Michael Fredericks, founder and chief executive of listed company Onthehouse, is embroiled in a legal dispute with one of the original investors in the real estate business.

In an application before the Supreme Court of Queensland yesterday, Justice Alan Wilson ordered Fredericks be removed as trustee of a private investment trust in which his former partner and Brisbane lawyer, Phil Heraghty, had invested seed capital in 2007.

Heraghty was one of the first investors in Onthehouse which now has 160 staff, an annual turnover of $24 million and offices in Brisbane, Sydney and Melbourne.

The business provides free property reports and listed on the Australian Securities Exchange in 2011 with a market capitalisation of over $80 million.

Heraghty claims Fredericks has failed to provide him with basic information and accounts since June 2011.

He says despite seven years of business Fredericks has not produced a single financial statement.

Heraghty claims Fredericks took trust money and paid personal credit card debts and banked the funds in a joint account with his wife.

Heraghty’s lawyer and managing partner of law firm Russells, Stephen Russell, told SmartCompany Fredericks has a $7 million share in Onthehouse and Heraghty doesn’t know what portion of this he is entitled to.

“From the very moment that my client invested it is hard to imagine anything going further wrong,” he says.

“The whole thing is a huge mess; there is literally not a single account, no balance sheet, no profit and loss accounts”.  

Fredericks filed an affidavit in court admitting to serious breaches of trust, though asking for more time to put the affairs of the trust in order.

Justice Alan Wilson found this was too late and removed Fredericks as trustee and replaced him with liquidator and accountant Ginette Muller of FTI Consulting.

Justice Wilson said: “It is appropriate to record the trustee’s paucity of record keeping ... indeed atrocious record keeping, which has to be read with the other unusual issues which have excited the applicant’s concerns.”

The court ordered Fredericks pay indemnity costs to Heraghty, citing “…compelling reasons to do so. The trustee’s very poor conduct, which is the conduct of a solicitor, and even if that were not the case, trustees shoulder special responsibilities, charges and obligations and it is inconceivable that Mr Fredericks did not understand his obligations.”

Heraghty has instructed his lawyers institute proceedings against Fredericks for maladministration of the trust.

“This is a salutary lesson that directors of public listed companies must apply the same standards to their private affairs as is expected in relation to their administration of public listed entities,” he says.

SmartCompany understands the dispute between Fredericks and Heraghty will have no impact on the running of Onthehouse.

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

Cairns-based company Blueline Solar has been issued with a product safety recall notice and threatened with a fine of up to $1.1 million as the fallout from the recall of a faulty solar power circuit breaker in May continues to hit small businesses.

In May, Attorney-General Jarrod Bleijie issued a recall for 27,600 Advancetech DC switches, marketed under the Avanco brand, following advice the switches may have contributed to electrical fires in homes across the state.

The circuit breakers are usually placed next to a solar panel inverter, and are used to shut off electrical current if solar panels become overloaded, as well as during maintenance.

However, a fault with the enclosure on the Avanco switches meant that, in some circumstances, moisture could enter inside the enclosure, potentially causing the switches to catch on fire.

The recalls prompted the collapse of Advancetech, with SV Partners appointed liquidators of the company on May 15, which in turn led to a spate of collapses in the Queensland solar industry.

In the latest fallout from the incident, the attorney-general has issued a recall notice to Blueline Solar and its distribution arm, Queensland Renewable Energy, which incorporated the switches into its solar systems. The order states the company has not taken sufficient action to ensure the faulty solar isolators do not harm or injure consumers.

It follows complaints by consumers to the Queensland Office of Fair Trading, who claimed they have been unable to secure a refund or replacement for faulty solar power circuit breakers purchased through the company.

Queensland Office of Fair Trading director of tactical compliance, Steve L’Barrow, told SmartCompany the large majority of the Avanco units were sold into Queensland.

“Basically, it started with the Electrical Safety Office issuing a recall on the inverter, which led to the importer going bust,” he says.

“There were a number of businesses supplied by the importer, and when it went bust, they were left carrying the bag for consumer guarantees under the Australian Consumer Law.”

L’Barrow says that as far as he’s aware, Blue Line was the last hold-out in terms of offering consumers refunds or replacements.

“In this particular recall, we understand [Blue Line] has [its] own distribution chain. It had been affected by the importers’ liquidation, which led to insurance issues,” L’Barrow says.

“Our concern was that Blue Line wasn’t doing what it needed to under Australian Consumer Law, and our understanding from Blue Line was that they were having insurance issues.”

SmartCompany contacted Blue Line Solar, but no official comment was available prior to publication.

A former executive of JBWere has filed a $4.5 million sexual harassment case against the NAB-owned stockbroking firm, claiming she was the victim of a “culture of harassment” after taking maternity leave.

In explosive claims filed in the Federal Court in August, and seen by Fairfax, former JBWere Queensland state manager Antonia Thornton said she was performance managed out of the organisation, was given higher targets and lower bonuses than her colleagues and was subject to derogatory remarks by former JBWere chief executive Paul Heath.

On one occasion Thornton says Heath, whose own claim for redundancy compensation was rejected by the Fair Work Commission in July, responded to news of her first pregnancy by saying “in his experience a woman’s IQ halves when she falls pregnant”.

On another occasion Thornton alleges Heath asked her to turn around while she was pregnant and said: “Yup, you are having a boy because your bum has blown out.”

Thornton says another colleague Steve Martino told her he was “pissed off, frustrated” and no longer wanted to share clients when she told him she would be going on maternity leave after the birth of her second child, but the head of human resources for JBWere allegedly told her not to make a complaint about Martino’s comments.

Thornton also claims her client base was reduced by a third when she returned to work in July last year and was asked on more than one occasion: “Do you really want to come back to work?”

Federal Court Justice Geoffrey Flick this week agreed to mediation between the two parties, with the case to return to the courts in November, but he told JBWere the case is “not a matter you can just buy your way out of”.

SmartCompany contacted JBWere parent company, National Australia Bank, but NAB declined to comment on the case. 

Maurice Blackburn associate and employment law specialist Daniel Victory told SmartCompany it is likely Thornton is seeking damages for loss of earnings as well as damages for hurt and humiliation.

While at least one of the employees against which allegations have been made, Paul Heath, is no longer with the company, Victory says JBWere may still be liable.

“Employers are liable for the conduct of their employees,” says Victory.

“But under discrimination legislation, they may not be liable if they can show they have taken all reasonable steps to prevent harassment and discrimination from taking place.”

Victory says Maurice Blackburn regularly sees sexual harassment cases, which “unfortunately are very under-reported”.

“It happens a lot more often than you see in the media,” he says.

Victory says it is often difficult for employees to speak out “so it is important that when people do speak out or raise concerns, one they are supported, and two, the complaints are dealt with appropriately”.

“It doesn’t matter if you’re a teacher or a cleaner or an investment banker, there is no place for sexual harassment in the workplace,” says Victory.

Members of the Australian book industry have spoken out against the Harper competition review’s  recommendation the federal government re-visit moves to relax restrictions on parallel importing, telling SmartCompany this morning another inquiry into the regulations would be “a waste of taxpayers’ money”.

While much of the public debate about the government’s “root and branch” competition review, chaired by economist Professor Ian Harper, has so far focused on the likely impact of competition law reform in sectors such as the grocery sector, any change to parallel import restrictions could be a game-changer for the book industry.

