Facilitating honest, like-for-like comparisons, being transparent about commercial relationships and clearly disclosing who and what is being compared are three of the major recommendations to come out of a new set of guidelines for businesses setting up comparator websites. 

The Australian Competition and Consumer Commission (ACCC) has released its latest set of guidelines for businesses to adhere to when setting up comparator websites.            

Comparator websites can be fraught with misleading information and the guidelines seek to show industry how to highlight comparisons with other businesses in a way that is fair and accurate to consumers.

The ACCC conducted a recent review of comparator websites after it found a number of websites included information that may mislead consumers as to the extent of the comparison service, the amount of savings that could be achieved and the impartiality of the comparisons.

ACCC deputy chair Delia Richard said in a statement that operators of such websites should carefully read this guidance and warned there would be “no excuse for non-compliance”.

“Comparator websites can drive competition and assist consumers to make informed purchasing decisions when comparing what are often quite complex products,” she said.

“However, the ACCC is concerned that poor conduct by some industry participants can mislead consumers.”

Ralph Bonig, special counsel of Finlaysons risk management team, told SmartCompany this morning that businesses setting up comparator websites sometimes found it difficult to make sure that products or services were compared “fairly to a comparable product”.

“That’s where the ACCC in the past has been successful in prosecuting organisations that have used comparator websites, because if you don’t properly reflect a true comparison, then you are guilty of misleading and deceptive conduct just as if you were publishing something about your own product that was wrong,” he says.

Bonig welcomes the ACCC’s efforts to give guidance to businesses that are seeking to provide comparisons, especially with the increasing online shopping trend.

“The ACCC is trying to give guidance to make sure when they are setting up comparators that they are firstly not biased or skewed and true comparators and that the consumer is getting the correct information, just as if they went out and independently researched each product or service” he says.

According to Bonig, the new ACCC guidelines should serve as an “eye-opener” for small businesses.

“I think they will help these businesses understand the complexity of area they are seeking to tread when their marketing their products,” he says.

Borig says that in the past small businesses likely found setting up comparator websites to be a bit of a minefield.

“Small businesses need to be careful that if they do want to market through comparator websites or comparator information that they have actually done the proper research and due diligence to make sure the material they are publishing is accurate,” he says.

“That is a costly exercise and involves more than just looking at straight price comparison.”

“You need to make sure you are comparing the same product or service and that involves sometimes some in-depth research, because there may be terms and conditions that your competitor has on their product or service that change its value.”

“For SMEs to understand all of that does involve in-depth research, which can sometimes be time consuming and costly.”

“But needs to be done if you are going to go down that path of comparator marketing because whether a small business or large multinational, the same penalties apply.”

A former bus company employee who was fired following two workplace incidents, including almost running over a fellow employee while there were in the bus depot, has won her unfair dismissal case and will get her job back.

In a case involving Northern Territory bus company Buslink Vivo and employee Dell Humphries the Fair Work Commission ruled in favour of Humphries, who was fired earlier this year.

The commission heard that 43-year-old Humphries, who had been working at the company for a year and a half, was employed as a bus driver and also as a bus marshal responsible for ensuring other bus drivers left the yard on time.

Buslink Vivo said the first incident occurred in December last year when Humphries allegedly crossed into a pedestrian area while pulling into the fuel bay, narrowly missing another employee who had to jump out of the way.

Humphries was issued a first and final warning for the safety breach, the commission heard.

The second incident occurred on January 3 when Buslink Vivo said Humphries was conducting marshalling duties and failed to send a bus run out on time.

She was fired a few days later.

But the commission found that the employer should not have connected the two breaches, with the first incident related to work, health & safety and the second relating to work procedures.  

It found as they were separate breaches of policy and did not represent a course of behaviour, it was harsh and unreasonable to dismiss Humphries.

Fair Work vice president Joe Catanzariti also ruled that Humphries should be reinstated to her position.

Rachel Drew, partner at Tresscox Lawyers, told SmartCompany the case involved “two serious breaches of the employer’s policy, within a short space of time”.

“The employee was dismissed for serious breaches of policy, but the commission found the dismissal was disproportionate to the misconduct,” she says.

Drew says employers must take care when identifying the reasons for a dismissal. 

“When dismissing a worker, the employer must ensure the misconduct is sufficiently serious to warrant dismissal,” she says.

“Even where a first and final warning is given, that may not be enough to justify dismissal unless the subsequent misconduct is also very serious.”

Drew says the employer followed a “fair process” by giving the employee a written warning on the first occasion, notice of their concerns on the second occasion and opportunity at three separate meetings for her to provide a response to the allegations.  

“But in this case a fair process was not enough to avoid the commission finding that, overall, the dismissal was unfair,” she says.

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

A former franchisee of a 7-Eleven store in Queensland has been fined nearly $7000 for underpaying a worker more than $20,000 and refusing to co-operate with the Fair Work Ombudsman.

The business, which was located in Brisbane’s Edward Street, closed last year.

The Federal Court has ordered former owner and operator, Mubin Ul Haider, to pay a fine of $6970 to the former employee, an international student from Nepal who worked at the store for about a year.

The employee, a man in his 20s, tipped off Fair Work Ombudsman inspectors to the underpayments.

The franchisee also failed to comply with the Ombudsman’s subsequent notice to produce employment documents in a set timeframe.

Fair Work Ombudsman Natalie James said in a statement that efforts to get the owner to resolve the matter voluntarily and by agreement fell on deaf ears.

“Enforcing our notices is fundamental to maintaining the integrity of Australia’s workplace laws and we will not tolerate them being ignored,” James said.

Will Snow, senior associate at Finlaysons, told SmartCompany this morning it is incumbent on small businesses to respond to such requests for information.

“The Fair Work Ombudsman has very wide powers to ask for really any documents that it wants in order for it to find out whether an employer has breached the law,” Snow says.

“You simply can’t ignore those requests, ignoring them doesn’t make them go away.”

Snow says in some cases there are grounds to seek an extension if a business is unable to respond in the given timeframe.

“The only way to comply with a notice is to give them what they want,” he says.

“If you don’t, you might be making a bad situation worse.”

Snow says if there had been concerns about legal obligations the 7-Eleven store’s status as a franchisee meant it could have sought assistance from its franchisor, while it was also in the franchisor’s interests to assist franchisees to avoid “brand damage”.

“Certainly there’s a negative association when people do the wrong thing,” he says.

“There’s a good business case for franchisors to assist franchisees with these issues.”

However, Snow says there is still a “clear responsibility” on the part of the franchisee to do right thing.

