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

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    The majority of disputes referred to Australia’s army of small business commissioners are being resolved successfully, according to Australian Small Business Commissioner Mark Brennan.

    Speaking at the COSBOA National Small Business Summit in Melbourne on Thursday, Brennan said across all jurisdictions, the success rate of disputes being solved by the commissioner’s offices has hit 80%.

    And while disputes have traditionally been solved through litigation, Brennan says alternative resolution methods such as mediation are gaining in popularity.

    Brennan describes dispute resolution as the “flagship function” of the small business commissioners, with Victorian Small Business Commissioner Geoff Browne telling the same audience 75% of the disputes seen by his office relate to retail leases.

    But both Brennan and Browne say the cost of resolving disputes for SMEs can be extremely high.

    Browne says based on survey data from completed disputes in Victoria in 2012, the average cost to businesses was $7,500 and 63 hours in time. The average time it took to resolve a single dispute was six months.

    Browne says more than 70% of the same 300 businesses surveyed said the dispute had an adverse impact on their business’ performance, their personal stress or their health and wellbeing, which highlights the costs of business disputes to SMEs.

    Brennan sees the role of his office, and those of his state counterparts, is to “influence behaviour in the business community to improve the quality of the business environment”.

    To this end, he believes all stakeholders have a role to play, including big business, which should act in a leadership role, government and policy makers, who should not be “umpires who’ve never played the game”, industry associations, and small business owners themselves, who should be “hungry” for information about how to run their businesses more successfully.

    Brennan told SmartCompany it is an area in which Australia is “leading the world” and other countries are becoming increasingly interested in the idea of a small business commissioner whose role it is to help resolve disputes.

    But changes are on the way to Brennan’s office, with the federal government announcing in the May budget its intention to “transform” the National Small Business Commissioner into a Small Business and Family Enterprise Ombudsman, and allocated $8 million over four years to that end.

    The government has already released a consultation paper about the change and Brennan says he expects a draft exposure bill will be released by the end of this month or in early September.

    “We’ll then be able to see what the legislation will look like,” he says.

    Brennan says he expects the legislation to “really just be giving legislative support for what we already do”.

    “And that will, obviously, be extremely helpful to be able to say, not only do we recommend you do this, but we’ve actually got some power behind us,” he says.

    But Brennan doesn’t believe the changes will drastically alter the role of his office.

    “The interesting thing in practice will be to what extent do you actually sort of run around waving the act at people because I’ve sort of found people respond better if you’re cooperative and give them a chance to sort of fix things up,” he says.

    Nevertheless, Brennan says having the government’s support in the form of legislation will be “very helpful”.

    “Legislation is the most concrete expression of a government’s policy, so you are in a position to say ‘the government takes this very seriously’,” he says.

    “I think it is an expression of their commitment to that concept of helping small business.”

    As for his priorities, Brennan says he wants to reach out to what he calls “the unaffiliated small businesses”—those who are not currently a member of an industry association or chamber of commerce—and help them understand the commissioner’s role in helping to resolve disputes.

    “They don’t get professional advice … and yet they put their house up against their business,” he says.


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    Industry Minister Ian Macfarlane has floated the idea that government grants be linked to the number of patents a university registers, rather than the papers it gets published.

    The suggestion comes at a time when Australia is rapidly going backwards in the development of technology products for export despite all of the federal government incentives into R&D tax concessions, venture capital, grants to industry and university grants aimed at commercialisable outcomes.

    Between 2001 and 2011 Australia’s GDP grew by 270% whereas high-technology exports grew by just 40%. In 2011 high-tech exports represented just 1.5% of all exports.

    The cause? We have almost no large companies exporting technology solutions to global markets. Without large companies investing and promoting technology solutions there cannot be a thriving technology sector because large companies, like the big trees in a rain forest, provide all sorts of high level cover and ground level support for a technology sector.

    Australia’s woeful patent track record

    Australia’s 20 largest listed corporations have just 3,400 patent between them. Thirteen of these companies have less than 20 patents in total. By comparison the 20 largest US listed companies hold many hundreds of thousands of patents and they collectively file over 20,000 patents year. Google alone owns 51,000 patents and IBM has a similar number.

    This discrepancy between Australian and US corporations is primarily due to the focus of large Australian companies on exploiting their “protected” share of the local market rather than exporting technology solutions.

    This bias against innovation has a knock-on effect that flows all the way through our economy, down to our SMEs and universities. Despite claims to the contrary, our universities lack useful inventiveness. Consider this; in 2008 Australian universities and research organisations managed to publish 3.18% of the world’s research publications but only an estimated 0.15% of the world’s patent filings.

    More worrying is that in 2010 about 220,000 patents were granted in the United States whereas only 16,000 were granted in Australia. The owners of about 204,000 US patents couldn’t be bothered filing an Australian-equivalent patent. The is because Australian patents have little commercial value due to the difficulties in enforcing patent rights in Australia and the low financial penalties for patent infringement.

    This is reflected in the fact that 80% of known cases of patent infringement in Australia are not pursued by the patent owners. Further, owners of one-third of all Australian patents are aware of patent infringement and yet less than half a percent (per year) of Australian patents are the subject of court enforcement. These are not the signs of a well-functioning patent system!

    What can we do about this? Government incentives, aimed at universities, CSIRO, SMEs or venture capital, will not have any impact until we figure out how to get some of our larger companies into the innovation game. And we have a weapon choice right in front of us, the patent system, which can be considered as a very “lazy” asset. What we need to do is make patents more valuable as assets and make patents cheaper to create and own. We can do this by taking three very simple steps.

    Fixing the system

    Firstly, the value of Australian patents can be increased by lowering the costs of patent enforcement and increasing the awards for successful patent enforcement. Quite simply we have to make our courts look a lot more like the US where damages for patent infringement are high and court costs are not awarded against losing parties. Success in these endeavours will be measured by the emergence on contingency lawyers for patent enforcement.

    If these changes are made, it would’t take very long for Australian corporations to be the subject of patent enforcement. This would then focus the boards of these companies onto their own patent positions. They would then act to protect themselves by investing in the internal development of patents, licensing patents from other parties, buying patents, joining defensive patent funds and the like.

    The Patent Box can work in Australia

    Secondly, we need to introduce a “patent box” scheme where a tax break is given to companies for the sale of products or services that are protected by patents. The patent box is one of two major tax incentives for new technology development; the other is the R&D tax concession. Put together the R&D tax concession and patent box systems are designed to encourage the investment into the development and commercialisation of higher-quality new technology platforms.

    A patent box scheme could be carefully crafted to avoid pitfalls seen in other countries. Most importantly, the patent box scheme must be reserved for cases where the original R&D behind the patents is performed in Australia and where the patents are owned by the company claiming the tax break. There also needs to be an audit process to ensure that products of a patent box tax claim have substantial patent protection instead of some ancillary patent claims not central to the market success of the product.

    If a patent box scheme was introduced Australia’s large corporations would immediately start looking at means to innovate so that they could claim the patent box tax incentive. The end result of these R&D efforts would be world-leading products and services with export potential.

    Patent application is part of the R&D process

    Thirdly, the general tax treatment of the costs of patenting makes no distinction between the process of developing and applying for patents and the maintenance costs related to granted patents; they are all capital expenditure.

    But, like research expenditure, any patent application expenditure is highly speculative because there is no certainty future economic benefits will flow to an entity which owns a patent application. Since patent applications have no value prior to the granting of a patent I propose a tax treatment for patents that allows all patenting cost to be expensed for tax purposes up until when a patent is granted (in a jurisdiction) whereupon further costs (of maintenance over the life of a patent) should be treated as capital expenses.

    I would go further and allow costs associated with patent applications to be eligible for the R&D tax concession. This would be a key enabler for bringing the patenting process properly into the R&D process, where it belongs but where it often fails to be. Treating patent application costs as R&D expenses would reduce the perceived costs and risks of patenting and hence encourage both innovation and patenting.