Under current arrangements, Australian book publishers have 30 days to establish their copyright in a particular book by making it available in Australia, and if copyright is established in that timeframe, book retailers are restricted from importing more than a single copy from overseas suppliers.

The arrangements, which were introduced in the early 1990s, also give publishers 90 days to resupply a title that goes out of stock.

The legislation has come under fire in recent years as the ease and availability of books from overseas retailers mean Australian consumers are much more aware of new release titles but can still wait up to 30 days to see the book in their local bookshop.

Removing parallel importing restrictions in the book industry was recommended by the Productivity Commission in 2009, but the government of the time decided to leave the legislation unchanged. The industry moved to informally change the arrangements by developing an industry code of conduct in 2012, which reduced the timeframe to 14 days for initial supply and 14 days for re-supply.

It’s for these reasons book publishers are hoping the government doesn’t take up the Harper review’s suggestion that the issue be revisited.

Louise Adler, chief executive of Melbourne University Publishing and president of Australian Publishers Association, told SmartCompany this morning another Productivity Commission enquiry into the regulations would be a drain on the taxpayers’ purse.

“The commission’s views are well-documented, it could hardly be viewed as an ‘independent body’ likely to form a view contrary to that expressed in the Competition Review draft policy,” says Adler.

“The issues surrounding parallel importation regulations have been rehearsed repeatedly and comprehensively over the years. Australian publishers and booksellers are working collaboratively and productively to ensure best practice operates in the interests of consumers to ensure speed to market is as efficient as possible and that pricing is robust and competitive.”

Henry Rosenbloom, publisher at Melbourne’s Scribe Publications, says it would be “very hard to believe a government would want to revisit” the issue, given it was so thoroughly examined in the past.

“I have no idea why they would want to pick it up again,” Rosenbloom told SmartCompany.

“My heart sinks to think we might have to go through that process again … it was incredibly draining and gruelling.”

While Rosenbloom says it may be the case that as a draft report, the Harper review has chosen to simply include every single item it could in this week’s report, he says there is still a “compelling argument” to maintain parallel import restrictions for the local book industry.

Adler agrees, saying the case study of a “rapidly declining” New Zealand book industry should “give pause to advocates of a ‘free market’”.

“The market has declined with every year since it was initiated – this year by 6.6% after a fall of over 10% last year,” she says.

“There have been no reductions in prices nor improvements in availability. Shops have closed, sales have all gone offshore to the US, all the major warehouses have closed, educational publishers have withdrawn and employment has fallen.”

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Booksellers have traditionally been in favour of relaxing parallel importation restrictions but Jon Page, co-owner of Sydney’s Pages & Pages bookstore and immediate past president of the Australian Booksellers Association, was surprised to see parallel importation among the topics referenced by the review.

“I am not at all surprised that the issue of relaxing or removing parallel import restrictions has raised it’s head again as we saw what happened with the music industry under the last Coalition government – and where are all the music shops now?” Page told SmartCompany.

“[But] I am surprised it has been raised in relation to increasing competition.”

“In the current environment the removal of parallel import restrictions would do nothing to increase competition as Australian business, particularly in the book industry, cannot compete with the unfair postal rates that overseas businesses enjoy and to a lesser extent, the 10% GST advantage overseas business also enjoy.”

“As seen in the music industry here and the book industry in New Zealand, opening the market to overseas imports does not lead to increased competition, it lessens competition, as the local market suffers or is wiped out,” says Page.

Page says he hopes the review takes into account the “positive effects the voluntary 14/14 code of practice has had on the industry with nearly all books now being released in Australia simultaneously with overseas”.

But Rosenbloom is less glowing in his assessment of the voluntary code.

“I said at the time it was a crazy idea and I still think that,” he says.

“It makes sense if you are bringing out big books, [but] it makes no sense for mid-list books, for which you need access to the author for publicity.”

“It’s a good example of something that sounds good on the surface but not in practice,” says Rosenbloom, who says he has not received any negative feedback from booksellers or sales and distribution organisations who have had to wait up to 30 days for the local release of one of Scribe’s international titles.

“We’re doing a book next year which will have simultaneous release in America and the UK … but it’s a big book and you can do that because of the bigness of the book. There will be 10 others before that and after that which are mid-list.”

The high cost of organisational fraud in both private and public sectors in Australia continues to haunt organisations, particularly fraud committed by “trusted” employees.

Cases prosecuted this month include former Sydney Ferries CEO Geoff Smith, who was sentenced to more than three years jail for a corporate credit card spending spree, and former Burke Shire Council deputy CEO Frederick Aqvilin, who is alleged to have illegally transferred more than A$1 million of council monies to his own account.

Spectacular cases in recent history include A$45.3 million stolen from ING by an employee over five years, and A$16.4 million stolen from Queensland Health, and later attributed in part to poor supervision and management.

Often even more damaging are financial crimes committed by groups of senior executives working in collusion within large organisations – frauds that are usually very difficult to detect.

Who can forget HIH, One.Tel and Clive Peeters? And then there’s the evolving Commonwealth Bank and ASIC fraud scandal in which the activities of dodgy financial planners led to thousands of people losing their life savings.

Multiple victims

The victims of fraudulent acts are not only shareholders or customers of the company; innocent employees are at risk as they can lose their jobs as a consequence of these crimes.

Then there are those who have missed out on aid from a not-for-profit organisation where a major fraud has been perpetrated. According to accounting firm BDO’s 2014 Not-For-Profit Fraud Survey, 70% of organisations that experienced fraud in the previous two years had suffered fraud in the past. This suggests many organisations had failed to implement fraud prevention policies.

KPMG reports that, although managers commit less fraud overall, the cost of a single incident can be hundreds of millions of dollars. Determining the overall cost of fraud to a nation like Australia is almost impossible as more than 50% of cases are never reported. This means the true cost is at best, an educated guess.

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Accountability in the UK and beyond

Recently, and in response to the ongoing problem of corporate crime, UK Attorney-General Jeremy Wright has considered bringing in a new offence of “failure to prevent financial crime”.

The proposed reform to the UK Bribery Act could result in companies being found guilty of financial offences regardless of whether the board knew about them, making it an offence if a company is found to have failed to prevent financial crime.

The fallout for companies, should this reform pass through parliament, is the potential of multi-million pound fines and reputational damage should rogue employees commit fraudulent acts that were preventable. This is in addition to legislation already enacted that places strict and heightened liability upon companies, directors and individuals for bribery-related acts when carrying out business in the UK.

The implication for Australian and other international organisations doing business in the UK is that the Bribery Act has extensive territorial scope, making them equally liable and exposed to prosecution for failure to prevent bribery, regardless of where the misdemeanour occurred. Therefore, if the reform is passed, Australian organisations doing business in the UK would also be open to prosecution if it could be shown that inadequate systems and weak control measures contributed to the crime when it occurred.

Organisations may argue that they are compliant with the Foreign Corrupt Practices Act (FCPA) or local laws such as CLERP 9 rules sitting under the Corporations Act, but this alone does not constitute immunity under the UK Bribery Act or, for that matter, with the US Sarbanes-Oxley Act.

Are Australian legislators doing enough?

The Corporations Act, passed in 2004, developed rules relating to financial disclosure, whistleblowing and remuneration for directors and executives and is relevant to company directors of small and large organisations. They are legally enforceable auditing standards, which have shifted the emphasis on fraud controls back into the corporate governance arena.

