A Perth man who fell victim to a Nigerian oil scam in the 1980s has allegedly been dragging other people into his own scam to continue to send money overseas, in the belief he will eventually get his original investment back.

Consumer Protection Western Australia has issued a warning to potential investors not to give any money to Gerardus (Gerry) Hermanus Jorissen or his wife Anne Jorissen.

Consumer Protection alleges Gerry Jorissen has taken at least $200,000 from at least 10 people in recent years, promising them a high rate of return on their investment, and then sent it to overseas criminals under the guise of an investment scheme.

In August last year, the Commissioner for Consumer Protection took action against Jorissen in the WA Supreme Court after he breached an enforceable undertaking placed on him in 2013, which prevented him and his wife from taking money from third parties to send overseas.

Since August, WA Police Major Fraud Squad has been advised of two fresh complaints against Jorissen.

“[He] now believes he is communicating with banking and legal professionals in America in relation to this bogus story of an outstanding investment pay-out owed to him,” David Hillyard, acting WA Consumer Protection Commissioner, said in a statement.

Hillyard said despite numerous warnings and the enforceable undertaking, Jorissen continues to solicit investments.

“[He is] absolutely convinced that the funds will eventually come back to him, but it's been a never-ending story of sending more and more money overseas to these perpetrators of the original scam," Hillyard said.

“We are now viewing this from the perspective that he is wilfully and neglectfully victimising others and is a perpetrator. The growing level of consumer detriment and financial risk to the community is why we have resorted to a public naming.”

“Our message is simple: DO NOT give money to Mr Jorissen or his wife. If you do, you will lose it for good because Mr Jorissen is caught up in an investment fraud and sends any money he can get his hands on to criminals who are offshore.”

The ABC reports one of the victims used his $70,000 worker’s compensation payout to invest in the scheme.

Fraud expert Brett Warfield of Warfield and Associates told SmartCompany it is rare to see a fraud victim allegedly perpetrate fraud themselves.

“It’s very unusual,” says Warfield. “[Fraud victims] usually become advocates and go out to the market to warn others.”

Warfield say the major red flags for business owners to consider when investing include how someone contacts you with the opportunity, including if they contact you unexpectedly via phone or email, what sort of contracts and legal processes there are to invest your money and the rate of the return promised.

“If they tell you it’s much more than a few percent above the interest rate or the government bond rate, something is probably going on,” Warfield says.

And Warfield says overseas scams are even harder for victims to follow up.

“If the money leaves Australia there are big problems to get money back.”

A Queensland abattoir worker has been found guilty of stealing more than $4000 worth of cow gallstones from his employer over a six-month period.

Dean Eames, 38, pleaded guilty to charges of theft in the Toowoomba Magistrates Court earlier this week.  

Gallstones from livestock can fetch up to $20,000 per kilogram as they are highly prized in Chinese medicine for the treatment of hepatitis and liver and gallbladder ailments.

While they come in a variety of shapes and sizes, Queensland Police said in a statement about the theft, stones that are “whole, smooth, lustrous” attract the highest price.

However, the former abattoir worker’s solicitor argued in court his client did not know how much gallstones could fetch on the market, according to the Toowoomba Chronicle.

Instead, Eames reportedly stored the stones at the abattoir and ate them for his own medicinal purposes.

Eames avoided two months in prison and was instead given a wholly suspended sentence.

Fraud expert and chief executive of Warfield and Associates, Brett Warfield, told SmartCompany SMEs need to have the right policies and processes in place in order to minimise employee theft.

“Organisations, whatever their size, really need to do a risk assessment to be able to identify where their major risk areas of theft and fraud are,” Warfield says.

“One of the components of that is the value of the items they have — so the value of their stock or goods. Of course, these things are highly regarded by Chinese medicine … so while they’re small in size you can put it in the same category as precious metals.”

The gallstone thief was successfully prosecuted thanks to CCTV footage. However, Warfield says business owners need to understand security footage has both benefits and drawbacks.

“CCTV is very good for going back once you have an idea of when something’s happened and you’re able to identify a time frame in recent history,” he says.

“Unfortunately it’s not good if you have to go back six months ago because most organisations don’t keep it that long. You also need to be able to make them [employees] accountable, so you need someone to look at how many cattle are coming through, the gallstones taken out of the cattle each time … treat it as an in-and-out stock item just as you would anything else.”

Warfield also points out only a tiny minority of staff steal from their employers.

“Regardless, every organisation should make sure they are constantly reviewing their controls because it’s also about protecting the integrity of their own staff,” he says.

“If something like this happens, their staff might get tainted with the same brush.”

Spanish retail giant Zara has been accused of racial profiling its customers and discriminating against its employees based on the colour of their skin in the US, in a report by an American not-for profit organisation.

It’s the third time in less than 12 months the retailer has come under fire for its racial insensitivity, after the brand was hauled over the coals last year for selling a T-shirt that appeared to look like a Nazi concentration camp uniform.

The Centre for Democracy in New York released Stitched with Prejudice:

Zara USA’s Corporate Culture of Favoritism last week, after interviewing 21 of the company’s employees.

The report includes a range of accusations, including that darker-skinned employees said they were least likely to be promoted, employees of colour said they were reviewed with harsher scrutiny from management than white American and European employees, and black customers were seven times more likely to be targeted as potential thieves than white customers.

Nicole Matejic, a specialist in crisis communications, told SmartCompany being associated with racial discrimination is incredibly damaging to a brand.

“This is not the first time it’s come up with [Zara],” says Matejic.

“I think clearly the perception has been created now… And if a company is truly confident their culture is not like that, they have to do a lot of work to change those perceptions.”

“They have to walk the talk and play the long game to convince people. The only way to do that is by demonstrating equal opportunity practices, racial tolerance and a holistic approach to the work environment,” she adds.

SmartCompany takes a look at this latest controversy in more detail, as well as two other times Zara was stung for racial insensitivity in the last year.

1. Racial profiling of customers

According to the report, the majority of Zara employees surveyed mentioned a practice of labelling suspected shoplifters as “special orders” as a security code to alert other staff.

“Employees overwhelmingly felt that the Zara practice led to black customers being disproportionately labelled as ‘special orders’ upon entry to Zara stores,” said the report.

Of the 57% of employees that mentioned the use of “special orders”, 46% noted black customers were called special orders “always” or “often,” compared to 14% of Latino customers and only 7% for white customers.