    Industry Minister Ian Macfarlane has floated the idea that government grants be linked to the number of patents a university registers, rather than the papers it gets published.

    The suggestion comes at a time when Australia is rapidly going backwards in the development of technology products for export despite all of the federal government incentives into R&D tax concessions, venture capital, grants to industry and university grants aimed at commercialisable outcomes.

    Between 2001 and 2011 Australia’s GDP grew by 270% whereas high-technology exports grew by just 40%. In 2011 high-tech exports represented just 1.5% of all exports.

    The cause? We have almost no large companies exporting technology solutions to global markets. Without large companies investing and promoting technology solutions there cannot be a thriving technology sector because large companies, like the big trees in a rain forest, provide all sorts of high level cover and ground level support for a technology sector.

    Australia’s woeful patent track record

    Australia’s 20 largest listed corporations have just 3400 patent between them. Thirteen of these companies have less than 20 patents in total. By comparison the 20 largest US listed companies hold many hundreds of thousands of patents and they collectively file over 20,000 patents year. Google alone owns 51,000 patents and IBM has a similar number.

    This discrepancy between Australian and US corporations is primarily due to the focus of large Australiancompanies on exploiting their “protected” share of the local market rather than exporting technology solutions.

    This bias against innovation has a knock-on effect that flows all the way through our economy, down to our SMEs and universities. Despite claims to the contrary, our universities lack useful inventiveness. Consider this; in 2008 Australian universities and research organisations managed to publish 3.18% of the world’s research publications but only an estimated 0.15% of the world’s patent filings.

    More worrying is that in 2010 about 220,000 patents were granted in the United States whereas only 16,000 were granted in Australia. The owners of about 204,000 US patents couldn’t be bothered filing an Australian-equivalent patent. The is because Australian patents have little commercial value due to the difficulties in enforcing patent rights in Australia and the low financial penalties for patent infringement.

    This is reflected in the fact that 80% of known cases of patent infringement in Australia are not pursued by the patent owners. Further, owners of one-third of all Australian patents are aware of patent infringement and yet less than half a percent (per year) of Australian patents are the subject of court enforcement. These are not the signs of a well-functioning patent system!

    What can we do about this? Government incentives, aimed at universities, CSIRO, SMEs or venture capital, will not have any impact until we figure out how to get some of our larger companies into the innovation game. And we have a weapon choice right in front of us, the patent system, which can be considered as a very “lazy” asset. What we need to do is make patents more valuable as assets and make patents cheaper to create and own. We can do this by taking three very simple steps.

    Fixing the system

    Firstly, the value of Australian patents can be increased by lowering the costs of patent enforcement and increasing the awards for successful patent enforcement. Quite simply we have to make our courts look a lot more like the US where damages for patent infringement are high and court costs are not awarded against losing parties. Success in these endeavours will be measured by the emergence on contingency lawyers for patent enforcement.

    If these changes are made, it would’t take very long for Australian corporations to be the subject of patent enforcement. This would then focus the boards of these companies onto their own patent positions. They would then act to protect themselves by investing in the internal development of patents, licensing patents from other parties, buying patents, joining defensive patent funds and the like.

    The Patent Box can work in Australia

    Secondly, we need to introduce a “patent box” scheme where a tax break is given to companies for the sale of products or services that are protected by patents. The patent box is one of two major tax incentives for new technology development; the other is the R&D tax concession. Put together the R&D tax concession and patent box systems are designed to encourage the investment into the development and commercialisation of higher-quality new technology platforms.

    A patent box scheme could be carefully crafted to avoid pitfalls seen in other countries. Most importantly, the patent box scheme must be reserved for cases where the original R&D behind the patents is performed in Australia and where the patents are owned by the company claiming the tax break. There also needs to be an audit process to ensure that products of a patent box tax claim have substantial patent protection instead of some ancillary patent claims not central to the market success of the product.

    If a patent box scheme was introduced Australia’s large corporations would immediately start looking at means to innovate so that they could claim the patent box tax incentive. The end result of these R&D efforts would be world-leading products and services with export potential.

    Patent application is part of the R&D process

    Thirdly, the general tax treatment of the costs of patenting makes no distinction between the process of developing and applying for patents and the maintenance costs related to granted patents; they are all capital expenditure.

    But, like research expenditure, any patent application expenditure is highly speculative because there is no certainty future economic benefits will flow to an entity which owns a patent application. Since patent applications have no value prior to the granting of a patent I propose a tax treatment for patents that allows all patenting cost to be expensed for tax purposes up until when a patent is granted (in a jurisdiction) whereupon further costs (of maintenance over the life of a patent) should be treated as capital expenses.

    I would go further and allow costs associated with patent applications to be eligible for the R&D tax concession. This would be a key enabler for bringing the patenting process properly into the R&D process, where it belongs but where it often fails to be. Treating patent application costs as R&D expenses would reduce the perceived costs and risks of patenting and hence encourage both innovation and patenting.

    Ian Maxwell owns a part share in a patent brokerage firm and provides consulting advice related to patents.

    This article was originally published on The Conversation. Read the original article.


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    The NSW Supreme Court has awarded over $1 million to an employee who was dismissed without reasonable notice.

    Susanna Ma worked as an accounts manager for businesses related to logistics company Expeditors International for 24 years.

    Ma was 49 years old when she was dismissed and had an accounting team of more than 12 people reporting to her.

    She claimed Expeditors International breached her employment contract by failing to give her reasonable notice before terminating her contract.

    Ma argued a reasonable notice period was 12 months at an income of $62,511 a month, which was the average monthly gross amount, including bonuses, Ma was paid. (See table at end of story.)

    But Expeditors International only offered five weeks pay in lieu of notice giving her a total payout of $50,000. 

    Her gross average annual income over five years was calculated at $750,132, or $62,511 per month.

    Acting Justice Nicholas found what was reasonable notice was to be determined after consideration of all the relevant circumstances of the case.

    Length of service and seniority were two important factors.

    The court also considered whether superannuation contributions were to be included in Ma’s ordinary pay.

    The court found the proper period of notice was 10 months and Ma was entitled to payment at her final salary rate.

    It also awarded the payment of a pro rata bonus of $8,138 and payment of the balance payable for long service leave in the amount of $265,373.

    Andrew Douglas of M&K Lawyers told SmartCompany there was an “inevitability” given Ma’s seniority and experience that the court would determine 10 months was a reasonable notice period.

    “The reality is that if you don’t specify your notice period in a contract you are left with reasonable notice as a matter of law,” he says.

    Douglas says what is reasonable is based on length of time, seniority and longevity.

    “There are key clauses in every employment contract which you must have,” he says.

    These include a notice period, whether you can require someone to stay at home once their contract is terminated on “gardening leave”, how remuneration is actually calculated, a continuity of employment clause and a clause specifying that the contract is the sole instrument governing the employment relationship. 

    “SMEs must also identify the nature of the job that is being done accurately so they can manage people’s performance,” Douglas says.

    He says most contracts in small business don’t include any description of the job the employee is doing. 

    “The problem with small business is they don’t have proper contracts so they are always chasing their tail with injured or poorly performing workers.”

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

    Ma's earnings as laid out in the court ruling:

    22. The plaintiff's PAYG payment summaries identified total amounts paid to the plaintiff for each immediately preceding financial year. Those amounts for the years ending 30 June 2006 to 30 June 2011 (inclusive) are set out as follows:

    Year Ending Gross payments Total allowances
    30 June 2006 $540,349 $20,196
    30 June 2007 $622,702 $20,196
    30 June 2008 $754,425 $20,566
    30 June 2009 $943,574 $20,640
    30 June 2010 $671,896 $20,640
    30 June 2011
    (plaintiff's employment terminated on 6 June 2011)
    $686,653
    (including termination payments)
     

     

       


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    It may have run a successful ad campaign mistaking the word ‘market’ with ‘meerkat’, but insurance comparison website Compare the Market has not won any fans for mistakes made in its most recent advertising, copping a $10,200 fine from the competition watchdog.

