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

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    Hottie has been in business since 2004

    A small online lingerie business that claims one of Australia’s biggest underwear brands has breached trademark laws by using the word “hottie” could have a “very strong case”, an intellectual property lawyer says. 

    Sirie Palmos, owner of Hottie Australia’s parent company Easton Corp Pty Ltd, is alleging the Bonds brand, owned by Pacific Brands, has breached trademarks she has held for a decade by naming several underwear styles in a new range “hottie”. 

    Bonds ran a widespread campaign promoting the new range, which was sold in Bonds stores as well as David Jones, Myer, Target and Big W and included the words “boyfriend hottie” and “hipster hottie”. 

    Fairfax reports Palmos, who owns the registered trademark for the word and brand “Hottie” in Australia, has rejected two compensation offers from Pacific Brands in the past few months after informing the company she is considering filing a lawsuit against the underwear giant. 

    Palmos told Fairfax the Bonds’ campaign had damaged her brand and she believes the compensation offers were attempts to “push this aside”. 

    References to the word “hottie” on the Bonds website have now been changed to “hot” and some of the retailers, including David Jones, have also reportedly changed the wording. However, but the word still appears in others’ branding, including Surfstich.  

    A spokesperson for Bonds told SmartCompany this morning the matter is in the process of being resolved.  

    “Following some incidental use of the word ‘hottie’ on a number of its Bonds branded products, Pacific Brands was made aware of an issue by Easton Corp,” the spokesperson said.  

    “Upon being made aware of the issue, Pac Brands began working with its retailers and Easton Corp's lawyer to commercially resolve the concerns. Our aim is to come to a satisfactory outcome for both companies." 

    Andrew Chalet, partner at Russell Kennedy, told SmartCompany this morning according to IP Australia Easton Corp had first registered the Hottie trademark for five classes in 2004. 

    Chalet believes Easton Corp may have a “very strong case” against the underwear giant because it had a registered trademark that has been used.  

    “They’ve done the right thing, and protected trademark at the right time,” he says. 

    Chalet says in these cases, if the trademark hadn’t been protected and was unregistered, the bigger company could have come in and the smaller business may have been forced to take legal action to protect its name. 

    “Generally if you’re acting for a bigger more powerful company and smaller company has not protected the trademark, the onus is on smaller company to prove their case,” he says. 

    “If Pacific Brands had come in and used this, and the SME hadn’t registered this [trademark], their rights against the bigger company would have been based on their ability to prove confusion.” 

    Chalet says SMEs have “real rights if you have registered your trademark and you do use it”, as in this case.  

     “It’s the perfect example of the value of registering a trademark,” he says.  

    Chalet says for a “powerful brand to change direction” after having products already in the market and such a widespread marketing campaign also suggests the strength of the smaller retailer’s case. 

    “If you don’t have a defendable position, you withdraw products,” he says. 

    SmartCompany contacted Sirie Palmos at Hottie Australia but she was not available for comment prior to publication.


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    A former employee of a business specialising in the design and fabrication of windows and window frames has been awarded $50,000 by the Fair Work Commission after he was found to have been unfairly dismissed after taking time off work to recover from surgery.

    Koichi Yokohata had been employed by Lidco Oregon Australia as a technical manager for seven months before he needed to take time off work for surgery.

    Yokohata gave written notice to his employer that he would be absent from work for 10 days in March this year the day before he was due to take leave, after previously discussing it with his boss.

    On his last day of leave, Yokohata phoned his employer to say his recovery was taking longer than expected and he would return to work in four days’ time.

    The Fair Work Commission heard the employer did not have an issue with this.

    But when Yokohata returned to work, he presented a medical certificate to his employer and claims he was verbally dismissed.

    His employer told him he was not meeting the business’s expectations, according to the evidence heard by the commission.

    Yokohata also told the commission he was not paid outstanding wages or other accrued entitlements.

    Lidco Oregon Australia was not present at the Fair Work Commission hearing and did not provide written documentation regarding Yokohata’s dismissal.

    Because of this, Commissioner Ian Cambridge ruled the termination was “manifestly harsh, unreasonable and unjust”.

    “In this case the employer has failed to participate in any conciliation of the matter,” Cambridge said in his judgment.

    “The employer has also failed to attend at the hearing or provide any explanation for non-attendance …The employer’s failure to properly attend to proceedings before the commission is broadly consistent with and reflective of the evidence of the unacceptable circumstances of the applicant’s dismissal.”

