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

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    Stuart MacGill wearing the baggy green in 2008

    Former Australian cricketer Stuart MacGill has launched a $2.6 million lawsuit against his former employer Cricket Australia, which he claims reneged on a deal to pay him match payments and prize money totalling more than $1.6 million.

    Legal experts say the case is a reminder that businesses need to be careful about the promises they make to employees.

    MacGill, who took 208 Test wickets for Australia during his cricket career, filed a writ against Cricket Australia in the Victorian Supreme Court on Monday. MacGill is represented by Julie Singleton Solicitors and has previously been reported to be dating Julie Singleton.

    According to Fairfax, MacGill claims Cricket Australia did not pay him injury payments totalling $1,640,890 during a two-year period from May 2008, during which time he was unable to play Test cricket.

    The figure includes $846,090 in tour payments for 15 away Test matches; $140,800 in tour payments for 11 home matches; $630,000 in retainer payments over 104 weeks; and $27,000 in prize money for nine test matches.

    MacGill is also claiming $984,000 in interest, plus legal costs.

    In his claim, MacGill said he entered into one-year employment contracts with Cricket Australia between 1998 and 2007. He claims Cricket Australia hired him on a 12-month contract on June 28, 2007 and had offered another 12-month contract for 2008 and 2009 before he was injured.

    MacGill said Cricket Australia had previously paid him when he was unable to play Test cricket due to injury earlier in his career and in May 2008 he was advised to return home from the Australian team’s tour in the West Indies because he was injured.

    MacGill said he did not receive payments under Cricket Australia’s player injury policy after this time and when he attempted to negotiate the payments with his employer, he claims Cricket Australia denied liability and refused to participate in mediation.

    Cricket Australia said in a statement on Monday it is aware of MacGill’s claim.

    “We are aware of the media reports but aren’t in a position to comment further,” said a Cricket Australia spokesperson.

    SmartCompany contacted Stuart MacGill and Julie Singleton but did not receive a response prior to publication.

    Andrew Douglas, partner at M+K Lawyers, told SmartCompany while limited information is available about the basis of MacGill’s claims, most elite sportspeople have contracts that require mediation of any dispute and allow, either in the contract or through policy, to financially accommodate a player if they are injured.

    Anthony Massaro, principal at Russell Kennedy Lawyers, told SmartCompany as a general rule, employers need to be careful about all promises they make to employees about remuneration or incentives.

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    The Full Federal Court has found in favour of the Victorian Office of Public Prosecutions after an employee claimed he was dismissed because of his mental illness.

    In a decision handed down in December last year the court held the OPP did not take adverse action against its former employee, Anthony Grant.

    Grant was a solicitor with the OPP and after breaking his leg he was increasingly absent from work and suffered from depression.

    His failure to attend several key appointments and complete requirements of his job led to his manager dismissing him.  

    Read more: Mental health warning to SMEs – cost to business $10.4 billion

    At first instance the Federal Circuit Court decision ordered that Grant be reinstated and paid compensation of $93,750.

    But on appeal the Full Federal Court held the key issue to determine is the actual reason which motivated the decision-maker – whether or not some proscribed reason subconsciously influenced the decision-maker is irrelevant.

    If the decision-maker’s testimony is accepted as reliable and honest it will discharge the onus imposed on the employer.

    In this case Grant’s manager gave clear evidence that he had made the decision solely because of Grant’s misconduct and for no other reason. 

    Catherine Dunlop, partner at law firm Maddocks, told SmartCompany the judgment is important as it assists understanding of the way that a court will consider general protections claims.

    Dunlop says the initial Federal Circuit Court decision had placed employers in a “very difficult” position.

    “The most important thing about the decision is that it confirms the courts will look at the actual reasons that motivated the decision-maker,” she says.

    “This area is still one where employers need to have really clear evidence, particularly when they are dealing with mental health or depression issues.”

    Dunlop recommends employers get medical advice where appropriate to understand the interaction between performance and prognosis in their employee’s prognosis.

    “Employers who don’t seek independent medical advice and make assumptions are at risk of having their decisions challenges.”

    Dunlop says dealing with mental illness is an area she advises employers on regularly. 

    “Many employers are very sensitive to wanting to understand all the issues and to try and assist employees,” she says.

    “I think there is a little more openness about discussing these issues too which is a good thing.”

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

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    Insurance broker Donald Mitchell-Innes has been awarded $300,000 after the NSW District Court found he was wrongfully dismissed by his employer for drunken behaviour at a work conference.

    Mitchell-Innes had worked for risk and insurance company Willis for seven years and the court found alcohol consumption, in a work context, was not uncommon amongst employees there.

    Read more: 10 unfair dismissal cases examined – key lessons for SMEs

    Employees were expected to socialise and consume alcohol with clients and prospective clients and Willis routinely reimbursed alcohol expenses resulting from employee gatherings or entertaining clients.

    Mitchell-Innes was sacked after attending a staff dinner in October 2012 whilst in Melbourne for a Willis training conference.

    Most of those who attended the dinner visited the Irish Times pub for some time after the dinner and Mitchell-Innes and one or two other staff stayed at the pub until the early hours of the next morning.

    Eventually Mitchell-Innes and another staff member left the pub to return to their hotel. Mitchell-Innes could not find his room key and after sitting down on a bench near the lifts in his hotel fell asleep until 7am.

    Mitchell-Innes still managed to make it to the conference that day, attending as an observer from 9am but some senior staff noted he “was not at his best”.

    After an investigation in the proceeding weeks Mitchell-Innes was sacked as a result of his condition at the conference. 

    But the NSW District Court found there was a manifestation of low-level intoxication, without other consequences of behaviour of significance in the workplace, and so dismissal was a harsh reaction.

    "In my view, this behaviour, [Mitchell-Innes’] condition at the conference, does not constitute a repudiation of the agreement, or other sufficiently serious misconduct enlivening a power of summary termination,” Justice Taylor found.

    “It was not serious misconduct in serious circumstances."

    The court took into account that Mitchell-Innes had not previously been disciplined for attending work intoxicated and his behavior at the conference was properly to be regarded as a solitary, one-off event in a period of almost nine years employment.

    Justice Taylor awarded damages of $296,650: $99,092 in lost salary, $118,182 for his lost retention bonus, $48,620 in long service leave and $30,755 in interest.

    TressCox partner Rachel Drew told SmartCompany intoxication in the workplace can be a valid reason for dismissal.

    But Drew says employers need to ensure if they are concerned about the workers drinking they have a policy in place that makes it clear it is unacceptable and connect intoxication with performance of work.

    “In some areas such as construction it is very easy to show that any level of intoxication in the workplace could give rise to very serious risk to the employer,” Drew says.

    However, in this case Mitchell-Innes’ behaviour was at an internal conference and so did not pose a serious risk.

    “His behaviour is below the standard expected by the employer and the employer is entitled to investigate and impose some form of penalty but dismissal seems to be a step too far,” she says.