Matejic says a company “skates on thin ice” when it asks its employees to act as security guards or “pseudo police officers” to stop shoplifting.

“Especially in Australia, the laws around detaining people are different in every state and territory. You can get done for false arrests quite easily,” she says.

“If you are a retailer and you encourage your staff to be pseudo police officers, you need to be very mindful of the law… Police and security guards are trained to do it – don’t try to take a one-size-fits-all approach to making staff do whatever the hell you want them to.”

2. Former attorney files discrimination suit over “anti- Semitic” dismissal

Earlier this month, Ian Miller, a former attorney for Zara, filed a $40 million lawsuit against the company claiming he was harassed and ultimately fired for being Jewish, American and gay, according to The Guardian.

Miller is alleging he was excluded from meetings, given smaller raises than co-workers and subjected to racist, homophobic and anti-Semitic remarks. This included being emailed images by top executives of Michelle Obama serving fried chicken and emails depicting Barack Obama in a Ku Klux Klan hood.

Zara has denied the allegations, but the case is still before the New York state court in Manhattan.

3. Racially insensitive products

Last year, Zara was forced to pull two products deemed racially “offensive” in two weeks after customers hit out at the retailer on social media.

A children’s shirt likened to the concentration camp uniform worn by Jewish prisoners caught the ire of customers, just one week after a T-shirt with the slogan “White is the new black” was pulled from shelves.

The striped shirt featured a yellow six-pointed star, which led commenters to say the garment resembled the striped uniforms of World War Two Jewish prisoners of war. And although the star had the word “sheriff” written on it, customers complained this was not clear from the website images for the product.

Zara International quickly responded, pulling the shirts and apologising. It said the sheriff’s badge from classic Hollywood Western films inspired the star design.

“We would not want any of our products or designs to be perceived as disrespectful or offensive,” said Zara at the time. “In addition, respect and dignity are amongst the principles that define and guide our corporate value; we vehemently reject any form of discrimination.”

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

A rare Fair Work Ombudsman (FWO) injunction application is underway seeking to restrain a retail operator from underpaying her employees.

Facing the injunction notice is Deborah Souris, who owned and ran Kenny’s Cardiology and Giftology stores in both Melbourne and Brisbane during 2014.

Since 2007, more than 40 employees of companies of which Souris has been a director have contacted the FWO. This injunction is specifically in regards to five employees.

Three Compliance Notices were sent out to Souris, requesting back-pay for five of her former employees amounting to $11,187.

It isn’t the first time Kenny’s management has been before the court, with former Kenny’s chief executive Anthony Underwood and former director of sales Randal Wilson accused of misleading and deceptive conduct by former franchisees.

Kenny’s Cardiology is now owned by WH Smith Australia Group.

This is only the second injunction case the FWO has sought in its 11 years in operation.

The FWO’s first case penalised a NSW hairdressing salon and its owner Nelvin Litesh Lal for underpaying staff to the amount of $162,000. Lal was also issued a restraining order from underpaying any hairdressing employees in the future.

“An injunction is an unusual step in a debt recovery case,” Anthony Massaro, of Russell Kennedy Lawyers’, told SmartCompany.

“When normal enforcement measures aren’t working, the FWO will consider alternative ways of getting an employer’s attention,” says Massaro.

Generally speaking, receiving one compliance notice is something to be taken seriously, let alone three.

Massaro normally advises clients that if they have a legitimate reason to fight the compliance notice then they should consider doing so, but if their business is in the wrong it’s best to pay up and move on.

“Most compliance notices are a result of genuine mistakes – an employer thinking an employee is covered by one award and the FWO saying it’s another, or a different classification” says Massaro.

With SME owners generally taking care of bookkeeping, Massaro says costly mistakes in calculating award rates are more likely to occur.

“If you contest the compliance notice and are wrong, you can be fined up to $51,000 as a business, $10,200 as an individual.”

SmartCompany contacted Souris but no response had been received before publication.

Rivals Carsales.com and Carsguide.com.au will go head-to-head in the Victorian Supreme Court next month, after Carsales.com initiated legal action against its competitor over what it alleges is deceptive and misleading advertising.

The dispute is over an advertising campaign created for Carsguide.com.au that included a stunt involving a lightning embossed blimp that was positioned over the Carsales head office in Melbourne and next to a billboard with the words: “Let lightning strike those who sell your contact details to dealers.”

The campaign also includes television and radio ads.

Carsales argues the “grossly misleading” campaign, which began on June 15, includes seven false representations, including claims that Carsales sells customers’ contact details to dealers, that customers’ contact details are passed on from Carsales to dealers without the customers’ knowledge, and that customers’ details are given to a range of dealers if that customer makes an enquiry using the Carsales website.

In a statement issued to SmartCompany this morning, Carsales.com chief executive Greg Roebuck labelled the campaign “misleading” and said Carsales will seek court orders to prevent Carsguide from making the claims and to publish corrective ads.

“We have sent a cease and desist letter to carsguide.com.au but they have this far refused to remove the ads,” Roebuck said.

“We believe that we have no choice but to go to the Supreme Court to stop carsguide.com.au and their attempts to mislead the Australian public.”

Roebuck said Carsales has “an obligation to do the right thing” by its millions of customers and said the company he leads would not have achieved its position in the market, and the trust of its customers, “if we were doing anything untoward”.

“Carsguide.com.au has gone out of its way to imply we’re in the business of selling consumer contact information to multiple dealers,” he said.

“This is untrue.”

“Consumer contact information is only provided to the owner of the specific car that is enquired upon and to no one else. There is no significant difference between the way in which carsales.com.au and carsguide.com.au provide contact details to the relevant dealer.”

But Carsguide has hit back, saying in a statement issued to SmartCompany this morning that Carsales is trying “to take Carsguide’s thunder”.

“We knew most consumers had no idea that when they inquired about a car on Carsales their contact details were being sold to the dealer,” Carsguide chief executive Lauren Williams said in the statement.

“Our campaign aims to drive broad awareness on this little known transaction. We want consumers to have the opportunity to make an informed decision – either be part of the transaction, or use Carsguide where dealer location and name are shown up front.”

Williams said Carsguide had previously used the “same business model as the market leader”, but relaunched its business using a “new open model” in January 2015.

