from non-English speaking backgrounds, more than $177,000.

    Between January and September 2010, employees were paid a flat rate of $13 an hour, which was under the minimum hourly rate. They were also not paid overtime rates they were entitled to of more than $21 per hour.

    Justice Buchanan found Crystal Carwash Café’s payment of a flat rate regardless of award entitlements was “deliberate and calculated”.

    “I have accepted that the contraventions were deliberate and part of a pattern of conduct designed to avoid liability under workplace laws,” said Buchanan.

    “I have also accepted that the respondents have shown a lack of remorse or contrition.”

    In all, 11 of Crystal Carwash Café outlets were found to have made underpayments, including its cafés in Bondi, Brookvale, Chatswood, Coogee, Gladesville, Merrylands, Mosman, Northbridge, Rose Bay, Rushcutters Bay and Strathfield.

    The company was also found to have not kept proper employment records.

    Crystal Carwash Café attempted to minimise the seriousness of their conduct on the basis that the underpayments had been rectified. But Buchanan rejected the defence.

    “I give that circumstance little weight,” he said. “The payments were only made after the applicant had commenced to investigate and when it must have been apparent that resistance was probably futile.”  

    The company was fined $70,000, while director and part-owner Anthony Sahade was penalised a further $10,000 and another $10,000 penalty was imposed on the person upon responsible for the company’s payroll and administrative functions, Peter Khouri.

    Employment lawyer Peter Vitale told SmartCompany the penalties were at the higher end of the available range the judge could have imposed.

    “The judge has indicated there were no mitigating factors on which he should reduce the penalties,” says Vitale.

    Vitale says the courts have recently made it clear they will substantially punish employers who are found to have deliberately breached the Fair Work Act, especially against vulnerable workers.

    “There’s no doubt the courts are increasingly less tolerant of employers who are found to have deliberately avoided their obligations under law. They are showing an increasing wiliness to severely punish employers who take advantage of workers, particularly unskilled and venerable workers,” says Vitale.

    SmartCompany attempted to contact Crystal Carwash Café but did not receive a response prior to publication.


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    An ANZ Bank employee has told a court she was threatened with disciplinary action after she refused to undergo a pelvic examination by an ANZ-chosen gynaecologist.

    Fairfax reports Katherine Bashour launched a pregnancy discrimination case against ANZ in February, alleging the bank had purposefully overlooked her for promotions and denied her more flexible working arrangements.

    Bashour, who had worked with the bank for five years, has since alleged ANZ demanded she take an internal pelvic exam last month, following her request to go on maternity leave early because of complications with her pregnancy.

    Bashour says she provided ANZ with medical reports and blood test results from her personal obstetrician when making her case for early maternity leave, but was asked to take an examination with an approved doctor to satisfy the bank of her condition. 

    She said she was unable to attend the exam because her doctors had advised her to stay at home as she had a dangerously low red blood cell count, and was then told by ANZ she would face disciplinary action for failing to comply.

    However, ANZ said in a statement issued to SmartCompany the bank "did not at any time request or require Ms Bashour to undertake a pelvic examination" as part of an assessment of her working arrangements. 

    "The primary purpose of the independent consultation with Ms Bashour was to assess the appropriateness of the support measures offered by ANZ to help Ms Bashour work safely from both the office and from home," said ANZ. 

    "These measures included an offer by ANZ of a free onsite car park and a desk with a permanently allocated meeting room to ensure Ms Bashour did not have to travel around the building unnecessarily for meetings."

    Bashour appeared at the Federal Circuit Court yesterday, seeking an urgent injunction to stop the bank from terminating her employment.

    "There has been a string of this sort of discrimination since I filed a complaint in the Federal Court in February," Bashour said, according to Fairfax.

    “I have been a top performer at work, recommended for promotions, I mentor graduates ... so facing these unfounded claims of disciplinary action is insulting. It's quite extraordinary ... this is just to punish me.”

    According to Fairfax, ANZ lawyers told the court on Thursday the case “was not at the point where the employee is going to be terminated".

    "[Ms Bashour] is subject to a disciplinary procedure under the bank's policy ... it relates to her conduct some time ago where [she] was not on parental leave and she was still at work ... and had been directed to undergo an independent medical examination," the lawyers said.

    Employment lawyer Peter Vitale told SmartCompany the unusual case, which is still before the courts, appeared to involve “other issues” yet to be made public.

    “It strikes me as unusual that an organisation with sophisticated human resources management like ANZ would take a step like that without a very good reason,” says Vitale.

    He says it appears as though ANZ had reason to believe the medical evidence Bashour had provided was not sufficient.

    Vitale also says it is highly unusual for an employee to go to court seeking an injunction to prevent termination of employment.

    “I would suggest there are other issues at play in this case,” he says.

    Vitale says female employees have the right to take unpaid special maternity leave early if they provide four weeks’ notice of a pregnancy-related illness. This early leave does not interfere with the 12 months of leave the employee is entitled to.

    He says the case also raises the issue of making staff visit a company-picked doctor.

    Vitale says in circumstances where there is reason for an employer to not be satisfied with the amount of detail in medical evidence – usually because an illness is referred to in generic terms – the employer has a right to get a better idea of exactly what is preventing the employee from performing their normal duties.

    “It can be reasonable for an employer to direct an employee to undergo a medical examination with a chosen doctor,” Vitale says, particularly if there are occupational health and safety issues to take into account.

    “I must stress though, there is no legislative provision for this, it’s a matter of common law and essentially based on the employees duties under the contact of employment,” says Vitale.


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