    Drew says if employers have a policy on alcohol consumption it is important for them to comply with that policy as well. 

    “If the employer is going to conduct a training conference that includes alcohol at dinner and paying for alcohol at a venue afterwards the employer needs to accept some degree of responsibility,” Drew says.  

    A spokesperson for Willis told SmartCompany the business is “very disappointed” in the decision and has lodged an appeal.

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    Online homeopathy store Homeopathy Plus! has accused the Australian Competition and Consumer Commission of “moving the goalposts” after the Federal Court found the company and its director, Frances Sheffield, engaged in misleading conduct.

    The comments about the ACCC moving the goalposts echo those made by importer Dateline Imports, which was fined $85,000 but awarded costs by the Federal Court in November last year.

    The Federal Court in Adelaide found the Homeopathy Plus! online store and information site breached Australian Consumer Law in a decision handed down on December 22 last year.

    The case revolved around three articles published on the site that claimed whooping cough vaccine is “unreliable at best” and “largely ineffective” in preventing whooping cough, and that homeopathic remedies are a proven safe and effective alternative.

    In April 2012, Homeopathy Plus! removed the articles following a request from the ACCC. However, the articles were reinstated in January 2013, which led the ACCC to begin proceedings against Sheffield and Homeopathy Plus!

    In the Federal Court judgment, Justice Perry said “the Australian Register of Homeopaths, which is the peak body in Australia, has taken the position that homeoprophylaxis should not be recommended as a substitute for immunisation”.

    “First, by publishing the three articles containing the Vaccine Representations and the Alternative Homeopathy Reasonable Basis Representations, the respondents engaged in conduct in trade or commerce that was misleading and deceptive, or likely to be so, in contravention of s 18 of the [Australian Consumer Law],” Perry said.

    “Furthermore, [Sheffield and Homeopathy Plus] in trade or commerce made false or misleading representations that the Vaccine is of a particular standard or quality (essentially short-lived, unreliable and ineffective) contrary to ss 29(1)(a) and (b) of the ACL by publishing the vaccine representations in the three articles when in fact the vaccine is effective in protecting the significant majority of people exposed to the infection from contracting whooping cough.”

    “Finally, the [Sheffield and Homeopathy Plus] also in trade or commerce made false or misleading representations in connection with the supply or possible supply of homeopathic products or treatments that these products or treatments have a particular standard or quality.”

    While the matter is set to return to court on February 4, Homeopathy Plus! has posted a statement on its website accusing the ACCC of “moving the goalposts” in its investigation.

    “We were taken to court by the ACCC because I wrote, and the Homeopathy Plus website published, three articles that discussed the whooping cough epidemic affecting Australia at that time, the effectiveness or lack thereof of the whooping cough vaccine, and homeopathic alternatives for its treatment and prevention,” the statement said.

    “The February 2013 warning letter from the ACCC to remove the above articles from our website before they commenced legal action, and their subsequent ‘Originating Statement’ with which they commenced action a few days later, were different to a new and amended document that was served on us in April once our preparations for court, based on the first Originating Statement, had begun.”

    Sheffield claims there were two key ways in which the documents differed.

    “1. The charge against us about homeopathy’s ability to treat whooping cough was dropped completely.

    “2. Inserted in numerous places throughout the document was the statement that we had, ‘made representations to the effect that there was a reasonable basis, in the sense of an adequate foundation, in medical science to enable it or them, as the case may be, to state that homeopathic treatments are a safe and effective alternative to the vaccine for the prevention of whooping cough.’”

    Aside from discussing the case, the Homeopathy Plus! website has a section titled “reversing Autism” and recently posted a column supporting US anti-vaccination campaigner Dr Sherri Tenpenny.

    While the ACCC would not comment directly on the comments in the most recent article, it referred SmartCompany to an earlier statement by ACCC Commissioner Sarah Court.

    “Representations that may mislead consumers about the effectiveness of medical products or treatments are of significant concern to the ACCC,” Court said.

    “In this case, there was a real risk that consumers might be influenced by the representations not to use the whooping cough vaccine and instead to rely solely on homeopathic products for the prevention of whooping cough. This is against the advice of medical professionals and the Commonwealth Department of Health.”

    Sheffield declined to comment to SmartCompany on the grounds the orders are due to be handed down on February 4 but said Homeopathy Plus would reveal more information in its weekly email newsletter this week.

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    The Australian Competition and Consumer Commission is warning small businesses not to fall for an email invoice scam that swindled one small business owner out of $500,000.

    The acting chair of the ACCC, Michael Schaper, told SmartCompany the consumer watchdog has received around 20 complaints about emailed invoices from scammers posing as legitimate suppliers to a small business.

    Schaper says around seven small businesses have so far been duped by the scam, handing over between $10,000 and $500,000 to the scammers.

    “All up around $600,000 [in losses] has been reported to us,” he says. “But they are just the businesses that have made a report to us.”

    “Typically 90% of the people who report a scam to us are doing the good citizen thing, they have been approached but not fallen for the scam.

    “But for a third of reports to have lost money is serious.”

    Read More: Don’t pay your bill to the wrong Telstra

    Schaper says it appears the scam has originated in North America and it is not uncommon for scammers who have some success in one territory to move on to other countries.

    He is warning small businesses to closely scrutinise any email invoices requesting payment as the fake invoices in this case may still contain the legitimate supplier’s name and logo, as well as links to the supplier’s website. The only changes will be in the bank account details where the money is to be deposited and possibly in the email address the invoice is being sent from.

    Schaper says in the reported cases, a small business received an invoice from what appeared to be one of its regular suppliers. But in between the supplier issuing the invoice and it landing in the inbox of the business, the invoice was taken offline by scammers and the bank account details modified. The small business subsequently paid the invoice into the wrong account and only discovered the error when the supplier contacted it to ask where the payment was.

    According to Schaper, email scams targeted at small businesses are becoming more sophisticated and small businesses are more likely to fall victim.

    “They are becoming harder to detect,” he says.

    “In a perfect world, you would ring your client to say you have received the invoice and cross-check. But these transactions can be for international sales or online sales and they are happening at all times of the night and day.”

    To guard against potential scams, Schaper recommends small businesses establish a multi-person approval process for any payments, with two or more people cross-checking payments that are made by the company.

    He also recommends ensuring accounting software is as up-to-date as possible, as accounting programs can often pick up irregularities in bank account details. It is also important to update any electronic security software on company computers.

    At the end of the day, Schaper says it pays to take an extra five minutes to check any invoices before they are paid.

    “The temptation is to pay the invoice as soon as you get it, but just spend a few extra minutes,” he says.

    Small businesses concerned about the scam can find more information on the ACCC ScamWatch website.

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    Nespresso is facing a legal battle in France against one its smaller competitors that claims it lost millions of dollars in revenue when the coffee giant modified its machines to jam when the products of other companies were used.

    Swiss coffee capsule maker Ethical Coffee Company, which makes coffee capsules that can be used in Nespresso machines, has lodged a complaint in a Paris court for patent infringement, according to AFP.