“When I started as CEO, we could see that the old model of hiding information and selling contact details was not a sustainable practice for a modern online business,” she said.

“We re-engineered our business and dealers now pay for views of their cars and not for consumer’s contact details.”

The first hearing in the case is scheduled to take place on July 10.

A Brisbane-based insolvency practitioner has been formally admonished by the Companies Auditors and Liquidators Board, following an investigation by the Australian Securities and Investments Commission.

Jonathan Paul McLeod is the principal of insolvency firm McLeod & Partners, a chartered accounting firm that specialises in corporate restructuring and insolvency.

ASIC investigated McLeod over his appointment to 17 external administrations between 2008 and 2012 and made 24 allegations against McLeod, 13 of which were established by the CALDB.

The CALDB, an independent statutory body, found on numerous occasions, McLeod failed to lodge reports with ASIC that detailed suspected offences as soon as practicable after he became aware of the possible offences.

McLeod was also found to have failed to provide a remuneration report to creditors; to properly declare his independence to creditors on numerous occasions; to properly consider whether he was disqualified from consenting to act as a liquidator; and open a liquidator’s general bank account within seven days of his appointment.

Seven other allegations made by ASIC were not upheld by the CALDB, while ASIC withdrew a further four allegations.

An admonishment by the CALDB is a form of reprimand and is one of three options the CALDB has when assessing the performance of a registered auditor or liquidator.

The board also has the power to cancel or suspend an individual’s registration or to require them to enter into an undertaking.

In this case, the CALDB said in a statement it made a decision to admonish McLeod after taking into account the fact that during the time when the conduct occurred, McLeod had been diagnosed with and received treatment for a serious illness.

The board also found McLeod did not engage in any “deliberate or dishonest conduct”, had co-operated throughout the proceedings and provided evidence to show that he has implemented processes and procedures “to address the deficiencies identified”.

The board said its ruling should act as a “reproof” to McLeod, “while also serving the public interest as a reminder to the insolvency profession generally” that registered liquidators must uphold their duties under the Corporations Act properly at all times.

SmartCompany contacted McLeod & Partners but did not receive a response prior to publication.

The Fair Work Commission has sounded a clear warning to employers that they can be held responsible for the behaviour of their employees if they provide unlimited alcohol at work functions, after a worker who sexually harassed his colleagues and swore at his boss at a Christmas party was found to be unfairly dismissed.

Stephen Keenan had been employed by Leighton Boral Amey Joint Venture since April 2014 and had been working in the role of team leader since October 2014, but was sacked on January 19 this year after a Christmas work function.

The Fair Work Commission heard employees were given access to unlimited alcohol at the event and Keenan drank 10 beers and one vodka and coke at the party, on top of two beers he had prior.

During the course of the party he told one of the company’s directors and a senior product manager to “fuck off” and asked a colleague “who the fuck are you? What do you do here?”

Once the work function had ended, Keenan went to a public bar with some of his colleagues. The commission heard he called one female colleague a “stuck up bitch”, causing her to become upset.

He was also accused of suddenly kissing another female colleague in an “unsolicited and unprovoked manner”, telling her he was “going to go home and dream about you tonight”.

Keenan allegedly told another female colleague “my mission tonight is to find out what colour knickers you have on”. She told him if he touched her skirt, “I’ll kill you.”

Leighton Boral Amey argued Keenan failed to comply with his duties and obligations and failed to uphold the company’s core value of “safety and respect”, based on his behaviour towards his female colleagues, but he denied the allegations and lodged an unfair dismissal claim with the Fair Work Commission.

While Fair Work Commission vice-president Adam Hatcher found the employer had a valid reason to terminate Keenan’s employment, he ruled the dismissal was harsh because the behaviour at the Christmas party was “isolated and aberrant in nature”.

Hatcher accepted as fact all of the allegations made toward Keenan but said only the conduct that occurred at the function venue between 6-10pm was relevant to determining if he was unfairly dismissed.

“It can be inferred from the evidence that the physical boundary of the function was the venue booked for it,” Hatcher said in his ruling.

“Employees were informed in advance that, in substance, [the company’s] standards of conduct would apply at the function, but there was no suggestion of any expectation that those standards would apply to behaviour outside the temporal and physical boundaries of the function.”

Hatcher took account of evidence provided that Keenan had a good record of employment and that ultimately his conduct was the result of how intoxicated he became at the Christmas party.

“An exacerbating factor in that respect was the manner in which alcohol was served at the function,” Hatcher said.

“In my view, it is contradictory and self-defeating for an employer to require compliance with its usual standards of behaviour at a function but at the same time to allow the unlimited service of free alcohol at the function.”

“If alcohol is supplied in such a manner, it becomes entirely predictable that some individuals will consumer an excessive amount and behave inappropriately.”

The commission has yet to decide whether Keenan will be re-instated to his position.

Workplace law specialist and partner at M+K Lawyers partner, Andrew Douglas, told SmartCompany the case is a warning to other employers.

“You can’t have a Christmas party with as much beer as you want and then complain people were drinking it,” Douglas says.

“You can’t push an opportunity and then complain if employees take it.”

Douglas says this issue of mutual responsibility is a re-occurring theme in workplace law and employers need to understand if they create circumstances where particular behaviour can occur, they share the responsibility for it.

For this reason, he says employers should always clearly communicate what is considered a work function and managers should not support or condone drinking with their employees outside of work.

However, Douglas says the Fair Work Commission may have taken a different stance in this case if it had been one of Keenan’s female colleagues who had complained about his behaviour.

“If a sexual harassment claim had been brought by one of the women, I have no doubt the [female] employee would have been protected,” he says.

SmartCompany contacted Leighton Boral Amey Joint Venture but the company declined to comment.

The former chief executive and chief financial officer of Sigma Pharmaceuticals face possible jail time after pleading guilty to fraud-related charges yesterday.

Elmo de Alwis, Sigma’s former chief executive, and Mark Thomas Smith, the company’s former chief financial officer, each entered guilty pleas in the County Court in Melbourne to two charges related to falsifying the company’s books.

The pair also indicated they would plead guilty on charges of giving false or misleading information to Sigma’s auditors and board at a later date.

Both men were bailed to appear before the court for a further plea hearing on September 17.

The fraud was uncovered by an Australian Securities and Investments Commission investigation into the pair’s conduct in accounting for four financial transactions between June 2009 and March 2010.

