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

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    A family-run business in Clifton Beach in Cairns has been ordered to pay back $65,000 to 19 employees after the Fair Work Ombudsman found it had been unknowingly underpaying its workers.

    Bransfords (Queensland), which owns a Mobil service station, takeaway food outlet and tackle shop, was only paying its workers a flat hourly rate and not in accordance with the respective Fast Food Industry Award, Vehicle Manufacturing, Repair and Retail Award or the General Retail Industry Award, the ombudsman found.

    The ombudsman discovered the underpayments during a random visit to the business in October last year.

    The owner of Bransfords said he was unaware of his obligations under the three awards.

    Bransfords has entered an enforceable undertaking with the ombudsman and has also implemented a new computerised payroll, rostering and record-systems as a result of the breaches.

    Fair Work Ombudsman Natalie James says the case highlighted the importance of employers understanding their workplace obligations.

    “Here is a business which had no understanding of Modern Awards or that it could be covered by multiple awards at the same site,” she says.

    Lachlan McKnight, chief executive of Legal Vision, told SmartCompany he believes it’s a case of a small business struggling to keep up with complex legislation.

    “I think from a legal perspective and from a business perspective the takeaway is that it’s complex at times,” he says.

    “To comply with all relevant FWO requirements is not easy when you’ve got a business to run.

    “Actually complying with what is relatively complex legislation can be a struggle.”

    McKnight says it’s interesting that Bransfords is now implementing computerised record-keeping systems.

    “That helps a lot, especially with a lot of casuals,” he says.

    “It’s a common experience, clients coming to us with legal issues but they also want a tech solution.”

    He says it’s not unusual to see small businesses not complying with the legislation, and this particular business was trying to juggle three businesses across three different awards.

    “If you’re operating in an area where you’ve got employees under one award, it’s a lot easier,” he says.

    “Running a small business is difficult and this is one area where it falls by the wayside.

    “The business owner is (often) just looking to make next payroll.”

    He says his advice for small business owners is to treat their business set up a bit like you would your health – it needs checking up on by a doctor every once in a while.

    “Small business should regularly, every year or so, get everything reviewed,” he says.

    “Go to a business lawyer and get everything reviewed – everything from awards, business contracts to business structure.

    “Legislation changes quickly and is dynamic, and getting that check-up is important.”

    Keith Graham, the owner of Bransfords, declined to comment. 

     


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    The Supreme Court of South Australia has approved a request by the liquidator of Patinack Farm for an arrest warrant for Nathan Tinkler to be issued.

    The former mining magnate was due to front up to court this morning to answer questions about the collapse of his thoroughbred racing empire. When he failed to do so, SmartCompany understands liquidator Anthony Matthews and Associates, the plaintiff in the case, applied to Judge Steve Roder for an order to issue an arrest warrant.

    The ABC reports Judge Roder said Tinkler had “no reasonable excuse” not to appear in court.

    While Judge Roder made the order to issue an arrest warrant, the warrant has not yet officially been issued. The case has been adjourned until September 10.

    Patinack Farm Administration collapsed into liquidation in November 2012, owing WorkCover South Australia more than $16,000.

    The thoroughbred racing and breeding farm reportedly owed more than $5 million to creditors. According to Fairfax, the Supreme Court is seeking to examine a payment of around the same amount, allegedly made by Patinack Farm Administration to another company controlled by the Tinkler group.

    According to Fairfax, lawyers acting for Tinkler had been attempting to have the matter adjourned but the liquidator was informed this morning Tinkler’s legal team had been “sacked”.

    Tinkler had previously avoided appearing before the court earlier this year after he agreed to pay $400,000 towards the collapsed company’s debts.

    The court case comes after retail magnate Gerry Harvey literally called in the farm on Tinkler in the second half of last year, calling in an estimated $40 million debt associated with Patinack Farm.

    Harvey auctioned off horses from the horse farm in September last year and the first day of the sale netted $22.48 million.

    SmartCompany contacted a spokesperson for Tinkler but did not receive a response prior to publication.


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    The Fair Work Commission has ruled logistics giant Linfox Australia was within its rights to sack a worker who threatened his supervisors, telling one of them to “fucken look at me in the eye” and “show me some fucken respect”.

    James Tolevsky had worked in a Linfox distribution centre in regional Victoria since December 2008. However, he was fired on January 9 after a heated meeting with two other Linfox employees on December 19, 2014.

    While Tolevsky argued he had not acted in an aggressive manner in the meeting and was therefore unfairly dismissed, Fair Work Commissioner Nicholas Wilson preferred the evidence provided by Linfox.

    The employer said during the meeting with his shift manager and team manager, Tolevsky became “argumentative”, leant over a table and in a “loud and aggressive tone” told his shift manager “fucken look at me in the eye. Show me some fucken respect”.

    According to the termination letter sent to Tolevsky, Linfox said he was asked to calm down and to stop being abusive, but again became agitated during the conversation, and said “Linfox doesn’t give a fuck about its employees”.

    “What are you going to do about my complaint? If you don’t do something I will; I’ll go to my doctor and he’ll put me off on stress leave or something; I’ll just sit at home and let my solicitor handle it; None of you are smart enough to take me on. Once I start something I don’t stop until the end.”

    The meeting was about an incident earlier that month when Tolevsky was found to be sitting in the factory’s lunch room instead of working on the factory floor.

    He argued that he was suffering from back pain, as a result of an earlier injury and for which he had been on a return-to-work plan, but his supervisors told the commission they had not been aware where he was at the time. They also said if he was in pain he should have been in an area designated for first aid, not the lunch room.

    The complaint Tolevsky was referring to in the meeting was made in September 2014 and involved a claim of bullying and harassment in relation to a performance management process called assessment technique review. Comcare had investigated the complaint but did not uphold the allegations.

    Tolevsky was suspended after the December 19 meeting while Linfox investigated the incident. He was interviewed about the incident on December 24 and 31 and a meeting was held on January 9 to discuss the future of his employment at Linfox.

    Commissioner Wilson ruled Linfox was able to demonstrate Tolevsky did use abusive words and tone in the December 19 meeting and the company had previous concerns about his work performance, including the lunchroom incident in early December, for which it issued written warnings.

    Together, this amounted to a valid reason for ending his employment at Linfox.

    “Were this matter a circumstance where an employee with an unblemished employment record has been subject to a work-related injury and then became abusive in a meeting of the type that took place on 19 December, it may well be that the collective circumstances do not amount to a sufficient or valid reason for termination of the employee,” Wilson said.