However, 10 years on there has been little change in the corporate fraud climate in Australia with cases continuing to emerge. The UK Bribery Act and proposed reform, alongside the tightening of the Sarbanes-Oxley rules in the US place greater emphasis on fraud prevention, compliance and corporate governance than currently exists in Australia.

The crackdown on organisational bribery and corruption by international legislators shows a growing intolerance of less than honest corporate practices.

Improving and strengthening governance and other control measures to minimise corporate fraud may spawn the next wave of legislation and force companies to take their fraud prevention strategies more seriously. It remains to be seen if reform to the Bribery Act is passed, and whether Australia adopts a similar legal principle. Regardless, unless organisations become more vigilant, proactive and transparent on minimising fraud, legislators may just force compliance upon them.

Jeanette Van Akkeren is a senior lecturer in forensic accouning at Queensland University of Technology

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

A Qantas flight attendant with a history of being drunk at work has had her claim for unfair dismissal rejected by the Fair Work Commission.

Margot Crowley, who had worked for the airline for just over 28 years, was sacked in January after an incident in which she failed to report for duty for a flight from New York to Los Angeles. When she arrived at the airport after missing her flight, she returned a blood alcohol reading of 0.117%.

Crowley told the commission she deserved another opportunity to seek help for her health-related problems associated with alcohol, but senior deputy president Justice Alan Boulton ruled in favour of Qantas, which he said had a valid reason to terminate her employment.

The commission heard Crowley had a history of alcohol-related incidents while employed by Qantas, including incidents in 2004, 2005, 2009 and 2012, at which time she was required to participate in a wellbeing program and was provided with written notice that any further incidents would jeopardise her employment.

The commission found that as a flight attendant, Crowley was responsible for the safety of Qantas passengers and by consuming alcohol during the ‘slip’ time between her rostered flights, was in breach of the airlines’ Cabin Crew Operations Manual.

“As a result of the previous instances, and the investigations, meetings and warnings involved, [Crowley] should have been fully aware of the need to address the problems related to her alcohol use and to ensure that she complied with Qantas policies and requirements,” said Boulton.

“The applicant was employed in a safety-critical role and it is important that Qantas is able to have trust and confidence that she could fulfil this role in a safe matter and not be affected by alcohol.”

While Boulton said he had “no doubt” Crowley has sought to address her issues with alcohol since the termination of her employment, he said Qantas previously gave her “opportunities and assistance in the past to address these problems, especially and most recently in relation to the … 2012 incident”.

“The incident of 8 January 2014 demonstrated that, despite such opportunities, there were continuing problems relating to the applicant’s conduct which directly impacted on her work as a flight attendant,” he said.

A spokesperson for Qantas told SmartCompany the airline has a "very strict drug and alcohol policy as part of our commitment to safety, including training, testing, and rehabilitation". 

"If an employee is found to have breached the rules, they are immediately removed from their role and undergo a comprehensive assessment to determine what treatment and support may be required and whether they are fit to continue to fly," the spokesperson says. 

Swaab Attorneys partner and workplace relations expert Warwick Ryan told SmartCompany since the introduction of the Fair Work Act in 2009, the Fair Work Commission has taken “a particularly hard line when it comes to alcohol or drug use”.

Ryan says while it can be more difficult for employers to effectively test for drug use, particularly marijuana, by employees, he says testing for alcohol is much more straightforward.

“The critical factor in this case is that there were five breaches,” says Ryan.

“This was the fifth breach of the policy, albeit over a 10 year period. The view of Boulton was that [Crowley] had a number of occasions, particularly in 2012 when she participated in a wellness program, to address her alcohol use but she made a choice not to.”

Ryan says the other factor in Qantas’ favour was the airline’s record in enforcing its policies in relation to alcohol use in the workplace.

“It’s a big advantage, particularly in tough cases,” says Ryan, who says if Qantas had not followed procedure, “it could have potentially given [Crowley] the lifeline she wanted”.

While Ryan says this case was “not a particularly significant decision”, given Crowley’s history of alcohol-related incidents and the high level of her blood alcohol reading, there is a “history of the commission being quite tough in this area”.

“The lesson for employers is that if you are looking to terminate an individual based on misconduct and you tie it to work health and safety issues that are not trivial, your prospects of being successful and holding on to it if there is an appeal are much greater,” he says.

“OH&S is probably seen as a much higher priority, whether rightly or wrongly, than productivity.”

The owner of a Melbourne childcare business has been fined almost $20,000 for underpaying five employees and allegedly showing no remorse for their actions.

Vivien Mahomet, the owner and operator of Academy for Kids, was fined $19,980 in the Federal Circuit Court following legal action by the Fair Work Ombudsman.

The employees in question were casual childcare workers aged in their 30s and 40s who each held a Certificate III in Children’s Services. They were underpaid their minimum hourly rate as well as casual loadings and broken shift allowances.

According to Fair Work, Mahomet contravened workplace pay slip obligations and failed to comply with a notice to produce documents issued by Fair Work inspectors. The ombudsman had previously warned Mahomet of the need to comply with workplace laws.

The ombudsman attempted to contact the business owner at least 15 times, but says on the majority of attempts they did not receive a response. In addition, Fair Work says Mahomet did not reply to an invitation to participate in a recorded interview regarding the allegations.

Handing down the penalty, Judge John O’Sullivan said the business owner had shown no remorse for underpaying five employees.

“There is no evidence that the respondent is remorseful or contrite; nor is there any evidence the respondent has taken steps to mitigate the seriousness of the conduct,” he said.

Employment lawyer Peter Vitale told SmartCompany the judge’s comments demonstrate there are a series of considerations the court will take into account when determining a penalty.

“Whether or not they have acted quickly to remedy the underpayment, whether they have shown remorse and whether or not they’ve been previously guilty of similar conduct are all matters which are taken into account,” says Vitale.

“There’s no doubt that the ombudsman has a pretty clear view that some industries are more prone to underpayment than others and those industries are specifically targeted.”

“But whether you are in one of those industries or not, the clear lesson is you should comply with your obligations. If you are unclear about what they are or you have discovered that you have not been complying, then don’t bury your head in the sand.”

Fair Work Ombudsman Natalie James said Mahomet’s lack of cooperation with inspectors was a major factor in the watchdog’s decision to take the matter to court.

“We made extensive efforts to resolve this matter but were left with no option but to pursue this matter in Court to recover employee entitlements and enforce workplace laws,” James said.

“Successful litigations such as this benefit employers who are complying with workplace laws, because it helps them to compete on a level playing field.”

The underpayments were not rectified until earlier this month.

SmartCompany contacted Academy for Kids but did not receive a response prior to publication.

A Perth bakery has been ordered to pay almost $10,000 for failing to provide and maintain a safe workplace after one of its bakers broke his arm when using a dough mixer.

La Crust Bakery was fined $9000 and ordered to pay costs of $900 after pleading guilty to the charge in the Perth Magistrates Court last week.

The court heard one of La Crust’s bakers underwent surgery and spent two days in hospital in August 2012 after attempting to mix batches of dough using two commercial mixing machines in the food preparation area at the back of the bakery.