According to ASIC, the pair was involved in arranging transactions for Sigma to buy wholesale pharmaceuticals at inflated prices during the period.

The amount of the inflated payment was then returned to Sigma and recorded in their accounting books as revenue, ASIC said in a statement.

As a result of these transactions, ASIC said Sigma overstated its income by $15.5 million, its inventories by $11.3 million and its profit after tax by almost $9.6 million for the year ending January 31, 2010.

The company then made adjustments to its accounts to reverse the overstatements.

If found guilty on the charge of falsifying accounts, Alwis and Smith could face fines of up to $11,000 and possible jail terms of two years per offence, while the pending charge of making false statements to the company carries a maximum penalty of $22,000 and five years jail time.

Brett Warfield, chief executive at Warfield and Associates, told SmartCompany this morning it can be difficult for businesses to know how to identify fraud if it is happening on a senior level.

Warfield says junior finance people in a company are usually unable to manipulate profits to the extent ASIC had allegedly uncovered at the pharmaceutical company.

“Looking at the issue, you have the two most senior people in the organisation doing it,” he says.

Warfield says it would take a “good strong board” to identify unusual transactions or unusual journal entries before taking action against a company’s directors suspected to be tinkering with the books.

“The overall thing people need to be aware of is if any transaction doesn’t seem right, it’s important to ask questions; no matter what the size of the organisation,” he says.

Warfield encourages small to medium sized business owners to “follow through” if they have a “gut feeling something is not right”, and not to rely on internal finance people exclusively.

“It’s no good to trust a finance person who says, ‘It’s all okay’,” he says.

“Owners might need to get independent, external advice from auditors – they can be very helpful.”

“But I want to emphasise, if you’ve got the CFO and CEO [doing it], it really, really is difficult to identify and do something about it.”

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

App developer and wellness blogger Belle Gibson was taken to court yesterday for failing to answer questions about allegations of fundraising fraud.

Consumer Affairs Victoria appeared at the Melbourne Magistrates’ Court to pose a series of 27 questions towards Gibson, including whether or not the wellness blogger ever had malignant brain cancer. Gibson did not appear in court. 

A spokesperson for Consumer Affairs Victoria confirmed to SmartCompany this morning the matter has been adjourned by the Magistrates’ Court until July 10.

The consumer watchdog also confirmed to Fairfax it is investigating if Gibson contravened any aspects of Australian Consumer Law, such as misleading and deceptive conduct.

Gibson is the founder of The Whole Pantry and she shot to prominence off the back of The Whole Pantry app, which was downloaded 300,000 times, and a cookbook of the same name.

However, in March allegations emerged that Gibson had failed to hand over thousands of fundraising dollars promised to charity and her cancer survival story was untrue.

It was later found Gibson failed to donate the promised $300,000 to charities as promised, however, Victorian Police said it would not pursue criminal charges against her.

Gibson admitted in April she did not have cancer in an exclusive interview with the Australian Women’s Weekly magazine.

“No. None of it’s true,” she confessed in the interview.

“I just think [speaking out] was the responsible thing to do. Above anything, I would like people to say ‘Okay, she’s human’.”

The backlash to her confession sparked anger among those who had been following her story and advice for years, including cancer victims.

Gibson’s latest media appearance was on the Nine Network’s program 60 Minutes on Sunday night, which saw reporter Tara Brown ask questions Gibson wasn’t prepared to answer.

“You don’t have a good record on telling the truth, do you?” Brown put to her.

“I’m not trying to get away with anything,” Gibson replied later in the interview. “I’ve not been intentionally untruthful.”

The former chief executive of Luxperience is suing the company and its founder, Helen Logas, over claims her employment contract was breached.

Logas founded the luxury trade show, a finalist in last year’s Smart50 Awards with revenue of $1.6 million, in 2011 and in March 2013, Lindy Andrews was contracted as the director of sales for the business.

However, her contract was terminated abruptly in September 2014. She has now filed a statement of claim in the New South Wales District Court seeking more than half a million dollars in damages and costs for a breach of contract.

According to the statement of claim, seen by SmartCompany, Andrews, who is the owner of another business called LCA Communications Group, turned down a lucrative job with Reed Exhibitions, which was worth an annual salary package of $250,000, to work for Luxperience.

Andrews said Logas offered her a position as director of sales for the 2013 Luxperience trade show, with an annual salary of $100,000. Andrews claims Logas said if the 2013 show was a success, she would relocate to New York, give up day-to-day involvement with the business, and appoint Andrews as chief executive of Luxperience, a position that would entitle her to a share in the company’s profits.

Andrews also claims Logas said they would work together to prepare Luxperience to be sold within a period of 12-18 months and Andrews would be entitled to a share in the proceeds of that sale.

Andrews claims the employment contract was made both in writing, via an email, and orally during an interview and follow-up telephone conversation.

Following the 2013 Luxperience event, Andrews took over as chief executive of the company and she claims Logas offered her an increased salary, a 10% shareholding in the company, a 10% share in the company’s profits and 10% of the proceeds of the sale of Luxperience.

In a series of emails exchanged by Andrews and Logas, Logas allegedly said Andrews could expect to make a figure of $595,000 if the business was sold.

A contract for Andrews to provide services to Luxperience was finalised in October 2013. According to the statement of claim, the contract offered Andrews an annual salary of $145,000, a bonus based on 10% of the company’s operating profit for the 2014 calendar year, a portion of which Andrews had agreed to pay back to the company, and an amount equal to 10% of the proceeds of the sale of Luxperience.

Andrews worked for Luxperience until September 9, 2014, at which time she received an email terminating her contract with Luxperience.

Andrews claims Logas never made her a 10% shareholder of the company and she suffered loss and damage because of this, to the value of $282,000.

She also claims Logas made misleading representations to her under Australian Consumer Law, which also resulted in loss and damage. For these claims, Andrews is claiming approximately $162,048. This amount is based on the income she would have earned if she had taken a job with Reed Exhibitions, $345,084, minus the income she received while working for Luxperience, $182,916, and less $120,000, which she believes she will earn from other employment until March 2016, when the Reed contract would have ended.

Further, Andrews claims Luxperience has failed to pay her unpaid invoices to the value of more than $40,000, as well as $165,615, which she claims would have covered the income she would have earned between September 9, 2014, and December 31, 2015.  