    The Australian Competition and Consumer Commission handed the company the penalty after it found recent claims in its advertising to be false or misleading.

    Compare the Market claimed its website compared more funds than any other insurance comparison service in the country, when there are at least two other Australian websites that compare more health insurance funds – including the public website operated by the Private Health Insurance Ombudsman.

    Compare the Market distributed a letterbox pamphlet in Queensland, New South Wales and Victoria between March and May this year that read: We now compare more health funds than any other website in Australia” andCompare more health funds than anywhere else”.

    The company also made similar representations on its website, banner advertising, flyers, television infomercials and a digital display in its office foyer.

    Compare the Market released a statement confirming it paid a fixed penalty of $10,200 following the issue of an infringement notice by the ACCC.

    “Compare the Market immediately withdrew the relevant marketing material from circulation, upon receipt of the ACCC’s concerns,” said the statement.

    “Compare the Market respects the important role of the ACCC, and remains committed to providing Australians with a clear and simple way of comparing everyday products and services.”

    Sally Scott, partner at Hall & Wilcox, told SmartCompany if a comparison statement made by a business is incorrect, it is seen as misleading and exposes the business to action by the ACCC.

    “If a business is going to make a claim comparing its offering to that of other businesses, whether it is a comparison of price or volume, then it must ensure that the comparison is accurate on day one and for as long as the representation is made,” says Scott.

    “This means that the business needs to do its due diligence on day one and then monitor that it remains accurate while the claim continues to be made, retaining all records.”

    Scott says these tasks can be difficult because businesses need to ensure nothing is missed.

    “In Compare the Market’s case, they would have needed to check every other website that compared policies and determined whether Compare the Market compared more funds,” she says.

    Scott says in some cases such an exercise may not be practical. But even if a business misses one or two competitors when completing its due diligence, as in the Compare the Market case, it can get caught.

    “Businesses need to keep in mind that they can get stung for misleading conduct even if they make a seemingly innocent mistake. If a claim is misleading, it’s misleading, regardless of intention,” says Scott.

    Scott says ongoing monitoring can also be difficult and suggests if a business cannot monitor a claim, they should not make it.

    “They should consider other ways of putting their sales pitch,” says Scott.

    Scott says these sorts of comparison claims are inherently risky and businesses should retain records and be in a position to prove any claims they make.

    “Some statements by businesses are so exaggerated and unrealistic, such as ‘best steak in town’, that they come across as unbelievable and just puffery. However, any claims that do come across as genuine, need to be accurate,” she says.

    Scott also says the case serves as a reminder to consider where your advertising is making these claims – in this case, across websites and even in its office foyer.

    “Businesses need to think outside the square and consider all possible places that they make representations and then whether those representations are misleading,” says Scott.

    “It is becoming more common these days for businesses to have proposed advertisements checked for the risk of misleading conduct, but it is still less common for businesses to turn their mind to other places in which they make representations.”


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    Law firm Maurice Blackburn today launched class action proceedings on behalf of all customers and businesses charged a late fee by a bank.

    The class action includes all customers who have ever been charged late payment fees by Westpac, St George, Citibank, BankSA and ANZ, whether or not they signed up to the original action. 

    Andrew Watson, the head of Maurice Blackburn’s class action practice, said the firm’s success early this year against the ANZ on late fees, has opened the door for millions of customers to recoup what is rightfully theirs.

    “Whilst that judgment is under appeal, we think we have a very strong case and that this course of action provides the best safeguard for the rights of all those consumers affected by late fees,” Watson said in a statement. 

    James Middleweek, from litigation funder Bentham IMF, which has bankrolled the litigation told SmartCompany SMEs are also included in the action.

    Middleweek says the target is “exorbitant bank fees” and he has in his sights the $112 million the banks charged Australian businesses in financial year 2010.

    “If the Court of Appeal were to find in our favour on dishonor fees and overlimit fees we would look to extend the class on those,” he says.

    Middleweek says late fees are not as big an issue for businesses as honour and dishonour fees as late fees are only charged once a month because of the payment cycle.

    “The particular offensive thing about honour and dishonour fees is banks can charge them on every transaction and so it is effectively a tax on small business,” he says.

    Middleweek says the appeal is “very important for small business”. 

    Neil Slonim, of The Bank Doctor, says class action fees are becoming expensive for the banks. 

    “Class actions do provide an opportunity for an SME or individual to seek to redress any wrongs they think a bank may have inflicted on them given that they generally lack such power,” he says.


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    A trademark battle is emerging in the Australian real estate industry, with the Real Estate Institute of Australia (REIA) slamming a move by the REA Group to trademark “realestate.com.au”.

    The REA Group, which uses the realestate.com.au domain name to list properties, applied to IP Australia to trademark the words in realestate.com.au in mid-2013 and this week IP Australia has granted its request.

    But industry lobby group REIA says trademarking the term could jeopardise the use of the term “real estate” by other businesses and professional groups.

    “REA once again appears to be making a technical grab for control of those things that belong to the industry at large,” said REIA president Peter Bushby in a statement.

    “It has in the past tried to prohibit others from using the words ‘real estate’ in their domain names.”

    However, a spokesperson for REA Group told SmartCompany this morning the trademark “does not mean realestate.com.au will ‘own’ the words ‘real estate’”.

    “Our trademark would only extend to real estate portals, not to real estate agency sites, and there would be no change for sites such as realestateview.com.au,” says the spokesperson.

    And the spokesperson says REA Group already has trademarks for versions of its realestate.com.au logo.

    “This new trademark will recognise the goodwill and reputation we have created through our brand and help protect it from parties who may try to leverage off this.”

    But Bushby said the term “realestate.com.au” is generic and describes the entire profession.

    “This is true particularly given the size of the real estate industry and the number of businesses operating with the term realestate.com.au either in their business or domain name,” he said.

    “Data from the Australian Bureau of Statistics shows that as at June 2013, there were 35,019 real estate businesses operating in Australia. A substantial proportion of those businesses use the phrase “real estate” as part of their branding to assist consumers to identify the industry and range of services that those businesses provide.”

    “Many also use a phrase that includes or is similar to realestate.com.au as part of their URL for the online delivery of their services,” he said.

    The REA Group’s claim over the term has already been tested by the courts, with the company successfully taking action against Real Estate 1 Ltd in 2010 over the use of realestate1.com.au.

    However, Property Observer reports in that case, the judge found the realestate1.com.au business was established to directly compete with REA Groups’ realestate.com.au.

    Finlaysons intellectual property, media and technology partner John MacPhail told SmartCompany it is unusual for businesses to attempt to trademark a URL.

    “The reason is they just don’t need that kind of monopoly because they already own the domain name,” says MacPhail.

    MacPhail says given REA Group has already had trademark protection for its realestate.com.au logo since 2002, its latest bid is simply taking their IP protection “one step further”.

    MacPhail says REA Group would have been required to present substantial evidence to IP Australia that consumers and other businesses clearly link the words realestate.com.au with REA Group’s service.

    While MacPhail agrees the term ‘real estate’ is too generic to trademark, he says there are currently more than 500 trademarks on the IP Australia register that relate to ‘real estate’ and another 83 applications that are pending.

    “It’s a crowded field,” he says.

    And while other businesses will now be prevented from using realestate.com.au, MacPhail says it will still be possible to register trademarks that are “very similar”.


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    A prison worker in Adelaide has been awarded $100,000 in compensation after a colleague sent an email from his account which was found to be defamatory.