According to a statement from WorkSafe WA, the larger of the mixers was fitted with an interlocking guard that shut off its power supply when the guard was raised, but the smaller mixer which was also being used by the baker was unguarded and used a spiral mixing attachment.

When it was time to remove the dough from the smaller mixer, the employee turned off the machine but reached into the mixing bowl with his left hand before the spiral attachment had completely stopped.

The baker’s arm was pulled further into the machine by the attachment and when he pulled his arm upwards, he fractured his arm.

WorkSafe WA Commissioner Lex McCulloch said in a statement La Crust Bakery installed a mixer guard on the machine after the accident, which cost the business just $600.

“If this had been done earlier, this incident would not have occurred and the employee involved would have been spared a great deal of suffering,” said McCulloch.

“Employers need to get the message that guarding is absolutely essential and that it is never safe to allow the moving parts of machinery to remain unguarded.”

“It is worth reminding workers that they too have a responsibility for their own safety and the safety of those around them, but it is up to the employer to provide the safe work environment via safely guarded machinery.”

Andrew Douglas, principal at M+K Lawyers, told SmartCompany if the same kind of incident happened in a business on the east coast of Australia, the penalty would have been much higher.

“In Victoria, New South Wales or Queensland, you would be looking at a tariff of upwards of $40,000,” says Douglas.

“Penalties [in Western Australia] are significantly lower and the court’s view of penalties is also lower.”

Douglas says the outcome of this case lays bare the disharmony of work safety legislation across Australian states, with employers in most other states likely to be slapped with a fine of anywhere between $40,000 and $100,000 for a similar entrapment injury, even if they were to plead guilty.

“It’s why there is a need for harmonisation,” says Douglas.

“It is such a serious incident, but also such a preventable one as the employer knew how to prevent it because it was doing so with another machine.”

“WA has always been extraordinarily pro-business in its safety legislation and intervention and management, and it has not come on board [with new legislation] as strongly as east coast regulators,” he says.

“The level of prosecution and the size of prosecution outcomes are both significantly lower.”

SmartCompany contacted La Crust Bakery but did not receive a response prior to publication.

Complex and duplicated regulations are holding the Australian food sector back, according to a report released by the Australian Food and Grocery Council today.

The Paddock to Plate report calls on the federal government to take notice of the burden excessive regulation, outdated transport rules and inflexible workplace awards is placing on the $311.4 billion food industry.

Without action, the AFGC says further jobs will be lost in the sector, which employs 1.64 million Australians, and local producers and suppliers will fail to take their share of growing global demand for food, which is anticipated to almost double by 2050.

In what the AFGC says is “the first attempt to take a whole of supply chain view across the food sector”, the report calls for a Productivity Commission inquiry into duplicated federal and state regulations in areas including food health and safety, waste management, land use, road access and trading hours.

The report estimates compliance with farming regulations accounts for 4.5% of companies’ total expenses and around 20 working days a year are spent dealing with administration.

In Queensland alone, agriculture businesses are governed by more than 55 pieces of legislation and regulations that amount to more than 9000 pieces of paper. In Tasmania, compliance with regulations is estimated to be costing farms 14% of their net profits.

The AFGC also wants restrictions on trading hours to be abolished, especially on public holidays, as well as greater flexibility in award provisions covering night, weekend and holiday work and improvements in the way overseas labour is used to fill seasonal employment gaps.

“Generally speaking, labour laws in Australia are based on the assumption that the labour needs of the agricultural, processing, transportation and retail sector can be achieved through the standard 9 to 5 work schedules,” said the report.

“[But] the reality is that the agricultural production and food processing sectors’ labour needs spike significantly during short but intensive harvest times; the transportation sector’s work is regularly conducted during night hours; and the retail sector services customers primarily during weeknights, weekends and peak seasonal times.”

“As a result, the real wages that are paid in these industries are significantly higher than other industries when overtime and penalty rates are considered.”

Reform is also needed to rules governing the transport industry, according to the report, which recommends the Road Safety Remuneration Scheme be abolished as it duplicates areas already covered by workplace health and safety laws and modern awards, and state governments work more closely to regulate the use of heavy vehicles.

The report came out of a retailer and supplier roundtable held by the AFGC in August and has been endorsed by the National Farmers’ Federation, the Australian Logistics Council and the Australian National Retail Association.

 An AFGC spokesperson told SmartCompany SMEs make up over 50% of the association’s membership and these members have had opportunities to provide feedback on the report through the council’s small business forums.

“Ineffectual regulations impact companies of all sizes across the supply chain,” the spokesperson says.

Peter Strong, executive director of the Council of Small Business, told SmartCompany COSBOA backs the report 100%.

“The food industry is absolutely being held back by the domination of a few,” says Strong.

“It’s about productivity and standards of living.”

Strong says differences between state laws are a cause of concern for medium-sized food businesses, which often supply larger businesses in different locations.

“If their lives are harder, it makes the suppliers’ lives harder,” he says.

“Small businesses are the collateral damage … it affects truck drivers, those in the transport industry. And often it is the perception of regulations. They are afraid of breaking the law.”

“The message is make it simple so we can understand it and deal with it,” says Strong.

“You can still achieve safety, we all want to achieve that, but it’s the industry that knows how to achieve it.”

Supermarket giant Coles has been banned from advertising that its bread is freshly baked or baked on the day it is sold for three years.

In a judgment handed down in the Federal Court this morning, Chief Justice James Allsop ordered the Wesfarmers-owned supermarket to refrain from making any representations that its bread products were entirely baked on the day of sale, were entirely baked in a Coles Baker Store on the day of sale or were baked from fresh dough when this is not the case.

In June, the Federal Court ruled Coles had engaged in misleading and deceptive conduct by promoting its bread as “Baked Today, Sold Today” and “Freshly Baked In-Store” when the bread was actually partially baked and frozen in Ireland then transported to Coles stores and “finished” in store.

The Australian Competition and Consumer Commission originally launched proceedings against Coles over the claims in June 2013.

Coles has also been ordered to display a court notice in its stores and on its website informing customers that it has broken Australian Consumer Law.

However, Judge Allsop is yet to impose a fine on Coles, which faces penalties of up to $1.1 million per misrepresentation.

A spokesperson for Coles told SmartCompany the retailer will comply will all court orders, including publishing the corrective notices online and displaying them in-store. 

"Packaging and marketing materials for the affected bakery products were changed some time ago and a final check of stores will be complete within 7 days to ensure any affected signage has been removed," the spokesperson says. 

"It was never Coles' intention to mislead our customers but we accept that we could have done a better job in explaining how these products are made, and we have already made changes to ensure customers are properly informed."

Laura Hartley, managing partner at law firm Addisons, previously told SmartCompany credence claims are a priority area for the ACCC.

“The ACCC has always been very concerned about having a level playing field and it doesn’t want the big guys to get away with making false claims when the little artisan bakeries and franchises are struggling,” said Hartley.

“These people are making bread which is truly fresh and then the big players are using this par-baked bread and trying to make a fresh claim when that is not legitimate.”

A copy of the notice Coles must display as ordered by the ACCC:

The Federal Circuit Court has fined a Melbourne business and its former director a total of $47,608 for ignoring a Fair Work Commission order to pay $2200 compensation for unfairly dismissing an employee.

On January 17, Fair Work Commissioner Tim Lee ruled World Gym Sunshine had 14 days to pay $2200 compensation plus interest to a then 23-year-old receptionist, Samaka Sophia Ndege.