    “However, in this case, Mr Tolevsky had been subject to written warnings about his conduct on two occasions during December 2014. This is far from an unblemished employment record. “

    “At the very least, by the start of 19 December, Mr Tolevsky could reasonably have been expected to be aware that his employment future was uncertain if there were to be repetitions of the behavioural and capability issues for which he had been warned and that if nothing else he should be alert to a repetition of the things that Linfox considered were to be below their expectations.”

    Commissioner Wilson said there were no other factors that cause him to believe Tolevsky’s dismissal was harsh, unjust or unreasonable and therefore he dismissed the application.

    Andrew Douglas, workplace relations principal at M+K Lawyers, told SmartCompany the key issue in this case was the extent to which Tolevsky’s previous conduct was a factor in his dismissal.

    Douglas says Commissioner Wilson made it clear the accumulation of similar behaviours amounted to a valid reason for dismissal.

    “The lesson for employers is very clear and that is to include a broad description of misconduct in warnings to employees,” Douglas says.

    Douglas says to constitute a warning, a letter from an employer to an employee must also explicitly state further misconduct will have consequences up to and including termination. 

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


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    A Queensland accommodation business has back-paid four employees more than $56,000 after it made them redundant last year and did not pay them their full entitlements.

    The business told former staff that because it was in financial trouble the company did not have to pay redundancy pay or accrued leave.

    The four women, who worked in front-counter and housekeeping positions, then went to the Fair Work Ombudsman seeking to clarify their workplace rights.

    An investigation by the employer watchdog found the former employees were entitled to outstanding wages, leave and redundancy pay.

    In addition, Fair Work found that the business did have the funds available to pay the former employees their full entitlements.

    One former staff member had more than 10 years’ long service leave and was owed more than $25,000.

    Swaab Attorneys partner and workplace relations expert Warwick Ryan told SmartCompany that businesses don’t have to pay a lump sum redundancy if they have 14 employees or less.

    “There are some exceptions around the construction industry and people who supply the construction industry through the joinery and building trades award,” he says.

    “But if you’re over that [14-person] limit, than it’s a difficult one for employers because often the very reason that you are having to lay people off is you’re not doing that well. And small businesses by and large don’t have a deep well to pull money out of… so it’s a very challenging thing for small business people.”

    Ryan says the requirement to pay redundancy used to be limited to award employees, but now everyone is covered under the national employment standards – subject to the 14-employees qualification.

    “Employers can apply to avoid having to pay redundancy in two circumstances where they would normally have to pay it,” he says.

    “That’s where the employer finds a job for their staff with another employer. There was a recent Fair Work decision which set the bar pretty high there about how involved that employer has to be in the process – you can’t just hand your staff a few notices for jobs. The other exemption is you can make an application where you cannot pay the amount.”

    Either way, Ryan says it is important for business owners to understand that the onus is on the employer to apply for the exemption.

    “If they just fail to do it, or make their own decision that you found them some other work or don’t have to pay, that would be a breach of the act,” he says.

    Fair Work Ombudsman Natalie James said in a statement the employer in this particular case has avoided enforcement action by cooperating in full and back-paying the money it owed to its employees. 

    “The business admitted it did the wrong thing and was quick to rectify the problem after we became involved,” she said.

    “This case is a timely reminder to employers that financial difficulties or the closure of a business do not mean workplace laws regarding redundancy and other termination entitlements can be ignored. Redundancy entitlements play a vital supporting role for people while they attempt to pick themselves up, find a new job and get back on their feet.”

    The Fair Work Ombudsman has not named the business.


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    A former employee of the Bank of Sydney has been awarded more than $20,000 in compensation after the Fair Work Commission found she was unfairly dismissed for throwing important documents in the bin.

    Pasqualina Repici started working at the bank’s Oakleigh branch as a customer service representative in 2012, but in November 2014 her employment was terminated after her employer discovered that she had incorrectly thrown around 25 bank documents into the document destruction bin.

    The documents ranged from customer account statements returned in the mail to certified ID and electronic transaction dispute forms.

    While the Fair Work Commission found the bank had a valid reason or terminating Repici’s employment, the commission found her actions were not deliberate.

    The commission also found the bank’s managers did not identify the specific documents thrown out or their level of importance before deciding to sack Repici, and did not encourage her to bring a support person to disciplinary meetings.

    As a result, the commission found the dismissal was harsh and Repici was entitled to compensation.

    Commissioner Anna Cribb said in her ruling the former employee’s explanation for putting the documents in the bin was “reasonable” and she did not receive procedural fairness during the disciplinary process.

    “On the one hand, there was a valid reason – a serious breach of procedures – which would have had a negative impact on the Bank and its customers, if any of those customers queried an action of the Bank which required access to the original document, and it was not in the customer’s file,” Commissioner Cribb said.

    “On the other hand, the actions of Ms Repici were not deliberate – the documents had been put in the bin inadvertently, by mistake, in the context of working in a busy branch and in the process of moving desks.”

    Ben Tallboys, senior associate at law firm Russell Kennedy, told SmartCompany this case serves as a reminder to business owners to be personally satisfied that a person’s actions warrant dismissal.

    Tallboys also points out that an employee should be given a reasonable chance to respond before a final decision is made.

    “What this decision tells us is that employers need to be doing everything possible to demonstrate to the commission that they’ve tried to be fair and reasonable in making such a significant decision,” Tallboys says.

    “It is really easy to get tripped up on the process when dismissing someone. That’s why it’s so important to step back and think about that process before you start it or before you make any final decision to dismiss someone.”

    Tallboys says in this particular case there were two issues that stood out to the commission that are important for business owners to take note of.

    “The commission didn’t like the fact that the person who decided to dismiss the applicant couldn’t say with any certainty what documents were thrown out or how important they were,” he says.

    “That obviously undermines that decision-maker’s opinion that this is a sackable offence. The second issue was that it was clear that the employee was distressed during the disciplinary meetings, particularly in circumstances where she was admitting to most of the misconduct. The commissioner thought a bigger organisation should have encouraged her to bring a support person along.”

    A spokesperson for the Bank of Sydney said in a statement the company was disappointed with the commission's decision to award compensation. 

    "The Fair Work Commission found on 21 July 2015 that the Bank of Sydney had a valid reason for terminating the employee's employment and the Bank of Sydney support that finding," the spokesperson said. 

    "Naturally the Bank of Sydney is very disappointed that the Fair Work Commission then awarded compensation to the employee based on the disciplinary process." 

    *This story was updated at 4.08pm on 22 July to include a statement from the Bank of Sydney


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    A Queensland sushi restaurant owner must repay four young backpackers $28,600 and make a $10,000 donation following a Fair Work Ombudsman investigation.

    The owner and operator of Bundaberg’s Nodaji Sushi restaurant, Younsig Kang, paid some employees flat rates of $14 an hour when they should have received between $21.65 and $25.13 an hour.