The claim was filed on June 15 and the case is scheduled for a pre-trial hearing on September 8.

SmartCompany contacted Andrews and Luxperience but both parties declined to comment.

A former plumber who used his work mobile phone to access dating sites and pornography has lost his unfair dismissal case after being sacked for failing to follow company procedures. 

Anthony Dunne, who had worked with plumbing company Repipe for three years, was fired in early 2014 for not completing time sheets and other paperwork, as well as being abusive to fellow staff members.

In his application for unfair dismissal, Dunne disputed these claims and said he had not been given any advance notice and was not told of the reason for the dismissal.

However, Fair Work Commissioner Matthew O’Callaghan said in his ruling he found Dunne’s testimony was “substantially lacking in credibility” and that he was “simply dishonest” with his use of evidence.

While Dunne has dyslexia, the commission heard Repipe chief executive Jaqueline Outram, made appropriate adjustments to his reporting arrangements, including a timesheet template.

In 2013, Outram had told Dunne she was concerned he was not servicing his work car and was not undertaking pre-start checks at worksites. This was followed by a “severe reprimand” later that year.

From September 2013, Outram was based in the Pilbara and could not double-check Dunne’s compliance with her instructions. However, she was made aware in 2014 that he had not completed seven of his 20 timesheets.

After his dismissal, the company also discovered Dunne had used his work phone to access as many as 200 dating and sexually-orientated websites over a four month period.

In his ruling, O’Callaghan said Dunne’s inappropriate use of his work phone contributed to his decision to dismiss the employee’s application for unfair dismissal.

“The frequency of Mr Dunne’s use of these sites, the extent to which he did so at times when he was at work and his use of password access which coincided with his access codes for Repipe functions, all represent valid reasons for the termination of his employment,” he said.  

Employment lawyer Peter Vitale told SmartCompany the commission seems to have cut the employer some slack in this case because they are a very small business.

Vitale says from the commission’s ruling it appears Repipe did not have a particular policy relating to the use of company mobile phones. 

“In some cases that might be sufficient to raise a doubt about whether or not the use by the employee was authorised or, to put it another way, not prohibited," Vitale says.

"But in this case the commission has found that he was accessing inappropriate sites from his work phone during working hours and that provided a valid reason for termination, even though it was only discovered after his employment was terminated.”

However, SmartCompany understands Repipe does have policies in place that cover the use of company assets and resources.

Vitale says this case highlights the importance of businesses having workplace policies in place when it comes to using company property and the internet during business hours.

“One can imagine that in a larger company, in the absence of a very clear policy relating to the use of company phones or internet usage, that the commission may have found there was not a valid reason for termination,” he says.

Repipe was not contacted prior to publication. However, since publication Repipe has indicated it disagrees with SmartCompany’s interpretation of the Fair Work Commission’s ruling but has not provided further comment. 

*This article was updated at 3.39pm on July 8 to clarify that SmartCompany has now contacted Repipe

The Victorian consumer watchdog is urging consumers to stay away from an online retailer after it received around 100 complaints from people who say they had paid for children’s toys but never received them. 

Consumer Affairs Victoria has issued a public warning notice against Toy Palace under Section 223 of the Australian Consumer Law.

The business is alleged to have breached the law and one or more people have suffered as a result.

Despite the watchdog raising these issues with the business, people have continued to complain to Consumer Affairs.

The behaviour is alleged to have occurred over a seven-month period. The watchdog is urging consumers who have not received their goods from Toy Palace to ask their financial institution for assistance.

Toy Palace’s website and Facebook page are no longer available; however, people have left scathing comments on customer satisfaction site Product Review – with the retailer scoring one out of five stars.

“After more than six weeks waiting for good[s] to arrive I attempted over many emails to get a refund,” one customer wrote.

“Toy Palace said they had refunded my money but didn’t. Don’t trust them at all.”

Meanwhile, a Sydney woman wrote that she could not understand how a person could do this to customers and especially their children.

“I ordered some toys for my son’s third birthday and then realised I would not get them in time so I cancelled the order within three hours later,” she wrote.

“They were fast to reply back to my emails then and told me I will lose 20% for cancellation. I replied that was fine as I just want most of my money back and over eight weeks later, many emails later and no replies I still DO NOT have my money back.”

Andrew Parlour, principal at Russell Kennedy Lawyers, told SmartCompany the best way for consumers to get their money back is to ask their credit card companies for a refund.

“It’s probably easier for someone who’s an online retailer to do a runner than somebody who has an established bricks-and-mortar store,” Parlour says.

“But there are a variety of offenses in place. Under section 158 of Australian Consumer Law, it is an offence if a person accepts payments for goods and services and at the time of the acceptance the person intends not to supply the goods or services. So if he’s taking this money without knowing he can’t come up with the goods, that will need to be established.”

Individuals can face penalties of up to $220,000 for breaching the law, with corporations facing a whopping $1.1 million penalty.

Parlour says this case is a good example of why consumers are now taking extra precautions when shopping online.

SmartCompany was unable to contact Toy Palace prior to publication.

A West Australian lawyer has been ordered to hand over more than $100,000 to a former client, after the state’s Supreme Court found the lawyer charged excessive amounts of money for work that was described as “wasted” and “inappropriate”.

Handing down his judgment yesterday, Supreme Court registrar Christopher Boyle found the lawyer, referred to in court documents as Mr K, charged his client, Mr M, more than $330,000 for legal representation in a family law dispute between November 2008 and April 2010.

But Boyle said Mr K “did not know what he was doing”, kept “unreliable” records and spent too much time undertaking administrative or clerical work, sometimes at an hourly rate of $270.

He therefore charged “substantially more than was reasonable or proper”.

Boyle ruled Mr K was only entitled to $220,000, as that amount would have adequately covered the amount of work if it was done by a competent and properly resourced legal practitioner, and ordered him to give back $110,000.

“That gives Mr K roughly two-thirds of what he claimed, and I think that properly reflects wasted or otherwise inappropriate work,” Boyle said.

While Boyle acknowledged the family law dispute between Mr M and his wife was “contentious and difficult” and Mr M’s legal costs were exaggerated by the behaviour of his wife and her legal team, he said Mr M was not experienced in family law and should either have not taken on the case or asked a more experienced practitioner to help.