Snow says there were alternative routes that the business in this case could have taken and offered this practical guidance for other businesses.

“In particular with visa holders, you still must comply with basic terms and conditions of employment, duties and entitlements,” he says.

“If an employee raises a concern about rates of pay, resolve that.

 “That might include looking at the award yourself; getting advice about it, but if you don’t resolve it that’s exactly when employees feel no to the option but to get assistance from the Fair Work Ombudsman.”

“A lot of it is about resolving issues before they get escalated. By ignoring it, it will not go away.”

A spokesperson for 7-Eleven told SmartCompany this morning that the company "fully supported" the work of the Fair Work Ombudsman.

"As advised by the Ombudsman, Fair Work undertook proceedings against former 7-Eleven Franchisee Mubin Ul Haider, and his company Haider Enterprises Pty Ltd," the spokesperson said.  

 "Mr Ul Haider and his company are no longer associated with 7-Eleven, following the termination of our business relationship on 25 July, 2014.

 "7-Eleven is pleased that the issue has been resolved in favour of the FWO and the employee."

*This story was updated with comments from 7-Eleven at 12.50pm on August 5.

Coles has been accused of misleading shoppers by copying the packaging of popular brand Carman’s for its own-brand range of muesli bars.

In the latest example of a big business facing allegations of ripping off a smaller business, Coles customer Alison Banney made the claims in a post on Coles Facebook page on Wednesday.

“Another Coles product piggy-backing on the success of an Australian brand, and stealing away customers by offering the product at a cheaper price,” Banney said alongside a photo of Coles and Carman’s muesli bars on a supermarket shelf.

The packaging of the Coles product has a similar black, green and white colour scheme to the Carman’s product. The font on the boxes is in a similar style and both packages have a clear window in the lower right-hand corner that shows some of the muesli.

The photo also shows a substantial difference in price, with the Coles product on sale for $4 and the Carman’s product retailing for $5.39.

“Could this packaging be any more similar to that of Carman’s?” Banney said.

“And even placing the new fake muesli bars among the Carman’s varieties – an obvious attempt to mislead consumers and ultimately put yet another Australian brand out of business.”

“This is ridiculous and I hope Australians make a conscious effort not to purchase the new Coles muesli bars.”

Coles responded to Banney’s claims by thanking her for the feedback and saying the supermarket giant is “disappointed to hear you feel this way”.

“Many of our customers are facing increasing household costs and so are looking for value from their supermarket shop,” Coles said.

“We have reformulated virtually all our Coles brand products in the last five years to improve the quality across the range and ensure that they are offering great value.”

“However, if our products do not meet our customers’ needs, they are subject to the same review as any other non-Coles product and will not remain in our range.”

Coles said it is “strongly committed to supporting Australian growers and manufacturers “ and works closely with these businesses to “build long-term relationships that are sustainable and profitable”.

“We are now buying $4 billion more Australian food from producers than 5 years ago and around 85% of all Coles brand products are sources from more than 280 Australian suppliers,” Coles said.

Speaking to SmartCompany this morning, Carman’s founder Carolyn Creswell said the Carman’s team “do see the similarities” between the products.

“Time will tell with consumers, we hope they don’t get confused,” Creswell says.

Creswell revealed Carman’s has received a number of phone calls from consumers about the similarities between the products but she says for the time being, her focus is her own business as she “can’t control what others do”.

“We’ve tried to create a unique look and so time will tell,” she says.

But Creswell says she will continue to monitor the situation.

John MacPhail, director of NDA Law, told SmartCompany similar-looking products appearing on supermarket shelves “is nothing new”.

“Certainly it is not just Coles,” MacPhail says.

“Aldi has developed a whole business model out of this by replicating the colours, the fonts, the general look and feel and whole product get-ups.”

However, MacPhail says in this case, the fact that the Coles name is quite prominent and in red on the packaging of its products, does mean the products “feel quite a bit different”.

MacPhail says it also helps that the products are side-by-side on the shelf as consumers are able to quickly compare the two items before making a purchasing decision.

Speaking more generally about product packaging, MacPhail says it is “very difficult” for businesses to protect the look of their products.

“It is very difficult to make the case, there is no trademark register to help with this,” he says.

“The only recourse would be if it was found to be misleading and deceptive conduct but I think in this case, it probably is not.”

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

Popular clothing brand Bonds has recalled more than 17,000 items of baby clothing, after a Victorian mother took to social media to reveal she had found a broken sewing needle sewn into the arm of a Bonds Newbies Coverall.

Bonds issued the recall on Thursday, after customer Anny Brooks posted a photo of the needle and the scratch it caused to her hand on Facebook on Monday.

“I’m so angry that something so dangerous was left inside a newborn suit,” Brooks wrote.

“Please check your children’s clothing before putting them on them as you never know what you might find.”

The recall covers 17,332 items, including all Bonds Newbies Longsleeve Coveralls, Pop Woven Dresses and Beginnings Cardigans, sold since December 2013.

The items were sold in Bonds stores and from its online store, as well as in Myer, Big W, Target, Toys R Us, Baby Bunting, David Jones, Your Wardrobe and Trade Secret stores.

In a recall notice published on the Australian Competition and Consumer Commission’s (ACCC) website, the Bonds website and in national newspapers, Bonds urged customers to stop using the products and return them to the company or place of purchase for a refund.

“Child safety and comfort is first and foremost at Bonds,” the company said in an accompanying statement.

“We were made aware this week of a sewing needle found in one of our Newbies Coverall baby suits in a [size] 0000. We were naturally very concerned and have acted quickly to address the issue.”

Bonds said it notified the ACCC of the recall and has asked all retailers to send back the products. The company has also established a customer assistance phone line and email address for concerned customers.

Independent branding expert Michel Hogan doesn’t believe the recall will do any long-term damage to the Bonds brand.

“The issue would have been if they had ignored it,” Hogan told SmartCompany.

While Hogan says Bonds would have probably preferred not to have been alerted to the safety issue via Facebook, Hogan says the brand’s swift actions to inform the ACCC and then recall the products holds it in good stead.

Hogan describes Bonds’ response to the incident as “very much the gold standard” when it comes to crisis management.

She says it harks back to the Tylenol recall of the 1980s in which the company conducted a widespread product recall, along with other measures, even in the face of contrary advice.

Hogan says it’s appropriate for brands to continuously monitor all communications channels, including social media, to make sure safety concerns can be identified and acted on quickly.

But she says what Bonds does next is just as interesting.

“The next step for Bonds is what it is going to do about its supply chain,” Hogan says.