    District Court judge Susanne Cole ruled this week Cosimo Tassone suffered “severe personal hurt and distress” when his former colleague Stephen Kirkham used Tassone’s email account to send a message to around 1200 people stating Tassone is gay, reports Adelaide Now.

    Cole awarded Tassone, who was suing Kirkham, $100,000 for non-economic loss, medical expenses and loss over wages over the email, which was sent in July 2011.

    The email sent by Kirkham read: “Hello people, just a note to say that I am a homosexual and I am looking for like-minded people to share time with.”

    While Cole found the imputation that Tassone is gay was not defamatory, she said the other suggestions contained in the email were.

    “The email also conveys the meaning that the plaintiff is promiscuous, is of loose moral character and is seeking to solicit sexual relationships with people he does not otherwise know,” said Cole.

    “I consider that those meanings are defamatory both within the community generally and among the recipients of the email.”

    Cole also found the suggestion in the email that Tassone would use his employment to solicit sex was defamatory.

    The court heard Tassone suffered considerable shock and anxiety in response to the incident and was declared unfit for work until September 2012.

    He told the court he was “in absolute shock” when he saw the email and worried his colleagues “would look at me differently – that I was hidden in the closet behind closed doors”.

    Kirkham initially admitted to sending the message from Tassone’s email account, claiming it was a “bad joke”. However, he later retracted the admission and said another employee at the centre was responsible.

    Andrew Douglas, partner at M+K Lawyers, told SmartCompany defamation law arises when someone says something which hurts, humiliates or intimidates someone, but unlike bullying, “the hurt and humiliation is the issue”.

    For comments to be defamatory, they must be published or communicated to anyone else other than the person concerned, says Douglas.

    While Douglas says individuals accused of defamation can sometimes use the defence of truth, in this case, that defence would never have been successful given that the intention of the email was to “scandalise” the victim.

    Douglas says for employers, this case raises the issue of whether or not an employee can be terminated for these kinds of actions.

    “If someone used a work computer or accessed the work IT system in any way, they would have no difficulty,” says Douglas.

    Douglas says there have been a number of cases where employees have been terminated for accessing another person’s email account and either making adverse comments about the individual or responding to a work-related matter in a different way to what the individual would have.

    “It should always be taken as the most serious breach of confidentiality as it attacks the company’s IT system and culture,” says Douglas.

    He says it is also a reminder of the importance for all employers and employees to regularly change their email passwords.

    SmartCompany contacted the South Australian Department of Correctional Services but the department was unable to comment on the matter for privacy reasons.


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    A Melbourne business is facing legal action in the Federal Circuit Court after ignoring a Fair Work Commission order to pay compensation to an employee it was found to have unfairly dismissed.

    The case comes after the Fair Work Ombudsman announced a push to ensure court penalties and back-payment orders are upheld in February last year.

    On January 17, the Fair Work Commission ruled World Gym Sunshine had 14 days to pay $2200 compensation to a 24-year-old receptionist, Samaka Sophia Ndege.

    Despite the order, the former employee contacted Fair Work claiming she had not been paid her compensation by the gym, which is located in the suburb of Sunshine in Melbourne’s west.

    Following the complaint, the Fair Work Ombudsman issued several notices to the business requesting for it to comply with the order, which were also allegedly ignored.

    As a result, World Gym Sunshine as well as its former sole director and part-owner, Wayne George Mailing, are set to face legal action, with a directions hearing listed for September 19.

    The gym faces a maximum penalty of $51,000, while Mailing could potentially receive a penalty as high as $10,200.

    World Gym Sunshine told SmartCompany Mailing sold the business in August of last year, and that it would not be commenting on the case further.

    SmartCompany attempted to contact Mailing, but no comment was available prior to publication.

    In its official statement, Fair Work Ombudsman Natalie James said she was prepared to take action where appropriate.

    “Our inspectors made extensive efforts to engage with this business to try to resolve the matter, but were not able to secure any co-operation,” said James.

    “Compliance is fundamental for the integrity of the workplace relations system and employers.”

    Employment lawyer Peter Vitale told SmartCompany it is unusual for an industrial relations case to reach the Federal Circuit Court, and it might be the first time it’s happened since the current Fair Work Commission was introduced.

    “The case is unusual in that when the Fair Work Commission makes an order, the vast majority of employers apply them,” Vitale says.

    “Since 1956, the mechanism has always been that if an employer or employee ignored a ruling of the industrial relations tribunal, then it could only be enforced through a federal court,” he says.

    “So this is an unusual example of the need to take action in the federal court to enforce a decision. Most people, whether they’re employers, employees or unions, will comply.”


    0 0

    Employers are being warned they may be liable for sexual harassment that happens outside the office, after the Federal Court ruled a pub two work colleagues visited to deal with sexual advances counted as a “workplace”.

    The sexual harassment case, which awarded damages of almost $500,000 to the plaintiff, follows a landmark case last month that paved the way for a huge rise in the penalties courts could impose in such cases.

    In December last year, Justice Mordy Bromberg found Jemma Ewin, a chartered accountant at entertainment company Living and Leisure Australia, was sexually harassed four times in May 2009 by Claudio Vergara, a casual accountant employed by the company.

    The case was back in court this week as Vergara attempted to appeal two of Justice Bromberg’s findings, including that the pub the two talked in could be defined as a “workplace”.

    In the original case, it was found Ewin – who was Vergara’s supervisor – was first harassed one evening in the company’s offices at KPMG House in Melbourne’s CBD.

    The court heard at the end of the working day, Vergara turned off the lights in the office he shared with Ewin, walked behind her, and tried in the dark to touch her hand, telling her she should finish work.

    He told Ewin he would turn the light back on only if she agreed to come to talk to him, as he wished to tell her something. Ewin agreed to accompany Vergara to the Waterside Hotel.

    The two then went to the pub, which was across the road from the office, where Vergara propositioned Ewin in “very explicit and crude terms and proposed that they have an affair”.

    Ewin, who is married, refused the offer, but Vergara later tried to kiss her on the walk to the train station.

    The next day at the office, Vergara asked Ewin: “What are you doing to keep Claudio happy?”

    That night, after an afternoon drinks function at the Melbourne Aquarium, the court found Vergara and Ewin had likely engaged in sexual intercourse, which Ewin told the court she had no memory of.

    She said she had woken up the next day with physical symptoms consistent with penetration.

    Vergara appealed the finding they had had sex, as well as the definition of the Waterside Hotel as a “workplace” – but both appeals were dismissed by the judges.

    Justice Richard White said while the evidence to support the act of sex was circumstantial, as the supervisor had no memory of it occurring, the circumstantial case was “strong”.

    The judges agreed with Justice Bromberg’s original finding that the pub visit was triggered by the supervisor's need to deal with the accountant's unwanted sexual advances, and that the “function” of both at the hotel “was to deal with what had commenced at the workplace” – and could therefore be considered a workplace.

    M+K Lawyers partner Andrew Douglas told SmartCompany since the landmark case of Oracle Vs. Richardson, the penalties courts are able to impose in sexual harassment cases have risen significantly.

    “The courts are starting to show the new tariffs, which are significantly above where they were a year ago, even significantly above where they were a month ago,” says Douglas.

    Douglas says while the complexity of the facts surrounding the sexual intercourse complicate the case, the matter of whether or not the pub could have been seen as a workplace was quite clear.

    “If you go to a place outside of work, then it can still be viewed as a workplace as long as there is a sufficient connection to the workplace,” he says.

    “Any workplace-related behaviour will always be seen as workplace-related behaviour [by a court].”

    Douglas says an example employers should keep in mind is a work Christmas party and any ensuing social activities. An employer may even be liable if a manager agrees to go out with employees after the function has finished.

    Douglas also says employers should look carefully at laws regarding improper emailing and bullying because in such cases even an employee’s home can be regarded as a workplace. 