Boyle referred to comments made by the Family Court judge that heard the dispute between Mr M and his wife, who questioned Mr M’s legal representation and the “staggering” amount of  $1.1 million in legal costs accumulated by the two parties, which was “totally disproportionate to the pool of [their] assets”.

He also relied on written correspondence between Mr K and Mr M, which he said showed he was out of his depth, including a fax message in which Mr K referred to a proposed interlocutory application and said “at the end of the day, if we put up a good fight and lose, the Court will recognise how strongly you feel about the matter, but will realise it was difficult for you to get proof”.

“Words fail,” said Boyle.

“That observation shows in my view the practitioner’s identification with his client’s cause had overwhelmed both his professional objectivity and his understanding of the proper performance of his duties to the court.”

The registrar was particularly concerned with a number of items Mr K billed Mr M for, including a “particularly disturbing” item titled “research”, for which there was no record of what was researched but there were 200 units charged at $270 an hour.

Other charges detailed in the court documents include “collecting of documents”, charged at $120 an hour, printing two letters, charged at $270 an hour, and $378 for “providing a taxi service and having an affidavit sworn”.

The court also heard there was a 20 day period in which Mr K charged for more than 10 hours a day and on six occasions, he charged the client for 15 or more hours a day, including three days in which he billed for 20 or more hours.

“The inevitable conclusion is that Mr K’s time records cannot be accepted as uncorroborated evidence even of time spent, let along whether that time spent was properly chargeable to the client,” Boyle said.

Rohan Harris, partner at law firm Russell Kennedy, told SmartCompany many business owners who are paying for the services of a lawyer will be protected under laws that regulate legal practices and solicitors, although these laws differ between states.

Harris says in Victoria and New South Wales, for example, there are “quite extensive” cost disclosure requirements that lawyers must adhere to and if a dispute arises, there are formal avenues for the legal costs to be reviewed. In Victoria, this may be through the Legal Services Commissioner or the Victorian Civil and Administrative Tribunal.

Harris says the “vast majority” of small businesses will be covered by these protections, with the exempt categories mainly made up of larger firms.

Harris says any business owner who is concerned about how much they have been charged in legal fees should revisit the agreement that was signed between the two parties.

“If you are not happy, you need to go back to the agreement, talk with your solicitor and see if you can resolve the dispute,” he says.

But even before an agreement is signed, Harris says “business owners really need to protect themselves from day one”.

To do this he recommends business owners do some research on their lawyer, including finding out if they are an accredited specialist in a particular area, and find a reputable professional.

“The cheapest lawyer won’t always be the best lawyer,” he says.

Harris says it is also important for business owners to establish a “proper engagement process” with their lawyers.

“Everyone should be clear on first of all, what work will be done by the lawyer, what the lawyer needs to do that work effectively, what it is going to cost and how the costs will be determined,” he says.

A former Yarra Trams employee has lost his unfair dismissal bid before the Fair Work Commission, after he was found to have been using his mobile phone while driving a tram.

Gabriel Soares had been employed as a tram driver with Yarra Trams in Melbourne from June 2011 but was fired on April 29, 2014, for misconduct.

Yarra Trams had been alerted to the alleged misconduct on the evening of January 13, 2014, after a passenger took to Twitter to complain she had seen a tram driver using his mobile phone while driving a tram on St Kilda Road.

“What happens when the @yarratrams rhino message is missed by its own? Drive on tram 114 on route 67 texting/FB as tram in motion! Not ok!”, read the tweet from the passenger Fiona Sweetman, referencing the Yarra Trams “Beware the Rhino” safety campaign.

The tweet was sent shortly after Sweetman alighted from the tram.

In her evidence provided to the commission, Sweetman said Yarra Trams responded to her tweet the following morning and also sent her a private, direct message, asking her to contact the company directly.

Yarra Trams told the commission it also sought a meeting with Soares on the same day, at which time he was told of the allegation that he was using his phone while driving a tram, which is a breach of one of Yarra Trams “cardinal” safety rules.

However, Soares said he was “just checking the time on my phone” and that he did not make a phone call at that time. Soares was asked to complete a report about his conduct on January 13 and this was discussed with his supervisor again on January 23.

Two subsequent meetings with Soares and his managers were held on February 14 and April 29 and the commission heard Soares was given opportunities to respond to the allegations.

In deciding if Yarra Trams had a valid reason to terminate Soares’ employment, Fair Work Commissioner John Lewin preferred the evidence of Sweetman, over that of Soares, who he said had provided inconsistent evidence.

“Given the nature of the relevant Cardinal Rules, and the nature of Mr Soares’ conduct in breach of those rules, in the context where Mr Soares was responsible for the operation of a tram in a safe and lawful manner, I find that there was a valid reason for the termination of Mr Soares’ employment,” Lewin said.

Lewin found the procedures followed by Yarra Trams ultimately resulted in a “fair go all round” and the complaints about Sores’ conduct were “of sufficient gravity” to rule that his dismissal was not harsh, unjust or unreasonable.

A spokesperson for Yarra Trams told SmartCompany Yarra Trams is "committed to developing a safer operating environment for the benefit of the whole community". 

"Yarra Trams' first priority is the safe operation of Melbourne's trams and safety of our passengers, employees and the community," the spokesperson says. 

"Our Cardinal Rules represent the key behavioural expectations of all employees."

Workplace lawyer Peter Vitale told SmartCompany this morning Commissioner Lewin found Soares’ evidence was unreliable and this ultimately decided the outcome of the case.

“Combined with the fact that the evidence of the conduct was given by a member of the public with no apparent motivation one way or the other, it was enough to convince the commission the employee had breached a fundamental safety rule for tram drivers,” Vitale says.

Vitale says it is a case that “really turns on its facts and the assessment of evidence from various witnesses”.

“In terms of [Sweetman’s] evidence, the commission noted that a, she was independent, b she made a record of what happened shortly afterwards and therefore it was a contemporaneous account of what happened, and c, she was in a good position to see what happened,” he says. 

The chief executive of the CSIRO is facing misconduct allegations by a group of former investors from collapsed IT company, Arasor International.

Larry Marshall was announced as the new chief executive of CSIRO in October last year and took over the reins earlier this year.

A former technology entrepreneur and venture capitalist, Marshall was previously managing director of Arasor International, which focused on developing integrated optoelectronic and wireless solutions.

Arasor International was listed on the ASX in 2006 and raised $81 million but collapsed in 2011 citing cash problems and was subsequently delisted.