“There are two pieces to this: the response to the issue and then what you’re going to do to make sure it doesn’t happen again.”

The Australian Football League has been accused of ripping off a South Australian design business in an artwork promoting this weekend’s multicultural round.

Tyson Beck, a graphic designer from Adelaide, has previously designed artwork for the US National Basketball Association and National Football League.

The designer turned to Twitter two days ago to accuse the AFL of copying an artwork he had published to social media only a couple of days before.  

The AFL’s artwork features a series of black-and-white and coloured tiles that make up the face of an AFL player, which is strikingly similar to Beck’s original piece for the NBA which features the face of NBA star LeBron James.

Beck's original concept above, and the AFL's version below

There have been a string of instances this year where big businesses have been accused of ripping off smaller companies and independent designers.

Beck told News Corp the AFL’s artwork went beyond simple inspiration.

“I understand design styles and trends can be mimicked but if you put these two images side by side, the grid is the same,” Beck said.

“The colours are the same and even the banknote style is the same.”

Beck said the AFL’s artwork was clearly an example of plagiarism.

“You can use things as inspiration but then they have crossed over on replications,” he said.

“I do a lot of work for the NBA and stuff can get copied on social media and it is good to see people inspired if they put their own twist on it. But someone else is getting paid to pick my brain, which isn’t cool.” 

The AFL has apologised to Beck, saying the work was created by an external agency but admitted the incident “should not have occurred”.

“The material produced for the AFL by the outside agency is too close to this person’s original work,” an AFL spokesperson told News Corp.

However as of this morning the artwork could still be seen on the AFL’s website promoting the 2015 multicultural round, which kicks off today.

When contacted by SmartCompany this morning, Beck declined to comment further because he was satisfied that both the AFL and its design agency have “admitted their wrongs”.

The Adelaide designer will not be taking legal action against the AFL or the company that designed the artwork for the league.

Jane Owen, partner at law firm Bird & Bird, told SmartCompany it is important businesses have a process of checks and balances in place when designing marketing material to avoid being caught up in a breach of copyright.

“In business, the most prudent approach you can take – and certainly one we’ve assisted clients in doing – is if you’re coming up with advertising or marketing copy to undertake legal vetting,” Owen says.

“You would ordinarily have a checklist that would ensure if you’ve used an image from somewhere else you’ve got clearance. So if it’s a stock photo, you’ve got a licence that covers its intended purpose. And if it’s an individually designed and created work, it is certainly individually designed.”

Owen says taking inspiration from someone else’s design is generally a big “no-no”.

“In a small business sense, you’re not necessarily going to have the support or budget to have that checklist and someone to go through that legal checklist,” she says.

“Your fallback position should be when you’re engaging an external agency is to ensure you’re getting some extended warranty about infringement issues. If you fell into this unfortunate circumstance that the AFL is in at the moment, you’ve perhaps got some commercial back-up to deal with the financial repercussions of a copyright suit.”

As for what a designer should do if they suspect a large company has ripped off their design, Owen says good legal advice is of the utmost importance.

“From a designer’s perspective, you probably want to get a lawyer’s eye to look at the alleged infringing work to form a view about whether there is an infringement,” Owen says.

“To establish infringement you have to establish an actual copying, so there needs to be a mental element.”

“Given the apology from the AFL and the stark similarity in this case there would be an inference that could be drawn. The closer the copying, the greater the inference.”  

SmartCompany contacted the AFL this morning but did not receive a response prior to publication.

A small real estate agency has been ordered to keep a property manager away from two other employees, after the Fair Work Commission ruled the manager bullied the two staff members.

The agency has also been ordered to develop and implement anti-bullying policies, procedures and training, in one of the commission’s few findings of bullying since it was given oversight of the area almost two years ago.

Fair Work Commissioner Peter Hampton made the orders on Wednesday, choosing to keep the identities of the company and employees under wraps in part to obtain a concession from the business that bullying occurred and in part to ensure the employees have access to a safe working environment in the future.

The two workers told the commission the manager threatened them with violence and belittled them, as well as yelling and swearing at them.

The manager was also accused of interfering and undermining the employees’ work on a daily basis and using physical intimidation, including “slamming” objects on the employees’ desks.

The employees, who took leave from their work because of the behaviour, said they raised the issues with their employer and the allegations were the subject of an informal investigation and attempts at mediation.

The manager subsequently resigned at the company but then took up a position with a related company. The commission heard there was “potential for interaction” between the two businesses and their employees and the manager had in fact been “seconded” back to the original workplace on a temporary basis.

The employer conceded to the commission that a finding could be made that bullying had occurred, that “unreasonable behaviour” towards the employees occurred and such behaviour risked the health and safety of the employees.

The employees and manager accepted the concession and Commissioner Hampton made several orders to prevent further bullying, including keep the manager and employees working in separate offices.

The business was also ordered to address the culture in its offices that led to the conduct occurring.

Charles Power, workplace relations partner at Holding Redlich, told SmartCompany the orders made by Commissioner Hampton are comprehensive and other employers should take note.

“This is a good model for all employers to consider as a way of dealing with workplace bullying complaints that are substantiated,” Power says.

“In that way, the commission has been very helpful by telling Australian managers how this problem can be fixed.”

Power says in this case, the real estate agency had in some respects “a blank canvas” when it came to policies to cover workplace bullying and a large number of other employers would be in a similar position.

Employers “shouldn’t throw up their hands” if they receive a bullying complaint, Power says, and having policies and procedures in place is important.

“Having positive measures in place in relation to specific cases as well as broader preventative measures can be a sort of insurance against being dragged into the Fair Work Commission,” he says.

The driver of a bulk tanker has lost his bid for his unfair dismissal case which hinged on allegations he was fired two days after lodging a complaint with the Fair Work Ombudsman about underpayment claims.

Brian Gregory Harwood was employed as a bulk tanker driver at RM & ME Singh from July 2013 but lost his job at the Queensland transport company on April 22 this year.

In the evidence he supplied to the Fair Work Commission, Harwood says he made an application with the Fair Work Ombudsman two days before his employment was terminated.

The FWO application claimed he was being underpaid wages and allowances under the relevant award.

According to Harwood’s evidence, the complaint involved discussions with a FWO representative and arrangements were made for mediation between the parties on May 18.

About a week after he was dismissed, Harwood made enquiries with the tax office regarding his wage rates and superannuation, a matter which is now under investigation by the ATO.

However, Harwood only made his application for unfair dismissal on June 16, some 34 days after it was due.

Unfair dismissal cases must be made between 21 days of the date of dismissal.