    Employees also had $12 a day deducted from their wages for “food and drinks” even when they didn’t consume anything from the shop.   

    When Fair Work inspectors initially investigated Kang, he told them the Korean backpackers had agreed to work for below-Award wages.

    He called them “troublemakers” for approaching the FWO for help.

    The female employees were backpackers working in Australia on 417 working holiday visas.

    Following investigation, Kang agreed to reimburse the workers all their outstanding wages and entitlements, publicly apologise for his behavior and give a commitment to comply with federal workplace laws in future.

    Kang’s two companies, Knodaji and Taejin, will each make a $5000 donation to the Queensland Working Women’s Centre to help it promote workplace rights.

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

    Ben Tallboys, lawyer at Russell Kennedy, told SmartCompany it is unclear why Kang underpaid his staff.

    “Unfortunately employers are still often making these sort of mistakes and it just highlights the importance of getting advice when taking on a new employee instead of waiting until there is a problem,” Tallboys says.

    He says employers should beware of the following when hiring staff:

     

    1. Ignoring the FWO website when determining pay

    “The FWO website has great tools for working out appropriate pay rates and it should always be the first point of reference,” Tallboys says.

     

    2. Failing to seek professional advice when still unclear

    “At the end of the day if an employer is not certain what they should be paying a staff member then they should seek professional advice,” Tallboys says.

    “That advice is always going to cost less than dealing with the ombudsman.” 

     

    3. Providing an off-the-cuff response to an underpayment claim

    “If someone claims they are underpaid, or if the ombudsman comes knocking, employers need to seek advice before providing a response,” Tallboys says.

    He says in this case it appears Kang took offence at the employees making a complaint and sent off a hurried response, which referred to the complainants as ‘troublemakers’.

    “I suspect that is why Nodaji Sushi was required to make the $10,000 donation, which was effectively a penalty,” Tallboys says.  

     


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    A Melbourne small business has been caught in the fall-out as customers of a travel agency in Western Australia were left stranded in Eastern Europe after discovering their return flights had not been booked despite paying the business to do so.

    Consumer Affairs WA has received complaints from 10 customers of Fremantle-based agency Sky Air Services who have reported turning up to the airport with their flights cancelled due to non-payment.

    Other customers are concerned because they have not yet been given confirmation of their flights and accommodation bookings, or did not have them booked at all.

    People who took to the business’s Facebook page to complain have received abusive replies, according to the ABC.

    Fremantle-based Sky Air Services has since deleted its Facebook page.

    “You’re a fucking pain in the ass,” the business wrote to one customer.

    “Hard maintance [sic] anyways! Good riddance and bon voyage!”

    The commissioner for consumer protection in Western Australia, Anne Driscoll, said in a statement there could be more people unaware they have been affected by Sky Air Services’ actions.

    “I would urge customers who booked through Sky Air Services in Fremantle to contact the airline or accommodation provider to ensure that their booking is secure,” Driscoll said.

    “I also encourage those affected to contact Consumer Protection so we can get an accurate picture of the number of consumers affected by this situation and keep them informed of developments as they occur.” 

    Driscoll said consumers should seek a refund from their card provider if they paid for their holiday using a credit card and did not receive what they paid for.

    “Unfortunately those who have paid by direct bank transfer may not be able to access redress in this way, which serves as a reminder not to pay for travel services in this way,” she said.

    “People in this situation should still speak with their bank about what options they may have. It is also worth checking your travel insurance policy and speaking with your insurance provider to see whether you are covered in this particular situation.”

    But a business in South Melbourne with the same name has been caught up in the fall-out, with Sky Air Services in Melbourne forced to publish a statement on its Facebook page confirming it is in no way affiliated with the Fremantle agency it shares a name with.

    “We are receiving an increasing number of calls from people complaining that we have charged their credit cards,” the business wrote.

    “On further investigation we have found that it has been Sky Air Services in Fremantle that has charged their cards. Please note that our offices in South Melbourne and Blacktown have nothing to do with the Fremantle agency which is a completely separate company.”

    Speaking to SmartCompany this morning, the general manager of Sky Air Services Melbourne, Lidia Jelinic, said her business has nothing to do with the one in Fremantle.

    “We’ve been in business for many, many years and have many clients who keep coming back to us,” Jelinic says.

    “We’ve had over 6000 visits on our Facebook over the past few days, normally we would have fewer. We have also had quite a few calls from concerned customers – even people calling just to say they are concerned about us.”

    Jelinic says while the confusion has been a “real inconvenience” for her business, she feels sorry for the concerned customers and has been instructing her staff to give callers the details of Consumer Protection in Western Australia.

    “The problem is you can’t contact the Perth people, they’re not answering the phone,” she says.

    Affected customers are being urged to contact Consumer Protection WA.

    Last month customers of a travel agency in Colac had their holidays ruined after discovering that the business owner had disappeared with their money.

    SmartCompany attempted to contact Sky Air Services in Fremantle but did not receive a response prior to publication.   

     


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    A group of 288 Pizza Hut franchisees that initiated a class action against the chain’s franshisor Yum! Restaurants last year will have their day in court on Tuesday.

    A directions hearing for the class action suit against Yum will take place in the New South Wales Federal Court on Tuesday, more than 12 months after the dispute over the pizza chain’s pricing strategy first came to the fore.

    In June 2014, 80 Pizza Hut franchisees attempted to stop Yum’s pricing strategy, which saw the Pizza Hut chain go head-to-head in a discount price war with rival Domino’s, offering pizzas for as little as $4.95.

    But the group of franchisees failed to secure an injunction to stop the pricing being introduced and in August, Diab Pty Ltd, a company owned by Sydney Pizza Hut franchisee Danny Diab, initiated legal proceedings against Yum in the Federal Court.

    An initial directions hearing had been scheduled for October 3, 2014, and applicant group members were given until October 28 to opt out of the action.

    According to court documents, Diab Pty Ltd filed a statement of claim, as well as material relating to the originating application and applicant’s genuine steps statement, in an unconscionable conduct application on June 12 this year. A defence was filed by Yum on July 10.

    Justice Bennett held a case management hearing on July 21 and a directions hearing will be held at 4pm on Tuesday.

    The ABC reports 288 out of 298 Pizza Hut stores are party to the class action, which will argue the chain’s aggressive pricing forced many franchisees out of business.

    At least one Pizza Hut franchisees has also submitted a formal complaint to the Australian Competition and Consumer Commission, alleging the franchisor’s actions resulted in their business becoming insolvent and their franchise agreement terminated.

    According to the ABC, 32 Pizza Hut franchisees have lost their business since the pricing strategy was introduced.