    Ethical Coffee Company claims it lost at least €50 million ($225 million) when the new Pixie range of Nespresso machines began featuring a "harpoon" device, which jams non-Nespresso capsules.

    The Ethical Coffee Company claims the move went against its patent.

    Nespresso is owned by Nestle, one of the word’s leading food companies. Its ‘pod’ style coffee has gained worldwide popularity in recent years off the back of a successful advertising campaign with actor George Clooney. It is undoubtedly the biggest player in the coffee capsule market.

    The legal stoush between the two companies began in 2012, when Ethical launched a civil suit in the Paris Commercial Court alleging Nespresso had acted in an abusive manner through a systematic campaign against Ethical’s compatible capsules, according to Lexology. It claimed Nespresso encouraged customers to use only Nespresso capsules in their Nespresso coffee machines without any objective reason.

    Ethical won the case last year, with Nespresso ordered to pay €500,000 to its competitor and €40,000 in legal fees.

    NDA Law director and partner John MacPhail told SmartCompany Nespresso’s move to protect its coffee capsules is likely to be part of its commercial method to sell its machines cheaply and earn most of its profit from its pods.

    “But that sort of cherry picking is likely to give rise to cheaper competitors on the aftermarket supply side,” says MacPhail.

    “It’s a risky move by Nestle.”

    MacPhail says similar legal action by small coffee capsule manufacturers in Australia would be complicated and would not be possible unless both the company and Nestle had the relevant IP rights registered here.

    Intellectual property lawyer Nicholas Milne, partner at Patentec Patent Attorneys, agrees it would be difficult to claim patent infringement on the basis that a mechanism rejects different capsules.

    “In order for patent infringement to be claimed, the technology for rejecting the capsule would have to be specifically patented,” says Milne.

    Nespresso and Ethical Coffee Company were contacted but SmartCompany did not receive a response prior to publication.

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    An Australia Post worker’s bid for workplace compensation can proceed after the mail carrier failed to convince the Administrative Appeals Tribunal the worker’s back injury was the result of a “sneezing fit”.

    Instead, senior tribunal member Jill Toohey ruled Vang Hung Chau’s work at Australia Post had aggravated an existing spinal condition and Australia Post is liable to pay him compensation for the injury.

    Chau, who had worked for Australia Post since 1990, told the tribunal he had seriously injured his back while working overtime in June 2012.

    Chau was moving trays weighing 10 kilograms or more on to trolleys and said he felt a sharp pain in his lower back just prior to finishing the shift.

    He thought the pain would go away and so decided not to report the incident immediately. Instead, he went home but took two days off work after visiting his local doctor. He subsequently took two months off work before returning to his job.

    After originally denying Chau compensation in July 2013, Australia Post subsequently changed its mind and agreed to compensate him for the injury. However, Australia Post said Chau was no longer suffering from the effects of the injury by November 2013 but Chau took that decision to the tribunal.

    In its defence, Australia Post argued Chau injured his back after he sneezed while driving on the morning after the alleged work incident, based on notes from his general practitioner, who Chau visited that morning.

    However, the GP later revised his notes in response to a request from Chau’s solicitors to say the sneezing was not the cause of the back pain.

    Australia Post also presented evidence that Chau had been suffering from a back injury for 13 years and claimed there were inconsistencies in reports from different doctors.

    But Toohey sided with Chau, accepting Chau’s counsel’s argument that if Chau was in his car and driving to the doctor on the morning of the alleged sneezing fit, he must have already been in pain.

    If this was not the case, he would have had to have been driving somewhere else very early that morning.

    Toohey was also satisfied Chau was still suffering from the effects of his injury after November 2013 and ultimately, his employment “contributed to a significant degree” to aggravated a pre-existing condition.

    A spokesperson for Australia Post told SmartCompany this morning Australia Post is “considering whether it has grounds to appeal” but said it is “too early to comment on the implications of this decision”.

    Andrew Klein, special counsel at Russell Kennedy Lawyers, told SmartCompany it is unusual for the tribunal to overlook contemporaneous notes from a medical practitioner, although Toohey did note that such evidence should not to be dismissed lightly.

    “Notes taken at the time of a consultation, in the normal course of things, would usually trump any other evidence,” Klein says.

    “They are generally trusted more than anything else.”

    However, Klein says this case instead turned on the “discrete piece of factual evidence” relating to the time at which Chau was in his car.

    “It’s indicative of the beneficial nature of the legislation,” Klein says.

    “If something is finely balanced … as it was in this one … the tribunal will prefer the interpretation that favours the applicant as the legislation is designed to help people who have been hurt or injured at work.”

    Klein says the doctor‘s revision of his notes from the initial consultation also worked in Chau’s favour, helping to “negate what would otherwise have been a pretty strong case from Australia Post”.

    However, Klein says the tribunal did indicate it did not simply just accept Chau’s version of events, as it was sceptical about the evidence of his daughter, who was in the car with him at the time of the alleged sneezing and said she had no recollection of her dad sneezing.

    Klein says Australia Post’s argument that Chau’s pre-existing condition would have deteriorated whether he was working also failed to convince the tribunal as it was based on a dated medical report that only referred to an isolated incident.

    “To make an argument that an injury is part of a degenerative back condition, it requires strong evidence to establish that,” Klein says.

    “The ultimate lesson is the more records you have and the better records you have, the stronger position you’ll be in.”

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    A bakery in the United States is being investigated for potential discrimination after it refused to ice cakes for a customer with the words “God hates gays”.

    Azucar Bakery in Denver, Colorado  refused to ice cakes for Bill Jack after he ordered several cakes in the shape of bibles in March last year.

    Jack has since filed a complaint with the civil rights division of the Department of Regulatory Agencies, alleging the business is infringing on his religious freedom.

    Business owner Marjorie Silva told USA Todayshe thought it was unfair the customer was accusing her of discrimination when she thought he was the one that was being discriminatory.

    “After I read it, I was like ‘No way’,” she said.

    “We’re not doing this. This is just very discriminatory and hateful.”

    But could a similar action be brought against an Australian business?

    Damin Murdock, principle lawyer of Murdock Cheng Legal Practice, told SmartCompany business owners in Australia have the right to do business with whoever they please – so long as they are not varying who their customers are on factors which could be considered discriminatory.

    “As a business owner, every dealing you have has an offer and an acceptance,” Murdock says.

    “In this case, the offer was made to make a cake and the baker accepted that offer and likely would have quoted a price for that at the time that the contract came into existence. Subsequently, it appears that the customer attempted to vary the terms of the contract which subsequently were not accepted by the baker.”

    Murdock says from a contractual perspective, there would be no requirement for the baker to accept that variation because the terms would have been agreed to prior to the cake being made.

    “The difference in this case though is that there’s been an allegation that the baker has refused to vary the terms of the contract on grounds which have been alleged to be religious discrimination,” he says.

