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

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    Waiter, there's a cockroach on my plate

    The owner of a vegan restaurant in Canberra has been fined $16,000 for breaching food safety regulations, after choosing not to rid his business of cockroaches on moral grounds.

    Fairfax reports Kingsland Vegetarian Restaurant was handed the fine in the ACT Magistrates Court on Thursday afternoon.

    Restaurant owner Khanh Hoang was originally charged with 12 breaches of the Food Act after ACT Health inspectors found live and dead cockroaches in the venue’s kitchen in April 2013.

    On Thursday, Hoang was convicted and charged $2000 for eight counts and given 12 months to pay the fine.

    According to court documents seen by Fairfax, Kingsland received its operation certificate in December 2012 but health inspectors visited the restaurant four months later following a tip-off from customers.

    Along with a cockroach infestation, the inspectors found food stored incorrectly, dirty kitchen walls, benches and equipment and faulty hand-washing facilities.

    The restaurant was forced to close its doors but re-opened six days later after the breaches had been rectified.

    Hoang admitted in a meeting with the Health Protection Service in June 2013 that he knew about the cockroaches but chose not to exterminate the insects because it would involve “killing little creatures”.

    Magistrate Maria Doogan heard this week that Hoang has passionate vegan values but now accepts his morals had been misguided at the time.

    Evidence presented to the court showed the kitchen at Kingsland is now “immaculate” and Hoang brings a pest control team into the venue on a regular basis and has appointed a food safety supervisor.

    Doogan took this evidence into account when handing down her ruling, along with the business’ limited capacity to pay the fine and its loss of reputation from the incident.

    Independent branding expert Michel Hogan told SmartCompany regardless of moral or philosophical beliefs, anyone starting a business must understand the rules and regulations of their industry, as well as the "baseline expectations of their customers". 

    "If whatever reason you cannot meet those expectations or play within the boundaries, find a different business to start," Hogan says. 

    In this case, Hogan says the restaurant's reputation will have undoubtedly suffered, but she says it has no one to blame but itself. 

    "Ignorance is not a defense," she says. 

    SmartCompany contacted Kingsland Vegetarian Restaurant and ACT Health but did not receive a response prior to publication.

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    Independent senator Nick Xenophon has this morning launched a public campaign against “bureaucratic madness and mindless red tape” after an Adelaide takeaway shop was threatened with fines of up to $20,000 for a flashing “Open” sign that had been displayed for at least 13 years.

    Senator Xenophon’s “Stop Red Tape Madness” campaign was launched outside the Feathers Fish and Chip Shop in the Adelaide suburb of Hazelwood Park earlier this morning.

    Store owner Peter Alevizos told SmartCompany he first received a letter from Burnside Council in early October 2014, advising him he risked a $20,000 fine if he did not gain development approval for a flashing LED “Open” sign displayed in the store’s window.

    Alevizos says he immediately turned the sign off, but a second letter arrived later that month after one of the store's employees accidentally turned the sign back on when Alevizos was not there. The council said in the letter it would waive the $750 fine if the sign was turned off permanently. 

    But Alevizos has displayed the sign at the front of his store for at least 13 years and the previous owner of the business also displayed a similar sign.

    “The previous owner had a sign there for around 8 years,” Alevizos says. "A sign has been there for 21 or 22 years."

    Burnside Council mayor David Parkin told News Corp the council was enforcing state laws, which require development approval for illuminated signs, after it received “a range of complaints from the community regarding signage of the shops at the Feathers corner”.

    “If we receive a complaint from the community we are compelled to act,” Parkin said.

    “The business displayed an illuminated sign in the shop window which is in breach of the development regulations … he can remove the sign, turn it off, or make an application for approval.”

    But speaking toSmartCompany after the campaign event this morning, Xenophon says this is a case of “bureaucratic red tape madness”.

    “It is out of control,” says Xenophon, who says he has been stopped in the street this week by other business owners who have shared their experience with “stupid” red tape.

    “Here is a small business owner who has been too frightened to turn on a sign for four months out of fear he will be fined.”

    “It’s bullying by the council.”

    Xenophon is urging any business owners who had have had similar experiences with council, state or federal red tape to contact him.

    “Businesses are going broke and councils should be there to help the community, not intimidate people,” he says. 

    Alevizos agrees with Xenophon, saying he is simply trying to run his business and serve his local community but the council has threatened to penalise him for "something so petty".

    "Hopefully some common sense will prevail," he says. "It's like I am being treated like a criminal."

    Alevizos says it is getting harder for Australian small businesses to navigate their way around red tape, a sentiment which is backed up by the SME Directions Survey conducted by SmartCompany and Crowe Horwath in 2014.The survey found Australian SMEs continue to be hampered by red tape.

    Of the 437 small businesses polled, 45% nominated red tape and administration as the biggest challenge for 2015, behind cash flow at 66%.

    The same survey in 2013 found red tape was by far the number-one issue SMEs wanted the Coalition government to address.

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    A former Melbourne lawyer has pleaded guilty to a multi-million dollar fraud to prop up two of his businesses, following a five-year investigation that has been likened to a Monty Python sketch.

    Alan Munt was charged with 26 offences relating to fraud between 1998 and 2009 last year, but in a hearing in the Supreme Court of Victoria yesterday, Justice Betty King said the way the investigation into the alleged fraudulent activity had been handballed between the Law Institute of Victoria, the Legal Services Board and Victoria Police was shameful.

    “Are you sure this isn’t Monty Python,” King said, according to Nine News.

    “It’s an absolute indictment on all of the organisations involved that this is just shunted around like a football. You should all be ashamed of yourselves.”

    Munt pleaded guilty to the charges, which included theft and obtaining property by deception.

    According to Nine News, Munt is accused of taking funds from clients under the pretence of a legitimate investment scheme but operated a Ponzi scheme by funnelling the money into Geelong-based soft drink company Noddy’s Soft Drinks and his legal practice.

    Munt is accused of pouring $1.65 million into Noddy’s Soft Drinks, which collapsed in 2009. He is accused of spending another $1.1 million to maintain the scheme, but the rest of the money is reportedly unaccounted for.

    He is also accused of diverting inheritance money pledged to charities to bank accounts in his name.

    The court heard Munt reported himself to the Law Institute of Victoria in September 2009, which then passed on the evidence of the scheme to policy in December 2009. The investigation was then reportedly delegated to the Legal Services Board, which hired a contractor to carry out the investigation, and reported back to the police in 2012. Charges were laid after another 15 months.

    “This is really Python-esque in its nature,” King said.

    “This seems to me an incredibly long (investigation) on someone who has provided all these documents”.

    Alan Munt’s layer, Greg Lyon QC, was not able to comment on the case when contacted by SmartCompany.