    As a result, the commission ordered Lidco Oregon Australia pay Yokohata 20 weeks’ remuneration, which totalled $50,000.

    Sarah Lock, principal lawyer at Workplace Law Group, told SmartCompany under the Fair Work Act employers must not dismiss their employees if they are temporarily absent from work because of illness or injury.

    “The commission determined that there was found to be no valid reason given by the employer for the termination and there was a complete lack of procedural fairness given to the employee,” Lock says.

    “Employers need to ensure that they have proper policies processes and procedures in place so that employees know exactly what is expected of them when applying and taking personal leave.”

    SmartCompany contacted the managing director of Lidco Oregon Australia Pty Ltd but did not receive a response prior to publication.

    SmartCompany was unable to contact Koichi Yokohata.

     


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    A restaurant in a New South Wales ski resort has been forced to reimburse 10 employees more than $3000 and issue a written apology after being caught out by the employer watchdog twice in less than a year.  

    Alfresco Pizzeria, based at Thredbo in the NSW Snowy Mountains, was audited in August last year and found to have paid workers as young as 15 and 17 flat rates of between $11 and $28 an hour.  

    The employees were collectively underpaid more than $3400 over three months, with individual underpayments ranging from $23 to $674.  

    In 2013, Alfresco Pizzeria was found to have underpaid 22 employees as much as $23,000 and received a formal letter of warning.  

    As a result of the most recent underpayments, the Fair Work Ombudsman asked the restaurant to sign an enforceable undertaking that requires the business to issue written apologies to the employees it underpaid.  

    Alfresco Pizzeria must also have an independent accountant audit its payslips and ensure future compliance with Australia’s workplace laws.  

    Fair Work Ombudsman Natalie James said an enforceable undertaking was used in this instance because the Ombudsman wants to encourage behavioural change within the business.  

    “We use enforceable undertakings where we have formed a view that a breach of the law has occurred but where the employer has acknowledged this and accepted responsibility and agreed to co-operate and fix the problem,” James said. 

    James acknowledged workplace laws can be very complicated for those who are not trained lawyers but she stressed small business owners still need to do the right thing.  

    “We are committed to helping employers understand and comply with workplace laws but operators need to make an effort to get the basics right in the first place,” she said. 

    “We know workplace laws can be complicated for the uninitiated, and for those who are not industrial experts, but we ask small business to use the tools and resources that we provide for them and not just apply arbitrary rates that seem about right.” 

    Peta Tumpey, partner at TressCox Lawyers, told SmartCompany while small business owners don’t often have dedicated HR managers, the Ombudsman does provide helpful resources when it comes to understanding the correct award rates.  

    “You’ve got the Fair Work Ombudsman’s site which has everything there,” Tumpey says.  

    “It’s a great tool to use because they [small business owners] can put their industry in, their types of employees and it tells them their rates straight away. Also, if they are found to be in breach down the track they can show the Ombudsman they thought they were complying.”  

    Tumpey says it is encouraging to see the Fair Work Ombudsman using enforceable undertakings.  

    “Employers, if they are in breach and in a position to negotiate with the Ombudsman, are very fortunate because it can avoid expensive civil proceedings,” she says.  

    “Not only do you avoid having a civil penalty imposed on you, it’s very efficient for your employees who have been underpaid. If you can show the Fair Work Ombudsman that you’re remorseful, it always puts employers in a better position.”  

    SmartCompany contacted Doug Edwards, the owner of Alfresco Pizzeria, but he declined to comment.


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    The Fair Work Commission has ruled in favour of a small skylight manufacturer that dismissed an employee for working on his own business while on company time.  

    Solarbright Country fired Matthew Jones in November last year after the business discovered he had used the company’s time and resources to work on his own private business.  

    Jones was told he had been fired on the morning he was due to return from annual leave.  

    An email had been sent to him from the company’s director, saying his employment was to be terminated immediately because of serious misconduct.  

    Jones disputed the allegations made against him, however, and took the matter to the Fair Work Commission where he argued his dismissal was unfair and he should be entitled to compensation.  

    Solarbright Country’s managing director, Paul Yako, told the commission he inspected Jones’s office while he was on annual leave and found marketing material for his business, MCG Roofing.  

    Yako also told the commission Jones’s calendar was 40% booked with tasks for his roofing business.  