Despite the order, Ndege 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 it to comply with the order, which were ignored.

As a result, World Gym Sunshine as well as its former sole director and part-owner, Wayne George Mailing, were taken to court by the Fair Work Ombudsman last month.

In a landmark decision, Judge John O'Sullivan ordered World Gym Sunshine to pay a $41,182.50 fine, while Mailing was ordered to pay a further $6426 in penalties.

In his ruling, Judge O’Sullivan said “this was a small business, however, that is no excuse”.

“There is no evidence that the failure to comply with the FWC orders is not deliberate. Everything points to the likelihood that the first respondent until the commencement of these proceedings has wilfully ignored them,” O’Sullivan said.

While World Gym Sunshine told SmartCompany Mailing has sold the business and its current ownership has “nothing to do with him”, there is evidence Ndege’s case was not an isolated incident.

Sarah McKeon, a university student who was employed at the gym at the time of the sale, told SmartCompany she pulled out of a case similar to Ndege’s as she didn’t have the time and resources to pursue the matter further.

“[Mailing] sold the business without giving us notice, and then he just came in one day and said ‘the business is sold’. He didn’t give us our last pay – he just up and left – so the manager at the time had to hire a lawyer to chase him down,” McKeon says.

“I had $1500 in annual leave after working there for a year and a half. When I chased him down, he said because he owned 20% of the business, he only owed me 20%, but he never paid even that.”

“He said it was up to me if I wanted to take it further, and ‘what could I do about it – I was just a young girl’. He didn’t want to budge.”

McKeon also alleges Mailing misled the gym’s new owners about how much money it was making, which led them to put pressure on staff about why the gym was not performing as well as the previous owners claimed it had.

It is not the only legal dispute Mailing is currently facing. Small business owner Alex Blagojevic, who purchased a separate business called Workout Workshop from Mailing four years ago, told SmartCompany he is currently pursuing legal action against him over a disputed rental bond.

Blagojevic claims that from when he purchased the business until 12 months ago, he leased its premises directly through Mailing. At the end of the lease, Blagojevic alleges Mailing did not pay back his bond, claiming superficial damage to the property and a missing TV.

Despite numerous attempts, SmartCompany was unable to contact Mailing prior to publication.

In an official statement, acting Fair Work Ombudsman Mark Scully said the gym had showed little remorse for its actions in the case.

“They could have avoided this significant penalty by simply accepting the commission’s original ruling and paying this young employee the relatively small amount of compensation ordered,” Scully said

“Compliance with commission orders is fundamental for the integrity of the workplace relations system and employers should be aware that we are prepared to take action where appropriate to ensure they are enforced.”

M+K Lawyers partner Andrew Douglas told SmartCompany the case is unusual because most businesses obey Fair Work Commission rulings.

“We don’t see many decisions in the unfair dismissal arena going to court, simply because once people negotiate and agree on a settlement, most businesses comply with it,” Douglas says.

However, as a result of the extension of the Fair Work Commission’s jurisdiction into bullying, Douglas warns the ruling could have implications for bullying cases.

“If you look at the reasoning in this case, the penalty was for breaching a decision handed down by the Fair Work Commission. That was the main reason for the penalty, and it aligns with criminal law,” Douglas says.

“In the bullying arena, there are no orders for compensation, but the same penalty regime is in place.”

“You might get an order that says ‘John doesn’t work with Betty’. But in a business, on a particular day, you might decide that you need John and Betty to work on the same shift. You can see how difficult it will be to apply a ruling on all occasions.”

Douglas says that while there have only been a handful of cases in the bullying regime so far, business owners should be careful about how they deal with them.

“While most businesses comply in Fair Work cases, in bullying, the orders control what you do every day, so the potential for breach is much higher,” he says.

“Be careful in accepting any orders from a commissioner if you can’t live with every day.”

A former head chef at the North Wollongong Hotel has been ordered to pay $70,000 in damages to the pub over thousands of missing chicken schnitzels.

In a judgment handed down last week, the Federal Circuit Court found Kobina Amponsem orchestrated a scam where he on sold the schnitzels to the pub for a higher cost and pocketed the profit.

The former chef had been bulk-buying chicken schnitzels from a business owned by his wife for between $1.80 and $1.90 each and then on-selling them to the pub for between $2.80 and $2.90.

The scam netted Amponsem a secret profit of $1 a schnitzel and the chef never told the pub how cheaply he was buying the schnitzels, nor that the company doing the on-selling was his wife's.

Amponsem told the court he didn’t reveal the information because the pub’s former owners, Laundy Pty Ltd, "didn't ask".

Laundy only realised something was wrong when after a few quiches went missing the company decided to audit its history of quiche and schnitzel sales.

Of the 22,510 schnitzels Amponsem bought, almost 10,000 of them were missing, and of the 324 quiches he had ordered, only 111 could be accounted for.

Criminal fraud charges against Amponsem were unsuccessful and so the former chef brought proceedings against Laundy over $11,000 in annual leave he said was outstanding. 

The pub owner said it had withheld the money in an effort to recoup its losses for the scam, which included more than $20,000 worth of schnitzel that was never delivered.

Judge Manousaridis found Amponsem's actions breached his employment contract and his fiduciary duty to his employer. 

“Having been requested to acquire the schnitzels for Laundy from another supplier, and having agreed to undertake that task, Mr Amponsem ’s duty to render faithful service to Laundy required him to acquire the schnitzels from SCCF on behalf of Laundy, and at the best price he could have negotiated,” the judge found.

Employment law expert Peter Vitale told SmartCompany it appeared Laundy had all the right policies in place and the right contractual terms but the pub owners may not have policed these sufficiently.

Vitale says employers need to be alert to potential scams like that perpetrated by Amponsem.

“Look out for overt examples of employee’s personal expenditure,” he says. “Secondly, be aware of circumstances like these where the person responsible for ordering the goods is also the end user within the organisation.”

Vitale says the case demonstrates the importance of making sure stock take is done officially.

“Make appropriate use of surveillance devices and keep an eye out for unusual explanations for employee behavior and making clear what the limits of the employees authority are,” he says.

SmartCompany contacted Laundy but they failed to respond in time for publication.

Michael Fredericks, the founder of Australian Securities Exchange listed Onthehouse, has resigned as chief executive after a legal dispute with one of the original investors in the real estate business.

Fredericks agreed to step down as the chief executive at the request of Onthehouse’s board last week and then resigned yesterday.

Fredericks said he decided to resign “in the best interests of the company and its shareholders” following his dissatisfaction with the actions taken by the board.

Fredericks founded Onthehouse, which now has an annual turnover of $26 million and 160 staff with offices in Brisbane, Sydney and Melbourne.

His share of the business is estimated at $7 million but a bitter personal legal dispute with his former partner and Brisbane lawyer, Phil Heraghty, has cost Fredericks control of his business.

SmartCompany reported on the dispute two weeks ago after the Supreme Court of Queensland ordered Fredericks be removed as trustee of a private investment trust in which Heraghty had invested seed capital in 2007.

Heraghty was one of the first investors in Onthehouse and claimed Fredericks failed to provide him with basic information and accounts since June 2011.

Heraghty also claimed Fredericks took trust money and paid personal credit card debts and banked the funds in a joint account with his wife.