The Commission’s deputy president Wells ruled against Harwood’s application for an extension of time and said there were no exceptional circumstances to cover him.

“It is clear that Mr Harwood was able to make enquiries with the ATO and the Small Claims Court of Queensland following his termination and to continue with his complaint to the FWO.

“I have concluded that Mr Harwood was physically and mentally capable of lodging an application with the Commission at that time.

“Whilst Mr Harwood stated he was unaware of a time limit and thought that the FWO could assist him with his dismissal, he confirmed in evidence that his complaint to the FWO related to underpayment of wages and not to a possible unfair dismissal.”

Russell Kennedy senior associate, Ben Tallboys told SmartCompany the case was a “pretty simple one”.

“In this case Mr Harwood knew he had been dismissed, and while he claims he wasn’t aware of 21-day deadline, he gave no evidence to suggest he was contesting his dismissal during that time,” he says.

“While he did give some evidence about querying underpayments of his wages and allowances with the Ombudsman and the tax office, none of this suggests a physical inability on his part to make a claim within the required time frame.”

He says the commission made it clear ignorance of time frames does not constitute exceptional circumstances.

“It might be that he was being underpaid, and the fact he was complaining about the underpayments was a factor in his dismissal, but at the end of the day he filed his claim out of time.”

Tallboys says there are a couple of takeaways for small businesses.

“Always be careful about dismissing someone who has recently made complaints, be it about underpayments or otherwise,” he says.

“When the timing between an employee complaint and their dismissal is suspicious, there is a greater likelihood the employee will make some kind of claim.

He says the other take-home message is that employers should “diarise the 21 days so that they’re mindful when [a claim] must be made by, so they can decide whether they can worry about it or forget about it”.

“If it was lodged on time the issue would have been was the dismissal fair, and the commission would have ruled on that,” Tallboys says.

Two New South Wales businessmen who took deposits from customers but failed to supply indoor and outdoor spas, saunas and outdoor furniture, have been ordered to pay penalties of more than $65,500.

Appearing in the Parramatta Local Court last week, brothers Nicholas Lord and Gerasimos Lord were ordered to compensate customers to the tune of $45,937.30, as well as pay fines of $18,000 and another $1566 in costs, for breaching Australian Consumer Law and the Fair Trading Act.

Among the offences the pair pleaded guilty to were accepting payment and not supplying goods in time and contravening an embargo notice.

The Lords were the directors of a business called Urban Boutique, which operated two retail websites: euromaxspas.com.au ad euromaxdirect.com.au.

NSW Fair Trading said in a statement last week customers who shopped at the online stores were required to put down a deposit of 70% when placing the order. The customers were then told to expect the spa or furniture they ordered to be delivered within six to eight weeks.

The state consumer watchdog said it first became aware that Urban Boutique had failed to supply goods within an agreed timeframe in March 2014.

During a subsequent investigation, NSW Fair Trading also discovered the Lords had been selling or offering to sell spa models that are banned because they contained potty skimmers, devices used in the water reticulation system of spas, that did not have protective covers.

Potty skimmers without protective covers have been involved in numerous incidents in Australia and overseas in which people have been disembowelled, seriously injured or died.

The NSW office of Fair Trading warned consumers to stay away from the business in April 2014, however the business continued to supply unsafe spas after it was issued with an embargo notice.

Several consumers supported Fair Trading in its prosecution of the Lords, including individuals from NSW, the Australian Capital Territory and Western Australia who had all ordered spas from the business.

Ursula Hogben, principal and general counsel at LegalVision, told SmartCompany there are two key points for small businesses to consider when it comes to supply timelines under the Australian Consumer Law.

“The first is, if you’ve accepted payment and made a contract with an agreed time, you have to supply within that timeframe or there is a potential breach of contract,” Hogben says.

Alternatively, Hogben says if the two parties have not agreed to a timeframe, the Australian Consumer Law specifies the goods or services must be supplied in a reasonable timeframe.

Hogben says the reasonableness of the timeframe usually depends on what has been purchased.

“For example, a piece of custom-made furniture will take a lot longer then say if you have booked a removalist for a specific date,” she says.

In the case of Urban Boutique, Hogben says the directors did specify the spas would be delivered within 6-8 weeks, but the issue was the items were not being delivered at all.

However, Hogben says Australian Consumer Law will consider whether a failure to supply goods or services is outside of a business’s control or if the business has taken steps to prevent the situation.

This means in circumstances such as natural disasters or industry-wide events, there is some flexibility for affected businesses.

Hogben says businesses can also build extra protections into their own contracts, including with a force majeure clause, which allows a contract to be suspended or terminate in circumstances beyond their control.

“The business is still covered by Australian Consumer Law but it offers better protections,” she says.

Urban Boutique has been deregistered according to the Australian Securities and Investments Commission. SmartCompany was unable to contact Nicholas Lord and Gerasimos Lord.

Two independent retailers will be forced to defend themselves in court after car maker Toyota Australia on Monday initiated legal proceedings against them for allegedly selling fake airbag accessories.

The lawsuit, which was filed in the Federal Court by the Japanese-owned company, follows a six-month investigation into what Toyota claims are counterfeit parts being sold in place of genuine Toyota accessories.

In a statement on Monday, Toyota Australia said it will argue before the court the actions of the two unnamed retailers amount to “trademark infringement” and “misleading and deceptive conduct”.

“We are concerned that customers have been misled into believing they have purchased a genuine Toyota part,” the car maker said.

The legal action relates to allegedly counterfeit airbag spiral cables, which Toyota said are of inferior quality and have not undergone the same “rigorous testing” as genuine Toyota parts.

The car maker said the parts pose potential safety risks to customers whose cars have been involved in an accident in which the airbag has been deployed.

“It is our expectation that the independent retailers will contact the impacted customers to advise them that they have purchased counterfeit parts and replace the airbag cable with a genuine Toyota part at no cost to the customer,” Toyota said.

“We want to take this opportunity to reiterate to customers that the spiral cable would only have been replaced if their vehicle was involved in an accident and the airbag deployed.”

“Customers are assured that the Toyota dealer network only uses genuine Toyota parts.”

According to news.com.au, Toyota has already contacted more than 200 car dealers in its network to request cars be inspected so the potentially unsafe parts can be identified. The retailers involved in the lawsuit have reportedly been unco-operative so far.

The allegedly counterfeit products reportedly cost as little as $50, whereas parts supplied by Toyota wholesale for around $300.

Melissa Monks, special counsel at King & Wood Mallesons, told SmartCompany this morning the action taken by Toyota “is a novel way to deal with a product safety issue where the counter party is not co-operative”.