    Murdock points out that because the customer attempted to vary the agreement unilaterally, the business owner was placed in a position where either way her actions could have been deemed discriminatory. However, to the best of his knowledge, there have been no similar cases in Australia.

    “However, if this was in Australia I would think that the baker could not be forced to commit an act which she believed to be discriminatory and possibly in contravention of the Sex Discrimination Act,” he says.  

    Shane Wescott, principal at Patron Legal, agrees and says a similar action brought about in Australia would be unlikely to succeed.

    “We do have various anti-vilification laws, at both federal and state level, and some of these specifically establish ‘religion’ or ‘religious belief’ as a protected category,” Wescott says.

    “However, we do not have a constitutionally enshrined right to freedom of speech, as they do in the USA, and, in my opinion, homophobic remarks would not be covered by the ‘religious belief’ protections.”

    Wescott also points out that in Australia we have “numerous strong protections” against anti-gay hate speech which reflects the community's attitude that anti-gay discrimination is unacceptable.

    “In Australia, the baker may even have exposed themselves to a legal risk if they had have agreed to the customer’s request,” he says.

    But Wescott says it is important for Australian businesses to ensure they are not discriminating against their customers.

    “In today's world, with the internet and social media, backlash against businesses accused of discrimination can be swift and severe,” he says.

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

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    Two of the world’s largest condom makers will fight out a patent legal battle in Australian courts this year over the rights to a “natural feeling” non-latex condom.

    Australian rubber company Ansell has filed a claim in the Australian Federal Court against RB, the British parent company of condom manufacturer Durex.

    Ansell claims Durex’s RealFeel condom products are infringing on a number of claims of the patent of its popular SKYN range of prophylactics, according to a statement released by the company when the court documents were lodged last November.

    Ansell claims the infringement by the RealFeel products has resulted in damage to the $3.3 billion ASX-listed company, including loss of sales to its SKYN product.

    Ansell will attempt to stop Durex from selling its RealFeel product in Australia, as well as seeking orders for destruction of all stocks of the Durex RealFeel products, damages or an account of profits lost by Ansell, and the company’s legal costs.

    A patent for SKYN condoms, which are promoted by Ansell as “the closest thing to wearing nothing”, was granted to Ansell in Australia in 2012, although the product has been on Australian shelves since 2008.

    While Durex has a lion’s share of the condom market worldwide, Ansell battles the company for market share in Australia.

    NDA Law director and partner John MacPhail told SmartCompany the fact Ansell is a market leader in Australia is likely why it chose to file its claim in Australian courts.

    MacPhail says the case appears to be a fairly straightforward claim for the patent of synthetic rubber technology and says the only obstacle he could see in Ansell’s claim to the patent was that the product had been sold in Australia before its patent was granted, which would usually invalidate the claim for the patent. But he says in this case, Ansell has “played it safe” and taken steps to protect itself by also registering the patent in the US, which sidesteps that invalidation.

    “Reading between the lines, there appears to be two reasons for investing in this patent,” MacPhail says.

    “One, the product offers greater sensitivity; and, two, it offers an alternative to those with latex allergies. The first of those reasons is the true marketing value of the product. It’s not the fact that it’s not latex, but the fact it can be made very thin.”

    RB, which also owns brands such as Dettol and Strepsils, issued a statement to SmartCompany declining to comment as the matter was ongoing.

    SmartCompany contacted Ansell but the company declined to comment.

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    A woman charged over alleged involvement in one of Australia’s largest home loan frauds faced court in Melbourne yesterday. 

    Manija Zayee is yet to enter a plea on charges linked to an alleged $110 million home loan fraud.

    Read more: ASIC defends its $110 million Myra Home Loans alleged fraud investigation timetable

    Zayee was charged after a lengthy investigation by the Australian Securities and Investments Commission into the activities of her mortgage broker partner Najam Shah and colleague Aizaz Hassan.

    The fraud allegedly involved using fake documents to apply for at least 350 loans with numerous lenders, including the Commonwealth Bank, Westpac, ANZ, National Australia Bank and others.

    ASIC alleges they submitted bank statements, pay slips, citizenship certificates and statutory declarations on behalf of clients from the now-defunct suburban Footscray company Myra Financial Services, where they worked, for loan applications between 2008 and 2011.

    The company was registered in Zayee’s name.

    Zayee has been charged with obtaining a financial advantage by deception by submitting false documents to secure a $136,000 loan from the Bank of Queensland.

    Siobhan Hayden, chief executive of the Mortgage & Finance Association of Australia, told SmartCompany the MFAA only became aware of the fraud when Shah and Hassan were arrested.

    Shah was a mortgage broker and previously registered with the MFAA but Hassan only acted as an introducer. 

    “It appears that the fraud has been perpetrated around validating deposits and employment credentials,” Hayden says. 

    “I’m keen like a lot of people to understand how it has been done, they have obviously used quite a sophisticated system. I would have to assume here the consumers were well aware of what is being structured for them so they could secure the loan.”

    Hayden says from her discussion with the lenders involved she understands not one loan is in fault with only a few in slight arrears.

    “$110 million has not been lost, it has been fraudulently acquired but the banks are still processing it,” she says.

    Hayden says the MFAA did not have to cancel Shah’s registration as it had already expired two months prior to the exposure of the alleged fraud. 

    “You can’t mitigate when someone chooses to be fraudulent,” she says.

    Hayden says people should still have confidence in the integrity of mortgage brokers.

    “Nearly 52% of loans introduced to lenders today are by brokers, so consumer confidence in brokers is still high,” she says.

    “If any consumer ever feels uncomfortable about services provided they should contact the MFAA to raise a concern.”

    ASIC has come under fire for its investigation of the alleged fraud after it was revealed Hassan was capable of writing loans until his accreditation was stopped on January 6, 2015. 

    Hassan appeared before a bail justice on January 2, 2015. 

    A spokesperson for ASIC defended the regulators role noting that the investigation into Myra Financial Services had been conducted over several years.

    "It has necessarily been a long, complex and at times extremely sensitive operation,” the spokesperson said. 

    "There are some important parts of the investigation which we are not able to divulge.”

    The spokesperson said ASIC does not as a rule flag an impending arrest to an employer or to other related parties.

    "To do so would increase the risk of the person of interest being tipped off, even if this was inadvertent,” the spokesperson said. 

    "It would potentially place the employer in a compromised position. For example, the employer may wish to suddenly treat the employee differently – perhaps even sack them.”

    A committal hearing for Zayee has been set for April 17, the same date Shah and Hassan will next appear in court.

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    The offending Vegemite crust pizza

    Pizza Hut Australia has been forced to remove advertising material for its latest promotion, after the parent company of Vegemite objected to the unauthorised use of the iconic spread’s name and logo in connection with Pizza Hut’s Mitey Stuffed Crust Pizza.

    Launched to coincide with Australia Day, the Mitey Stuffed Crust Pizza features a Vegemite and cheese-filled pizza crust. The Vegemite brand was included in videos and other images as part of the launch but Mumbrella reports the advertising material has now been removed from the Pizza Hut website and social media accounts.