Both Heraghty and Fredericks say the dispute between the pair is now resolved.

Fredericks said in a statement he appreciated Heragthy was “frustrated” by the delay in resolving administrative documentation involving The Fredericks Onthehouse Trust.

“My focus has been squarely on the performance of the Onthehouse company, at the expense of my personal affairs, including my trust holding documents,” he said in a statement.

Fredericks said any suggestion of serious misconduct by him has been corrected.

Heragthy said he was satisfied steps are being taken to bring the trust’s affairs into order.

The Onthehouse board issued a statement to the ASX announcing Fredericks’ resignation and noting the “private civil legal case” had no impact on the financial performance or operations of Onthehouse.

“The board did acknowledge that the matter had caused unnecessary distraction and publicity in relation to the company,” the statement said.

Onthehouse is now searching for a new chief executive.

An employee who claims she was rendered incapable of working by her colleagues’ perfumes and aftershaves has lost her compensation claim.

The public servant worked at a customer services centre for the Department of Human Services in Orange, New South Wales.

But “A” claims she suffered years of discomfort after first noticing her condition in 1995.

She was not diagnosed as having multiple chemical sensitivity until February 2012.

The employee attributed her condition to “constant exposure to perfumes/oils and chemicals”. 

She claimed her multiple chemical sensitivity significantly worsened after the Department of Human Services moved into a new air-conditioned, open plan and sealed building in late 2011.

From this time A was exposed to residual smells of new carpet, fittings, paint and glue, as well as perfumes.

The public service department had formerly been housed in an older style building in which groups of staff had separate rooms, and windows could be opened, and the woman’s team had agreed not to wear perfumes.

In late 2011 A had to be taken to hospital in an ambulance suffering from nausea, disorientation, headaches, dizziness and chest pain.

She stopped working on February 2012 and accepted a workplace insurance claim for “aggravation of multiple chemical sensitivity”.

But the Administrative Appeals Tribunal rejected A’s further claim for permanent impairment in a judgment handed down last month.

The AAT found the evidence indicated at least some of her symptoms would have arisen from contact with volatile chemicals outside the workplace

Anthony Massaro, principal at Russell Kennedy Lawyers, told SmartCompany multiple chemical sensitivities is a really difficult condition to deal with as an employer as it is often difficult for medical practitioners to verify what the condition is.

“It can easily be abused by a malingering employee to get their way in the workplace,” he says.

Massaro says the decision by the AAT has significance for workers’ compensation cases, not just Comcare, in relation to symptoms or injuries that are contributed to by factors outside work.

“The decision is likely to make it much harder for multiple chemical sensitivity to be the basis of a permanent impairment claim but wouldn’t stop it being the subject of a normal Workcover claim,” he says.

Massaro says if an employee presents with multiple chemical sensitivities and says it is exacerbated by factors in the workplace there are two things which you should be doing.

“The first is sending the employee off to an independent medical assessment to try to get more detail and the second is having a look at what can be done about the workplace,” he says.

Massaro says employers can consider putting in place policies or agreements asking staff not to wear as much aftershave or perfume, changing cleaning products and implementing no-flowers policies.

“Try to deal with the environmental factors so it is possible to have the person continue working and try to get a medical opinion to get a better idea of what the triggers are and how they can be avoided,” he says.

A few months ago, in my first piece as your Chief Legal Columnist, I shared my top five legal tips for buying property.

Since then, I've been overwhelmed with requests to share tips 6-10! Spring is the peak season for real estate and many of you will be in the market to purchase a property, whether for yourself to live in or as an investment. Before you head out to an inspection next weekend, or sign a contract of sale, please keep the following list of tips in mind.

1. List all fixtures/extras in the contract

Anything not physically bolted down is considered a chattel, not a fixture, and could be removed by the vendor. To avoid any doubt, list removable items in the contract. These include dishwashers, free-standing ovens, pool equipment, mirrors, mantel pieces, garden sheds, pot plants and farm equipment.

Vendors have been known to remove free-standing dishwashers and ovens before settlement. And be on the lookout for anything you might be buying with the property which is not particularly desirable. I recently reviewed a contract where a daggy sofa bed located in an attic-style room was included in the sale, probably because it was almost physically impossible to remove it!

2. Read the Owners Corporation rules. Owners Corporations, or Body Corporates, own and manage the common property in subdivisions

Each owner pays a contribution to the maintenance of the common property and shared services provided to the owners, such as gardening and caretaking. Some large apartment developments have more than one Owners Corporation, especially where there are carparks, gyms and swimming pools.

Every Owners Corporation has rules; if they don't make their own rules the default legislative rules apply. Always carefully read through the OC rules in the contract, to see if they are something you or your tenant could live with. Last week I read a set of rules that prohibited any pets, no exceptions. Other rules state a limit on the number of pets and even the weight of dogs!

3. Be careful with off-the-plan purchases

Even though the real estate agent may say the building will be finished next year, the contract could actually allow for five years until completion. If you sign it, you're stuck with it. Remember that you have limited control over fixtures and fittings: aim to specify as much as possible in the contract.

The vendor usually has the right to substitute fittings for similar brands and quality, so it's important to list benchmark brand names. The vendor can also generally make minor variations to your apartment, such as reducing the size by a few square metres. This is risky for one-bedroom apartments: if they are too small, you may struggle to obtain finance. Check with your lender before signing any contract.

4. Be wary of finance on solar panels, newly-renovated kitchens and new swimming pools and spas

These could have been obtained by the vendor on finance or a hire-purchase arrangement. The vendor may not necessarily own them and this will need to be covered off in the contract of sale, particularly in relation to the Personal Property Securities Register, which is a national database of items secured by finance, including vehicles (but not real estate). The last thing you want is for a financier to be overlooked and then your solar panels are repossessed.

5. Consider obtaining building and pest inspections

Older period homes may have hidden issues with foundations and roofing, as well as termite infestation. Spending a few hundred dollars on a building and/or pest report could save you a fortune if you avoid buying an issue-plagued home. Blocks of flats built in the 60s and 70s will now (if they haven't already) require their windows to be replaced due to rotting. Read the Owners Corporations Annual General Meeting minutes carefully to see if this has already occurred or is on the cards.

Look at how much money the OC has in the bank. Will you be required to contribute to major capital works in the future? Look out for the condition of driveway concrete and stairwell carpets too.

Forewarned is forearmed!

Note: the above is general information and should not be considered as legal advice.

This article originally appeared on Women’s Agenda.

A former Bunnings employee has had his claim for unfair dismissal rejected, after the Fair Work Commission ruled the retailer did all it could to accommodate the worker’s medical concerns.

In a case that clearly demonstrates the requirements for an employee to meet the inherent duties of their job, the commission heard Reynato Reodica, who started work at Bunnings warehouse in Auburn, New South Wales in 2010, suffered from an umbilical hernia while helping a customer lift items in October 2011.

Reodica underwent surgery for the hernia in March 2012 and from that point was restricted to lifting no more than 10kgs while working.

To accommodate his condition, Bunnings allowed Reodica to return to work in July 2012 in a full time role as a gatekeeper, but Reodica said while performing the new role he was over-exposed to cold temperatures, wind gusts and rain gusts and therefore developed pain in various spots on his body, including sore gums and teeth problems.

After filing a claim for workers’ compensation in August 2012, Reodica was then moved to the cash register within the store. However, Bunnings said this position was no longer available after October.