    “I was taken as an idiot,” Yako told the commission.  

    The commission ruled in favour of Solarbright Country and dismissed Jones’ unfair dismissal application.  

    In his ruling, Commissioner Geoff Bull said the employment relationship between the two men was “doomed to fail”.   

    “I find that Mr Yako had reasonable grounds for holding the view that Mr Jones’s conduct was sufficiently serious to justify immediate dismissal,” Bull said. 

    “On this basis, the termination was consistent with the Small Business Fair Dismissal Code; the application for an unfair dismissal remedy is dismissed.”  

    Employment lawyer Peter Vitale told SmartCompany all employees have a basic duty not to have personal interests that conflict with the interests of their employer.  

    “In this case, the fact that the employee was using time for which his employer paid him to work on his own business amounted to a clear conflict of interest and a breach of the duty of good faith,” Vitale says.   

    “The fact that the employee’s business was in competition with the employer amounts to a conflict of interest, even if he had been conducting it wholly in his own time.  

    “These breaches amount to serious misconduct for which the employer is entitled to terminate employment summarily.”  

    SmartCompany contacted Solarbright Country and Matthew Jones but did not receive a response prior to publication.


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    Supermarket giants Woolworths and ALDI have been called out by the Australian Competition and Consumer Commission for their approach to suppliers under the Food and Grocery Code of Conduct. 

    Small businesses have been urged to keep the supermarket giants in check by educating themselves on their new protections under the code, which aims to ensure better relationships between grocery wholesalers or retailers and their suppliers. 

    The consumer watchdog said today it is investigating the approach big supermarket retailers are taking to implement the voluntary code, which was introduced in June, after receiving complaints from suppliers. 

    So far Coles, Woolworths, Aldi and a smaller supermarket chain called About Life have signed up to the code. 

    ACCC chairman Rod Sims says he has concerns some retailers signed up to the code are presenting inflexible Grocery Supply Agreements (GSA). 

    “The code imposes a duty to deal with suppliers in good faith and we are concerned by reports we have received from suppliers that suggest that some retailers have not got off to a good start when it comes to implementing the code,” he says. 

    “The ACCC has concerns as to the manner in which some retailers, in particular Woolworths and Aldi, are presenting new Grocery Supply Agreements, which might give the impression that the supplier is not able to negotiate the terms of the GSA.” 

    It follows comments by ACCC Deputy Chair Dr Michael Schaper last month, who told SmartCompany the code is important because there had been “far too many instances of large firms racing to the bottom” when it came to their competitiveness in the large scale retail market.   

    A spokesperson for ALDI told SmartCompany today it respects the “role of the ACCC in maintaining a fair and complaint food and grocery industry, and will respond in due course to the specific claims that have been brought to our attention”. 

    The spokesperson says ALDI had “long been recognised for its excellent relationships with suppliers”. 

    “ALDI’s commitment to sign and implement the Food and Grocery Code 2015 (Code) before any other major supermarket is testament to our business values and dedication to quality supplier relationships,” the spokesperson says. 

    “The spirit of the Code reflects ALDI’s current practice with suppliers; forging long-term, sustainable relationships and working in partnership to provide Australian shoppers with high-quality products at permanently low prices.” 

    Jos de Bruin, chief executive of Master Grocers Australia, told SmartCompany today the intention of code of conduct is about “exactly that, it’s about behaviour”. 

    “It’s about the respect any large organisation or retailer should show towards its suppliers,” he says. 

    “Whether it’s farmers, manufacturers or on-sellers… it is a basic code of conduct which needs to be engaged with in order to do business in a fair manner.” 

    De Bruin says the reason the code was put together is to do with the unconscionable conduct some of the major supermarkets had been known to direct towards suppliers in the past.  

    “Large companies should not be in the business of putting people out of business or threatening suppliers,” he says. 

    De Bruin says he believes Woolworths and Aldi are “wanting to nail their suppliers to the floor” when it comes to committing to GSAs. 

    “Where is the negotiating, where is the understanding of others’ businesses,” he says. 

    “I think the large players, Woolworths and Aldi, are going beyond the pale.” 

    De Bruin welcomed the ACCC’s decision to question the retailers about the code so early into its introduction. 

    “It’s their remit to preside over the code, when you opt into the code it’s compulsory,” he says. 

    “I think the ACCC is doing the right thing by consumers, grocers and the national interest. 