    His advice is for employers to have strict policies and procedures in place to protect them from liability, such as in this case where Living and Leisure Australia avoided implication.

    Douglas says with the correct policies and procedures in place, employers can show they have provided a safe and non-discriminatory workplace, can protect themselves from adverse actions, and can still have the right to terminate an employee who has done the wrong thing. 

    “If you get it right you can deal with bad guys and avoid being liable,” he says.  

    SmartCompany attempted to contact Living and Leisure Australia, but the company could not be reached prior to publication.


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    Mark Ronald Letten, the South Yarra property developer who defrauded more than 1000 investors out of more than $100 million, has been sentenced to five years and eight months in jail for his crimes.

    The 60-year-old former accountant and director of a number of collapsed companies, including LGH Holdings, will be eligible for parole after serving a minimum of three years.

    When sentencing Letten in the Melbourne County Court on Thursday, Judge Michael McInerney described Letten's property schemes as an "economic shamble or shemozzle that was doomed to failure", according to Fairfax.

    "This whole enterprise, which was overseen by Mr Letten, had more severe structural defects than the Titanic," said Judge McInerney.

    "Like the Titanic, it sank ignominiously."

    Letten first appeared in the Melbourne Magistrates’ Court in December 2013 after his arrest on 37 criminal charges relating to 21 property schemes over a 10-year period.

    He pleaded guilty to 27 of those charges in January, including 21 counts of operating unregistered managed investment schemes and five charges of dishonestly using his position for his own advantage.

    McInerney declared in his sentencing that had Letten not pleaded guilty, “I would have sentenced you to an aggregate term of seven years and six months with a non-parole period of four years”.

    An investigation by the Australian Securities and Investments Commission found more than 1000 investors had placed more than $100 million in investment property schemes set up by Letten in Australia and New Zealand between 1998 and 2010.

    Schemes managed by Letten include the Healesville Walk Shopping Centre joint venture in Victoria, Reef House Resort in Palm Cove, Queensland, and the Yarra Valley Golf joint venture in Chirnside Park.

    Investors suffered losses of at least $67 million in the schemes, while Letten also lost $17 million of his own funds.

    Letten's lawyers had previously argued the schemes collapsed largely because of the global financial crisis.

    In the sentencing, McInerney said Letten had “arrogantly failed to implement the statutory safeguards which would have protected these longstanding investors”.

    “I cannot remove from my mind the analogy to the gambler who keeps gambling despite ongoing losses. Mr Letten was totally arrogant in regard to his capacity and believed that the rosy past would continue forever,” said McInerney.

    “Unfortunately, this proved to be totally incorrect.”

    On February 25, 2010, the Federal Court appointed Damian Templeton and Phillip Hennessy from KPMG as receivers and managers to the property of the 15 unregistered managed investment schemes and their related companies and ordered that the schemes be wound up.

    Templeton told SmartCompany this morning the receivers had now progressed through a vast range of issues, with only two or three matters left to finalise.

    “There are a couple of New Zealand assets we’re still working through, but they should be resolved in the coming months,” says Templeton.

    The first distribution of compensation to investors happened in May last year, with 27 cents to the dollar paid out to the victims of Letten’s schemes.

    Templeton says the second round of compensation will occur within the next few weeks, which he expects to be around 5 cents to the dollar.

    In June, the Federal Court gave the go ahead for legal action against Letten by the receivers over breach of trust.

    Templeton says he expects there to be a third round of compensation, but said he couldn’t put a timeline on that before the outstanding assets and legal matters are yet to be resolved.

    “You feel for the investors. The impact on them has been massive,” he says.

    “The sooner we get the money to them, the better.”


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    The Fair Work Commission has ordered Qantas to immediately reinstate two flight attendants sacked for alleged inappropriate use of company-issued Cabcharge cards.

    The case sees Qantas join a list of major companies, including logistics giant Linfox, which have lost unfair dismissal cases due, in part, to unclear workplace policies.

    Two Qantas international flight attendants, Albert Chew and Margaret Leong, were sacked by the airline after using two company-issued Cabcharge cards to pay for at least 11 shared taxi rides from their homes to Sydney’s Mascot Airport.

    The pair lived close to each other and were regularly scheduled to work on the same flights through Qantas’ “buddy system” program.

    For each of the trips, the pair claim they paid with two company-issued Cabcharge cards rather than one, in contravention of company policy.

    The pair also opted to use an upmarket hire car service rather than an ordinary metered taxi service for the trips. However, Leong claimed it was standard practice for flight attendants to use hire car or limousine services, and Qantas did not challenge the point.

    In addition, the flight attendants also used a further four Cabcharge cards for a trips between the airport and the city, trips they concede were not authorised under company policy.

    In their defence, the flight attendants claimed many years of service for the airline, with Chew commencing in 1987 and Leong in 1992. They also said they had no awareness of company policy around the use of hire cars, and had no recollection of signing any documents agreeing to the policy when the Cabcharge cards were issued.

    Chew and Leong also claimed they had not received any financial benefits from paying for the trips with two Cabcharge cards rather than one, and would have been eligible to pay for two separate fares with separate Cabcharge cards had they travelled to the airport separately.

    During the hearings, it was revealed Qantas had not kept a written record of the flight attendants signing an agreement outlining the policy.

    In a decision handed down on August 12, Fair Work Commission deputy president Jeff Lawrence said while the pair should have been reprimanded over the breach of policy, they should not have been dismissed.

    “There was no issue raised concerning either Mr Chew or Ms Leong’s record or capacity as flight attendants. There was no difficulty raised as to their ability to become part of the cabin crew again. Qantas stated that it had lost trust and confidence in them because of the breach of policy. I am sure however, that they have learnt their lesson. There is no chance of them repeating their error, in my view,” Lawrence said.

    Along with reinstatement, the flight attendants had requested to be compensated for the time, but this claim was rejected by Lawrence.

    “I find that the former is appropriate, but they should suffer some penalty because of the breach of policy. I decline therefore to order restitution of lost wages between their dismissal and the date of this decision,” Lawrence said.

    A Qantas spokesman told SmartCompany "we are dissapointed and we are currently reviewing the decision".

    Employment lawyer Peter Vitale told SmartCompany the case is another reminder that businesses need to be careful when it comes to implementing and enforcing policy.

    “The lynchpin of this decision was that Qantas was unable to demonstrate that its employees were aware of their policy or what their policy is,” Vitale says.

    “That appears to be due to a breakdown in their procedures. They were unable to produce a signed copy of the policy or any evidence of an information program.”

    “The key to success is to ensure policies are communicated to employees, employees understand them, and a record is kept on their permanent file,” he says.

    Vitale also says the long service of the employees, who had been with the carrier since 1987 and 1992, played a role in the outcome.

    “This is a case where, very clearly, the long service was an important consideration for the commission,” Vitale says.


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    A major Australian kitchen blender company attempted to engage in price fixing and resale price maintenance, according to the Australian Competition and Consumer Commission.

    The ACCC has instituted proceedings in the Federal Court against OmniBlend Australia, alleging the business attempted to engage in price fixing with a competitor.

    The competition watchdog says when this failed, OmniBlend “induced” the other company to engage in resale price maintenance by refusing to supply the competitor unless it stopped offering discounts on certain blenders.

    Resale price maintenance is when a distributor agrees to sell or advertise a manufacturer’s product for a certain price.

    In a statement, ACCC chairman Rod Sims said the consumer watchdog takes price fixing seriously.

    “Price fixing and resale price maintenance affect consumers by increasing prices, reducing consumer choice and distorting the competitive process,” said Sims.

    “The ACCC views these types of anticompetitive conduct very seriously and will not hesitate to investigate and where appropriate take enforcement action against businesses who engage in this behaviour.”

    Sally Scott, partner at Hall & Wilcox Lawyers, told SmartCompany if the ACCC can prove of the alleged breaches, OmniBlend could be facing “huge” penalties.