    However, according to Nine News, Lyon told the court Munt’s confession and co-operation with the investigation is evidence of his remorse.

    Lyon reportedly told the court Munt was motivated by greed and maintaining an outward appearance of success.

    A spokesperson for the Law Institute of Victoria told SmartCompany the institute is unable to comment on the case as it is still before the courts but said it will be filing further submissions to the court on February 13.

    Brett Warfield, forensic accounting specialist and chief executive of Warfield & Associates, told SmartCompany a Ponzi scheme, especially one that has been operating for more than seven years, can be difficult to unwind.

    “It depends how far back the evidence goes,” Warfield says.

    “It can certainly take a while to unwind as there are usually a lot of transfers and transactions and it can be difficult to trace what each transaction was for.

    While Warfield says a confession and co-operation from the individual accused of fraud can greatly assist an investigation, over time a person’s memory can also diminish and they won’t necessarily recall what each transaction was for.

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    Supermarket owner Metcash has been accused of bullying by two of its suppliers, just weeks after rival supermarket giant Coles paid a $10 million penalty over similar allegations.

    Nelson McKinnon Lawyers this morning confirmed to SmartCompany the firm is acting for two suppliers, Cofco Distributors and Fasttrack Logistics, in regards to allegations of unconscionable conduct.

    The two Indonesian-owned companies have alleged Australia’s third biggest supermarket business asked for "excessive" rebates from suppliers and forced them to fund international business trips for Metcash staff, according to a statement of claims seen by Fairfax.

    A Metcash spokesperson told SmartCompany this morning the supermarket was not in a position to comment on an ongoing legal matter but said the company would “defend their position vigorously”.

    Fairfax reports the statement of claim, which was lodged in the New South Wales Federal Court in December, alleges Cofco and Fasttrack paid rebates of up to $10.36 million to Metcash, which created cash flow problems and losses for the companies.

    According to Fairfax, the claim also alleges Metcash asked the suppliers to fund business-class study tours to places such as Japan, Las Vegas and Hawaii.

    Cofco alleges it paid $395,275to send Metcash employees on the overseas trips. SmartCompany understands these tours are common practices for independent supermarkets to source their products.

    SmartCompany understands Cofco Distributors and Fasttrack Logistics have been suppliers of Metcash for around 12 years and share a director, Lawrence Homarwijaya.

    It is understood the case went before the Federal Court this morning but both parties have agreed to an adjournment until March.

    Unconscionable conduct has been in the crosshairs of the Australian Competition and Consumer Commission in the last 12 months after action was taken against Coles. Woolworths was also accused of bullying late last year.

    Peter Strong, executive director of the Council of Small Business of Australia, told SmartCompany while he believes the legal matters against Metcash need to go through the courts, he says the actions of Coles and Woolworths are more detrimental to small suppliers and the Australian economy.

    “The bigger issue is Coles and Woolworths, because they are impacting productivity in this country,” says Strong.

    “The bottom line is they are the ones with a huge impact on the Australian economy.”

    “We need to make sure that if there is any cultural behaviour of bullying by big business, that that is stamped out,” says Strong.

    SmartCompany contacted Cofco Distributors and Fasttrack Logistics but did not receive a response prior to publication.


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    A former betting accounts manager at ACTTAB has been handed a $1 million fine and had her home restrained after being convicted of a 10-year-old fraud that saw her swindle $1.42 million from the former government-owned gambling provider.

    Pamela Close was jailed for 12 months last year after pleading guilty in the ACT Supreme Court to two charges of defrauding ACTTAB and obtaining property by deception. Close was given a five-year sentence, with 12 months to be served behind bars and a further 18 months via weekend detention.

    Close, who worked for ACTTAB for 20 years, admitted to stealing funds from the organisation between 2001 and 2010 to fund her gambling addiction.

    According to Fairfax, Close was found to have exploited a glitch in the ACTTAB system that allowed her to re-open a finished horse race and place trifecta bets on the winner. She then directed the winnings to false accounts.

    The fraud was uncovered by police in 2010 after ACTTAB began investigating suspect betting activities.

    But the case returned to the ACT Supreme Court this week, after the Australian Capital Territory Director of Public Prosecutions also attempted to seize Close’s home and a 2004 Ford Falcon, which it argued were subject to automatic forfeiture under criminal assets legislation.

    Close and her estranged husband objected to the application, calling the actions arbitrary and unlawful.

    On Monday, ACT Supreme Court Justice ordered the property be restrained in order for Close to pay a penalty of more than $1.09 million, but ruled the property and the car should not be automatically forfeited because there was no direct link to the fraud and the assets.

    Gary Gill, head of forensic accounting at KPMG, told SmartCompany the presence of a gambling addiction in this case “is no surprise”.

    “In a lot of frauds we investigate, there is often a gambling problem,” Gill says.

    While Gill says it is not clear how senior Close’s position was in the organisation, and the access she had to the ACTTAB systems, he says most fraud in Australia is perpetrated by people inside an organisation.

    “Especially people who have been there longer than five years,” he says.

    Gill says longer-term employees who commit fraud will often “know their way around” a company’s system and can often stumble across a weakness in the system “almost by accident”.

    SmartCompany contacted ACTTAB’s owner Tabcorp but the company declined to comment on the case. 

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    A Crown trademark dispute has flared between casino operator James Packer and property developer Iwan Sunito.

    James Packer's Crown Resorts is seeking to have Crown Group Holdings barred from using trademarks such as Crown Apartments, Crown Towers and Crown Resort in marketing its apartment projects.

    The paperwork was filed in the Federal Court on 30 January by Peter Chalk at Ashurst Australia.

    The first hearing is 24 February before Justice John Griffiths.

    Packer is hopeful of undertaking its own apartment project as part of the proposed Crown Sydney hotel and casino development.

    Iwan Sunito is CEO and 1996 co-founder of Australian property development company Crown Group. He started his own architecture firm in 1994 before forming Crown Group in 1996 with its first project in Bondi.

    Crown Group has been awarded some of the industry’s top accolades including the 2014 Urban Development Institute of Australia (UDIA) NSW President's award, UDIA High Density development award and awards from the Master Builders Association, Housing Industry Australia and International Property Awards.

    A Packer spokesman told The Australian Financial Reviewthat Crown Resorts has become "increasingly concerned that Crown International Group is taking advantage of Crown Resorts' brands and reputation in its offerings of residential apartments, serviced apartments, hotel rooms and retail shopping.

    This article originally appeared on Property Observer.

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    A former Sydney bottle shop worker has been awarded $7000 in compensation, after the Fair Work Commission ruled he was unfairly dismissed for not cleaning up a broken sign.