    Images of the pizza are still visible on the Pizza Hut Australia Facebook page, although the images do not include the Vegemite name or logo.

    The Vegemite name has been trademarked since 1923 and along with trademarks for several Vegemite logos, is currently owned by Mondelez International, the parent company of Vegemite owner Kraft.

    Julia Marget, head of corporate and government affairs for foods, cheese and grocery in the Asia Pacific for Mondelez Australia, confirmed to SmartCompany Mondelez is “in discussion with Pizza Hut regarding the unauthorised use of the Vegemite brand in their marketing”.

    “Vegemite is one of the most loved and trusted brands in Australia,” Marget said.

    “As the custodian of the Vegemite brand, we go to great lengths to ensure that any brand association is carefully assessed prior to granting approval. Companies that associate themselves with or leverage off our brand without authorisation will be aggressively pursued.”

    “We take the protection of our brands extremely seriously and will take all measures available to use to ensure that continued love and trust in the Vegemite brand that our consumers expect,” she said.

    In a statement issued to SmartCompany, Pizza Hut Australia said it is “currently reviewing all imagery relating to the promotion of the Mitey Stuffed Crust Pizza” for “legal reasons”.

    The company declined to elaborate on the “legal reasons” behind the review.

    Jamie White, solicitor director at Pod Legal, told SmartCompany Australian businesses must have express permission to use another company’s name, logo or other imagery in advertising.

    “Failure to do so might give rise to action under trademarks law, the Australian Consumer Law or under the common law tort of passing off,” White says.

    White says in this case, the owner of the Vegemite trademarks may have grounds for action under the Australian Trademarks Act, but says their primary concern is more likely to be that “Pizza Hut is suggesting an affiliation with, approval or endorsement of, Vegemite and that is clearly not the case”.

    “And this is central to an action under the deceptive trade practice provisions of the Australian Consumer Law and or under the tort of passing off, which assists to protect the reputation and goodwill of Australian brands,” he says.

    White says the remedies available to Australian businesses that believe another business is using their intellectual property without permission include an injunction, which prevents the infringing conduct from continuing, or a court order for the infringing company to pay damages.

    “However, perhaps an even greater consequence that a violating brand faces is the damage to its brand, and in some cases, that can irreparable,” White says.

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    Media identity Craig Hutchison receives some on-ground instruction from Sam Newman

    Melbourne-based media company Crocmedia has been fined $24,000 over the “exploitative” treatment of two of its interns.

    The Fair Work Ombudsman Launched legal action in July 2013 against the radio and television producer, alleging it had breached its obligations towards interns.

    The Federal Circuit Court yesterday handed a $24,000 penalty to the company, which is owned by well-known journalist and businessman Craig Hutchison, for breaching the Fair Work Act.

    Read more: How should you deal with interns?

    Judge Grant Riethmuller found Crocmedia had not paid any wages to two young workers, aged 23 and 20 at the time, despite having engaged them in employment for one year and six months respectively.

    Crocmedia had instead characterised the workers as ‘volunteers’ and had only reimbursed them each between $75 and $120 per shift for expenses.

    The two began work with the company during a three-week unpaid work experience stint and were then hired for ‘casual work’ by the company.

    The employees primarily worked on an ad hoc basis in the role of ‘producers’ for the “All Night Appetite” radio program, which was regularly broadcast on the SEN network from midnight to 6am.

    In 2013, the Fair Work Ombudsman found the workers were owed a total of $22,168 for their work. At the time, Crocmedia complied with investigations by the watchdog and back-paid both employees, as well as a third worker who was owed more than $28,000.

    While Judge Riethmuller said he did not believe Crocmedia had been openly defiant of the law, he said the company knew its actions breached minimum wage requirements.

    “[Crocmedia] cannot avoid the proposition that it is, at best, dishonourable to profit from the work of volunteers, and at worst, exploitative,” Riethmuller said.

    “I am not persuaded that [Crocmedia] engaged in a deliberate strategy to exploit the employees, although it is clear that [Crocmedia] was content to receive the benefits that flowed from the arrangement, and that the arrangement itself, when viewed objectively, was exploitative.”

    Hutchison, chief executive of Crocmedia, said in a statement to SmartCompany Crocmedia has “been working cooperatively and positively with Fair Work Australia and accept[s] the penalty handed down”.

    “We are pleased the matter has now come to a resolution,” Hutchinson added. 

    Emma Starkey, senior associate employment lawyer at Maurice Blackburn, told SmartCompany the judgment was a significant decision regarding internships.

    “In this case the court recognises that Crocmedia had contrition and had taken steps to rectify the underpayments, but it also suggests in the future fines we will see for employers who exploit interns are likely to increase,” says Starkey.

    “It sends a strong message the courts are not going to permit exploitation of interns.”

    Starkey says employers must take proactive steps to understand how the law pertains to unpaid work.

    “Some of the key factors include, how long is the engagement? The longer it is, the more likely it is an employment relationship. In this decision it was around one year,” she says.

    “Other factors include, what tasks are they given? In this case they were effectively the producers of the radio show. Also consider, who is getting the benefit. Is the intern getting the work experience benefit or is the company benefiting commercially?”

    But Starkey says this case should not put off employers from taking on interns.

    “Internships undertaken properly serve a good purpose,” she says.

    “Employers shouldn’t necessarily turn away from engaging interns, but they need to do so properly and if they continue to employ them, they have to pay them.”

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    The operator of two Gloria Jeans coffee franchises has been fined $110,500 by the Federal Circuit Court for paying workers as little as $8 an hour.

    Tsinman Fu and Ping Ostrovskih, the owners and operators of Gloria Jeans Caulfield, were each smacked with fines of $17,500 and $13,000 respectively, while their company, Primeage Pty Ltd, was hit with a further $80,000 penalty.

    The Fair Work Ombudsman commenced legal action in April last year after investigations uncovered 22 casual employees had been paid flat rates of $8 to $10 an hour, with the underpayments totalling $83,566.

    The majority of the workers were international students from non-English speaking backgrounds and a third of them were under 21 year of age. They were owed payments ranging from $219 to $17,103 each.

    The investigation also revealed workplace laws relating to pay slips, meal breaks and employment records had been breached.

    In labelling the pair’s actions as “deliberate”, Judge Grant Riethmuller found Fu and Ostrovskih had previously been found to have underpaid an employee’s entitlements through another company, Noval Enterprise Pty Ltd.

    Riethmuller said as Gloria Jeans franchisees, the pair would have had access to information, advice and assistance in relation to human recourses from the franchisor. He also said Fu’s Bachelor of Business degree from Deakin University was evidence the business owner should have been aware of workplace laws.

    “It appears to me that it is reasonable to draw an inference that a person who holds a Bachelor of Business degree would, either through training in the degree, or general knowledge given their obvious interest in the operation of businesses, be aware that there are minimum standards for employees, and of the necessity to ensure that those standards were identified and complied with,” said Riethmuller.