    In a statement issued to SmartCompany, Pizza Hut Australia general manager Graeme Houston said Pizza Hut is "looking forward to finally resolving this matter in court and moving on so we can focus on our core role of helping our franchisees build their businesses". 

    "We are unable to comment further while the case is before the courts," he said. 


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    A Melbourne architectural firm has been ordered to pay a former employee $27,500 in compensation after the Fair Work Commission found the worker had been unfairly dismissed after allegedly being abused by her husband who also worked for the company.

    While Eliana Construction and Developing Group argued the worker had resigned from her position, Fair Work Commissioner Julius Roe ruled in favour of the evidence of the worker, who said she was unfairly sacked after her employer said it was not possible for her and her husband to continue working in the same office.

    The worker had been employed as a draftsperson at Eliana since June 2014. However, her employment ended in January this year after an alleged violent incident involving her husband that she said left her in fear of her life.

    The employee returned to work three days after the incident took place, at which time a police-initiated intervention order was in place to exclude her husband from contacting her or going to the family home.

    However, the intervention order had been amended by a magistrate to allow both the worker and her husband to continue working from the same office but it specified the husband was not to “approach or remain within three metres” of the employee.  The employee gave evidence that she was comfortable with those arrangements.

    The director of Eliana told the commission he informed the female employee at a meeting that he could not have the pair “both working in the office in the same department” as he could not protect the woman from her husband.

    In evidence, the director said he told the worker he could not fire her husband and suggested the employee work from home. He said the employee gave him an ultimatum that either she or her husband had to leave, and when he said he “could not help her” she offered her resignation.

    But in the employee’s version of events, the company’s director allegedly told her he had to terminate her employment “because it would not be safe or nice for the employment to continue” and “keeping you both in the office is a no”.

    Commissioner Roe ruled the intervention order on its own was not a valid reason for dismissal.

    “Firstly, it had nothing to do with [the employee’s] conduct and performance and everything to do with the conduct of another employee, [the employee’s] partner,” Roe said.

    “Secondly, I am not satisfied that it was impossible for the two persons involved to continue in employment.”

    Roe also ruled Eliana did not make reasonable adjustments to accommodate the worker’s circumstances and given there were no serious concerns about her performance and that she was in a vulnerable position, the dismissal was harsh, unjust and unreasonable.

    Roe said it would not be appropriate for the employee to be reinstated and ordered she be paid $27,500, the maximum allowable compensation for 26 weeks of work.

    Employment lawyer Peter Vitale told SmartCompany this morning the commission ruled against the employer in this case because Eliana did not “take any reasonable steps to explore how it could go about complying with the restraining orders issued by the magistrate”.

    “The employee gave evidence she was comfortable with the arrangements as they would have been without alterations but the employer didn’t even give her an opportunity to test the arrangements,” Vitale says.

    Vitale says it was the “unwillingness” of the employer to even explore if the pair could continue working in the same office that led to the commission viewing the company’s actions as “completely unreasonable”.

    “It may have been a different outcome for the employee and there may not have even been an unfair dismissal case if the employer had, for instance, tried the arrangements out and then discovered it was untenable to have the two people working in the same workplace,” Vitale says.

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

     


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    Two Melbourne businessmen who paid seven backpackers nothing while paying themselves $500,000 have been fined $11,880 each by the Fair Work Ombudsman for underpayments.

    Employees of Jonathan Paul William Stielow and Claudio Salvador Locaso’s former marketing and distributing business, Invivo Group, were contracted by a Melbourne company to install power boards in homes as part of the Victorian Energy Efficiency Target Scheme.

    While the employees were meant to be paid for walking door-to-door offering the scheme’s free power boards to households, an investigation by the Ombudsman found eight Invivo Group employees were underpaid a total of $14,964 between 2012 and 2013.

    Seven of the employees, who were overseas workers on 417 visas and aged 19, were found to be paid nothing despite working between 50 and 117 hours, while the other worker was paid 16% of his full entitlements.

    The Ombudsman also found record-keeping and payslip laws were breached by the company, which is no longer operating.

    Locaso and another marketing and distribution business, which were owned and operated by The Syndicate Group Pty Ltd, are also facing legal action from the Ombudsman over allegations of similar conduct.

    Federal Circuit Court Judge Heather Riley fined Stielow and Locaso $11,880 each, which represents nearly 90% of the maximum penalties.

    In her judgment Riley said it was noteworthy that while Stielow and Losaco’s company was “paying some employees nothing at all, they were paying themselves salaries that totalled almost $500,000”.

    She also noted the “very long and drawn out process” it took to get the pair to co-operate with authorities.

    “The end result was no doubt a significant expense to the public purse,” she said.

    Fair Work Ombudsman Natalie James said the penalty should serve as a clear warning to other business operators who are tempted to exploit overseas workers.

    “We place a high priority on taking action to protect the rights of overseas workers in Australia because they are often not fully aware of their workplace rights and can be reluctant to complain,” James said.

    Ben Tallboys, senior associate at law firm Russell Kennedy, told SmartCompany the case highlighted that while accidents happen, employers couldn’t use ignorance of the law as an excuse to justify underpayments.

    “When staff are being underpaid and the company and directors are profiting, then you can expect the ombudsman and the court to come down hard,” Tallboys says, adding the Ombudsman was forced to pursue the directors of the company in this case because the firm was no longer operating.

    Tallboys says employers who intentionally underpay staff, or who refuse to investigate and resolve an underpayment claim, can expect to receive a high penalty.

    “A company that underpays an employee can be exposed to a penalty of up to $51,000, while individuals, such as directors, responsible for the underpayment can be personally liable for a penalty of up to $10,200,” he says.

    “Any penalties ordered by a court have to be paid in addition to any monies already owing to the underpaid employee.”

    Tallyboys says the key thing for small businesses to remember is ignorance is not an excuse.

    “They need to make all reasonable attempts to find out what they should be paying staff,” he says.

    “When they receive a complaint, be it from an employee or ombudsman, they need to react swiftly and appropriately to that complaint.

    “If they don’t, then the chances are much greater that the matter will end up in court and the employer will be facing strong penalties.

    “The ombudsman only takes these matters to court when underpayments are intentional or where employer refuses to acknowledge any wrong.”

     


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    The South Australian consumer watchdog has warned individuals and other businesses to stay away from an unlicensed business that has been using door-to-door sales tactics to supply and install solar systems across the state.

    In a statement issued on Friday, South Australian Commissioner for Consumer Affairs Dini Soulio said Green Engineering (Vic) is accused of failing to provide adequate cooling-off periods in its sales contracts, failing to show up to compulsory conciliation meetings and in some instances, when it did attend conciliation meetings, failing to ignore signed commitments to resolve disputes with customers.