    While his employer argued James McKinnon was a casual employee and therefore was able to be sacked without warning, Fair Work found McKinnon had worked for The Crest Hotel in Sylvania, New South Wales, on a regular and systematic basis and could reasonably expect to work the same each week. He was therefore covered by unfair dismissal protections.

    McKinnon, a full-time student, started working at The Crest Hotel in August 2012 but was fired in February last year after being unable to clean up a broken sign in the bottle shop area.

    Hotel owner Nick Balagiannis asked McKinnon to clean up the area during his Saturday shift and while McKinnon and another work dismantled the broken sign, he was unable to dispose of the sign because the bins were full and they were short-staffed.

    McKinnon was asked to clean up the area again on Sunday, but as he was the only bottle shop attendant rostered on that day, he was unable to leave the counter unattended and therefore did not complete the task. The sign was eventually cleaned up towards the end of the shift once another worker arrived.

    But McKinnon was called into work “for a quick meeting” on the Monday and the licensee and bottle shop manager told him the hotel’s owner wanted him dismissed because he had not followed up on orders to clean up the broken sign.

    The Crest Hotel argued before the Fair Work Commission that McKinnon was a casual employee and therefore was not covered by the unfair dismissal protections of the Fair Work Act. It also argued McKinnon failed to follow a clear and reasonable request but did offer to reinstate him as a casual and pay a settlement fee of $500.

    But McKinnon gave evidence that he regularly worked four shifts in the bottle shop and provided three weeks of payslips to show he earned an average of $710 a week. McKinnon argued he was not given an opportunity to respond to his dismissal and other employees who did not follow the same instruction to clean up the area were not dismissed.

    The Fair Work Commission sided with McKinnon and ordered The Crest Hotel to pay him $7000 for compensation for lost earnings for the two months in which he was able to find another job.

    Employment lawyer Peter Vitale told SmartCompany the case touches on a “difficult” aspect of Australian employment law as there is no specific definition of what causal employment is.

    Vitale says under the common law, a casual employer relationship is one where the employment is irregular and each engagement between the employer and the employee is a “separate contract of employment”.

    But the Fair Work Act does provide unfair dismissal protection for long-term casual workers who have a responsible expectation of continued employment.

    Vitale says in this case, the commission needed to determine if McKinnon was protected under this provision and once it had found he was, it then proceeded to consider the usual factors that come into play in an unfair dismissal case, including whether there was a valid reason for the dismissal and if the employer followed a fair process.

    “Some employers who have casuals who work regular part-time or full-time hours and have done so for a long time, need to be aware, whether designated as casual or not, they may have rights for unfair dismissal claims or even long service leave,” says Vitale.

    SmartCompany contacted The Crest Hotel but did not receive a response prior to publication.

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    Energy retailer Simply Energy has paid a $20,400 fine to the Australian Competition and Consumer Commission following allegations of misleading door-to-door sales conduct.

    The latest fine comes after similar action by the ACCC against a number of other energy companies including Australian Power & Gas and AGL.

    The ACCC alleged that during 2014, Simply Energy employed door-to-door sales staff to persuade consumers to switch from their existing electricity provider.

    On two separate occasions, these sales staff allegedly told consumers that there was an ‘urgent problem’ or ‘something wrong’ with their existing electricity supply when it wasn’t the case, breaching the Australian Consumer Law in the process.

    “Consumers have a right to expect that door-to-door sales representatives will not make false or misleading representations, or otherwise engage in unlawful sales tactics,” said ACCC Chairman Rod Sims in a statement.


    Commonwealth Bank profits hit $4.62 billion


    The Commonwealth Bank has reported an increase in its first-half profits to $4.62 billion, with bad debts falling and solid revenue growth.

    The result was boosted by the bank’s net interest income growing by 6% to $7.89 billion, while its interest earning assets increased by $49 billion to $739 billion.

    Following the announcement, The Age reports Commonwealth Bank chief executive Ian Narev has called for a “coherent long-term plan” for the Australian economy following the mining boom.

    "Weak confidence is a significant economic threat," Narev said.

    "Businesses need the certainty to invest to create jobs, and households need a greater feeling of security. That requires implementation of a coherent long-term plan that clearly addresses target government debt levels and timeframes, infrastructure priorities, foreign investment, business competitiveness policies and, above all, job creation."


    Shares down on open


    Aussie shares have traded lower this morning, despite gains on Wall Street overnight.

    According to Tristan K’Nell, head of trading at Quay Equities, local investors are “taking a breather with a very busy day in corporate earnings to digest” yesterday.

    “Overnight headlines were around Greece with the market optimistic of a solution, however this was offset by continued weakness in the oil price,” K’Nell said.

    The S&P/ASX 200 benchmark was down 29.7 points at 12.14pm AEDT. On Tuesday, the Dow Jones closed 139.55 points higher, up 0.79% to 17868.8 points. 

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    A TNT dockhand who repeatedly made complaints about the company’s integrity, including allegations of internal corruption, has lost his unfair dismissal bid in an important ruling for Australian employers.

    The Fair Work Commission found Alphonse Kaskol was lawfully dismissed after he made a series of “unsubstantiated” complaints relating to his role as an occupational health and safety representative at TNT.

    Kaskol, who had worked at TNT’s Brisbane depot for six years as a casual dockhand, distributed emails and memos to TNT staff after he was elected to the site’s OHS committee in February 2013. These communications related to his views on what he considered to be “fundamental flaws” with the TNT OHS committee.

    Among his allegations, Kaskol claimed the committee’s constitution was “corrupt” and was not meeting TNT’s broader OHS standards. He also claimed he was the subjected to bullying and harassment, including alleged racist comments made by one manager.

    TNT rejected Kaskol’s claims after an investigation and he was informed that continuing to make derogatory and potentially defamatory comments about managers and employees of TNT would be viewed as misconduct, as would making false and vexatious complaints.

    Kaskol was dismissed on October 14, 2013 on the grounds of serious misconduct, after he did not respond to a letter requesting he substantiate further allegations.

    Fair Work Commission deputy president Ingrid Asbury found Kaskol’s allegations were totally misconceived and his dismissal was not unfair.

    “I am satisfied that Mr Kaskol did make numerous and repeated, unsubstantiated and serious allegations against TNT and its employees, including allegations of corruption,” said Asbury.

    “Mr Kaskol’s conduct was repeated and continued in the face of clear warnings that he would be dismissed if he continued with it. Further, I am of the view that TNT was extremely tolerant of Mr Kaskol’s behaviour over a significant period of time and went above and beyond what would be expected of a reasonable employer to have Mr Kaskol rectify his behaviour,” she added.

    Employment lawyer and M+K Lawyers partner Andrew Douglas told SmartCompany this is an important ruling for Australian employers because its shows employers can manage the performance of a serial complaining employee through the right processes.