In January 2013, the Workers Compensation Commission instructed Bunnings to offer Reodica suitable duties, and he again started work as a cashier in February. Again Reodica said the area he was required to work in was “cold, windy and draughty” and also claimed he cracked a tooth while in the role.

A decision was made to close the Bunnings warehouse store in Auburn in mid-2013 and according to Mr Hannaford, the manager at Bunnings Castle Hill, Reodica opted to be redeployed to the Castle Hill store.

However, it was decided in consultation with Bunnings’ HR department that Reodica’s requirements to work in an environment that was “inside, out of the cold and wind and it would need to be 22 degrees” was not feasible at the Castle Hill store and, after a period of Reodica not working for six months, his employment was consequently terminated in January 2014.

Commissioner Roberts ruled in Bunnings favour, finding the retailer “did everything it reasonably could have done to give Mr Reodica an extended period of time to see if his medical conditions would improve”.

“[Reodica’s] self-stated physical condition precludes him from returning to work at Bunnings and Bunnings was entitled to … end the employment relationship. It is to Bunnings’ credit that it waited so long to do so when it could have acted earlier.”

Roberts found Reodica’s dismissal was “the inevitable result of his medical conditions” and therefore Bunnings’ treatment of him was not harsh, unjust or unreasonable.

“His medical condition has had a markedly adverse effect on his life but his inability to perform work at Bunnings without restrictions is not his fault or that of Bunnings,” Roberts said.

Bunnings employee relations manager Judd Young told SmartCompany that Bunnings “has a long history of providing care and support for our team members”.

“While we regret the situation in which Mr Reodica finds himself, we believe the decision made by the Fair Work Commission was fair,” says Young.

Employment lawyer Peter Vitale told SmartCompany Bunnings clearly made “very substantial efforts to identify duties suited to the employee given his medical diagnosis and ultimately after a long process, Bunnings was unable to do so.”

Vitale says the case shows the Fair Work Commission will assess the employee’s fitness for their job against their original position, as opposed to other prospective positions.

“It’s consistent with a case some years ago – Cosma vs Qantas Airways Limited – where the employee unsuccessfully argued their contract for employment had changed so their position had changed, and while they were not fit to perform the duties of the original position, they were fit to perform the duties of the changed position,” he says.

Andrew Douglas, partner at M+K Lawyers, told SmartCompany it is common for employers to go above and beyond their responsibilities in attempting to accommodate workers who are ill or injured.

“It’s incredibly common to have good employer behaviour, for them to be generous and continue to try to work with employees, whether they are injured at work or outside of work,” Douglas says.

“We hear about all the terrible cases where someone with cancer has been terminated, which would lead us to believe Australia is filled with terrible employers but quite the opposite is true.”

Vitale says it can be extremely difficult for SMEs to manage long-term ill or injured employees, “particularly if their condition severely limits the types of duties they are capable of performing.”

Nevertheless, he says it is “absolutely necessary that before making a decision to terminate an employee on these grounds, [the employer] exhausts the possibility that they are going to receive a favourable medical assessment in respect the employee.”

A Perth breast imaging clinic and its former director have been fined $100,000 after the consumer watchdog emerged victorious in its legal battle with the business.

The fine follows a Federal Court ruling in March that breast imaging provider Breast Check engaged in misleading or deceptive conduct and made false representations about the devices used in its breast imaging services.

The court also found the former director of Breast Check, Dr Alexandra Boyd, had been knowingly concerned in Breast Check’s conduct.

The proceedings, launched by the Australian Consumer and Competition Commission, related to Breast Check’s use of a device known as the Multifrequency Electrical Impedance Mammograph (MEM) and a digital infrared thermographic camera to capture images of a customer’s breasts.

From about February 2011, only the infrared thermographic camera was used by Breast Check.

Judge Michael Barker found Breast Check falsely represented that breast imaging done using a thermography device alone, or in conjunction with the MEM device, could provide an adequate scientific basis for assessing whether a customer was at risk from breast cancer and the level of that risk and assuring a customer that they do not have breast cancer.

Barker also found Breast Check represented there was an adequate scientific basis for using the devices as a substitute for mammography when that was not the case.

On Friday, Federal Court Judge Michael Barker ordered Breast Check, now trading as PO Health Professionals, to pay a pecuniary penalty $75,000.

Barker also ordered Boyd to pay $25,000 for her contraventions of Australian Consumer Law.

Alongside the penalties, Barker issued injunctions against Break Check and Boyd from representing there is an adequate scientific medical basis for any breast imaging service being effective in assessing if a customer is at risk of breast cancer and the level of that risk; being able to assure a customer that they do not have breast cancer; or being a substitute for mammography unless there are reasonable grounds for making such representations.

Melissa Monks, special counsel at King & Wood Mallesons, told SmartCompany Breast Check and Boyd were fortunate not to have received greater penalties.

“The commission was seeking much higher penalties but the court must take into account a whole lot of factors when making its decision,” says Monks.

“While the court found the conduct was serious, it occurred for a relatively short period of time of seven months, it was a very small company and it was their first offence.”

Monks compares the penalties to those recently imposed on another breast imaging business, Safe Breast Imaging, and its sole director, which were ordered to pay a combined $250,000 in September for similar contraventions of Australian Consumer Law.

“The conduct there was much broader and wider,” explains Monks. “They had a website and social media; they run a Google AdWords campaign, so their reach was much broader.”

“The nature of their representations also went further as they said doctors were involved in approving their services.”

Monks says the ACCC was right to label the conduct of Breast Check and Boyd as “evil” as the case is “not just about people losing money … it’s about people’s lives”.

“Most medical practitioners are above the board but there are those who operate at the fringe,” she says.

“Thankfully the regulators are jumping on them and using their powers to educate the public and ensure this doesn’t happen again.”

SmartCompany was unable to contact PO Health Professionals or Alexandra Boyd.

A New South Wales hairdressing salon has come under fire from the Fair Work Ombudsman for a second time, with the employment watchdog launching legal proceedings against the company and its director for allegedly failing to back-pay a number of its employees.

The Fair Work Ombudsman said this week it has launched legal proceedings against hairdressing salon The House of Colour @ Tuggerah and its director Nelvin Nitesh Lah for not back-paying three employees a total of $3620.

Earlier this year, the ombudsman launched proceedings against Lah and three of his other hairdressing businesses to obtain an injunction to restrain him from underpaying his employees. The legal action is still before the Federal Circuit Court.

In the case against The House of Colour, the ombudsman alleges three employees, including an apprentice aged 23 and two workers aged 24, were not paid their accrued annual leave entitlements when their employment was terminated earlier this year.

The employees contacted the ombudsman for help when they did not receive their entitlements and despite the ombudsman issuing the company with Compliances Notices for the outstanding amounts to be paid in 21 days, the employees are yet to receive their entitlements.

“Our inspectors made extensive efforts to engage with this company to try to resolve the matter by agreement but as has been the case previously, we have not been able to secure any co-operation from Mr Lal or his company,” said acting Fair Work Ombudsman Mark Scully in a statement.

The ombudsman is seeking court orders for the employees to be back-paid in full, while The House of Colour faces a potential court penalty of up to $25,500.