    “We as Australians should not accept unconscionable conduct.” 

    De Bruin says it is “more evidence of these businesses trying to push suppliers to limits”. 

    “They have always pushed boundaries and are very close to that boundary of behaving unethically and inappropriately,” he says. 

    “That’s the warning the ACCC are putting out today.” 

    In a statement provided to SmartCompany, a spokesperson for Woolworths said the supermarket is a strong supporter of the grocery code and was "surprised and disappointed" with the ACCC, which had "failed to recognise our prompt actions some weeks ago".

    "We were the first national retailer to commit to sign up to the code and have been working progressively with our suppliers since then to implement it," the spokesman said.

    "A minor wording issue was raised with us in relation to a letter sent to a number of our suppliers offering to amend agreements to... comply with the grocery code."

    The spokesperson said the wording issue in question has been used in letters to suppliers "for many years" and was designed to "avoid changes to agreements being missed or misunderstood".

    "Wanting to deal with this issue promptly, two weeks ago we changed the paragraph in the relevant letter," the spokesman said.

    The supermarket considered the code process had "worked exactly as it was intended to".

    "We engaged quickly and constructively with the AFGC, the ACCC and our suppliers on this issue," the spokesman said.

    *SmartCompany updated the story at 4.51pm on September 24 to reflect comments supplied by Woolworths.

     


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    A yum cha restaurant in Queensland has copped more than $23,000 in fines after it was caught not providing official employee work records to staff.  

    The Federal Court in Brisbane this week issued fines of $20,700 to Yum Cha Robina, the company behind Gold Coast restaurant Yum Cha Robina Chinese Restaurant.  

    The Fair Work Ombudsman discovered the company had provided false rosters, time sheets and pay records for 45 employees, including international students and overseas workers on 457 visas, following an audit last year. 

    A subsequent investigation revealed discrepancies between the employees’ records and the employer’s records. 

    Yum Cha Robina part-owner Ika Ngai-Ki Wong was also fined $2850 as a result of the investigation, after admitting she had provided false documents and the records did not reflect the actual hours worked or wages paid to employees. 

    The correct paperwork was later provided to the Ombudsman. 

    Fair Work Ombudsman Natalie James said in a statement the legal action was necessary. 

    “The court’s decision should make it clear that record-keeping is not optional and providing false records to disguise underpayment of staff is serious misconduct,” she said. 

    Will Snow, senior associate at Finlaysons, told SmartCompany this morning he has come across similar cases in the past. 

    “I’ve seen this happen before where an employer thinks it can escape liability by producing the sorts of records the Fair Work Ombudsman wants to see,” he says. 

    “But what has happened here, it seems, is that the employees in question had their own records and gave their own evidence. 

    “It’s an easy exercise for the Ombudsman to then go through the court process to test exactly where the truth sits.” 

    Snow says producing false records can increase liability because the business is likely to attract a penalty for underpayments and for falsifying documents.  

    “It might be one of the reasons the Ombudsman has decided to prosecute,” he says. 

    Snow says it is a case where misleading a government regulatory body compounds the risk and the penalty.  

    “And they didn’t get away with it,” he says. 

    “The Ombudsman has significant powers to find out what has gone wrong and lying about it will only make matters worse.  

    “You can certainly see the Fair Work Ombudsman continues to be very active in ensuring compliance and ensuring employees get paid proper rates.” 

    SmartCompany contacted Yum Cha Robina but did not receive a response prior to publication.


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    A disability support pensioner who claims she was offered 63 loans over a six-year period by Cash Converters despite them knowing she had a gambling problem and would struggle to repay is taking the payday lender to court.  

    The court action is the latest legal controversy for Australia’s largest payday lender, which has been hit with a string of class actions from customers around the country in recent years over claims of exorbitant interest rates. 

    In this case Cash Converters is accused of irresponsible lending practices in relation to a 57-year-old Melbourne disability support pensioner which says she has a gambling addiction and would therefore not be able meet the loan repayments without significant hardship. 

    The Consumer Action Law Centre (CALC), which is representing the client in the case before the Federal Circuit Court, claims the payday lender repeatedly offered the pensioner loans despite knowing she is a disability support pensioner with a gambling problem. The centre claims Cash Converters should have known the customer could not meet repayments on the loans.  

    Jillian Williams, director of legal practice at the Consumer Action Law Centre, said in a statement the case is an example of how current payday lending laws have failed vulnerable Australians. 