    “There are currently some very big and important cases around to try to preserve the right of employees to make complaints,” says Douglas.

    “But sometimes, with all the noise around employment law, people forget the basics.”

    Douglas says employers can discipline and subsequently terminate a worker who makes false, defamatory and offensive complaints, particularly where the comments interfere with performance management.

    Douglas says it is important for employers to remember that if an employee makes complaints that are designed to harm and hurt others, or makes a complaint for improper purposes, the complaint itself can amount to serious misconduct.

    “You are allowed to manage people’s bad behaviour,” says Douglas.

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

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    Five companies that offered household appliance rentals have agreed to refund 115 consumers more than $230,000, following a crackdown by the corporate watchdog.

    The Australian Securities and Investments Commission took action after discovering the companies were not licensed to provide leases to consumers.

    The companies offered fixed-term rental leases for household appliances as well as consumer electronic products, including mobile phones, computers and televisions.

    ASIC said in a statement Smart Link Rentals, Ezi Keep Rentals, Rent2Keep, Rent Ezi Appliance Rentals and Want It Rent It have agreed to collect only the cost price of the rented goods and refund customers any payments they received above that amount.

    The vendors have also agreed to stop offering regulated consumer leases and to transfer ownership of the goods to customers once the cost price has been paid.

    In total, more than $230,000 will be refunded to 115 consumers, the majority of whom receive Centrelink benefits, said ASIC.

    ASIC has also added an extra condition to Smart Link Rental’s credit licence, requiring the company to engage an independent consultant to review its compliance with credit legislation over the next 12 months.

    According to ASIC, Smart Link Rentals entered into commercial agreements with three of the other companies, Ezi Keep Rentals, Rent2Keep and Rent Ezi Appliance Rentals, to offer fixed-term leases to consumers.

    Smart Link asked for a ‘licensing fee’ of approximately $40,000 and an ongoing monthly payment of 7% of turnover in exchange for documentation to establish a household rental business. However, the three businesses did not hold an Australian credit licence.

    In a statement, ASIC deputy chairman Peter Kell said the regulator will continue to pursue companies that act outside of the law.

    “The licensing regime is designed to provide safeguards for consumers and dealing with someone who does not hold an Australian credit license means there is no recourse to important consumer rights like the right to access a free external dispute resolution scheme,” Kell said.

    ASIC has previously come down heavy on consumer credit businesses for targeting vulnerable people, including imposing a three-and-a-half year ban on all of the franchise directors of a Victorian-based household goods rental provider, Mobile Rentals, in September 2013.

    In November, ASIC launched legal action against appliance rental company Make It Mine, which it alleges breached consumer credit laws, including responsible lending obligations to consumers.

    Rohan Harris, principal at law firm Russell Kennedy, told SmartCompany rental companies are subject to both a licensing regime and a consumer credit code.

    “The licensing regime is designed to ensure people who conduct credit activities or offer credit products are suitably qualified and in a position to do so in a responsible manner,” Harris says.

    “And the consumer credit code is to ensure people entering into contracts have an opportunity for full disclosure.”

    “This is a prime example of companies seeming not to comply with either obligation.”

    Harris says in this case, the five companies were dealing with consumers in a vulnerable position and there is an onus on all companies operating in this sector to assess the financial position of consumers and their ability to pay.

    “There is quite a heavy onus there ... It almost overrides the principle of buyer beware”.

    Harris warns credit licence holders that appoint authorised representatives to also supervise those representatives, as they have ultimate responsibility for contracts under their licence.

    “You can’t appoint a third party as a representative unless you are willing to supervise and take responsibility,” he says.

    SmartCompany contacted Smart Link Rentals, Ezi Keep Rentals, Rent2Kepp and Rent Ezi Appliance Rentals but did not receive a response prior to publication. SmartCompany was unable to contact Want It Rent It.

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    The operator of two Sushi Izu outlets in Sydney has entered into an enforceable undertaking with the Fair Work Ombudsman, after the employment watchdog found the franchisee underpaid a South Korean backpacker more than $5000 over an 11-week period.

    Instead of relying on the Fast Food Industry Award 2010 to set wages for her workers, the Fair Work Ombudsman discovered Joo Young Ju rang competing businesses in the area to ask what they were paying their employees and used this information to set her wages at a “market rate”.

    As a result, a 26-year-old worker who was in Australia on a 417 working holiday visa was paid a flat rate of less than $16.50 an hour, when they were entitled to $17.68 an hour for normal hours and penalty rates of up to $39.57 an hour for weekend and evening shifts and overtime.

    The former employee was also underpaid annual leave entitlements during December 2013 and February 2014. Overall, he was underpaid more than $5000.

    Joo Young Ju’s company Fine Food Gallery is the operator of Sushi Izu outlets inside Woolworths supermarkets in Double Bay and Town Hall in the Sydney CBD.

    Ju co-operated with the ombudsman’s investigation and as her business had no previous complaints, she was able to enter an enforceable undertaking as an alternative to litigation.

    As part of the undertaking, Fine Food Gallery has agreed to back pay the employee in full, undertake workplace relations training, self-audit employee wages and entitlements and register with the Fair Work Ombudsman’s online self-help tool My Account.

    The company will also display workplace notices about the contraventions and apologise in writing to the employee.

    While Fair Work Ombudsman Natalie James said in a statement Woolworths should be concerned about the underpayments, as the Sushi Izu outlets are located within Woolworths stores and Sushi Izu employees prepare sushi for Woolworths’ fresh food displays, a  Woolworths spokesperson told SmartCompany the supermarket has “no control” over the operations of Sushi Izu outlets.

    “Nevertheless, we expect that all those we deal with operate within the law and will raise the matter with them,” the spokesperson says.

    Swaab Attorneys partner and workplace relations expert Warwick Ryan told SmartCompany it is in the interest of employers to co-operate with the Fair Work Ombudsman as legal action through the court system can often result in significant fines, which are in addition to orders to back-pay employees’ entitlements.

    Ryan says recent cases of companies receiving “elevated” fines from courts can be seen as efforts to “send a message of deterrence” to small business operators.

    “My impression is the Fair Work Ombudsman and the courts are as active as they have ever been, particularly when it comes to hospitality,” Ryan says.

    But Ryan says employers are left in a difficult position because if there is an underpayment, and there is the threat of a significant fine from the courts as a result of a prosecution by the Fair Work Ombudsman, the employee will “have something over you”.

    “And that is never a good position to be in,” he says.

    SmartCompany contacted Sushi Izu but did not receive a response prior to publication. SmartCompany was unable to contact Ju.