“We are certainly starting to see the misleading conduct provisions used in a more proactive way to try to combat product safety risks, particularly by regulators, such as the current proceedings by the Australian Competition and Consumer Commission against a supermarket where it has alleged that their continued sale of products that they had knowledge were defective is misleading representation that the products are safe,” Monks says.

“The only drawback is the length of time and cost it can take to get a court outcome, even if a court is willing to ‘fast track’ a case and there is the ability to recover some costs.”

But Monks says it is understandable that Toyota is pursuing legal action.

“Given the risk to a company like Toyota’s brand and reputation, and the potential for real consumer harm, it is understandable that they’ve taken such a path,” she says.

A Commonwealth Bank employee has failed to convince the Fair Work Commission he was bullied at work, despite claiming he was “micromanaged” by being made to attend two performance management meetings a week and singled out for breaching the bank’s “clean desk” policy.

Mohammad Aly is a customer assistant officer at CommSec, a position he has held since 2012.

Aly applied for a stop-bullying order from Fair Work that would allow him to continue to work for CommSec but not under the supervision of his two managers.

However, Far Work Commissioner Michelle Bissett dismissed his claims and found his managers acted reasonably to manage his work performance.

The claims relate to Aly being placed on an Enhancing Employee Performance Plan (EEPP), first in July 2014 and then again in October 2014.

Each of the plans lasted for several months and were designed to lift his work performance to standards set by CommSec.

Aly told the commission he was placed on the performance management plans without justification and was held to a higher standard of performance than other employees. CommSec disputed this.

He said he was unnecessarily micromanaged and “nit-picked”, including having to attend two meetings with his manager each week despite only working three days and being forced to move desks when there was no reason to.  

One of the meetings related to the EEPP and the other was a coaching session with his manager, similar to meetings held with other staff.

Aly also told the commission a warning he received about breaching the bank’s “clean desk” policy also amounted to bullying.

He had received a warning around the time he was first placed on an EEPP in July 2014 about an incident in which a confidential document was left on his desk overnight instead of being locked away in a secure area, as per company policy.

However, Aly denied the incident and said he was unfairly singled out as other employees had blatantly breached the same policy. He produced photos of other desks as evidence to the commission.

Aly’s complaints were investigated internally at CommSec and the investigation found his managers acted reasonably.

Commissioner Bissett agreed, finding Aly’s managers had “reasonable grounds” to find Aly’s work performance needed managing and they did not hold him to a higher standard of performance than other employees in the same role.

Bissett found Aly’s managers took a reasonable approach to managing his performance, offering support and assistance to help him improve his work performance.

The commissioner also disputed the claims that Aly was micromanaged and required to attend too many meetings.

“Each detail of his work was not being scrutinised to an unreasonable level such that a claim for micromanagement could be sustained,” Bissett said.

“Whilst I appreciate that Mr Aly felt he was attending too many meetings this was a facet of his part-time employment. The number of meetings held with him was of course a delicate balancing act but it was important that Mr Aly was aware of his performance in terms of the EEPP and that he not miss out on coaching otherwise provided to Customer Assistant Officers.”

Finally, the commissioner ruled Aly was not bullied in relation to the bank’s clean desk policy as management had reasonable grounds to issue a warning about the incident.

“I do not consider that there is any evidence to support a conclusion that [the managers] applied the clean desk inconsistently,” Bissett said.

“The photographs provided by Mr Aly show ‘messy’ desks but there is nothing in them to indicate they breach the policy.”

A spokesperson for the Commonwealth Bank told SmartCompany this morning the bank acknowledges the commission’s findings and “re-iterate[s] the application was dismissed on the basis that the employee’s managers acted reasonably”.

“It would inappropriate to comment further in relation to a matter concerning a current employee,” the spokesperson says.

Employment lawyer Peter Vitale told SmartCompany it is disappointing to see a case like this end up at a Fair Work Commission hearing instead of being resolved via mediation between the two parties.

“The key thing in this case was that the commission found that the allegations of bullying were all based on the employees’ own perceptions and were not supported by objective evidence,” Vitale says.

In particular, Vitale says Commissioner Bissett noted “just because the employee didn’t agree with the performance standards of the employer and their approach to performance management, it doesn’t mean the procedures were unreasonable”.

“There was imply no evidence that the employee was treated any differently to any other employee or on an objective basis, unreasonably,” Vitale says.

Two companies associated with Perth-based property developer Nicheliving have been penalised for misleading advertising that included advising prospective buyers they could obtain an investment property for “just $59 a week”.

The Australian Securities and Investments Commission (ASIC) issued four infringement notices totalling $40,800 to Australian Property Alliance (APA) for misleading advertisements published on various Nicheliving marketing channels, including its Facebook and YouTube channels and several free-to-air TV adverts.

According to ASIC, the “just $59 a week” advertisements are misleading because they did not disclose the “detailed assumptions and qualifications which underpinned a negative gearing investment strategy, requiring the consumer to enter into a mortgage to finance the purchase of a property and to pay an upfront amount of $35,000”.

The corporate watchdog also imposed new licence conditions on Wealth WA (WWA), which provided financial services to Nicheliving, saying it was also concerned about historical advertising it published.

WWA and APA have since withdrawn the advertising.

In a statement, ASIC deputy chairman Peter Kell said the companies’ behaviour was deceptive.

“The advertising of credit products and services must be clear, accurate and balanced, particularly in relation to the sale of real estate which may involve borrowing significant sums of money,” Kell said.

Ian Ramsay, professor of commercial law at Melbourne University, told SmartCompany this morning that the case was the latest in a series of ASIC enforcement actions over misleading statements in the property market. 

“We’re seeing ASIC devote more resources to this area, and the reasons it’s doing that is in response to complaints,” Ramsay says.

According to Ramsay, ASIC is responding in part to an “extraordinary number of advertisements we see for property investment” and partly because of concerns expressed by others in the market, including the Reserve Bank of Australia, about growing risks with property investments.

Ramsay says the current case, in which significant information has not been disclosed in the advertising, “really is quite an important issue these days”.

“Especially with growing evidence of the number of Australians moving into property investment, it is one of the most significant investments people will make and dwarfs other types of investments,” he says.

“There has to be a recognition that these type of enforcement actions are very welcome but it is hard for a regulator to monitor the entirety of this industry.”

“So we’re seeing here a more active regulator, but at same time given the volume of advertisements out there at moment, it’s hard for the regulator to keep on top of it all.”

Ramsay says ASIC is currently “stuck” with substantial decline in resources, staff losses and reduced funding and is increasingly relying on consumers to point out such issues.