Marshall, along with other Arasor company directors, is now at the centre of a misconduct case which has been before the Federal Court since 2012 according to reports in The Australian today.

A group of shareholders who call themselves Caason Investments allege Arasor’s financial statements failed to comply with relevant standards for disclosing information about the company’s financial position.

Caason also alleges Arasor’s directors provided a prospectus which made misleading forecasts about the company’s financial performance.

A spokesperson for CSIRO confirmed to SmartCompany the organisation did have knowledge of the court action prior to Marshall’s appointment earlier this year.

“Dr Marshall made the required confidential private interest disclosure to CSIRO before he was appointed Chief Executive of CSIRO – with the appointment announced on 9 October 2014 and commencing in January 2015. ,” the spokesperson said in a statement.

“Dr Marshall’s prior disclosure to CSIRO included the proceedings brought by Caason Investments Pty Ltd in 2012 against the directors of Arasor in 2006 and later the auditors.

“As the case is before the Federal Court we are unable to comment further at this time.”

The owner of a Canberra-based Subway franchise and the premises’ landlord will head to court later this month, following a heated dispute over an access road built in front of the shop.

The access issues at the Subway shop at the Civic Canberra House building came about after landlord and developer Morris Property Group asked the franchisee in 2013 to relocate from a site about 30 metres away because of redevelopment plans, reports Fairfax.

The franchisee agreed to move but a week before they were due to open their new store, a truck access lane to the 16-storey apartment building construction site and a two-metre high timber wall was allegedly put up directly in front of the shop, blocking visibility.

Owner Tony Prior told Fairfax he was shown plans for the site indicating work on an outdoor area in front of the store would be complete by November 2014.

But Prior claims, as a result of the limited access, trading plummeted and he was forced to cut his staff numbers.

According to Prior, in its previous location the franchise had been averaging sales of up to $16,700 a week in 2013 and about $15,900 in 2014, but since it was relocated and had the access road obstruction, sales dropped to $9300 a week.

In a statement provided to Fairfax, the developers said it had complied with its obligations under the lease and had been negotiating in good faith to resolve the franchisee’s problems.

However, the two parties have been unable to reach agreement on the lease dispute, which will go before the ACT Magistrates Court later this month.

Jason Gehrke, director of the Franchise Advisory Centre, told SmartCompany access issues occurred “occasionally” in retail leasing and can have more significant consequences for businesses than other types of leasing concerns.

“Especially if the business is dependent on passing traffic, or people passing buy, to stop in and buy something on the spur of the moment,” Gehrke says.

“When you’ve got to navigate building works and barricades, as a customer it’s easier to keep walking to the next place. “

Gehrke saysthe issue is one of potential misrepresentation for the landlord if the court found there was any inducement for the franchisee to enter a less than satisfactory agreement.

He says another issue the dispute may open up is a potential breach of the lease agreement because the tenant hadn’t had “quiet enjoyment” on their site.

“In these kind of instances, and this could occur in retail too, the franchisee may be in a better position to request the resources of the franchisor to assist in negotiating a suitable compensation from the landlord,” Gehrke says.

Gehrke says franchisees need to be extra careful when entering lease agreements on development sites.

“You should always, prior to signing any lease, always ask their intentions for the site in future and get that in writing,” he says.

SmartCompany contacted the franchisee but they were unable to comment further at this time.

SmartCompany also contacted Subway head office and Morris Property Group but did not receive a response prior to publication.

A Sydney man who worked as a corporate fraud investigator at a telecommunications company has been charged with 68 offences relating to fraud and embezzlement.

New South Wales Police said in a statement yesterday a 44-year-old man had been arrested by Fraud and Cybercrime Squad detectives, following an investigation that has been underway for more than two years.

Read more: How to spot a fraudster in your business

Police will allege the former employee fraudulently distributed more than 120 mobile phones to professional sports players, clubs and others during a four-year period between 2008 and 2012.

Police said many of the recipients of the phones believed they were part of a sponsorship deal or were gifts from the telecommunications company and investigators are not alleging there has been any wrongdoing by the sports clubs or individual players.

The former employee has also been accused of embezzling funds from payments he received that were not passed on to the company. The embezzlement charges are not related to the mobile phones.

Police have charged the former employee with a total of 68 offences, which includes 35 counts of obtaining benefit by deception, 28 counts of fraud, two counts of intention to defraud using a false or misleading statement and three counts of embezzlement.

He has been bailed and is due to appear in Wyong Local Court on August 26.

The man no longer works for the telecommunications company, but according to Fairfax, works in a corporate fraud investigation role for another company.

Fairfax has also named rugby club Manly Sea Eagles as one of the sporting clubs that allegedly received the mobile phones.

While police have not named the business that employed the man, commander of the Fraud and Cybercrime Squad, detective acting superintendent John Watson, said the company has been assisting with the investigation.

“When conducting investigations into allegations of corporate fraud or corruption, the assistance provided by the affected companies is integral to our work,” Watson said in the statement.

Andrew Morgan, forensic services partner at BDO Australia, told SmartCompany “enormous trust” is usually placed in individuals who are employed in corporate integrity roles but most businesses fail to effectively audit “what these watchers do”.

“They are often the face of integrity in the organisation and when they do the wrong thing, it is a massive breach of trust and confidence,” Morgan says,

“It is the same when a police officer is charged with a criminal offence. They hold a really trusted role and it is worse than a bookkeeper who has taken advantage of a vulnerable system.”

Morgan says all business owners and managers must “take a step back and always look objectively” at the actions of all employees.

“We call it professional scepticism,” he says.

“Everything must past the scratch and sniff test. Even if someone is in a trusted position, there should always be some form of third party verification or sampling of what they are doing.”

While police have not indicated if the former telecommunications worker made a financial gain from the alleged actions, Morgan says not all fraud is motivated by financial pursuits.

“It’s no different from the checkout chick at the supermarket who when their family comes through the checkout they ring stuff up at a discount,” he says.

“It doesn’t always have to be cash in pocket. That’s why there are charges like obtaining benefit by deception.”

Burger chain Grill’d is being taken to the Federal Court by a former employee who was sacked after she circulated a petition that asked for full award entitlements for herself and her co-workers.

Kahlani Pyrah, who began working at Grill’d Camberwell in June 2014, will also ask the court for her old job back.