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    A small beer company in the US is fighting back against Red Bull after the energy drink giant filed a trademark notice against it, alleging the company’s ‘ox’ logo, slogan and name infringed on Red Bull’s rights to the design of a “bovine animal”.

    The David-and-Goliath type battle echoes that of Australian brewery Wayward Brewing, which last year took on a multinational beer giant in a trademark battle and won.

    Old Ox Brewery, based in the town of Ashburn in the US state of Virginia, has since taken to social media to gather support for its fight, including posting an open letter to Red Bull claiming they are being held “hostage” by its demands.

    Around 10 months ago, Old Ox received a letter from Red Bull’s lawyers notifying the small business that Red Bull objected to its trademark application for their brewery name and logo, according to the Washington Post.

    Graham Burns, Old Ox's chief financial offer, told the Washington Post he thought the two companies could sort out the issues through an informal process, but Red Bull began to escalate its demands on what the brewery could and could not use in its designs.

    Burns said Red Bull’s demands ranged from never using the colour red, silver or blue, to never using red with any “bovine term or image” and never producing soft drinks.

    “Every time we heard from them, it got more and more complicated. It became clear from the nature of the opposition that they opposed to the name of the brewery altogether," said Burns.

    But last month Red Bull took things a step further, filing a formal notice of opposition in the United States Patent and Trademark Office.

    “An ‘ox’ and a ‘bull’ both fall within the same class of ‘bovine’ animals and are virtually indistinguishable to most consumers,” said Red Bull.

    “In addition, an ox is a castrated bull.”

    Turning to public opinion to fight the Austrian drinks giant, Old Ox president Chris Burns blogged an open letter to Red Bull last week that said although the company seemed “pretty cool”, it was being “extremely uncool” to the family-owned micro-brewery.

    “For reasons that we cannot understand, you have attempted to strong arm us into changing our identity for the last 10 months because you believe folks might mistake Old Ox beer for Red Bull energy drinks. We respectfully disagree. The only similarity between our two products is that they are both liquids,” said Burns.

    Old Ox is also using its Facebook page to gather support, posting links to its media interviews.

    And opinion is clearly on their side, with a series of posts and reviews supporting Old Ox over Red Bull.

    “I don't even like beer. But, I'll support your business over any stupid energy drink. Btw, your logo is by far the coolest,” said one five star review.

    But Narissa Corrigan, principal at Ampersand Legal, told SmartCompany small businesses need to be very careful when commenting publicly on a legal stoush.

    “It can be quite risky when you take litigation public, especially if the other side is agitated,” says Corrigan, pointing to possible issues of defamation, injurious falsehood and even competition law.

    “It really can come back to bite you.”

    Corrigan says SMEs should be particularly careful when posting on social media and should be vigilant about what their users say.

    “You need to be incredibly measured in what you're saying when you're publishing things on social media because you are inviting the public to comment and your company can be held responsible for what they say,” she says.

    Corrigan says she can understand why Red Bull is concerned but says most small businesses would not deliberately choose to infringe upon a trademark, only to have to undertake a costly recall of products and other branding.

    “If Old Ox is sensible they’d be pretty careful. I’d like to think companies like this would be sensible enough to get their trademarks right before they get their graphic designs settled, especially if they’re similar to a big, well-known brand.”

    SmartCompany contacted Red Bull Australia but did not receive a response prior to publication.

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    A Melbourne catering company will face court for allegedly ignoring a Fair Work Commission order to compensate an employee who had been unfairly dismissed.

    Arlington Catering & Events is facing legal action after the commission ordered the business to pay $15,384 to a former employee who it said was unfairly sacked and not given any redundancy pay.

    Andrew Ham was dismissed from his role as a function and bar manager in 2013 following nine years with the company due to what the business owner described as a company restructure.

    At the time of the decision, vice president of the Fair Work Commission Graeme Watson said the process adopted by the employer “left a lot to be desired”.

    “In particular, it would have been a fair process to discuss the situation with Mr Ham, who was a long serving employee in a senior position, and to explore alternatives to making him redundant,” Watson said.

    “I consider that the process was seriously deficient in that regard.”

    While Watson said he believed the reason for the dismissal was true, the fact the employer did not discuss alternative options with the employee resulted in it being an unfair dismissal. 

    “In those circumstances and having regard to all of the circumstances, I find that the termination of Mr Ham’s employment was unjust and unreasonable, and that I should consider an appropriate remedy arising from that finding,” he said.

    The employee lodged a complaint with the Fair Work Ombudsman after the compensation was not paid within the required 21 days.

    Sarah Lock, principal at Workplace Law Specialists Brisbane, told SmartCompany this case highlights how the Fair Work Commission has limited power in forcing businesses that do the wrong thing to pay the necessary compensation without court action.

    “The Fair Work Commission has limited power to assist in obtaining the full settlement monies or part payment,” Lock says.

    “In my experience I have asked for matters to be relisted for direction or a further conference to see if the parties can come to another arrangement in retrieving the monies.”

    Lock says if a business does not comply with the commission’s order to pay compensation, then action can be taken in the Magistrates Court or another state’s equivalent.

    “It is a relatively easy process but can take time,” she says. 

    “You may also be able to apply for costs spent in retrieving the amount.”

    Fair Work Ombudsman Natalie James said in a statement the employer watchdog made several requests for Arlington Catering & Events to comply with the commission’s order.

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

    “Building a culture of compliance with workplace law is important, and employers should be aware that we are prepared to take action where appropriate.”

    The compensation remains unpaid, with a directions hearing listed in the Federal Circuit Court in Melbourne for February 19.

    SmartCompany attempted to contact Arlington Catering & Events, however, the company’s phone was disconnected. Its website is also currently offline.  

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    An Adelaide funeral director who faked his clients’ deaths to keep his business afloat yesterday received four-and-a-half years’ jail time for his crimes, with a non-parole period of three years.

    Robin George Knight had previously admitted to obtaining $425,595 from insurers in prepaid funeral bonds from clients he said had died but who were in fact still alive.

    He pleaded guilty to 22 counts of deception and one count of attempting deception in the Holden Hill Magistrates Court in Adelaide in December.

    Knight, the former director of Knight Brenton James Funeral Directors, which has since close down, amended old medical certificates to attempt to prove to insurers his clients were dead and faked the signature of his business partner.

    The 46-year-old represented himself in court yesterday, according to the ABC, and told the sentencing magistrate he deeply regretted his actions.

    "It is a daily struggle to live with the consequences of my actions, particularly how a number of people have been let down and left with a severe disadvantage," Knight told the court.

    Knight told the court the media scrutiny of his case alone was enough to warn other business owners off committing fraud.

    "The media attention of my situation would be a very strong deterrent to any other person who might consider this as a reasonable course of action and I obviously warn them against it," Knight said.