“At the moment there’s a real tension out there, extraordinary interest in property investment, really a number of misleading advertisements and a regulator suffering decline in resources and able to do less at the moment,” he says.

Ramsay says ASIC’s decision to get an agreement from the company to employ an independent compliance consultant in addition to the financial penalty should serve as a warning to other businesses.

 “The message here is it’s better to be on the front foot and not to have the regulator impose improved compliance procedures in part because of adverse publicity.”

SmartCompany contacted NicheLiving, WWA and the APA but did not receive a response prior to publication.

The Myer executive fired for his misleading CV has escaped a prison sentence and will instead serve 400 hours of unpaid community work.

Dubbed the ‘Myer Liar’, Andrew Flanagan last week pleaded guilty to deception charges in a County Court case.

Flanagan conned his way into three high-paying jobs, including a role as group general manager of strategy at Myer in a role that paid $400,000 a year.

Nine News reports Victorian County Court Judge Gerard Mullaly ordered Flanagan to serve a three-year community corrections order, which includes 400 hours of unpaid work, as well as undertake alcohol and mental health treatment.

Judge Mullaly warned Flanagan he could end up in jail if he breaches any of the conditions of the order.

Domino’s profits jump 40% on the back of tech investment

Domino’s pizza chain has unveiled stellar results for the 2015 financial year, with net profit after tax jumping by 40% to $64 million.

Domino’s shareholders will be pleased, with the ASX-listed chain also revealing it will pay a fully-franked dividend of 27.2 cents in September, bring the company’s total dividends for the year to 51.8 cents. This compares to 41.1 cents the year before.

In a statement to the market, Domino’s attributed the results to its ongoing investment in technology, including its Pizza Mogul platform and its Live Pizza Tracker, and a rise in digital and lunchtime sales.

Same-store sales for the chain grew by 11.3%, with Domino’s also opening 59 new stores in the period. Revenue for the year totalled $702.4 million, up from $588.7 million the year before.

Shares follow slump in Chinese currency

The local share market fell this morning on the back of poor corporate earnings reports and more bad news out of China because of the yuan’s slump.

Michael McCarthy, chief market strategist at CMC Markets, said investors were looking at welcome relief in trading today however, “as seller exhaustion gives way to a strong buying impulse”.

The S&P/ASX200 benchmark was down 0.5%, falling 28.7 points to 5480.5 points at 11.55am AEST. On Monday, the Dow Jones closed up 1.39%, rising 241.79 points to 17615.2 points.

A Malaysian restaurant in Perth has avoided legal proceedings after paying international students and a backpacker on a 417 working holiday visa as little as $15 an hour.

Malaysian Dining Delights short-changed five employees more than $4000 between July 2014 and January this year, according to the Fair Work Ombudsman.

The employees were underpaid their minimum hourly rate, as well as overtime, weekend, evening and public holiday allowances.

The business has paid an $850 on-the-spot fine and agreed to reimburse the employees.

The employee with the 417 holiday visa, however, cannot be located and her outstanding wages have been put in a trust until she can be contacted.

The owner of Malaysian Dining Delights told SmartCompany he was not aware he was underpaying his staff and is thankful that the Fair Work Ombudsman has agreed to assist him with complying with workplace laws.

“They were very friendly and taught me how to pay correct wages,” the owner says.

Fair Work Ombudsman Natalie James said Malaysian Dining Delights had no previous issues with non-compliance and therefore an enforceable undertaking (EU) was appropriate.

As part of the undertaking, the business owner has agreed to have employees’ future payslips and records assessed independently.

James said the undertaking will help create a behavioural change in the business and reduce the likelihood of it reoffending.

“Many of the initiatives included in EUs help to build a greater understanding of workplace responsibilities, motivate the company to do the right thing and help them avoid the same mistakes again,” James said.

Rachel Drew, partner at TressCox Lawyers, told SmartCompany enforceable undertakings can be accepted by the Fair Work Ombudsman as an alternative to commencing a claim when there is a suspected breach of the Fair Work Act.

“The Fair Work Ombudsman will generally only consider accepting an enforceable undertaking in place of court action if the employer has provided full co-operation,” Drew says.

“Typically, they won’t accept the enforceable undertaking unless the business has admitted the contravention. The ombudsman also tends to require that there be no deliberate conduct and the business owner has to convince the ombudsman that it won’t be repeated.”

Drew says there are a number of advantages for employers who enter into enforceable undertakings instead of going through the courts.

“First of all, accepting an enforceable undertaking means they avoid all of the costs, delay and uncertainty of a court process,” she says.

“It also means they can avoid being ordered to pay a fine. If the Fair Work Ombudsman commences an action for some breach of the Fair Work Act, typically the result is the business is ordered to repay the underpayments and a fine in addition.”

“With the enforceable undertaking what the business is required to do is generally some expenditure… in this case his records were checked. But that expense is within their control. It is over a short period of time and it’s not in the nature of a fine, so it tends to be a bit more palatable for businesses.”

The Fair Work Ombudsman is taking legal action against the No Land Tax Campaign in New South Wales and its party leader Peter Jones over payments owed to 21 workers who worked for the party during the NSW election campaign in March.

Better known as the No Land Tax Party (NLTP), the activist group captured media attention after it secured the number one spot on the ballot paper and fielded candidates in every lower and upper house seat in the state earlier this year.

On Monday the Ombudsman revealed it had initiated legal action in the Federal Court against the party after receiving almost 1000 requests for assistance from workers who said they weren’t paid promised wages for handing out how-to-vote cards on election day.

The workers were allegedly offered $30 an hour for the work, as well as $500 bonuses if candidates polled well, by brochures mailed out to NSW homes by the party prior to the election.

The workers generally worked shifts of between nine and 10 hours on election day, Fair Work said in a statement.

While the Ombudsman believes up to 3600 people could have been affected, it is only commencing legal proceedings in relation to 21 workers.

Some of the 21 workers were teenagers, with the youngest one aged 14, and as a group are allegedly owed a total of $6155.

The Ombudsman is seeking penalties against Jones and the NLTP in relation to four alleged contraventions of the Fair Work Act, which could see the party fined up to $51,000 per contravention and Jones fined up to $10,200 per contravention.

Fair Work Ombudsman Natalie James said in a statement the ombudsman had made “every effort” to resolve the matter without the need for legal action, and cited Jones’ lack of co-operation on the matter, including a failure to take part in interviews with inspectors.

Will Snow, senior associate at Finlaysons, tells SmartCompany this morning the case is a “very unusual situation”.