    “Lenders have to assess the ability of borrowers to be able to pay the loan. In this case our client alleges Cash Converters only assessed income and ignored significant warning signs,” she said. 

    “Payday loans are an extremely expensive product and it’s well documented that repeated use can worsen a borrower’s financial situation.  

    “That’s why lenders have a legal obligation to ensure loans aren’t ‘unsuitable’ and that they won’t cause financial hardship.  

    “We allege Cash Converters gave repeated loans to a person when it was quite clear they were unsuitable.” 

    In a statement provided to SmartCompany this morning, Cash Converters managing director Peter Cummins said the Consumer Law Action Group’s claim about the case evidencing a failure in new federal consumer credit legislation is “highly misleading”. 

    “Only seven out of the 31 loans from group companies were made to this borrower since that legislation fully commenced on 1 July, 2013, a period of 27 months,” he said. 

    “It is surprising that CALC has launched this action without exhausting the consumer protections provided under the Consumer Credit Protection Act for hardship and for external dispute resolution by the independent credit ombudsman”  

    But Consumer Action Law Centre chief executive Gerard Brody told SmartCompany this morning the problems with payday lending are widespread and the centre is calling for an overhaul of the laws introduced in 2013, including reforms that would see a stronger cap on amounts that can be loaned. 

    Brody says the whole industry is “pretty shocking” but this is a particularly appalling case of irresponsible lending.  

    “It’s pretty indicative of the types of conduct we generally see from payday lenders,” he says. 

    “Our experience from clients is that most are repeat borrowers, reliant on multiple payday loans. 

    “That’s our central concern with payday lending.” 

    Brody says while from a lender’s perspective a large number of short-term loans might make for a good customer, from the borrower’s perspective it can have a negative snowball effect. 

    “What tends to happen, particularly for those on a low income or under financial stress, because of the way in which the loan is structured with a direct debit on payday, the repayments are taken from their income and leaves them with not much money left over,” he says. 

    Brody says the law states payday lenders need to obtain at least three months of bank statements for every advance, and while Cash Converters had done so in this case, he alleges the lender had been only looking at income rather than expenses. 

    “The law is pretty clear, to lend responsibly, it should be understanding process of loan and taking steps to verify a person’s situation, not just income but outgoing,” he says. 

    Brody cites a report by the Australian Securities and Investment Commission from earlier this year that detailed widespread problems with compliance in the payday lending space, including criticisms of the industry not keeping much information on file about the purpose of such loans or evidence it had considered someone’s situation. 

    He says SMEs in the payday lending space should only be advancing a loan where it will not cause substantial hardship. 

    “We think payday lending businesses should be offering fairer loans and appropriate rates,” he says. 

    “Any small business, any payday lending business - you should be complying with law.”


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    A father and son pair of financial advisers will face increased scrutiny to ensure their compliance with financial services law, following a crackdown by the corporate watchdog.  

    Queensland-based Reid Menkens and his son Leo Menkens, who run a small financial services business in Brisbane called Menkens Financial Group, have entered into enforceable undertakings with the Australian Securities and Investments Commission. 

    The pair was investigated as part of ASIC’s project targeting compliance in the four major banks, Macquarie and AMP. 

    Reid Menkens is a former representative of Millennium3 Financial Services and AMP Financial Planning, while Leo Menkens is a former representative of AMP Financial Planning.  

    ASIC’s concerns about the pair’s conduct came about after a review of AMP files found the father and son had allegedly failed to demonstrate they were acting in the best interests of clients, failed to keep proper records or to provide timely statements of advice. 

    As part of the enforceable undertakings, Reid and Leo Menkens have agreed to appoint an independent consultant to audit their compliance. The consultant will then report to both ASIC and the Menkens’ current financial services licensee, Austplan.  

    ASIC deputy chairman Peter Kell said it is incumbent on advisers to comply with financial services law. 

    “Financial advisers need to ensure their processes and documentation demonstrate that they have acted in the best interests of their clients,” Kell said.  

    Brad Fox, chief executive of the Association of Financial Advisors told SmartCompany this morning he believes the financial services industry as a whole has improved in recent years. 

    “Financial advice has been going through a significant period of reform for the last five years, the outcome of which is a significantly increased level of professionalism across the industry,” he says. 

    “As the higher standards of compliance are introduced, ASIC has an important role to play to ensure that providers of financial advice meet those new standards.” 