    In December, Knight had told media other business owners should learn from his mistakes.

    “Swallow your pride and admit when things are not going well and take action because once you start this sort of situation, it’s obviously very difficult to get out,” Knight said at the time.

    Magistrate Cathy Deland said Knight's actions were serious and warranted a prison term, according to the ABC reports.

    "I note that this money has not gone into funding a luxurious lifestyle for you, it has gone into your attempt to keep the business afloat when obviously it was not able to recover," said Deland.

    "Nevertheless, the offending amounts to a breach of trust.”

    "I doubt the people who have lost their money are particularly interested in what happened to it, they have suffered regardless."

    Fraud expert Brett Warfield of Warfield and Associates told SmartCompany the three-year non-parole sentence was fairly strong, given the amount he had fraudulently obtained was only around $400,000.

    “I’d say it’s a pretty tough sentence for that amount,” says Warfield.

    Warfield says that business owners not only need to consider the possibility of jail time for committing fraud, but the lasting reputational damage to their current and future business ventures.

    “One of the things we do with our clients is talk to them about media searches on prospective business partners,” he says.

    “Something like this would come up straight away in any searches, and while it wouldn’t necessarily make their decision for them, it would certainly impact on that decision.”

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    A Queensland woman has failed to convince the Federal Circuit Court she was discriminated against because of her sexual orientation, after being sacked for her “polyamorous lifestyle”.

    Susan Bunning had been employed by Brisbane-based Centacare, a social services organisation run by the Catholic Church, since 2007, working in the role of clinical practice co-ordinator in the family support division since 2009.

    But in August 2013, Bunning was dismissed for gross misconduct and bringing Centacare’s reputation into disrepute after her work contact details were discovered on a website for the Brisbane Poly Group.

    The site is for individuals involved or interested in polyamory, which involves having multiple consensual sexual partners or relationships. Bunning was described on the site as a “poly-friendly” counsellor.

    Bunning was asked about the website by her managers on August 5 and was dismissed immediately with five weeks’ pay.

    She initially lodged a complaint with the Australian Human Rights Commission in November 2013, alleging discrimination on the grounds of her sexual orientation, but the commission rejected her bid in August 2014 on the grounds the complaint was “misconceived”.

    Instead, Bunning pursued the matter in the Federal Circuit Court, arguing there was no valid reason for her dismissal, she was not given procedural fairness in the termination process and she should have been given 12 months’ notice, rather than five weeks.

    But Justice Salvatore Vasta sided with Centacare and dismissed Bunning’s application, ruling that being polyamorous is “sexual behaviour” not “sexual orientation” and therefore does not fall within the jurisdiction of sex discrimination legislation.

    “Sexual orientation is how one is rather than how one manifests that state of being,” Vasta said.

    “The manifestation of that state of being can take many forms.”

    Bunning argued sexual behaviour is a subset of sexual orientation but Vasta disagreed.

    “If the contention of the applicant were correct, many people whose sexual activity might label them as sado-masochists, coprophilians or urophiliacs could claim that such is more than mere behaviour; it is in fact their orientation.”

    “If the contention were correct, then the illegal activities of paedophilia and necrophilia may have the protection of the Sex Discrimination Act 1984.”

    Employment lawyer Peter Vitale told SmartCompany it is unusual for an employer to successfully have an employee’s claim dismissed summarily without a trial.

     “It is very difficult for those applications to succeed because you have to show the claim is absolutely hopeless,” he says.

    “But the judge is saying here, [Bunning’s] sexual orientation is whatever it is, but the behaviour is the manifestation, not the orientation itself.”

    Vitale says Bunning would have been unable to pursue an anti-discrimination claim under Queensland laws as religious institutions have some grounds to terminate employees who do not adhere to the religion’s beliefs and values. However, a similar case could stand up in Victoria if the Labor government is successful in limiting the same exemption to circumstances where a religious belief is an inherent requirement of a job.  

    But Vitale says Bunning may have grounds to pursue a separate claim over the termination of her employment if it was done so in a separate state-based court.

    While some common law claims over contracts can be heard in the federal court system if there is an associated jurisdiction with a federal statute, in this case, Justice Vasta ruled there was not jurisdiction under the federal Sex Discrimination Act.

    SmartCompany contacted Centacare but the organisation was unable to comment.

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    There are calls for tougher food handling regulations and threats of a class action lawsuit over the recall of frozen berries by Patties Foods, with the Australian Made Campaign urging small businesses to be aware of the risks of imported goods.

    The latest developments come after the Victorian food manufacturer and distributor issued a total product recall of its frozen berries after a number of cases of hepatitis A were linked to the products last week.

    In a notice on its website, Patties has extended the recall of Nanna's 1kg frozen Mixed Berries to include Creative Gourmet Mixed Berries 300g and 500g packs, as well as Nanna's 1kg frozen Raspberries.

    Law firm Slater and Gordon is now urging anyone adversely affected by the recall to contact Slater & Gordon as part of a potential class action.

    “We’re investigating whether that will be an appropriate response,” Slater and Gordon principal lawyer Julie Clayton told SmartCompany.

    “I’ve heard reports in the media of around 10 confirmed cases. Now that’s enough to make a class action claim, but it’s not clear whether a class action would be viable at this stage.”

    Clayton says Australian Consumer Law gives rights to individuals who were injured as a result of a safety defect in goods to claim compensation against the relevant manufacturer.

    “The way the Australian Consumer Law operates is to favour the consumer over the importer or manufacturer of a product, in that the consumer doesn’t have to prove the manufacturer knowingly did anything wrong as they would in most other cases,” Clayton says.

    “All the consumer has to show is the product isn’t fit for purpose, or isn’t safe. That puts the onus on businesses in cases like this.”

    Clayton said under the Australian Consumer Law, Australian distributers of imported goods can be held responsible for a product’s safety to the same extent that they would if they had grown or manufactured it themselves.

    “In a situation like this, the product appears to be imported, if what we’ve heard in the media is correct. From the point of view of ACL, is doesn’t matter where that contamination occurred; whether locally or overseas, the Australian company is treated as the manufacturer and is liable.”


    Food labelling laws


    Meanwhile, the fallout from the health scare is also attracting interest in Canberra, with Palmer United Party leader Clive Palmer issuing a statement calling for tougher food labelling laws.

    “We want to introduce a coloured tag system to properly inform consumers of the origins of the products they buy,” Palmer said.

    “If a product contains more than 5% of the product including packaging not originating in Australia, it would carry a red tag and if an item has 95% or more of its content made in Australia then we would be proposing a green and gold tag.

    “The aim of this kind of food labelling reform would enable consumers to be able to make informed decisions about their purchases and to promote and protect truly Australian goods and services for the betterment of everybody in this country.”