“A person saying they’re paying $30 an hour for handing out how to vote cards, that’s perhaps too good to be true,” he says.

Snow says new political parties are not known to be swimming in funding, and equally it is uncommon for campaign volunteers to be paid on election day, but the people doing the work should have been paid.

“It’s unusual and you can see why they’d be taking action,” he says.

Snow says it will be interesting to see if the Ombudsman’s action will result in the party paying the workers.

“The biggest question is always; can they pay?,” he says.

Snow says it is likely the Ombudsman would have selected the people it was most interested in taking legal action on behalf of, especially the 14-year-old.

“For someone who is 14, to have one of their first experiences in paid workforce, to not get paid (is one reason),” he says.

Snow thinks the Ombudsman’s decision to take legal action for only a handful of the thousands of workers allegedly affected by the non-payments is a matter of resources.

“While it would be interesting to take action on behalf of the 3500 odd people, getting a matter through a court requires every single one to be committed to the action,” he says.

“It’s a matter of practical reality.”

Snow also says Jones, as the party’s leader, would feel “very much in the spotlight” on this matter.

“His house could be on the line, let alone his political career or support at the next election,” he says.

Snow believes there could be broader reaching consequences because of the litigation.

“It’s an interesting case of damage to your wider brand in the context of employment; this is a fledging party trying to garner community support on an issue but at same time having legal action launched against for not complying with the law,” he says.

Snow says small and medium size businesses can learn from the case.

“You’ve got to be very careful about creating open-ended arrangements which you can’t monitor,” he says.

“This is almost like a global job offer; everyone get on board, I’ll pay you.”

Snow says it is likely that the party could only have afforded to pay much fewer people.

“If you’ve got a particular job you’re putting out there, really have a proper budget behind it,” he says.

SmartCompany contacted the No Land Tax Party for comment but did not receive a response prior to publication.

A family business in Melbourne has been hit with a $7500 fine after the Federal Court found it had sacked an employee in part because he queried his rate of pay.

Cardinia Waste & Recyclers, which specialises in waste removal services, was found to have terminated a casual truck driver’s employment on the same day he insisted he should be paid more generous penalty rates in line with the relevant industry award.

However the family business claimed it sacked Steven Kennewell because of serious misconduct and unsatisfactory workplace performance.

Cardinia Waste & Recyclers claimed the former employee had taken too long to perform his duties, kept disappearing from work and refused to wear high-visibility clothing.

Federal Court judge Richard Tracey said in his judgment these claims justified the dismissal “to some extent”.

However, the judge said Kennewell should have been given a formal warning before he was sacked.

“Mr Kennewell, for example, conceded that he may not have, on occasions, secured the tarpaulins on his truck,” Tracey said.

“He attributed this to difficulty in reaching the tarpaulin knots. He also conceded that he had been asked, at least once, to put on a fluorescent vest which he should have been, but was not, wearing in the yard. He was not, however, at any time reprimanded or given a formal warning in respect of any of these matters.”

As a result, Cardinia Waste & Recyclers was ordered to compensate Kennewell $2900 despite the fact that the court found it was “highly likely” his employment would have been terminated at some part due to workplace performance.

The family business was also slapped with a $7500 fine, with the court ruling it was not appropriate for Kennewell to be reinstated.

Swaab Attorneys partner and workplace relations expert Warwick Ryan told SmartCompany what happened in this case is a common occurrence in workplace disputes.   

“Often employees who assert their rights aren’t necessarily the best employees,” Ryan says.

“That’s not always the case, but you can get a poor employee asserting their workplace rights and so therefore it blurs the line.

“One of the key lessons out of this is there were no documented warnings. If they’d had a series of documented warnings leading up to the determination of poor performance, rather than conversations on the run, they would have been in a better position to argue the reason for the determination was the history of conduct and poor performance. The case ultimately turned on that.”

Ryan says the other lesson for small business owners is that not complying with the relevant industry award can put you in a vulnerable position when dealing with poor performers.

“If you don’t’ comply with an award, in the end it will catch up with you,” he says.

“Often the employee that will bring you undone is going to be the employee you’ve shown the greatest grace to or has been the worst performer, or both. It makes it not only financially but also emotionally galling.”

SmartCompany contacted Cardinia Waste & Recyclers but did not receive a response prior to publication.

A former senior financial planner at Westpac has been banned from the financial services industry for life after he allegedly submitted false insurance policies and used fake signatures and conversations to back-up his submissions.

The Australian Securities and Investments Commission (ASIC) says Martin Hodgetts submitted nine false insurance claims between May and September last year.

ASIC alleges the documents contained invented details such as imaginary conversations and false signatures which had not been approved or requested by any existing or new Westpac customers.

Hodgetts also allegedly used the bank’s internal software system to alter the details of two of the false policies after submitting them in order to avoid detection.

The decision to ban Hodgetts for life came from investigations made as part of ASIC’s Wealth Management Project.

ASIC deputy chairman Peter Kell said in a statement Hodgetts’ conduct was “misleading and deceptive”.

He says it was driven “purely by the commissions he collected which is completely contrary to the integrity required of a person in his position”.

Hodgetts is now facing criminal charges in relation to the conduct, with ASIC referring the matter to Victoria Police.

Professor of commercial law at Melbourne University, Ian Ramsay, told SmartCompany it was “fairly rare” for ASIC to impose a permanent ban.

“The permanent ban indicates the seriousness of which ASIC viewed Hodgetts’ alleged behaviour,” he says.

Another issue of significant interest in the case is the police involvement, Ramsay says.

“Clearly once you’ve got someone falsifying policies,” he says.

“That’s more than negligence, that’s certainly something that warrants referral to the police.”

Ramsay says he understands ASIC’s Wealth Management Project had come about after a number for complaints in the area of financial services and “highly critical reports” from parliamentary inquiries about the standard of financial advice that people have received.

“Too often [it] has been deficient,” he says.

“Also there are undoubtedly cases which have come forward where people have lost substantial amounts of money.”

Ramsay says evidence of lack of compliance and monitoring within the largest financial organisations was another “critical issue” behind the ASIC project, especially as the regulator has uncovered “quite significant evidence of failings” in recent times.

Ramsay welcome’s the regulator’s investigations because he says it will help instil confidence among consumers.

“I think what we’re seeing now is consumers react to some of these ongoing scandals coming out of big institutions, where ASIC’s role is not only to enforce the law but to reinstall confidence in the financial advice industry,” he says.

A spokesperson for BT Financial Group told SmartCompany this morning that it was taking the matter "very seriously".