    While Soulio said Consumer and Business Services (CBS) has evidence that an affiliated company that is registered in Queensland does hold the relevant electrical licence in SA, the entity trading as Green Engineering (Vic) does not.

    “This is a warning to residents across the state, in particular in regional areas, that they should be on guard about the way Green Engineering (Vic) carries on its business,” Soulio said.

    According to CBS, door-to-door sales reps from the company approached potential customers in regional areas with contracts that specified a cooling-off period of just five days.

    But under Australian Consumer Law, the compulsory cooling-off period for consumers is 10 days. Companies can face fines of up to $50,000 for failing to inform consumers of the cooling-off period or commencing work during a cooling-off period.

    “In one instance, the business began to install a solar panel system the day after the contract was signed,” Soulio said.

    CBS also alleges the company has failed to meet its requirements under the Fair Trading Act, including not participating in compulsory conciliation conferences in 2014 and this year. This could lead to fines of up to $10,000 for each breach if a criminal prosecution is pursued.

    “Where the business did show up at a compulsory conciliation conference and signed agreements to resolve the dispute with a customer, the business has, on more than one occasion, ignored its commitment and has ultimately failed to fulfil its undertakings,” Soulio said.

    “This conduct demonstrates an unwillingness on the part of the business to resolve ongoing disputes with customers and that is simply bad business.”

    Rohan Harris, principal at law firm Russell Kennedy, told SmartCompany any business that carries out unsolicited selling, including door-to-door sales, must comply with a number of provisions under Australian Consumer Law.

    Unsolicited selling relates to any circumstances outside the typical selling or retail environment and often happens at a customer’s own home.

    “In those circumstances, there are a number of rules that have to be followed,” Harris says.

    “This includes identifying yourself, only visiting in designated calling hours and providing certain notices about the consumer’s rights, which includes a 10-day cooling-off period.”

    Harris says businesses are also prohibited from supplying goods and services within a cooling-off period and in some circumstances, taking payment during the cooling-off period.

    Harris says while the Australian Consumer Law is enforced by state regulators, as well as the Australian Competition and Consumer Commission, the same rules apply in all states and territories.

    “Anyone who is active in the unsolicited selling space would be well-versed in these rules,” he says.

    SmartCompany contacted Green Engineering (Vic) but did not receive a response prior to publication.

     


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    Car classifieds website Carsales has triumphed in its legal battle against News Corp-owned rival Carsguide.

    The Victorian Supreme Court today ruled that Carsguide’s recent advertising campaign, which made a number of allegations about Carsales’s business practices, was misleading and likely to deceive consumers.

    Carsales initiated legal action earlier this year, arguing its rival made “grossly misleading” representations in a series of television and radio advertisements.

    In particular, the website took issue with the allegation it sold its customers’ contact details to car dealers without their knowledge.

    Carsales chief executive Greg Roebuck said in a statement he welcomed the court’s decision.

    “We saw the carsguide.com.au campaign as trying to damage the relationship of trust that Carsales has established with consumers over many years,” Roebuck said.

    “We see this decision as a win for both us and the consumer, who will now not be subjected to these misleading advertisements.”

    Roebuck also tried to hose down concerns the legal battle was an example of a bigger business taking on a smaller one.

    “Carsguide.com.au has tried to paint itself as David in a battle with Goliath, when this is simply not the case,” he said.

    “Carsguide.com.au is owned by News Corp Australia and some of the largest car dealerships in Australia. We are pleased with this outcome and expect that it will lead carsguide.com.au to take a different and more reasonable and balanced approach to its advertising campaigns in the future.”

    In a statement issued to SmartCompany, Carsguide chief executive Lauren Williams said the company regretted its recent marketing campaign.

    “In 2014, Carsguide introduced an approach to advertising cars that generally gives customers the choice to remain anonymous until they know who and where a dealer is,” Williams said.

    “Since early 2015, Carsguide has not charged dealers on a leads model basis. Unfortunately the court found that the advertisements conveyed misleading representations. Carsguide regrets this.”

    This is the first time the company has backed away from its controversial advertisements, after refusing to remove them after receiving a “cease and desist” letter from Carsales last month.

    Carsales listed on the Australian Securities Exchange in 2009, raising $163.6 million in its initial public offering.


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    Myer has come out on the front foot revealing it had dispensed with the services of a cleaning provider following revelations that subcontractors had underpaid staff by $6300.

    The underpayments made by subcontractors to Pioneer Facilities Services were revealed following a visit to Myer’s Fountain Gate store in southeast Melbourne during December last year, when the Fair Work Ombudsman says it interviewed two cleaners during an unannounced visit.

    According to the Ombudsman, the two cleaners, one of whom was an employee and the other purportedly an independent contractor, were found to be earning a flat-rate of $17 an hour.

    The cleaners worked for cleaning services contractor A&K Saana Services, which was subcontracted to clean Myer sites at Knox City, Highpoint, Fountain Gate and Altona in Melbourne.

    Myer’s agreement was with RCS Cleaning Services, which subcontracted to Pioneer Cleaning Services, which in turn sub-contracted to A&K Saana Services.

    A subsequent investigation in May this year revealed nine cleaners at several Melbourne sites in Melbourne had been short-changed a total of $6300 in less than a month.

    Fair Work inspectors found A&K Saana Services was one of a number of sub-contractors to Pioneer that underpaid employees and misclassified a number of staff as independent contractors.

    As a result of the investigation, A&K director Admir Kolakovic has entered into an enforceable undertaking with the Ombudsman and senior officials met with Myer to discuss supply chain compliance.

    A Myer spokesperson told SmartCompany this morning the retailer will continue to work with the Ombudsman in its investigations.

    “The FWO informed Myer on 14 July 2015 that a sub-contractor of Pioneer Facilities Services had acknowledged it was in breach of the Fair Work Act,” the spokesperson says.

    “Prior to this, Myer but had been working with the FWO in its investigation into the cleaning services provided by Pioneer and its subcontractors.”

    The spokesperson says Myer has also sought further information from Pioneer Facilities Services over the past six months to demonstrate its compliance, and the compliance of subcontractors, with workplace laws.

    “Despite repeated requests, Pioneer Facilities Services did not provide us with enough information to satisfy Myer,” the spokesperson says.

    “Subsequently, Myer made the decision to terminate its contract with Pioneer in June 2015.”

    The spokesperson says Myer took its duties as a responsible Australian employer “very seriously”.

    “All the company’s suppliers, and their subcontractors, are expected to comply with their contractual obligations, which includes full compliance with workplace laws,” the spokesperson says.

    “If information is provided to Myer that a supplier is not complying with its contractual obligations or relevant laws, Myer will investigate the matter and take appropriate steps available under its contracts to help ensure compliance.”