    Fox says SMEs that deal with financial advisers should undertake due diligence in selecting them, which includes checking to see the advisers are registered on the ASIC Financial Advice Register. 

    “For small businesses and their owners that seek financial advice, which is particularly relevant where a company has debts and personal guarantees in place, they need to ask pertinent questions around the standards that the financial adviser has that ensures they exceed the law,” he says. 

    Fox says when finding an appropriate adviser, asking for references or seeking a referral from another professional that can be trusted is also “very useful”. 

    “It is a very small number of financial advisers that have received an ASIC action against them,” he says. 

    “Business owners and the public should proceed with confidence to seek the financial advice that they need.” 

     A spokesperson for AMP confirmed to SmartCompany this morning the two advisers’ representative status had been terminated and the company had notified ASIC about it. 

    “AMP takes advisor professionalism and the delivery of high quality advice to consumers very seriously,” the spokesperson says. 

    “In instances where advisers don’t meet our standards we will take appropriate action.” 

    SmartCompany contacted Menkens Financial Group, Millennium3 and Austplan but did not receive a response prior to publication.


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    STA Travel has taken down an image from an online brochure and its social media channels after a former customer accused the travel group of using an image of her without her knowledge or consent.

    Australian student Anthea Jirgens told Mumbrella she was shocked when a friend told her she was in one of STA Travel’s European travel guides.

    “It was all a bit weird,” Jirgens said.

    “I had tagged Santorini in the picture, which I guess is how they found the photo. But it was taken by my ex-boyfriend and meant for friends and family, not for commercial use in a holiday brochure.”

    The picture is of Jirgens holidaying in Greece, and was taken by her then boyfriend.

    STA Travel has since taken the image down from social media and the online version of its European travel brochure.

    Andrew Chalet, partner at Russell Kennedy lawyers, told SmartCompany STA have followed all the right steps in this particular instance.

    “Once you’ve realised you’ve clearly done the wrong thing, first of all you’ve got to fix up what you’ve done and fix any copyright infringements,” Chalet says

    “Once they [STA] were put on notice that they didn’t have permission from the copyright owner, all they could do is take the image away in all its various uses. So, I think they’ve don’t that the right way, but obviously there is still the potential for a compensation claim.”

    Chalet says businesses need to be extra careful when publishing photographs of individuals.

    “Photographs of people where that person can be identified is considered private information under the Privacy Act,” he says.

    “People need to be careful not only from a copyright perspective, but also a privacy perspective when using other people’s images.”

    This particular case highlights how in this day and age it is all too easy to breach copyright, according to Chalet.

    “For example, there are photograph libraries where you can source photographs for publication that will give you the photographs but don’t have a copyright licence, so you have to source that yourself,” he says.

    “Even if you have photographs which are appropriate, you still have to get the copyright permission to use them.”

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


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    The corporate watchdog is investigating a Victorian-based travel agency amid claims its directors intentionally deregistered the business in the midst of legal disputes with former customers.

    The Australian Securities and Investments Commission is taking a closer look at Sports Australia Travel Group after 12 former customers attempted to sue the company for compensation in the Victorian Civil and Administrative Tribunal in August.

    According to The Australian, ASIC has written to the customers informing them complaints about the company’s deregistration will be investigated further.

    The customers were left out of pocket after booking tours with the company to the football World Cup in Brazil in June 2014.

    They claimed Sports Australia Travel Group breached its contracts for a “Support Australia Tour”, which was reportedly promoted as including opportunities to meet the Socceroos, as well as match-day transfer, four-star accommodation and other pre-match functions.

    In separate actions against the business before VCAT, the customers claimed the business breached Australian Consumer Law as tour accommodation was poor, arrangements for the functions fell through and transport to and from the football match was cancelled. Their compensation claims ranged from $2200 to $13,544.

    But VCAT senior member Stella Moraitis dismissed each of the claims at the end of August as Sports Australia Travel Group was deregistered in May.

    Moraitis said the deregisteration of Sports Australia Travel Group by directors Robert Duncan Smith and James Lawrence Winton on May 27 “many months after the commencement” of the proceedings “probably does evidence an intention to avoid the consequences of any adverse findings”.

    However, Moraitis ruled liability for the customers’ claims for breach of contract could not be extended to the directors as they were not personally party to the contracts.