    “Unlike the penalties for consumer law breaches – such as misleading conduct – the penalties of competition law breaches can be linked to the company’s turnover or benefit obtained from the breach,” says Scott.

    “This means that the penalties can be extremely large, such as the penalty of $36 million imposed on Visy a few years back.”

    Scott says the maximum penalty for competition offences can be more than $10 million if 10% of the benefit obtained from the offence is more than $10 million. This maximum penalty also applies if 10% of the business’s annual turnover for the relevant period is greater than $10 million.

    “This allows the ACCC and the court to ensure that the penalty sufficiently hurts the company that has done the wrong thing and sufficiently deters others from doing the same thing,” Scott says.

    “Otherwise, there would be a risk that businesses would treat the potential for a penalty as just a cost of business.”

    Scott says businesses cannot force their resellers not to sell or advertise their goods below a minimum price.

    “They can certainly recommend a minimum resale price, provided it is in fact a genuine recommendation and nothing more,” says Scott.

    “Businesses can’t threaten to stop supply if a reseller sells below a minimum price. The goal is to ensure that competition is unrestricted in relation to price.”

    SmartCompany attempted to contact OmniBlend Australia’s lawyer for comment but did not receive a response prior to publication.


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    A US court has found the fictional “Clean Slate” software brand in the Dark Knight Rises movie doesn’t infringe the trademark of a real life business.

    Fortres Grand markets a Clean Slate software program which is used “to protect public access computers by scouring the computer drive back to its original configuration upon reboot”.

    The business owners were surprised to see Clean Slate software in the latest Batman movie which provides a right-to-be-forgotten which

    “enables an individual to erase all traces of her criminal past from every database on earth so that she may lead a normal life.”

    In the movie, Catwoman uses Clean Slate to overcome her shady past. 

    Fortres Grand claimed the use of Clean Slate in the movie infringed its trademark.

    It also claimed the sales of its real life product plummeted after the movie’s release.

    Fortres Grand blamed reverse trademark confusion, which involves “potential customers mistakenly believing that its Clean Slate software is illicit or phony on account of Warner Bros’ use of the name.”

    But the Seventh Circuit court found the fictional and real Clean Slate products were “quite dissimilar” and that general confusion “in the air is not actionable”.

    “That consumers may mistakenly think Warner Bros is the source of Fortres Grand’s software—is still ‘too implausible to support costly litigation’.” the court found.

    A spokesperson for Fortres Grand said the business was disappointed with the decision.

    “It is well known that movies are filled with real product placements and have a serious obsession toward realism,” the spokesperson said in a statement.

    “There is no reason for a person to think a technology is fictitious by reason of its appearance in a fictional movie.”  

    The spokesperson also said confusion is a bigger problem for computer security software than for many other types of products because people are particularly sceptical when trying to identify legitimate security software.

    “We relied on the value of our trademark to convey unambiguous confidence that Clean Slate is identified with a reliable legitimate developer of computer security software,” the spokesperson said.

    Bill Ladas, special counsel at law firm King & Wood Mallesons, told SmartCompany if a similar situation occurred in Australia the use of Clean Slate would be unlikely to infringe a registered Australian trade mark.

    "The use in the context of the film is unlikely to be seen as 'trade mark use', and so would fall at the first hurdle," Ladas says. 

    He says it is an "interesting" issue as to whether there is a law of "reverse confusion" in Australia.

    Many years ago, Ian Thorpe was able to get his Thorpedo mark past an earlier registration for a Torpedoes mark.

    "Thorpie's reputation tended to reduce the risk of confusion in the judge's view, so the reverse confusion argument didn't work there".

    This is in contrast to a recent UK case in which The Glee Club, a comedy club in the UK with a registered trade mark, made out a trade mark infringement case against Fox in the UK that might see the very famous Glee franchise change its name in that country.

    "Leaving aside whether Fortres Grand could make out a relevant reputation in Australia, the use by Warner Bros in the film appears unlikely to be a misrepresentation, so grounds based on passing off and the Australian Consumer Law are unlikely to fly," Ladas says. 


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    Celebrity chef and former Senior Australian of the Year, Maggie Beer, has entered into an undertaking with the Australian Competition and Consumer Commission over misleading product labels.

    Beer’s successful business, Maggie Beer Products, has acknowledged its conduct was likely to have been misleading and in breach of the Australian Consumer Law.

    The undertaking is in relation to four products: ice cream, aged red wine vinegar, extra virgin olive oil, and rosemary and verjuice biscuits. 

    These products are made in Victoria and Queensland but are labelled with “Maggie Beer A Barossa Food Tradition” and with Beer’s address “Maggie Beer Products: 2 Keith Street Tanunda South Australia 5352”.

    The ACCC found as a result of these representations in close proximity on the labels, “a reasonable consumer” would have gained the overall impression that each of these products was manufactured in Tanunda, the Barossa Valley or South Australia.

    Maggie Beer Products also made representations at a fair event and in correspondence with Woolworths that the four products were made in South Australia or were otherwise “local” products.

    ACCC chairman Rod Sims said the ACCC pursued Beer as consumers are often willing to pay premium prices for local products, so protecting the integrity of credence claims made about food products is a priority enforcement area for the regulator.

    “The Barossa Valley is a nationally recognised premium food and wine destination, and businesses in that region use place of origin claims to promote or distinguish their product from others in the market,” he said in a statement.

    “Misleading representations about the origin of products to capitalise on this demand undermines the integrity of credence claims which are relied on by consumers and, equally important, can harm competing producers whose products are made locally.”

    Maggie Beer Products has cooperated with the ACCC’s investigation and is amending its labelling so that the place of manufacture for products made outside of South Australia is made clear to consumers.

    Beer is also publishing an article in Food Magazine about the issue and has released a video on her website.

    In the video, Beer says she makes “200 or so” products for Maggie Beer Products and, of all of those, only four are made interstate. 

    “It all starts here in this Barossa kitchen. If we are unable to take products into the wider market place because of lack of equipment or technology, we first look to South Australia to find the right partner and only then, if we need to, do we look interstate,” she says. 

    Beer says she has “never hidden” that the four product lines are not made in the Barossa or in South Australia.

    But Beer says “I understand and accept” that labels must be “100% accurate”.

    Beer told SmartCompany she was “shocked and horrified” by the claims and says she has never hidden where Maggie Beer Products are produced.

    “I want to unreservedly apologise to anyone who feels they have been misled I am horrified that anyone feels that way,” she says.

    Beer says she does not feel she has been unfairly targeted by the competition watchdog.

    “I think the ACCC have a really important job to do, there is no way I ever felt there was anything we were doing wrong,” she says.

    But Beer did agree the investigation feels like a storm in a teacup or perhaps a verjuice bottle.

    “I can’t say I’m happy that I’m under the spotlight like this but I’m happy any misconception can be cleared up,” she says.

    The undertaking follows the ACCC’s run in with Saskia Beer, Maggie Beer’s daughter, about false or misleading claims about the origins of her company’s pig meat.


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    A labour-hire contractor has agreed to pay more than $20,000 back-pay to 10 overseas workers, but the Fair Work Ombudsman has been told the underpayments were just the start of the company’s poor workplace practices.

    The company, which the watchdog has not named publicly, hired the workers from Hong Kong and Taiwan to work at a NSW poultry processing plant between May and October 2013.

    The workers, aged between 21 and 30, were in Australia on 417 working holiday visas and were sub-contracted to label and pack trays of meat.

    They told the Fair Work Ombudsman’s overseas workers team that female workers were paid $11.50 an hour, while males received $12.50 an hour. Workers using the mincer were paid $13.50 an hour.

    Shifts lasted between 8 to 16 hours, with some lasting up to 20 hours, and workers were paid in cash, with neither tax nor superannuation deducted.