    Ben Tallboys, senior associate at Russell Kennedy, told SmartCompany it is important employers are sure of their obligations in situations where they want to pay an employee a flat rate.

    “The key thing here is if you’re paying your employees a flat rate, you need to make sure you do it properly,” he says.

    “It’s about making sure you’re paying at least, or more, than what is required under any modern award and that you’ve properly documented the arrangement.”

    “These situations demonstrate that if you don’t take the time to get things right in the first place, the ombudsman is going to require you to do 120% to fix the situation.”

    Tallboys says engaging an individual as an independent contractor is “always a risky business”.

    “Particularly when you intend to be paying the ‘contractor’ less than what you’d be paying them if they were an employee,” he says.

    “You need to take extreme care when deciding to engage someone as an independent contractor, which means getting payment terms right and making sure it’s an independent contractor.”

    “In this case it’s absolutely clear the person was an employee.”


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    Businesses and individuals that are found guilty of wrongdoing by the Australian Securities and Investments Commission will now be more frequently asked to cough up the costs of the investigation.

    ASIC revealed its new approach to the recovery of investigation of expenses and costs on Wednesday, explaining that while it has had the power to recover such costs it rarely exercised it.

    The new policy means from July 29, ASIC is likely to pursue the costs of an investigation if the investigation has led to a successful prosecution or civil proceeding against a person.

    As well as litigation expenses, ASIC could attempt to recover salary and travel costs for ASIC staff involved in the investigation.

    ASIC will not necessarily come down hard on everyone, however, with the watchdog saying it will give people who are subjected to these investigations the potential to negotiate so there is an appropriate outcome.

    Rohan Harris, principal at law firm Russell Kennedy, told SmartCompany this morning ASIC’s powers to chase such costs have been around for years.

    “It’s just that ASIC have flagged a new approach in applying those powers,” Harris says.

    Harris says the new stance is “certainly aimed at the big end of town” in terms of recuperating the cost of large investigations, noting there are “lots of recent cases” regarding the misconduct of stockbroking firms and banks.

    “But there is also the potential to be applied to small businesses,” he says.

    Harris says any business engaged in the provision of financial services or advice, management of investment schemes or providers of consumer credit could fall into this category.

    “There are lots of SMEs involved in those sorts of activities,” he says.

    “So there is potential for this to apply for broad range of businesses.”

    Harris believes the underlying motivation for the new approach comes down to ASIC’s “limited resources and funding”.

    “It needs to look at ways to recover the costs of these types of investigations, which are often time consuming and expensive,” he says.

    Harris says the new approach won’t necessarily deter illegal behaviour, but anyone who is investigated would need to factor the change of policy in when deciding how to defend their claim.

    “It’s there as a disincentive for a business who does the wrong thing not to draw out a purely tactical defence of any claim,” he says.

    Harris says another interesting aspect of the new policy is ASIC itself has the power to issue the order to pay the investigation cost and it didn’t have to come from a court.

    This means while a business has the right to review that order, it would need to prove it was an improper investigation to get out of paying the costs.

    “It’s definitely another string to its (ASIC’s) arsenal,” he says.


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    Cash Converters shares are in a trading halt after the payday lender was hit with another class action lawsuit over fresh claims it overcharged borrowers for interest rates and brokerage fees.

    The latest class action, led by Maurice Blackburn on behalf of 30,000 Queensland customers and filed in the Federal Court, relates to claims the payday lender was allegedly charging customers interest rates of up to 160% in addition to brokerage fees, which is well above the 48% legal limit lenders are allowed to charge customers on consumer credit contracts.

    It is not the first time the country’s largest payday lender has faced legal action over exorbitant interest rates, with two class action lawsuits levelled against it in 2013.

    Nor is it the first time the ASX-listed company has entered a trading halt, with a previous trading halt having been called on June 17 this year as the company sought to finalise the settlement details of one of the two class actions.

    The following day, the company reached an in-principle settlement agreement to pay $23 million to 37,500 low-income Cash Converters customers in NSW who claimed they were being exploited by excessive interest rates. That class action was also led by Maurice Blackburn.

    Shares in Cash Converters were halted on Thursday, with Cash Converters International company secretary Ralph Groom telling the market the lender was requesting a trading halt in response to media reports about the class action.

    “Cash Converters International Limited wishes to enter into a trading halt in response to reports in the media it will today be served with a class action writ issued in the NSW Registry of the Federal Court of Australia,” Groom said in a statement.

    The trading halt will be in place until Monday August 3.

    In a statement provided to SmartCompany, special counsel at Maurice Blackburn, Miranda Nagy, said the class action, which refers to interest rates charged between 2009 and mid 2013, came about after Queensland borrowers alerted the lawyers to similar practices to those happening in NSW.

    Nagy says in 2011, Cash Converters admitted having in place mechanisms to ensure the company received a greater return than the 48% annual cap imposed on them.

    She labelled the practice as “deliberate and systematic”.

    “It resulted in vulnerable people incurring massive additional fees and interest, in contravention of the very laws that were designed to bring down some of the cost of the credit,” Nagy says.

    Nagy says the class action is seeking to recover $30 million in refunds from all brokerage fees paid by the Queensland borrowers during the 2009-13 period.

    “The class actions regime gives people an equality of arms through strength in numbers, meaning that big companies can’t just win by attrition, which is something to be grateful for in cases like this,” she says.


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    Many family businesses are unnecessarily destroyed by the breakdown of the owners’ marriage – particularly when the separated couples have worked together in their business.

    Statistics highlight why husband-and-wife owners of family businesses cannot ignore the possibility that their personal relationships may unfortunately fail sometime in the future.

    ABS divorce data suggests that more than 40% of marriages fail while RMIT University research has found that spouses are involved in more than a third of Australia’s family-owned businesses.

    Family lawyers generally advise their clients to sever their financial relationship with the other spouse and separate their assets when negotiating a property settlement.

    This advice is given because the Family Law Act provides for what is known as the “clean break principle”.  In short, couples are typically advised under the principle to end their financial relationships in order to get on with their separate lives.

    While advice to sever financial relationships is appropriate in the vast majority of circumstances, it can have devastating consequences for the future of a family business.

    There are however, ways that separated couples can still continue to own and operate a business together – unless there is a high-level of conflict between them.

    Here are seven critical questions to consider which may help prevent the failure or loss of your family business in the event of a breakdown of a marriage breakdown.

     

    1. Is the business more valuable if kept intact?

    Many family businesses are split as part of a separating couple’s property settlement. This can prove extremely costly in terms of lost value because businesses are often more valuable if kept intact.