    Australian companies are prohibited under the Corporations Act from commencing a voluntary deregistration if the company is subject to any legal proceedings or has outstanding liabilities.

    However, ASIC records show Sports Australia Travel Group applied for voluntary deregistration on March 31.

    Sports Australia Travel Group was registered in mid-2013 and according to Creditorwatch, previously traded under the names World Cup Travel and Three Travellers.

    According to The Australian, several related entities: Cricket Travel Australia, Spring Racing Travel and Tennis Travel are still registered.

    Patrick Coghlan, commercial director at Creditorwatch, told SmartCompany this morning it is very easy to deregister a company in Australia, with company directors able to apply directly to ASIC to voluntarily deregister their business.

    “You just have to satisfy certain requirements, including have zero assets,” Coghlan says.

    However, the ease at which directors can deregister a business means it is difficult for “a consumer or even a creditor to protect against it”, Coghlan says.

    In this instance, Coghlan says ASIC will likely be looking closely at the timing of when the company’s deregistration documents were lodged and whether it had already been notified by VCAT of the legal action against it.

    Coghlan says the number of voluntary deregistrations is on the rise but it is “safe to say the vast majority are done for the right reasons”.

    “But that doesn’t stop people doing it maliciously,” he says.

    For small businesses, Coghlan’s advice is to “be wary all the time” when doing business with other operators.

    “It’s something we tell our clients all the time. How do you know they will pay you, that they will do the right thing?” he says.

    “You need to do as much due diligence as possible, within reason.”

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

    SmartCompany was unable to contact Smith, Winton and Sports Australia Travel Group and its related entities.


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    An Adelaide man has lodged a formal complaint with South Australia’s liquor and gambling commissioner after a nightclub in the city’s central business district allegedly kicked him out because he was not drinking alcohol.

    The man was asked to leave Lava Adelaide when a security guard discovered he was only drinking non-alcoholic drinks.

    John, who did not give his last name, told The Advertiserthe nightclub was sending people the wrong message.

    “I was quite shocked, because the industry is trying to become more responsible, so I thought they were perhaps doing random checks to see if people were intoxicated, but it was completely the opposite,” John said.

    “I should not be discriminated against because I don’t drink. I might not drink because I don’t like drinking, I might have a medical condition or on antibiotics or I might be a designated driver, all of these things weren’t considered by the security guard.”

    The South Australian Liquor and Gambling Commissioner is investigating the incident.

    Ursula Hogben, principal and general counsel at LegalVision, told SmartCompany as long as the nightclub in question isn’t discriminating against John on the grounds of religion or race then it is not breaking the law.

    “There are rules about discriminating against someone’s gender, sexual orientation, marriage, race and religion,” Hogben says.

    “If he wasn’t drinking because of his religion, that might be different. Also, if he was clearly visually identifiable as from a particular religion that doesn’t drink alcohol then this could be seen as racial discrimination.”

    Hogben says apart from these factors, there is no law saying a business cannot discriminate against someone who is not drinking. 

    “A nightclub is someone’s private business, not a public space,” she says.

    “So as long as they’re not breaching any discrimination rules, then they are not actually breaking the law.”

    Emma Jervis, also a principal at LegalVision, told SmartCompany whether or not the man in this case paid to enter the nightclub could affect his case.

    “That could raise an issue where there was a contract formed whereby he was entitled to remain in the premises because he had paid for that privilege,” Jervis says.

    Hogben, meanwhile, says the lesson here for small businesses is all about goodwill and reputation.

    “You want people to feel comfortable in your business and there’s a public policy to not only admit non-drinkers but to actually encourage them,” Hogben says.

    “Some bars have free soft drink for the designated driver. It’s about the bigger picture.”

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


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    Canberra has become the first jurisdiction in Australia to formally legalise ride-sharing app Uber before its launch next month.

    It will be the first state or territory to put in place regulations for the service before Uber is open to users in October, as well as offering a series of large concessions to taxi drivers, as the Canberra Times reports.

    Under the new rules announced by the ACT government, Uber drivers will have to undergo compulsory criminal history and background checks and obtain third-party and property insurance, while the company’s highly controversial ‘surge pricing’ model will be banned during “emergencies”.

    Uber drivers will have to pay $50 for accreditation and licence fees will set them back $100 a year.

    Canberra’s traditional taxi network will be replaced by the Transport Booking Service, which will cover taxis, Uber and GoCatch, and will be in action from October 30.