    After an investigation, inspectors found the workers should have been paid between $16.50 and $39 per hour, depending on the shift.

    On top of these underpayments, workers told the employment watchdog they were forced to pay $100 a week from their wages to cover compulsory accommodation. They were told they would not receive work if they chose to live elsewhere.

    According to the workers, the accommodation was in crowded share houses with up to 30 employees, with two or more people sharing a single mattress in some cases.

    The Fair Work Ombudsman has said it has referred its concerns about the company’s other workplace practices to the “relevant authorities”.

    The Ombudsman also said it was concerned about sub-contracting arrangements it had discovered through the process of the investigation, including the existence of interrelated sub-contacting companies set up by the contractor.

    These sub-contractors were found to have shared the same accountant, interchanged directors, listed individuals as signatories on bank accounts and transferred supervisors from one company to another as labour hire contracts were signed.

    Employment lawyer Peter Vitale told SmartCompany this would have raised questions for the Ombudsman over who the actual employer of the workers was.

    In terms of the underpayments, Vitale says it appears the employer has simply tried to play a flat rate of pay that is less than what the award requires them to pay.

    “Whether or not the fact they were from overseas on holiday might have been a consideration or influence on what the employer was doing is unclear, but it certainly is inferred from the Ombudsman’s statement,” says Vitale.

    Vitale says the Fair Work Ombudsman is fairly consistently on the lookout for employers who take advantage of foreign workers and is also looking at the meat industry more generally.

    Vitale says the compulsory deductions for accommodation to be lawful they would have to be specifically provided for within an award and could only be done in accordance with the Fair Work Act, which requires deduction to be reasonable and in the best interest of the employee.

    “On the surface, it seems it would be difficult to show those deductions were lawful” he says.

    “It would be doubtful whether the circumstances of this case would meet requirements of the act.”


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    The Fair Work Commission has criticised an employee who brought an unfair dismissal claim, which it says is “riddled with” nonsensical propositions and “downright lies”.

    Miroslav Vujica was a forklift driver with TNT Australia and claimed his dismissal was harsh, unjust and unreasonable.

    TNT dismissed Vujica after investigating him following reports he had been performing work for a competitor, Toll, while absent from TNT on workers’ compensation.

    The Fair Work Commission found TNT had a valid reason to terminate Vujica because of his conduct during the investigation. 

    As part of the investigation, TNT interviewed Vujica but during the interview Vujica was not truthful in some of his responses and refused to answer some questions.

    The Fair Work Commission found employees have a duty to cooperate with an employer’s investigation into their conduct.

    “Where an employee deliberately sets out to lie during an investigation, it is even more serious than a lack of cooperation or failure to disclose relevant information,” commission deputy president Sams said.

    “It could well be viewed as misconduct of itself.” 

    Sams was scathing of Vujica’s evidence in the unfair dismissal case.

    "I find the applicant’s evidence to be riddled with nonsensical and irrelevant propositions, utterly ridiculous and implausible explanations and, regrettably, downright lies,” he said.

    “There was not a skerrick of evidence of any conspiracy by TNT against him.”

    Sams found it was “little wonder” that TNT dismissed Vujica.

    “This is a figment of a very colourful imagination,” he said.

    “I wonder whether he actually believes his own nonsense or whether it is some sort of game for him to respond to allegations against him by making unsubstantiated allegations of his own.”

    Emma Hoy, special counsel at Maurice Blackburn Lawyers, told SmartCompany employees and employers need to be careful how they approach an investigation.

    “Being dishonest during an investigation can in of itself be a reason for termination, regardless of the matters being investigated,” she says.

    “An employee seeking secondary employment will usually need to notify the employer first, [Vujica] has unnecessarily created a whole web of lies when all he needed to do was notify his employer.”

    A spokesperson for TNT told SmartCompany Vujica’s claim did not have any merit and TNT was confident the Fair Work Commission would find in TNT’s favour. 


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    German discount supermarket Aldi has been forced to change the point-of-sale signage in a number of its stores after the corporate regulator found its disclosure of credit card surcharges was inadequate.

    A review by the Australian Securities and Investments Commission found the popular supermarket chain did not consistently disclose in all of its stores that credit card customers would be charged a 0.5% surcharge on purchases.

    At least two Aldi stores had no material advertising the credit card surcharge to customers, while some stores presented the information on a sign about the registers and others informed customers via a sticker at the register.

    ASIC found Aldi customers were not informed of the 0.05% surcharge that applies when they used their credit and debit cards for contactless payment or “tap and go” transactions, and in cases were a PIN or signature was required for a credit card payment, customers were informed about the surcharge after they had inserted or swiped their card, which ASIC said “was too late”.

    Under the Australian Securities and Investments Commission Act 2001, it can be considered misleading or deceptive if businesses do not adequately disclose surcharges or create the impression that surcharges do not apply.

    ASIC said in a statement that in response to its findings, Aldi has agreed to update its store signage as well as further educate cashiers to tell customers about the surcharge before their transaction is finalised.

    A spokesperson for Aldi Australia told SmartCompany the supermarket has had hanging signage and stickers at registers outlining credit card fees since the company first began accepting credit card payments.

    But the spokesperson says the signage will be updated “to also specifically reference the Tap and Go surcharge”.

    “Aldi is aware there are high costs associated with accepting credit cards,” says the spokesperson.

    “However, rather than inflating prices across the board, to compensate for the credit card acceptance costs, Aldi prefers customers to make the choice themselves.”

    ASIC deputy chairman Peter Kell said in the statement merchants are responsible for disclosing credit card surcharges to their customers.

    “Merchants need to be transparent about fees and charges where credit card surcharges apply so that consumers can consider using other payment methods without additional costs,” said Kell.

    “Consumer should also be mindful that payments by contactless or “tap and go” cards are currently treated as credit card transactions, meaning that fees may apply where there are surcharges in place, even where they are using a debit card. We urge merchants to ensure consumers are aware of any surcharges that may apply for payments using these cards.”

    Chris Hamilton, chief executive of the Australian Payments and Clearing Association, told SmartCompany understanding the requirements around credit card surcharges can be “tricky” for SMEs.

    However, he said this example highlights the one straightforward message all merchants should follow.

    “Think carefully about if your customers know what they are paying, and if they don’t, put up a sign,” says Hamilton.

    Hamilton says in this case, ASIC is indicating that if a merchant is charging a surcharge but not telling their customers about it, they are potentially acting in a misleading way.

    And there is potential for more confusion when it comes to contactless payment transactions, says Hamilton, with some payment terminals not offering the opportunity to choose between debit and credit accounts when the payment is processed.

    “So again disclosure is relevant,” says Hamilton. “It’s a wise idea to put a sign up.”

    The other important consideration is if the surcharge being levied is “reasonable”, says Hamilton, although the actual surcharge amount will vary between industries. 


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    The Fair Work Commission has awarded a truck driver $16,128 in unfair dismissal compensation from his employer after he was caught on camera urinating on a Woolworths warehouse while at work.

    The case is the latest in a string of unfair dismissal cases won by employees due, at least in apart, to procedural reasons. Similar cases include the marijuana smoking ferry driver, a childcare worker accused of smacking a two-year-old child and the Qantas flight attendants who allegedly misused their Cabcharge cards.

    Truck driver David Cowan was employed by a company called Sargeant Transport. As part of his job, he was required to make five to 10 deliveries per week to a Woolworths Regional Distribution Centre at Barnawatha, near Wodonga in northeast Victoria.

    On February 28, Cowan was caught on a closed circuit security camera urinating on a wall of the warehouse, before pressing an intercom button and making his scheduled delivery.

    The incident was in violation of the company’s driver’s manual, which clearly states: “All employees are to conduct themselves in a polite and courteous professional manner at all times whilst on duty. Whilst on a customer’s premises drivers are expected to adhere to any rules applicable at the site.”