Pyrah claims she received a trainee wage of $15.20 when she started with the business, as well as below-award rates when she turned 20 and worked on Sundays.

After receiving advice from her union, the 20-year-old held a meeting with her co-workers to discuss their options and circulated a petition calling for full-award entitlements.

The petition was signed by eight of Grill’d employees.

On June 30, Pyrah applied to the Fair Work Commission. However, 10 days later she was sacked.

An online petition calling for Pyrah to be reinstated has so far received almost 9000 signatures.

SmartCompany understands Pyrah is accused of bullying two male managers.

Pyrah said in a statement she is asking to be reinstated because her job with Grill’d meant a lot to her. 

“I am good friends with my coworkers and I really like working there,” she said.

“I come from regional Queensland and this job allows me to support myself while I study here in Melbourne. I want my job back. I want my workmates to get paid the award minimum and I want Grill’d to respect our right to join a union and speak out. This is supposed to be a democratic country so it should be our choice. But it’s not. Many of my coworkers are just too scared.”

In a statement provided to SmartCompany, a Grill’d spokesperson said the Camberwell store was a small, family owned-franchise and will strongly defend itself against the former employee’s claims, which are “vigorously denied”.

“The owners run a values-based business that prides itself on providing a safe and enjoyable workplace for its employees,” the spokesperson said.

“The franchise partners at this restaurant work hard to make staff and community responsibilities their highest priority. The agreement that applies to our restaurants are legally valid and operative and ensures lawful rates of pay for all our employees.”

Jess Walsh, Victorian secretary for the hospitality union United Voice, told SmartCompany employers failing to pay employees award rates is all too common in the hospitality industry.

“In our experience this kind of underpayment is common and so too is the sort of intimidation and harassment she [Pyrah] has faced as a result of speaking out about the underpayment,” Walsh says.

“For us there’s been a surprising level of outpouring of support by Kahlani overnight. It’s obviously struck a nerve out there with people who work in hospitality and people who have perhaps young people and children in their family working in hospitality.”

Dear Aunty B,

I launched my website recently with a few dozen suppliers, local and overseas. 

I had written a very basic five-step process of working with them (I list their products with none of their branding, customers order the products through me, I pay the supplier less my rate plus delivery, they deliver the products to me), but I hadn't emailed them any contract as my lawyer was away on holidays when I launched, and had my T&Cs in the to-do-list on his return. 

Now he's written it (in rather off-putting legalese language), I am wondering whether to go back to them, requiring them to scan and sign it to remain a supplier on my website, or to let them know these are the new requirements without the need to sign it? Or only to use it for new suppliers?

What would you suggest?

Holly

Dear Holly,

Well done for getting on the front foot with your website, I always say being up front with how you work saves a bunch of bull later on.

Your lawyer wouldn’t be the first to have put together “off-putting legalese”, let me tell you, but business lawyer Andrew Parlour at Russell Kennedy, has been ever so kind as to help shed some light on the conundrum you say you’re left with.

Bad news first – you don’t have much choice not to let existing suppliers know what the terms and conditions are, Parlour says.

“Current and new suppliers won’t be bound by the T&C’s unless they are aware of the terms and agree to be bound by them,” he says.

But here’s the good news, because Parlour says a supplier doesn’t need to return a signed copy to indicate agreement.

“Agreement can be inferred by conduct, such as the supplier continuing to offer their goods through the site, provided that the supplier is made aware of the terms and that they will be taken to have agreed to the terms if they continue to offer goods through the site,” he says.

“The T&Cs should protect you, Holly, so they should apply to all further supplies, whether made by current suppliers or suppliers that ‘sign up’ in the future.”

If all else fails, Parlour has some rather sensible advice actually – make the lawyer rewrite the damn thing in plain English.

“If you think the T&Cs are overbearing and will put off suppliers I’d go back to your lawyer and ask him to redraft them,” he says. 

“A balance needs to be struck between protecting your interests while not subjecting a supplier to unreasonable risk. Having suppliers refuse to supply because of overbearing terms will not help your business.”

Of course it’s probably best you also seek out some independent legal advice on this one too.

All the best with your website, and do remember to keep that lawyer of yours on his toes.

Be smart,

Aunty B

The director of a collapsed New South Wales beauty chain has been jailed for two years for dishonestly breaching his duties as a director and making false statements.

Ali Hammoud, director of ERB International, appeared before the District Court of NSW in Sydney on Friday.

He was sentenced to two years’ imprisonment with 12 months to serve after pleading guilty to misappropriating $2.6 million from the business shortly prior to it being placed in liquidation.

Hammoud also pleaded guilty to making a false statement to obtain a financial advantage following an investigation by the Australian Securities and Investments Commission.

Hammoud’s sentencing follows an earlier case before the Companies Auditors and Liquidators Disciplinary Board (CALDB), which saw William James Hamilton suspended for six months, for his conduct as joint liquidator of ERB International.

Hamilton was a partner at Hamiltons Chartered Accountants at the time.

The CALDB found Hamilton had entered into a deed of settlement with the directors of ERB to accept an amount without investigating what the business’ true level of debt was.

It also found he failed to seek the approval of the court or a resolution of creditors and failed to seek legal advice before entering into the deed of settlement.

During the course of ASIC’s investigation, it uncovered Hammoud’s conduct.

In sentencing Hammoud to a term of actual imprisonment, Judge Haesler emphasised that company directors hold important positions of trust and need to be aware that they face jail if they breach that trust and act dishonestly.

ASIC Commissioner John Price said, in a statement, “Directors have a duty to act honestly and with integrity and in the best interests of the company.”

Ian Ramsay, professor of commercial law at the University of Melbourne, told SmartCompany if a business is close to collapse its directors have to be particularly careful. 

“ASIC’s expectations of directors in a business to insolvency is a heightened scrutiny and monitoring of the financial state of the company because otherwise directors are at risk of personal liability of trading when the company is insolvent,” he says.

Ramsay says also as a result of some earlier litigation in the courts there is an important question as to whether a chairperson of a board has heightened obligation to make sure directors scrutinise the financial obligations of the company. 

“The board needs to be proactive in terms of liaising with professionals to get the best possible details and that can include the company’s auditors and, depending on the circumstances, may also include insolvency professionals,” he says.

“There will be important questions about what did the directors do in a proactive sense.”

Since the detection of the offending by ASIC, all creditors of ERB have been paid.