    In a separate statement, independent Senator Nick Xenophon called for tougher food handling regulations and a review of the Department of Agriculture and Food Standards Australia and New Zealand (FSANZ) food handling system.

    “For example, the government does not test for bacterial infections of foods, as part of its spot-checks of 5% of low risk food imports,” Xenophon said.

    “Our system is almost entirely reactive, in that it tests five per cent of food products as they enter the country. We should be looking at issuing permits to export to Australia, so that adequate sanitation and health checks can be carried out in advance.”

    “This is a serious and widening outbreak of illness apparently caused by basic hygiene failures in China. These berries were considered ‘low risk’ but failed the most basic of health checks – carrying a bacteria common in faecal matter.”


    Australia’s health and safety advantage


    Australia Made Campaign marketing manager Ben Lazzaro told SmartCompany Australian made products have a clear advantage in terms of health and safety.

    “This is a spectacular example of the huge differences between the health and safety standards of some countries and the high standards Australians take for granted,” Lazzaro says.

    “We have a clean, green environment and more importantly we have a strict framework and high standards for manufacturing goods to make sure they’re fit for purpose.”

    Lazzaro says while there is sometimes a cost implication for small businesses as sourcing overseas products can sometimes be cheaper, “there’s a reason for that”.

    “You can take that element out of your risk profile and minimise your risk by sourcing locally… When your brand is at stake, it’s not worth the risk,” he says.

    The thoughts are echoed by entrepreneur Dick Smith, who told SmartCompany many developing countries “simply don’t have the money to afford the quality and health controls we do”.

    “To produce my tomato sauce, I need to go through a clean room like an operating theatre. These standards hardly exist in China,” Smith says.

    “It’s surprising. Most Aussies don’t buy the cheapest car, and most Aussie women won’t buy the cheapest handbag. But when it comes to food, most Aussies will buy products without proper health and safety controls.”

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

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    A former employee of the Australian Tax Office has lost her bid for more compensation, following an incident four years ago in which the ergonomic settings of her work station were altered without her knowledge.

    While Sharon Gibbs was found to have injured her neck and shoulder as a result of changes to the height of her desk and chair, and received compensation from public service insurer Comcare between 2011 and 2013, the Administrative Appeals Tribunal ruled last week Comcare was justified in refusing Gibbs any further compensation as her ongoing pain was the result of a pre-existing degenerative medical condition.

    Gibbs, who had worked for the ATO since 1997, injured her neck and one of her shoulders in April 2011, which she attributed to changes to the height of her desk and chair. At the time, Gibbs was working as a debt collection officer.

    Gibbs had put a sign on her desk saying “do not adjust or sit at this desk” and was initially told by her supervisors that no one else had used her work station. But the next day, her supervisors apologised and admitted casual works had used the work station and made changes to the desk and chair.

    ComCare paid Gibbs compensation for aggravated neck pain and the sprain of her shoulder and upper right arm between 2011 and 2013. She previously received compensation for a work-related neck and shoulder injury in 2005

    But Gibbs argued she was entitled to additional compensation, as she was still suffering from pain associated with the injury. Gibbs has not worked for the ATO since June 2012.

    The Administrative Appeals Tribunal ruled in April 2014 Comcare was not liable to pay Gibbs additional compensation as medical evidence provided by two doctors indicated she had been diagnosed with a degenerative disease that would have caused her current pain.

    The tribunal upheld the same ruling on February 12.

    Andrew Douglas, workplace relations principal at M+K Lawyers, told SmartCompany it is common for workers’ compensation claims to be based on incidents that appear to aggravate or irritate previous injuries.

    Douglas says in this case, it was clear the adjustment of Gibbs’ work station caused a soft-tissue injury but the underlying cause of Gibb’s ongoing pain was her existing medical condition.

    He says the lesson for employers with workers who have chronic illnesses is to always work with the employee and insurer to monitor if the workplace is contributing to the illness.

    Douglas says employers are required to provide a safe place to work for their employees and to make “reasonable adjustments” to the workplace to ensure the workplace remains safe.

    “Making sure you provide a safe place to work is an hourly or daily thing,” he says.

    “There’s no doubt in this case, if the employer had been more vigilant in managing the ergonomics for this woman, she would not have suffered the second injury and the employer would have avoided paying any compensation.”

    SmartCompany contacted the ATO but the ATO was unable to comment due to privacy considerations.

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    A small business owner has been handed an eight-year jail sentence for defrauding the Australian Tax Office of $5.8 million.

    Martin Douglas Aitchison  will serve a minimum of five years behind bars after Victorian County Court judge Meryl Sexton ruled he “demonstrated a level of greed” by lodging false business activity statements (BAS) with the ATO between 2008 and 2012, reports Fairfax.

    Aitchison pleaded guilty to three charges of obtaining a financial advantage by deception and one charge of attempting to obtain a financial advantage by deception.

    The court heard Aitchison, who previously operated a small trucking company called Aitchison Heavy Hauling, lodged the false documents purporting to show tax paid on fuel purchases through a family trust and over the four-year period was refunded around $5.8 million by the ATO.

    Aitchison allegedly told the ATO he operated a fleet of between 100 and 200 trucks but in fact only owned one truck and one trailer.

    According to News Limited, Aitchison first made the false petrol claims in 2008 when three false claims led him to receive $400,000 from the ATO. He went on to claim more than $2 million in 2011 and more than $3 million in 2012.

    In one incident, he lodged 19 false tax invoices in a bid to show his company purchased 1,250,000 litres of fuel from MOBIL for his company but after an ATO audit in 2012, MOBIL advised the ATO no fuel had been delivered to Aitchison’s address.

    After this incident, Aitchison went on to claim a refund for another $600,000 but the claim was rejected.

    Judge Sexton heard Aitchison used the cash to fund a lavish lifestyle, including upgrading his family home, purchasing property on the Gold Coast and in New Zealand and buying other luxury items, including a houseboat and a Mercedes-Benz car for his wife.

    While Sexton found Aitchison was trying to provide for his family, his actions mean his family will be worse off in the long-run.

    “Stealing from the Commonwealth means the government has less to spend on services such as payment of pensions that your wife will now have to receive,” she said.

    According to documents lodged with the Australian Securities and Investments Commission, Aitchison placed Aitchison Heavy Hauling into liquidation in April 2013.

    The ATO has reportedly recouped $2 million from the liquidation process.

    Gary Gill, head of forensic accounting at KPMG, told SmartCompany it is likely the fraudulent invoices were discovered as a result of the ATO’s internal data analytics systems.

    “I imagine they would have quite sophisticated data analytics to look for unusual transactions and if taxpayers are regularly receiving refunds,” Gill says.