    He said the restaurant and hospitality industry was “notorious for non-compliance” and said workers within the industry often felt unable to voice their concerns for fear of losing their jobs.

    Maurice Blackburn employment lawyer Jenna Vardi told SmartCompany the need for a wider deterrent in the hospitality industry played a significant role in the judgement.

    “The case makes it clear courts will impose significant penalties for underpayments of vulnerable workers and on the business operators themselves,” says Vardi.

    Vardi says the Fair Work Ombudsman has pursued a number of cases against businesses that have underpaid vulnerable workers, such as young people and overseas workers, suggesting the area is a priority for the watchdog.

    “People will always try to get away with things and rort the system, but the Fair Work Ombudsman has said it will continue to investigate and prosecute employers who do the wrong thing,” she says.

    “This is a clear warning to keep on top of procedures and industrial instruments.”

    In a statement issued to SmartCompany, Gloria Jeans said the company has “training programs and support systems in place to support Franchise Partners in their business operations”.

    “Each Gloria Jean's Coffees Franchise Partner is responsible for ensuring their business is compliant with employment law, the Fair Work Act and all relevant employment awards,” the company added.

    SmartCompany contacted Gloria Jeans Caulfield but did not receive a response prior to publication.

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    An Adelaide real estate business has been fined $29,790 in the Federal Circuit Court after two of its sales employees were paid significantly less than the company’s job ads had suggested.

    One salesman, who had an MBA in sales and marketing and 22-years’ experience in commercial sales, was paid less than $7000 for a job that was advertised with a potential salary of at least $120,000.

    The employee responded to an ad for a salesperson placed by residential development company Longridge Group in 2011, which promised “an earning structure that doesn’t limit earnings – $120k++”.

    But he quit after 10 months of signing up customers to Longridge building contracts, having earned just $6704 for signing up four customers. He should have been paid $20,013. 

    A second employee, who had qualifications in real estate and a certificate in building and construction, also took a job with the company after it was advertised as having a salary of $70,000 plus.

    He told the court he understood he would be able to earn between $70,000 and $80,000 a year from selling Longridge homes, but quit after six months, having not sold any homes and not being paid anything at all. He should have been paid minimum wages and entitlements totalling $11,647.

    The Fair Work Ombudsman launched legal action against Longridge after the employees complained to the watchdog.

    Longridge later admitted it had inadvertently breached workplace laws by paying the two employees on a commission-only basis. It subsequently back-paid the workers in full.

    Judge Stewart Brown said the employees provided valuable services to Longridge for which they were not remunerated.

    “They manned (Longridge’s) display villages, they fielded inquiries from the general public, they acted as the public face of Longridge,” Judge Brown said.

    “The gentlemen in question worked for periods of months, rather than weeks or days, before they each threw in the towel (with Longridge) and sought alternative employment.”

    Employment lawyer and M+K Lawyers partner Andrew Douglas told SmartCompany despite the misleading ads, this was a simple case in which the employer failed to pay the minimum entitlements to workers.

    Douglas says even commission-based jobs attract minimum award entitlements, including annual leave.

    “It is very common in number sale-based jobs to offer commission only employment,” says Douglas.

    “But there are minimum entitlement that exist under the award, so employers should be aware of awards before offering people employment.”

    SmartCompany contacted Longridge but the company declined to comment.

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    An Airbnb customer who used the short-term accommodation platform for the first time has had a rude start to her morning after an unexpected visit from the tenant’s real estate agent.

    Lily Ray, a freelancer from Newcastle, was staying at an Airbnb apartment in North Melbourne last week only to be interrupted by a routine property inspection.

    “She basically said do you know what you’re doing is illegal, it’s subletting, it’s illegal in Australia,” she says.

    “She said don’t worry, what you’re doing isn’t a problem – but what she’s doing is [the tenant subletting the room on Airbnb].”

    Ray says the woman she was subletting from rents two properties in the same apartment block – one as a permanent home and the other as a property which she regularly sublets on Airbnb for a small profit.

    “They got in touch with her and said you have to get out of this one,” Ray says.

    “Most likely she will have to leave within a couple of months.”

    According to the Tenants Union of Victoria, tenants are not allowed to sublet their property without their landlord’s written consent.

    In New South Wales, property owners have been threatened with fines of more than $1 million for renting rooms on Airbnb and other short-term accommodation websites due to running “unauthorised” bed and breakfasts.

    Cameron McEvoy, a property investor and commentator, told StartupSmart it would appear a real estate agency would be in its right to cease a tenant’s contract for subletting an apartment or room on Airbnb if it broke an existing contract or agreement.

    “From a Sydney context I don’t think Airbnb has taken off to the degree it would like to,” he says.

    “There are so many legal reasons why it’s not feasible in Australia. Any stay of less than three months requires a TA [tenancy agreement]. Every time you sublet you have to submit a TA and if you have someone staying for one night you just can’t do that.”

    While fellow fast-growing startup Uber has raised more than $4 billion since its launch in 2010 – which it has partially used to fight off regulators around the globe by paying fines issued to drivers – Airbnb has raised a significantly lower total of $826 million as of August last year.

    McEvoy says it will be interesting to see whether Airbnb takes a similar approach to Uber in pressuring state governments to wind back regulation.

    “Locally I think they’ll make a business call as to whether they’ll just leave the market or fight hammer and tong. They will probably have to do one of those two things.” 

    Despite having her stay at an Airbnb property interrupted by a cranky real estate agent, Ray says she will definitely be using the short-term accommodation site again.

    “It was still much better than what I could get for that money with a hotel room,” she says.

    “And the woman who rented to us was very apologetic and didn’t blame us for telling the truth at all.”

    A spokesperson for Airbnb told StartupSmart the company advises its hosts to familiar themselves with local regulations that “differ all over the world”.

    “But one of the things that we consistently hear is that many of the regulations and conditions are outdated and difficult to interpret because they were written in the 1960s and 70s - long before anyone had thought about the sharing economy or Airbnb,” they said.

    “That's why we've been talking with policy makers about the need for clear, progressive and fair laws that allow for home sharing.”

    This article originally appeared on Startup Smart.

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    Ignorance of the law is no defence and the Australian Tax Office doesn’t take very kindly to “I didn’t know” as an excuse either. So what’s a busy small business person or entrepreneur to do when there’s a raft of tax and legal changes every year. 

    We’ve spoken to legal and tax experts to uncover the key changes to the legal and tax system which you need to be across this year.

    Here’s the SmartCompany cheat sheet for the key tax and legal changes of 2015:


    1. Legal changes


    Rohan Harris, principal at law firm Russell Kennedy, told SmartCompany franchising, privacy and company directorship are all areas of legislative change that small businesses need to watch out for in 2015.




    The myriad of small businesses that operate under franchise systems should be aware of the new Franchising Code of Conduct which came into operation on January 1, 2015. 