Emeline Gaske, a lawyer in the employment and industrial relations team at Maurice Blackburn, told SmartCompany the case is “quite unfortunate” as The House of Colour and Lah were given the opportunity to pay the employees what they were owed.

Gaske says it is important for businesses to “know their obligations and to comply with them”.

“If a breach is brought to their attention, they need to rectify it as soon as possible to avoid this kind of court action,” Gaske says.

“In my experience, if employers treat their staff well, pay them what they are meant to be paid, they will benefit greatly from their productivity and loyalty.”

Gaske says the Fair Work Ombudsman will often focus its resources on employees “who couldn’t otherwise represent themselves” and this tends to be a problem in lower paid and non-unionised industries such as hairdressing.

SmartCompany attempted to contact The House of Colour but the number listed for the business was disconnected.

Supermarket giant Coles will create a $500,000 fund to back-pay collectors of its supermarket trolleys as part of an enforceable undertaking with the employment watchdog that will put an end to a two-year legal battle.

The Fair Work Ombudsman first raised concerns about the treatment of trolley collectors employed by sub-contractors of Coles in 2011, before launching legal action against Coles and two sub-contractors operating at several Coles sites over the treatment of 10 trolley collectors, who were allegedly underpaid more than $200,000.

The employment watchdog alleged Coles was aware the trolley collectors were not being paid correct minimum wages and conditions and the company failed to ensure its sub-contractors were complying with workplace laws.

In a statement today, the ombudsman said Coles has accepted it has an “ethical and moral responsibility to ensure all entities and individuals directly involved in the conduct of its business comply with the law and meeting community and social expectations to provide equal, fair and safe work opportunities”.

As part of the undertaking, Coles will back-pay the 10 employees almost $221,000, as well as establish the $500,000 fund, which will be used to back-pay any other trolley collectors who are subsequently found to have been underpaid.

The undertaking means the ombudsman will not pursue its legal action.

Coles has also agreed to randomly audit the wages of at least 20% of the trolley collectors employed by its primary trolley collection provider, United Trolley Collections, and Coles managers will undergo workplace training.

In a statement issued to SmartCompany, Coles said it has been working to re-structure its trolley collecting operations “away from a traditional contracting model” since the ombudsman raised concerns in 2011.

“Coles previously had more than 30 contractors but improved its operations in late 2012 by contracting to one national trolley collection provider, administered under a single external payroll,” said Coles.

“Coles also established a hotline for external complaints to be escalated to senior management. Bank guarantees are in place with the sole contractor to secure against any risk of underpayments [and] with the assistance of the Fair Work Ombudsman, the sole contractor has entered into a deed of proactive compliance, which provides transparency of payments to third party employees.”

Coles said the enforceable undertaking with the ombudsman will help the company bring all of its trolley collection services in-house by the end of 2016. Direct employees of Coles already collect the trolleys at 400 of the supermarket’s stores.

“Coles believes the Fair Work Ombudsman plays a vital role in the community by ensuring fair practices for employees and preserving the integrity of workplace relations in this country,” said Coles.

Rachel Drew, employment, industrial relations and workplace safety partner at TressCox Lawyers, told SmartCompany an enforceable undertaking is something the ombudsman can accept from a company as an alternative to a court claim.

However, Drew says the ombudsman will generally only accept an undertaking “where the employer admits there was some contravention”.

“In turn, the Fair Work Ombudsman has to believe the contravention was not deliberate or reckless,” she says.

Drew says it is likely Coles believed it had sub-contracted out its employment responsibilities to the trolley collectors but “under the Fair Work Act a person can be involved in a contravention if they are aware of it”.

While Drew says an employer will generally weigh up the pros and cons of accepting some responsibility and defending litigation, in this case it appears Coles is “going further than it legally needs to” to rectify the situation.

“They seem to be trying to put a positive spin on it … they are trying to correct past errors and do the right thing by creating a half-a-million dollar fund to pay other collectors,” she says.

Drew says it is unlikely the undertaking will have flow-on effects to other parts of Coles’ business as it appears trolley collecting “was a very particular part of the business that was capable of being sub-contracted out”.

“And it’s an area that tends to attract students, young people, and casual workers so there is some level of vulnerability,” says Drew, who says it is likely cases of trolley collectors being underpaid by other businesses will emerge.

“For many businesses, sub-contracting seems to be an easy way to employ people, but when you sub-contract you do lose control.”

“Bringing the trolley collectors in house will likely be safer and probably cheaper in the long run.”

The owner of a Brisbane 7-Eleven store has been fined $250 for throwing a metal chair at an employee who told him he was unwell.

Ninemsn reports Avinash Pratap Singh pleaded guilty to one count of common assault in the Brisbane Magistrate’s Court on Tuesday.

The court heard one of Singh’s employees, a young man in his early 20s, arrived at Singh’s store to start his shift at 10.15pm on August 26.

After starting work, the employee informed Singh he was not feeling well, which prompted an argument between the pair. During the argument, the court heard Singh became so angry that he threw a metal chair across the room towards the worker, who was struck on the knee.

The employee sought medical attention but only required pain relief.

Singh apologised in court for the incident, saying he did not intend to injure the worker.

“It was just a spur-of-the-moment, just at that time of night, and just … the way he carried on about it and it just got out of hand to be honest with you,” Singh told Magistrate Linda Bradford-Moore.

Bradford-Moore fined Singh $250 and ordered he pay the employee $200 in restitution. No conviction was recorded as Bradford-Moore said Singh was unlikely to commit further offences.

While 7-Eleven declined to comment on the specific incident, a 7-Eleven spokesperson told SmartCompany the company’s franchisees “have responsibilities as employers and as business people”.

“It is our expectation that they meet these responsibilities and obligations at all times, including abiding by all relevant laws,” the spokesperson says.

“7-Eleven takes any failure to meet these obligations seriously and takes appropriate action in accordance with our franchise agreement.”

Andrew Douglas, partner at M+K Lawyers, told SmartCompany the incident highlights the lack of understanding of workplace law among Australian employees and employers.

Douglas says there are a “myriad of possibilities” in the case if the employee had chosen to initiate action under the various workplace statutes.

“The employee certainly had a compensable injury and could have had access to benefits if they filed a workers compensation claim,” says Douglas.

“The employer unquestionably breached workplace health and safety legislation by failing to provide a safe work environment and he risked imprisonment on the basis of reckless endangerment.”

“If the employee could not return to work there may have been a compelling argument for a constructive dismissal and they may have been entitled to up to 26 weeks of their current income.”

“There is an argument that sits somewhere in an adverse action claim, if the employee could argue they were mistreated because they had complained … and if the employee had managed to keep their employment, they could have made a bullying complaint that could place restrictions on the actions of the manager.”

But Douglas says the scenarios are unlikely to play out as the employee chose to seek the police’s help instead.

“It just shows you how rarely affected employees take complaints to regulators,” he says.

“It’s a continuing issue that all people have little understanding of workplace law. There are so few complaints of bullying in relation to level of bullying we know occurs.”

“It’s likely a large percentage, over 10%, of Australians are currently being bullied in the workplace but of the 12 million Australian adults in the workplace, as of July, just 640 bullying complaints had been lodged with the Fair Work Commission.”

Douglas says Australian workers are more likely to attempt to deal with workplace incidents personally and both employees and employers have “very poor knowledge” of the courses of action available to them.

“They don’t know the tools in their kit bag,” he says.