    While Gill says the case is “certainly unusual”, it shows the myriad of ways fraud can be conducted.

    “At the end of the day, if you create false documents and put in the claims, some people are able to succeed,” he says.

    The Australian Tax Office declined to comment on the case when contacted by SmartCompany. 

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    The Australian Competition and Consumer Commission wants the courts to impose larger penalties of up to $100 million. 

    In a speech to the Committee for Economic Development of Australia at lunchtime today, ACCC chairman Rod Sims will say the competition watchdog thinks the penalties should offer more deterrence.

    This follows complaints that last year’s $11 million penalty against Flight Centre was “immaterial” and statements by a Federal Court judge that maximum penalties of $1.1 million available against Coles for unconscionable conduct were “arguably inadequate” given its turnover of $22 billion.

    “Penalties should not be seen as simply a cost of doing business,” Sims will say in his speech. “They need to be at a level which achieves both specific and general deterrence.”

    While some businesses think they have a lot to gain from breaching Australia’s competition and consumer law, Sims will say they should have much to lose as well. 

    While the ACCC can seek penalties of up to 10% of a business’ revenue in cases of price fixing and cartel conduct a fine of up to $1.1 million per penalty is the maximum that can be sought in cases dealing with misleading and unconscionable conduct.  

    Ahead of the speech Sims told Fairfax the difference between a $10 million fine and a $100 million fine is “quite profound”.

    “People will sit up and take notice, because it starts to show up in the profit and loss statement, and it will grab attention, which is what we are trying to do with our deterrence messages.”

    SmartCompany has an advance copy of Sims’ first speech for 2015, which will outline the ACCC’s enforcement priorities for the year: cartel conduct in government procurement, truth in advertising, competition and consumer issues in the health sector and industry codes.

    He will say that the watchdog has worked hard after cutting its staff by 12.5% but getting an additional $20 million in funding from the government.

    Sims will say competition and consumer issues in highly concentrated sectors remains a priority and the Coles unconscionable conduct outcome sets a benchmark which can be applied to other sectors.

    “This outcome has very important economic consequences. This is about smaller businesses being able to have faith in their contracts with larger businesses so they can plan and invest.”

    Sims will say naming truth in advertising as a priority, particularly when engaged in by large businesses with broad impact, is important as it is also required for a successful market economy.

    “Our action in this area serves a dual purpose. When advertising is untruthful consumers are misled and honest traders are put at a competitive disadvantage.”

    The ACCC will also concentrate on emerging consumer issues in the online marketplace to ensure the rights and obligations that exist in the bricks-and-mortar world are not ignored online.

    “One problem is significant delays by online businesses in addressing consumer complaints about either the product itself or delivery,” Sims will say.

    “We and other ACL regulators will be working with industry to improve responsiveness to consumer concerns.”

    As well as bedding down changes to the Franchising Code of Conduct, the introduction of a code of conduct to address unfair practices in the grocery sector will be a major focus in 2015.

    Sally Scott, partner at law firm Hall & Wilcox, told SmartCompany there is no doubt that under Sims’ tenure, the ACCC has been particularly litigious.

    “Despite a tight budget, the ACCC has seemingly had little difficulty finding funds for many court cases,” she says.

    “Large penalties naturally raise greater awareness of the risk amongst the wider business community, and Rod Sims no doubt hopes this translates into fewer contraventions.”

    Scott says the ACCC can’t take action against every business that contravenes the competition and consumer law.

    “It doesn’t have the budget to do so,” she says.  “It must choose its targets to ensure it achieves the greatest deterrence. Seeking larger penalties is part of this.”

    But Scott cautions that although the ACCC can seek larger penalties, the ultimate decision of the size of the penalty will rest with the court, even where there is consent.

    “If business wasn’t already alert to risks of contravening the competition and consumer law as a result of the ACCC’s propensity to litigate, this should help achieve that awareness and encourage business to take steps to minimise the risk,” she says.

    “This is what Rod Sims hopes to achieve.”

    Scott says in order to seek higher penalties for consumer law offences, like misleading conduct and unconscionable conduct, that are not constrained by a dollar limit, there will need to be government intervention in the form of a change to the legislation.

    "I wouldn’t be surprised if we see Rod Sims campaigning for such a change, and his speech appears to be one step in such a campaign. In the meantime, in the absence of such a change, he has indicated that he will keep pushing for ‘penalties of appropriate deterrent value’ which is code for seeking as high a penalty as possible." 

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    An employee who was sacked for groping a bartender while staying at a hotel paid for by his employer has lost his unfair dismissal case before the Fair Work Commission.

    Commissioner Danny Cloghan dismissed a claim by an employee brought against his employer, who were both not named in court documents.

    The employee had worked at the company for seven-and-a-half years when he was put up in a hotel the company regularly uses to accommodate employees as part of their employment, in February 2014.

    On the evening of February 11, the employee asked one hotel employee what she was doing after work and gestured to his lap. He also made comments of a sexual nature to another hotel worker, regarding her facial piercing.

    One of the hotel workers gave evidence to the commission the employee’s behaviour then escalated quickly and he “groped” her bottom.

    “I felt the person squeezing my bum with their hand,” said the hotel worker, who was also unnamed in court documents.

    “It felt like the person was using two hands to grope my bum because the contact was made across both bum cheeks and I believed I felt more than five fingers touching me. I did not see how many hands the person used to grope my bum.”

    The employee was dismissed from his employment on April 17 for his actions.

    The employer told the employee “your actions as an employee have brought [the Employer] into disrepute and put both the hotel and [the Employer] to significant cost and inconvenience.”

    The employee said he apologised to the bartender on several occasions and argued his actions had occurred outside of the workplace.

    But Commissioner Cloghan found it was reasonable to dismiss the employee, given the existing relationship between the employer and the hotel.

    Employment lawyer and M+K Lawyers partner Andrew Douglas told SmartCompany the case was representative of a larger change happening in employment law, which considered an expanded definition of the meaning of a ‘workplace’.

    “In old case law, if someone did something bad outside of work, an employer could not do anything about it,” says Douglas.

    But Douglas says several prominent cases have now shown if the employees’ actions impact the employer's reputation, then they are able to discipline them accordingly.

    “There is a brand and reputational relationship between a business and the person,” he says.

    “If you do something that damages the brand and reputation that has some natural connection to the business, you can be reprimanded.”

    Douglas believes this shift can be beneficial for employers if they make it clear what their brand is and build those values into policy and business collateral so all employees understand it. He says if this is made clear, it is reasonable to discipline an employee to protect your brand.

    “For good businesses, employees are their best advocates. But now for businesses where employees are bad advocates, they have a way of dealing with them,” he says.

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