    “There is a new duty imposed on franchisors and franchisees to act in good faith when dealing with each other,” Harris says. 

    “Franchisors must now provide franchisees with an information sheet outlining the risks and rewards of franchising.”

    Harris says greater penalties may now also be imposed for breaches of the code.  “Franchisors should be making sure that their documentation and processes are updated to comply with the new requirements,” he says.


    Directors’ duties


    A significant portion of small businesses are held in private companies, and Harris says the Abbot government’s promised 1.5% reduction in the company tax rate from July 1, 2015 may only increase that trend. 

    “Throughout 2014 the Australian Securities and Investments Commission worked with a number of state and federal government agencies as part of an ATO chaired ‘Fix It Squad’,” Harris says.

    “One of the recommendations from the squad was for ASIC to work with small business to increase awareness of what it means to be a company director.”

    He says company directors can also expect ASIC will continue to be on the look out for small business directors who breach their duties and should be held accountable.

    “I expect that ASIC will continue to look to disqualify directors of failed companies, particularly in the construction, labour hire, transport, security and cleaning industries where there have been a disproportionate number of allegations of illegal phoenix activity,” Harris says.

    “Directors who continue to allow their businesses to trade whilst insolvent will continue to be held personally accountable for insolvent trading liabilities.”




    The new Australian Privacy Principles are now in full swing, including stronger enforcement powers than before for the Office of the Australian Information Commissioner (OAIC).

    “I expect that the Commissioner will be proactively seeking to exercise his increased powers,” Harris says.  

    “Small businesses in particular need to be wary about using cloud services to store ‘personal information’ concerning their staff, customers and suppliers.”

    Harris recommends SMEs check their privacy policies are sufficient to cater for the use of offshore cloud servers, and updating as necessary.




    The landscape for the increasing number of business owners who will be looking to retire in the next few years will continue to shift, according to Harris. 

    “Business owners are pro-active about preserving and improving the value of their business and wealth through good succession planning will benefit,” he says.   

    “This will also continue to present opportunities for the next generation of business owners.” 

    Harris says business owners who fail to implement a well-considered succession plan will be left behind.


    2. Tax


    The Abbott government has promised a wholesale review of the tax system and is busy at work on other changes to taxation which are scheduled to be implemented this year. 

    Tristan Webb, national tax director at Crowe Horwath, says the rules governing the taxation of employee share schemes and superannuation are all in question. 


    Employee share scheme


    The government released draft legislation last month outlining proposed changes to employee share option schemes.

    The draft legislation provides more detail on the proposed changes, which the government committed to making last October, as part of its Industry Innovation and Competiveness Agenda.

    But it has already proved controversial as the draft legislation only applies to Australian early-stage startups – companies with less than $50 million turnover, existing for less than 10 years.

    It excludes listed companies and won’t be of assistance to Australians employed by a foreign company if they get equity in that company.

    Nevertheless, Webb says if the draft legislation is implemented this year it’s good news for SMEs.

    “For smaller companies which struggle to get capital from elsewhere, this is a good way to attract capital and reward key employees,” he says.


    Superannuation Clearing House


    The Small Business Superannuation Clearing House is set to be broadened and is now available to any business with turnover of less than $2 million.

    Webb says this is “a free online service that allows people to satisfy super guarantee allowance pretty easily and saves a lot of compliance costs.”

    He anticipates the changes to broaden the Superannuation Clearing House should pass before the end of the financial year.


    Tax white paper and the GST


    Webb says there are also further changes to the tax system which have been “hanging around” from the days of the previous government and “need to be tidied up”.

    A rewrite of Division 7A  is occurring alongside a broader consideration by the government of the taxation of trusts.

    Division 7A has been a huge bugbear for businesses since it was introduced around 17 years ago.

    The law impacts private companies with trusts and aims to ensure funds can’t be removed from the company and given to shareholders or their associates tax free, but its effectiveness is debatable.

    “All of this seems to be in limbo and it seems to be because it will be potentially tied in to the tax white paper,” Webb says.

    In terms of GST, Webb predicts the promised tax white paper will flag an increase in the GST rate or a broadening of the base.

    “We’d prefer to see a broadening of the base because you can target the equity concerns through the welfare system,” Webb says.

    “It just makes the operation of the tax more efficient so you don’t have stupid court cases over whether a biscuit is a biscuit or a bread.”

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    The operator of a chicken shop in Victoria has come under fire after deducting $50 from each of his staff members’ wages after one employee’s pay packet was allegedly stolen.

    Brett Wilson, whose 18-year-old daughter works around 15 hours a week at the store, contacted talkback radio station 3AW after his daughter’s boss docked everyone’s pay to cover the cost of the lost money.

    The cash was allegedly stolen from a filing cabinet and the decision to dock everyone’s pay was made after no one came forward.

    “She approached her boss in the back office and said what’s going on here,” Wilson told 3AW host Neil Mitchell.

    “He said last week a pay packet from another employee was taken out of a filing cabinet and no one has come forward to say who did it, so I’ve taken $50 out of each and everyone’s pay packet to cover the loss of the wages.”

    The radio station chose not to name the business, however, says it has since made contact with the operator who assured them he would refund the money.  

    Workplace lawyer Peter Vitale told SmartCompany it can be lawful for an employer to deduct money from an employee’s wages, but “only in very limited circumstances”.

    “An employer can deduct money from an employee’s pay if the deduction is principally for the employee’s benefit,” he says.

    “So, for example, if the employee buys goods or services from the employer and the employee has approved a specific deduction in advance in writing.”

    Vitale says should an employee suspect they have had their pay deducted, there are a number of avenues to take – but the first should be having a discussion with their boss.

    “If an employee feels that money has not been correctly deducted from their wages, they should first take the matter up with their employer to see if there is a legitimate explanation or perhaps that an error has been made,” Vitale says.

    “If the matter can’t be resolved, the employee is able to bring the matter to the attention of the Fair Work Ombudsman.”

    Last year, a Perth café was stung by the Fair Work Ombudsman after docking an employee’s wages because a pork belly dish was “not crispy enough”.

    The business has since been required to pay thousands of dollars in penalties and compensation due to unlawful deductions which took place over an 11-month period.

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    The private life of one of Australia’s richest families has been laid bare in an explosive court case in the Supreme Court of Western Australia yesterday. 

    Michael Wright died in 2012 aged 74 with an estimated wealth of $1.5 billion.

    His father, Peter Wright, made his fortune as the business partner of the late Lang Hancock exploring the Pilbara.

    Michael Wright worked for the family business and then bought a Margaret River winery, Voyager Estate, in 1991, despite being a teetotaller.

    After Peter Wright’s death, Michael Wright inherited a $900 million fortune along with his sister, Angela Bennett.

    Then in 2010, he and Bennett received $1 billion from mining magnate Gina Rinehart after she was legally forced to give up 25% of the Rhodes Ridges iron ore mine.