"We self-identified an issue through our monitoring processes and proactively alerted ASIC," the spokesperson says.

"There was no customer impact as a result of his actions.

"Mr Hodgetts resigned from WFP in September 2014."

The spokesperson said the action taken by ASIC was in line with the group's stance at Monday's senate inquiry in which it recommended the 11 planners that had been reported to ASIC for serious compliance breaches, including Hodgetts, not be allowed to work in the industry again.

A family business in rural Victoria has won a $400,000 legal battle against a Chinese manufacturer that was ripping off its products and selling them under the same name.

Lucas Mill, which is based in the small community of Wooragee in north east Victoria, has been operating for just over 20 years.

The family business makes portable timber saws and has an annual turnover of more than $14 million, according to The Border Mail.

Lucas Mill has sold more than 15,000 saws in 100 different countries.

However co-founder and general manager, Warren Lucas, realised last year a Chinese business by the name of SSML was selling copycat products.

And to rub salt into the wound, the Chinese company was selling them under the same name.

“We noticed 18 months ago that a Chinese company was advertising on their website our machine,” Lucas told SmartCompany.

“They were calling it a Lucas Mill, too, which is all very cheeky. So we got our solicitor to write them a warning letter, but they weren’t paying much attention. So they still kept making copies and a couple appeared in New Guinea – so we thought ‘enough was enough’.”

READ MORE: How to protect your business from copycats and what to do if you get ripped off

Lucas says pursuing legal action against the Chinese company was difficult because it required a lot of detective work, not to mention the significant geographical and language barriers.

“In China, the court likes to see the real thing,” he says.

“So we had to do some pretty good detective work on the ground to intercept this machine. We had to do a trap purchase and capture one of the offending saw mills in China. Customs seized it on our behalf and a Chinese judge had to be present when the crate was opened up.”

Lucas says he suspects copycat behaviour by overseas companies is widespread and highly damaging to small businesses in Australia.

“I would say there is a hell of a lot of companies out there, and if you haven’t got the dollars or inclination to fight it they [the copycats] would probably walk away with it,” he says.

“But China’s feeling a bit self-conscious as the spotlight is on them to do the right thing with IP rights. You can register your copyright with Chinese customs and while they don’t police it, if you red-flag it and draw it to their attention they’ll intercept it and seize.”

Lucas Mill was been awarded damages of two million yuan, which is about $420,000.

The Chinese company has just over a week to appeal the decision.

Shoplifting costs small businesses billions of dollars each year; however, a video that has recently gone viral shows how a retailer in the Netherlands decided to fight back by throwing a party for a suspected thief, even giving her a slice of cake.

Video footage shows a manager at homewares chain HEMA catching an alleged shoplifter just before they prepare to leave the store.

But instead of reporting the woman to security or calling the police, the manger hands her a bouquet of flowers.

“Congratulations, you are the 10,000^th shoplifter in this shop,” the manager says.

“We have a hat, we have champagne. We have real HEMA pie!”

Before long the unsuspecting customer takes off her party hat and runs out of the store, serenaded by music and a group of dancers.

While the footage was filmed almost a decade ago, the video has made the rounds on a number of news sites recently at a time when retailers are turning to the internet to name-and-shame bad customers.

In January, a restaurant in Western Australia posted CCTV footage on its Facebook page in order to name-and-shame a couple it claimed left without paying their bill.

The tactic has since proved popular with Australian businesses, with a surf and sports store in regional NSW posting CCTV footage to its Facebook page of alleged thieves just a few months ago.

As a result the store was contacted by the perpetrator’s mother, who apologised and said she would return the merchandise.

However, Narissa Corrigan who is principal at Ampersand Legal, told SmartCompany it is important SME owners understand that publishing a video of suspected shoplifters exposes their business to significant legal risk.  

“Generally when someone’s suspects someone of committing a crime or doing something wrong, police are called to prosecute and investigate,” Corrigan says.

“Social media isn’t a tool through which regular citizens should be trying to prosecute someone by public opinion. Call the police if you’re worried that someone has committed a crime and they will deal with it.”

Corrigan says while posting a video of alleged shoplifters online may be a clever marketing stunt, the risks nearly always outweigh the potential benefits.

“Potentially innocent people always have potential rights against people who make these kinds of posts, particularly if they turn out not to be true,” she says.

“I think people should be really cautious before they post anything like this on social media. It’s got so much potential to go wrong for everyone involved.”

The former owner of a Crust Pizza outlet in Sydney will have to pay back a slice of what he owes to eight employees after he was found to have underpaid in 2013.

Sotirios Theocharidis, who formerly owned and ran the pizza outlet in Maroubra, was fined $3825 by the Federal Court last week for failing to reimburse eight delivery drivers and sales employees a total of $25,955.

The Fair Work Ombudsman discovered the underpayments in 2013 and issued Theocharidis a compliance notice about the repayments, but did not get a response.

In imposing the fine, Federal Court judge Nick Nicholls found Theocharidis’s contravention of workplace laws was deliberate, and that he had been unco-operative with the Ombudsman.

Nicholls requested the penalty be paid to the workers to partially rectify the underpayments, which remain outstanding.

The judge found it is incumbent on business owners to comply with compliance notices.

He warned the penalty imposed should serve as a “general deterrent to others in the fast food industry”, which he noted is “said to be ‘notorious’ for non-compliance”.

Ombudsman Natalie James says failure to pay back workers any moneys owed is something she will not tolerate.

“We prefer to assist employers to rectify inadvertent non-compliance issues but we are prepared to take legal action against employers who refuse to co-operate,” she says.

Ben Tallboys, senior associate at Russell Kennedy, told SmartCompany this morning the case is an example of an employer and business owner “burying their heads in the sand” upon discovering they were underpaying their staff.

“When an employer receives advice from the ombudsman, or even an employee, that staff are being underpaid, the employer needs to obtain professional advice as soon as possible,” he says.

“In this case, the employer was a company that went bankrupt and so when the underpayment was not rectified the Ombudsman decided to pursue the director of the company personally for a penalty.”

Tallboys says it is somewhat surprising in this case the director “chose not to even defend or acknowledge the court proceeding”, which had resulted in a penalty being imposed.

“It now remains to be seen if he will comply with the court order,” he says.

Tallboys says the case should serve as a reminder to other small businesses that employers ignore the ombudsman at their own peril.

“It does go without saying there are cost pressures in the fast food industry, but even so, employers in this industry must make sure they are paying the minimum requirements,” he says.

“Crying poor is not an excuse.”

SmartCompany contacted Crust Pizza for comment but did not receive a response prior to deadline.