    Discuss with your professional advisers such as your accountant, financial planner and family lawyer the broad options regarding the future of your family business.

    Think about whether you and your former spouse should continue to own the business together despite your marriage breakdown or whether you should sell the business and divide the proceeds. Your business adviser can offer various other solutions given the particular circumstances.

     

    2. If we decide to keep owning the business together, who should manage it?

    The management choices may include: the estranged couple continuing to manage the business together; the spouse with the more hands-on involvement in management taking over full management; the appointment of your adult children from your relationship to work in the business or the appointment of an outside manager.

    If one spouse has been successfully running the business prior to separation then it may well make sense for this arrangement to continue. Speak to your accountant or other business advisers.

     

    3. Can I really share day-to-day management decisions with my former spouse?

    This is a fundamental question many former couples face when they have owned and operated a small business together. As you no longer share your personal lives, sharing an office every day may be too challenging. Sharing ownership, however, can be a different matter.

     

    4. What formal arrangements should be put in place if we are to continue to share ownership following our divorce?

    Consult your business adviser/accountant about whether the business should be restructured in any way given the changed circumstances.

    Also, take advice about what formal steps should be taken to ensure transparency and efficiency in any decisions concerning the ownership, the exchange of key business information and for the frequency of business meetings together.

    And make sure both spouses receive equal access to information regarding the business – if they decide to remain joint owners. Discuss how this will happen and set guidelines for how this will be achieved. Typically, it will be much more straightforward and less stressful to agree on these details in advance.

    With continued shared ownership of the business, perhaps the bottom line is to try to remove emotion from any decision.

     

    5. Should I appoint my own professional advisers?

    Decide whether you should retain your own advisers rather than continuing to have a common accountant and/ or financial planner with your former spouse.

     

    6. What should I do if the family business premises are owned by our family self-managed super fund?

    Many joint business owners, of course, also hold their business premises in their family SMSFs.

    Even if one of the former spouses decides to sever his or her day-to-day involvement in the management of the family business, the business premises could remain an extremely worthwhile superannuation investment. Further, the continued use of the business premises could be crucial for the business’s survival.

    Gain professional advice about what action to consider. There are several strategies intended to ensure that the family business retains use of the premises. The particular strategy should much depend on a couple’s personal circumstances – including the extent of their super and non-super assets.

     

    7. Are formal exit strategies in place to allow one of the spouses to later leave the business or to pass on their share of the business to a child?

    An exit strategy should be critical to any decision by separating owners to continue operating the business together after the breakdown of their marriage.

    If you cannot agree with your spouse about this now you are unlikely to do so in the future.  Also, take legal advice about ensuring your will reflects your decision to keep operating the family business together. Your will should make provision for your interest in the business to be passed on to your beneficiaries with the opportunity for your former spouse to acquire your share of the business from your estate.

     

    Glenda Laurence is a principal and head of Family Law with Argyle Lawyers. She was one of the first accredited Family Law specialists in NSW.

     

     

     

     

     

     


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    A mobile phone repair company in Adelaide has been fined $5000 after failing to pay a smaller on-the-spot fine for payslip breaches.

    Mobizone, which claims to be Adelaide’s leading phone repairer on its website, was originally fined $550 by the Fair Work Ombudsman for a breach of workplace law last year.

    The Industrial Relations Court fined the business $3500, while Mobizone’s business manager and part owner Raymond Kebbe was fined an additional $1500.                 

    According to the Ombudsman, the breach was revealed after Fair Work inspectors audited the workplace last year and found a member of staff on a 457 visa was only being issued payslips when he asked for them.

    Workplace law dictates that employees must be provided payslips within one working day of their wages.

    While the Ombudsman made “numerous requests” for Mobizone to pay back the on-the-spot fine for the breach, it refused, Fair Work Ombudsman Natalie James said in a statement.

    “Instead of having a $550 fine to pay, the financial penalty is now significantly greater and comes with publicity and potential risk to the business’s reputation over its conduct,” she said.

    “We place a high importance on enforcing compliance with payslip obligations, because when employees don’t receive them, it undermines their ability to understand how their wages have been calculated and to check they’ve received their minimum lawful entitlements.”

    Ben Tallboys, senior associate at Russell Kennedy Lawyers, told SmartCompany this morning the higher penalty on the employer could have been easily avoided.

    “The simple fact of the matter is employers have to provide a payslip within one day of paying an employee,” he says.

    Tallboys says this is important for two reasons; one being the employer was required by law to do so but also because it was important for the employee to have all that information at hand.

    “A detailed payslip should show how much an employee is being paid, how it’s being calculated and what their leave entitlements are,” he says.

    “It’s important that employees get that immediately so if there is an issue it can be dealt with immediately.”

    He says in this case, the business appeared to have been “haphazard with payslips” and did itself no favours by “flat out” ignoring the Ombudsman’s on-the-spot fine.

    “You can’t just put your head in sand when the ombudsman shows up on your doorstep,” Tallboys says.

    “That is what the employer did on this occasion and now they, and the business manager responsible for the payslips, have got penalised.

    “It all could have been avoided if payslips were issued at the time employees were paid.”

    Tallboys says the simple lesson for other small business is to provide detailed payslips to employees.

    “Employers need to know requirements and what they need to include in the content of payslip and if they don’t know they should seek advice,” he says.

    “If an employee or ombudsman challenges the content or provision of a payslip, you’ve got to deal with it immediately.

    “It doesn’t make sense for any business to ignore a fine from the ombudsman.”

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


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    Flight Centre has successfully appealed an $11 million dollar fine imposed by the Federal Court last year for anti-competitive behaviour.

    The judgment, handed down on Friday afternoon, brings to an end a three-year legal battle.

    The Australian Competition and Consumer Commission (ACCC) initiated proceedings in March 2012, alleging that Flight Centre attempted to enter price-fixing arrangements with Singapore Airlines, Malaysian Airlines and Emirates six times between 2005 and 2009.

    The original Federal Court judgement and accompanying penalty was handed down in December 2013, finding that the company had engaged in anti-competitive conduct with three airlines.

    Flight Centre will now be reimbursed in full – with the multi-million dollar figure to be included in the company’s 2015-16 financial results.  

    The consumer watchdog has also been ordered to pay the company’s legal costs for both the initial case as well as the appeal heard by the full bench of the Federal Court.

    Flight Centre’s managing director, Graham Turner, says Flight Centre welcomes the judgment and hopes it will bring six years of legal action to an end.

    “As we said when the ACCC initiated this test case, for more than 30 years Flight Centre has sought to deliver cheaper airfares to the travelling public,” Turner says.

    “The company is not in the business of attempting to make airfares more expensive.”