    Wright married four times and was known to have three children but now university student Olivia Mead has emerged as Wright’s “secret” daughter.

    Mead is suing the executor of Wright’s will and his two other daughters Alexandra Burt and Leonie Baldock.

    It appears Wright’s son, Myles Wright, was cut from his father’s estate.

    Mead is claiming the $3 million trust set up for her by Wright is unfair.

    Fairfax reports her list of demands include a $2.5 million home, a $250,000 diamond studded bass guitar, $10,000 a year to spend on accessories and shoes and an axolotl (Mexican walking fish). 

    Mead said she wanted to have four children, a $100,000 wedding and to buy a “cosy” two-storey home in South Fremantle. 

    Mead told the court yesterday she first met her father when she was nine months old, but their relationship was “sporadic”.

    “Overall, I did not have a close relationship with dad,” she said in an affidavit read in court.

    Giving evidence, Burt told the court Wright had once told her he would “remove” her from his estate because if you were “out of the family” you were “out of the business”.

    Fairfax reports Burt was asked if business was more important to her father than family, to which she said, “Sometimes yes.”

    Burt said Wright could be “brutal” and family meetings often required formal agendas and note-taking. 

    She told the court Wright was a business orientated individual who wanted his children to study “traditional” degrees such as accounting, law or commerce that allowed them to become professionals.

    The case continues today. 

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    The UK Employment Appeal Tribunal has upheld an appeal from a games retailer that sacked an employee for making offensive comments on Twitter.

    The Newcastle-upon-Tyne Employment Tribunal initially ruled the employee, referred to as Mr Laws, was unfairly dismissed from his job as a risk and loss prevention investigation manager at Game Retail, after he was fired for misconduct when a co-worker complained of his use of the social media platform.

    Laws initially opened a Twitter account sometime before July 2012 for personal use but chose to follow 100 Game Retail stores from his account, 65 of which followed him back. The tribunal heard over time, he started using his Twitter account for limited work purposes as well as personal and followed the stores he was responsible for managing to monitor any inappropriate activity by employees of those stores.

    A co-worker complained to the company many of Laws’ Twitter posts were “offensive, threatening and obscene”, referring to diatribes he launched against various groups, including football fans, dentists and caravanners.

    But the tribunal ruled Laws had not registered for Twitter as part of his job or used the platform as part of his job. It ruled he was unfairly dismissed because the offensive tweets were not related to work, did not identify him as a Game Retail employee and were made during the employee’s own time.

    Also in the employee’s favour was Game Retail’s lack of social media use policy that explicitly stated misuse of social media in an employee’s own time would be regarded as misconduct.

    However, the UK Employment Appeal Tribunal sided with Game Retail in November and sent the case back to another tribunal to be reheard.

    In the second ruling, the tribunal decided the Newcastle-upon-Tyne Employment Tribunal had not given sufficient consideration to the “public” nature of Twitter, or Laws’ decision not to use Twitter’s privacy setting to restrict who could see his tweets.

    While the tribunal acknowledged Laws’ claim that he only intended to use his Twitter account for personal use, it said that claim needed to be balanced by the fact he chose to follow 100 Game Retail stores via the account and 65 of those stores followed him back.

    Employment lawyer and partner at M+K Lawyers, Andrew Douglas, told SmartCompany the use of social media by employees has repeatedly come before Australian courts and although cases in Australia have tended to involve Facebook, “Twitter is just another social media platform” and “the principles are identical”.

    “If you use a social media platform in or out of work in a way that is threatening to people at work, abusive or bullying or damaging to the brand of your employer, it is highly likely it will end in disciplinary action,” Douglas says.

    But Douglas says employers of all sizes must have an “explicit social media policy” in order to be able to take disciplinary action against employees who misuse social media outside of work.

    “Introduce a policy that clearly stipulates a code of conduct and makes clear the responsibilities of employees,” says Douglas, who says it is also essential for employees to be trained under the policy.

    Douglas says this is an area of employment law that has been developing for some time.

    Cases initially dealt with the distinction of what is personal and what is work-related Facebook use, before moving on to questions of restraint of trade clauses when it comes to using a professional platform such as LinkedIn. Contemporary cases are now dealing with Twitter use by employees.

    “This case shows that the familiar becomes the law,” Douglas says.

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

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    The employee argued the film he was watching was "educational"

    A security guard who was sacked for watching porn on the job has lost his unfair dismissal claim against the company that sacked him.

    Renato Lusica was terminated from his job at Linfox Armaguard in March last year for alleged serious misconduct, after he was found to have watched a sexually explicit movie entitled Expert’s Guide whilst on duty in the control room.

    The 67-year-old gave evidence that security guards often watched movies from a hard drive during a “lull period of their duty”. He said he was on an afternoon shift on February 28 last year during such a “lull” period when he switched on the hard drive.

    “When I saw the movie, I noted that it was an adult film and I became curious. I was switching it on and off while I was not attending to people or during the lull time,” Lusica told the Fair Work Commission.

    Lusica, who worked with the company for 14 years, was stood down in March, but alleged there was no “genuine investigation undertaken” into his conduct and that he was “set up” by his mangers to “find a way to dismiss” him.

    He contended his watching of the video was not inappropriate because no on had seen him watch it and because the movie was “educational”.

    “The unfair dismissal caused me severe emotional and financial hardship. I am now 68 years old and would be difficult to find another job. Had I been retrenched I would be entitled to redundancy payment consistent with my 14 years of service,” Lusica said.

    Armaguard argued the video was clearly not “educational” and featured “very explicit, pornographic material”. The company gave evidence that CCTV footage showed Lusica watching the movie on and off for about an hour, minimising the screen when not viewing it.

    Commissioner Roberts found the termination was not harsh, unjust or unreasonable, and Lusica had embarked on a course of conduct that led to him being dismissed.

    “He was not dismissed as a result of some conspiracy against him but rather because his fascination with the movie’s content overcame his common sense,” said Commissioner Roberts.

    In the commission’s view, Lusica’s age, background and experience, his lengthy period of employment, his future employment prospects and the economic and personal effects of the termination of employment on him did not outweigh his improper conduct.

    Employment lawyer and M+K Lawyers partner Andrew Douglas told SmartCompany the case was an example of an employer having correct policies and procedures in place.

    “If the employer has clear policies in place and has trained people about those policies that viewing material of this nature could lead to termination, and you do it anyway, then you can be terminated,” says Douglas.

    Douglas says while there are some mitigating factors, such as the nature of the material and the length of which it is watched, these will be measured against an employee’s history. But in this case, the serious nature of the misconduct was enough to outweigh the employee’s history.

    A spokesperson for Linfox Armaguard told SmartCompany it could not comment on the specifics of the case as it was ongoing, given Lusica had made an appeal against the decision.

    “Armaguard is committed to providing an environment where team members are treated with dignity, courtesy and respect and can work without distress or interference caused by harassment, sexual harassment, discrimination, bullying or any other inappropriate workplace behaviour,” said the company in a statement.

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