    Within days of the incident, on March 6, a manager from Woolworths informed Sargeant Transport’s group operations manager Simon Gray about the security footage. The supermarket giant advised him that, under its company policy, Cowan would be banned from making deliveries to its company sites for three months.

    A day later, a human resources manager from Sargeant, Kate Jewell, had a short discussion with Cowan over the phone about the footage.

    Gray was then invited by Woolworths on March 12 to view the footage, and after a discussion with Jewell, decided to dismiss Cowan.

    While not seeking to be reinstated by Sargeant, Cowan filed an unfair dismissal claim against Sargeant Transport seeking compensation.

    In the decision, Fair Work Commissioner Bissett found that urinating at the entrance to the distribution centre “is not conduct that could be described as ‘polite and courteous’ or ‘professional’”.

    “I am satisfied that the applicant did urinate at the entrance to the RDC on 28 February 2014. Further, I am satisfied that the conduct was in breach of the respondent’s policy as set out in the Drivers Manual,” Bissett said.

    However, despite the parties agreeing that it was inappropriate to urinate on a customer’s warehouse, and despite the rules being clearly stated in the driver manual, Sargeant Transport was still found to have unfairly dismissed Cowan.

    “At no stage was any allegation put to the applicant in writing, nor the extent of the evidence explained to him. Further, some relevant information, such as the length of the ban from Woolworths, was not given to the applicant,” said Bissett.

    “The conduct warranted disciplinary action but I consider dismissal a harsh decision.”

    SmartCompany contacted both Sargeant Transport and Woolworths this morning but no official comment was available prior to publication.

    Employment lawyer Peter Vitale told SmartCompany he would not classify the most recent decision as being part of a trend towards employees winning cases on procedural grounds.

    “But certainly there have been some decisions recently which have, for various reasons indicated a tolerance for misconduct,” Vitale says.

    “In this case the commission found that an employer’s investigation was unsatisfactory and it failed to provide a reasonable opportunity or the employee to have a support person present.”

    Vitale says even in cases where an employee doesn’t wish to regain their old job, they can still ask the Fair Work Commission for compensation for unfair dismissal.

    “However, the usual approach of the commission is to reduce the compensation to take into account anything the employee has earned elsewhere in the meantime,” he says.

    “In this case, the commission also took discretion to reduce the employee’s compensation by 30% on the grounds their own conduct contributed to their dismissal.”


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    Telstra has warned consumers about a four-fold increase in scammers seeking to gather personal information over the phone in the past year, with phishing scams in particular on the rise.

    The news comes after an ACCC report released last year estimated $93 million was reported as being lost to scams each year, with the ACCC receiving nearly 84,000 reports of scams from consumers and small businesses in 2012.

    A phishing attack is when a hacker impersonates a trustworthy institution, such as a bank or a phone company, through an email message or phone call in order to get victims to hand over sensitive personal or financial information, such as passwords or credit card details.

    In the latest incarnation, customers are being told their computers are infected with a virus, and they need to pay Telstra technical support to fix the problem. The scammers then ask the victims for their personal banking details.

    In a statement, Telstra’s executive director of customer advocacy, Peter Jamieson, said the increase over the past 12 months is a concern for the carrier.

    “The increasing number of these telephone scams is concerning and customers should be alert to any attempts to trick them into disclosing their credit card or banking details over the telephone,” said Jamieson.

    “Telstra is encouraging its customers to protect their personal information and be particularly wary of telephone calls from numbers they don’t recognise,” he said.

    A spokeswoman from the Australian Communications and Media Authority confirmed to SmartCompany there has been an increase in the number of calls reported from scammers claiming to be from Telstra.

    “We noticed an increase in reports from people with numbers listed on the Do Not Call Register about receiving calls from scammers pretending to be from Telstra / Bigpond (or working for Telstra) at the beginning of 2014. The scam calls seemed to be a variation of the PC Virus calls,” the spokeswoman says.

    “The number of complaints we were getting about this scam accounted for about 15% of all complaints to the Do Not Call Register, so quite high.”

    “We spoke with Telstra about these calls and issued a consumer alert on 26 March on Facebook, which included a link to our website describing the typical anatomy of the PC virus / tech support scam calls.”

    The spokeswoman says PC Virus scam calls including the Telstra twist are now running at about 10-12% and have actually stabilised over recent months.

    “Since the start of 2014, the ACMA has also experienced a general increase in reports from consumers on the Do Not Call Register about scam calls. While reports of scam calls accounted for about 10-15% of all complaints in 2013 – that number is about 20% so far in 2014,” the spokeswoman says.

    “The most common scam calls reported to us to date in 2014 are: PC Virus scam calls (including with a Telstra/BigPond twist), The Qantas/Virgin Dial 1 scam calls and investment/bank reclaim scam calls.”

    The spokeswoman says it’s important to remember that listing your number on the Do Not Call Register will not necessarily stop spam calls to that number.

    “Consumers need to be vigilant to the possibility of a scam when receiving any unsolicited call to their number.”

    Small businesses should report scams to the Australian Competition and Consumer Commission via the SCAMwatch website at www.scamwatch.gov.au or to Crime Stoppers on 1800 333 000.

    In addition, Telstra says that customers who suspect a phishing scam originates at a Telstra account can report the scam through its official misuse of service form, on 132200 or through the Telstra 24 x 7 app.


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    Lawyers for fast food restaurant Hungry Jack’s appeared in the Melbourne Magistrates Court this week over charges relating to the death of an elderly man in one of the restaurant’s carparks.

    Fairfax reports packaging giant Visy Paper and Veolia Environmental Services are also facing charges over the incident, which occurred in the Melbourne suburb of Mill Park in March 2013.

    A man, 86, and his wife, 83, were both injured in the carpark of the Mill Park Hungry Jack’s when they were struck by a large dump bin that was being lowered by a truck.

    According to a report at the time, the couple was taken to the Royal Melbourne Hospital to be treated for head injuries. The man later died.

    WorkSafe chief executive Denise Cosgrove said in a statement in March 2013 the tragic incident was a “reminder of the dangers of vehicles operating close to pedestrians”.

    “We find that cordoning off the location during activity, having clear pedestrian pathways, using trained spotters and clear signage are just some of the ways workplaces can eliminate those dangers,” said Cosgrove.

    The companies have been charged with failing to ensure that persons other than employees were not exposed to risks to health and safety, and a committal hearing has been scheduled for December.

    Employment lawyer Peter Vitale told SmartCompany employers have a responsibility to ensure the safety of all people in their workplaces. 

    “There are several provisions in the Occupational Health and Safety Act which require an employer or anyone else who has managerial control of a workplace to ensure that people other than employees are not exposed to risk to health and safety arising from the conduct of the business,” says Vitale.

    While Vitale says the penalties vary depending on which offence an employer is charged with, the maximum penalty for a company can be up to $1.3 million.

    In this case, Vitale says the three companies are likely to have all been charged with similar offences or potential variations of the same offence.

    “Fundamentally, it will rest on the duty of the employer not to expose people to risks to their health and safety,” he says.

    Finlaysons partner and workplace law specialist Guy Biddle told SmartCompany in this case, the companies have been charged because the accident occurred while they were conducting their normal course of business.

    Biddle says companies are not necessarily responsible for other types of accidents that happen in their worksites, such as a customer being hit by a car in a restaurant carpark, but they are responsible for ensuring activities linked to their “conduct of business” are safe.

    “Whatever they are doing with their business has to be safe,” he says. 

    SmartCompany contacted Hungry Jack’s and Veolia Environmental Services but did not receive a response prior to publication. A spokesperson for Visy declined to comment.

    A spokesperson for WorkSafe Victoria told SmartCompany it would be inappropriate to comment on the case as the matter is before the courts. 


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