    Turner also defended the company’s behaviour, arguing it was only logical the business would ask for commissions and “reasonable access” to deals from suppliers.

    “This is a logical and natural business request for an agent to make to ensure the customers it serves on behalf of airlines are not disadvantaged,” he says.

    “Given that travel agents book up to 80% of international flights in Australia, it benefits consumers because it means special offers are not solely available from supplier websites.”

    Meanwhile, ACCC chairman Rod Sims says the competition regulator will consider its next move.

    “The ACCC took this action because of its concern that Flight Centre’s conduct could harm competition and ultimately affect the prices available to consumers,” Sims says.

    “If it had been successful in its conduct, Flight Centre’s actions were likely to have meant that consumers would not have seen the benefit of competition through lower ticket prices offered online by the airlines concerned. Pursuing anti-competitive agreements and practices to protect consumers remains one of the ACCC’s enduring enforcement priorities.”

    Howard Rapke, partner at Holding Redlich, previously told SmartCompany businesses need to be mindful of behaviour that is or is perceived to be anti-competitive because the consumer watchdog takes these matters very seriously.

    “The ACCC sees it as very serious and as an important part of their statutory role,” Rapke said.

    “Clearly the ACCC as a regulator wants to be seen to be deterring what it sees as anti-competitive conduct. I think it’s crucial for officers and directors of a company to be very well informed about what the consequences are of a breach of the competition laws.”

     


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    The former chief executive of a business that farmed sea snails has been charged with 17 counts of providing false or misleading information after investors poured more than $40 million into his company.

    Andrew Ferguson, the former head of Australian Bight Abalone, has been charged with nine counts of disseminating false or misleading information to prospective investors as well as a further eight counts of providing false or misleading information to the directors of his company.

    It is alleged the misleading information was contained in reports, product disclosure statements as well as two media releases.

    Australian Bight Abalone used to be Australia’s largest offshore abalone farmer, raising $44 million from 1400 investors over four years.

    Abalones are types of edible molluscs which can be grown in offshore cages or on land in tanks that are pumped with sea water.

    The shellfish are popular in Asian countries, as well as Europe and the United States.

    Australian Bight Abalone operated an offshore farm near Elliston in South Australia between 2005 and 2009, however the business collapsed into administration after it was only able to harvest part of its stock due to a higher-than-expected mortality rate among the sea snails.

    The company also operated management investment schemes which allowed investors to acquire interests in the farm and therefore a return on sales.

    However, the Commonwealth Director of Public Prosecutions is now taking Ferguson to court, alleging that documents distributed to board members and potential investors contained false or misleading information about the growth and survival rates of abalone.

    Each charge in relation to false or misleading information has a maximum penalty of five years imprisonment along with a fine of $22,000.

    Ursula Hogben, general counsel at LegalVision, told SmartCompany it is important for business owners to be aware of the disclosure requirements and the different levels of disclosure required for listed and unlisted companies. .

    “This company was an unlisted public company, and there are two key lessons worth noting,” Hogben says.

    “The first is there is a general requirement not to make false or misleading statements. The riskiest thing the company does is generally forecasts – so future planning. However, we all know that’s what investors in the market want to know.”

    Hogben says the solution is to have “very well-researched and thoughtful forecasts” with very clear assumptions.

    “Then, if any of those assumptions don’t come through, you can point to those assumptions as for why the assumptions weren’t met instead of an information gap looks misleading,” she says. 

    “You’re looking at the industry as well as just your own business. You’re looking at global demand, seasonal demand in the case of the abalone farm…. all kinds of market indicators.” 

    Hogben also says this particular case has important lessons for company boards and directors.

    “These days the courts are stricter in saying directors have to make an independent assessment of information,” she says.

    “That kind of independent assessment by the board is needed so the board is not liable as well.” 

    Andrew Ferguson could not be contacted for comment.

    The matter, which was heard at the Adelaide Magistrates Court on Friday, has been adjourned until September 2015.


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    Businesses and individuals in South Australia are being warned to close their doors on a bitumen-laying business with workers that have been labelled “bandits” and “travelling conmen” by the state’s consumer watchdog.

    South Australia’s Consumer and Business Services issued a public warning about Hildenbrand Roads on Friday, with Commissioner for Consumer Affairs Dini Soulio saying in a statement some businesses and individuals have already parted with “thousands of dollars’ for the business’s substandard work.

    The group has been accused of laying bitumen without a licence and completing extra work that had not been agreed to and then “demand[ing] large amounts of cash to pay the unauthorised work”.

    “Consumer and Business Services has received reports of the conmen doorknocking in Aldinga, Old Reynella and Sellicks Hill,” Soulio said.

    “We believe it’s a small group of men with Irish accents who have made approaches in the area offering to undertake bitumen work for cash.”

    Soulio said businesses must have a licence under the South Australian Building Work Contractors Act but “there is no indication that this company is licensed”.

    The warning about Hildenbrand Roads is part of the South Australian government’s wider crackdown on “travelling conmen scams” in the building industry.

    “Once payment is handed over, the conmen will disappear, making it extremely difficult to seek redress for shoddy or incomplete work, so any repairs will cost you extra,” Soulio said.

    “They typically use state and territory borders to escape detection by authorities.”

    Ursula Hogben, principal and general counsel at LegalVision, told SmartCompany every consumer has rights against con artists under Australian Consumer Law (ACL), including small businesses that buy goods and services from other small businesses.

    Hogben says it is a common misunderstanding that small business owners believe the ACL guarantees don’t apply to them but the protections apply to all goods and services purchased for $40,000 or under.

    “A lot of small businesses buy goods and services under that limit and so the consumer guarantees apply to them,” Hogben says.

    If a small business does have concerns about goods or services it has purchased, and it falls under the $40,000 threshold, the business has a right to have the products re-supplied, repaired or refunded.

    “If it is a small fault, the seller has the right to choose if it is a repair, re-do or refund but if it is a major fault, the purchaser has the right to choose,” she says.

    There are also provisions in the ACL that cover door-to-door salespeople, including a mandatory 10-day cooling off period.

    “You have 10 days from the first day of the agreement and you can terminate it either verbally or in writing,” Hogben says.

    “Even if the product has been partly used as part of a trial, you still have cooling off rights. There are quite strong protections.”

    Hogben says there are a number of important steps small businesses should take to avoid being ripped off by other operators.

    The first step is to conduct a search using the Australian Securities and Investments Commission database to check if the business is registered. Hogben also recommends checking the Scamwatch website provided by the Australian Competition and Consumer Commission to make sure there are no public warnings issued for the business in question.

    Finally, Hogben suggests “Google them”.

    “The internet is such a great source of information,” she says.

    SmartCompany was unable to contact Hildebrand Roads.


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