    The rise of Uber in Australia has seen a series of protests from taxi drivers in nearly every major city, with claims the startup has an unfair advantage and is operating illegally.

    To placate these concerns, the ACT government will be reducing taxi licence fees from $20,000 to $5000 by 2017, and will no longer force cab drivers to wear uniforms.

    Another primary issue with Uber has been safety fears that have constantly surrounded it, and the regulations will enforce car inspections, driver assessments and medical tests to try to ensure user safety.

    Uber recently announced plans to launch in the nation’s capital, and has claimed that nearly one in 100 residents have signed on to be drivers already. All up there are about 15,000 Uber drivers in the country.

    It appears that Victoria will likely soon follow in Canberra’s footsteps, although this could be a much trickier path, with Uber already operating in Melbourne for more than two years, and an UberX driver currently facing court.

    It also comes as the New South Wales government seems to be employing the exact opposite approach, having just stripped the licences of 40 Uber drivers.


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    Australia’s major airlines have come under fire for “price gouging” during football finals season, with North Queensland federal MP Bob Katter and Western Australian Premier Colin Barnett highlighting the prices being charged for flights for the NRL and AFL grand finals.

    The comments follow recent interest from the Australian Competition and Consumer Commission about the issue of price-fixing in the travel industry, with Flight Centre recently appealing a fine imposed upon it for alleged anti-competitive behaviour.

    Federal Member for Kennedy Bob Katter has come out in defence of Queensland consumers this week, claiming the cost of flights from North Queensland to Sydney for the NRL Grand Final weekend is exorbitant.

    In a statement yesterday Katter said major airlines have quoted prices around the $2000 mark for return trips from Townsville or Cairns to Sydney for the final. However, he claims the companies are offering a return price for the following weekend of only $400.

    “It is outrageous to take advantage of the North Queensland people’s rugby league spirit and their local patriotism, to simply price gouge them,” Katter said.

    Katter said the airlines that run flights between the cities should be “utterly ashamed of themselves”.

    “The sooner North Queensland is a separate state, the sooner we can hit back at everyone from government to big corporations in order to get a fair go, rather than just being used as a milking cow,” he said.

    Qantas, which doesn’t usually run direct flights between Townsville and Sydney, told SmartCompany this morning the airline had added an extra return service which didn’t stop in Brisbane.

    A spokesperson said this extra direct service meant it could offer cheaper flights for the final, but they had all sold out.

    “Unfortunately all the less expensive fares have sold out and because the finals series falls within school holidays, our flights are busy,” the spokesperson says.

    Virgin and Jetstar are also offering flights between Townsville and Sydney this weekend.

    WA Premier Colin Barnett has since supported Katter’s calls decrying the high prices during the football finals.

    “Good onya Bob. If you think Queenslanders have got it tough, come to Perth and try booking a flight to the AFL Grand Final,” Barnett told AAP.

    Alistair Little, partner at TressCox Lawyers, told SmartCompany it appears Katter’s comments about price gouging are a reference to the perceived unfairness to consumers but there is little legal redress under competition law.

    “Katter is saying it’s unfair, but unfortunately fairness and the law don’t always run side by side,” he says.

    “It’s a reflection on lack of competition in market but no ability for any kind of legal redress.”

    “There are no real grounds for caps being put on the charges airlines impose because for most part they end up losing money.”

    Little says companies adjusting fares for peak periods might be frowned upon but changing the laws regulating what airlines can charge is off the cards.

    “It’s really a case of prices will be set by people in the market based on what it can charge,” he says.

    Little says there is a very little competition for the flights between the cities in question, with no alternative routes.

    “There are very few companies which will fly you direct, airlines can charge what they want and do,” he says.

    Little says while the airline industry is generally “fantastically competitive” around the world, very few airlines around the world make a substantial profit.

    “Airlines could protest quite vigorously their margins are slim,” he says.

    He says the lack of competition in the space in Australia is largely a function of our relatively small economy.

    “The key would be to have more competition in the market, but that’s hard because margins are so thin,” he says.

    Little believes airlines will continue to charge “whatever they can get away with”.

    “While consumers will say that’s unfair, very little prospects of any legal redress in future,” he says.

    “It’s incredibly unfair for consumers in this position, but that is a factor of the market that they’re entering into.”

    SmartCompany contacted Katter, Virgin and Jetstar but did not receive a response prior to publication.

     


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    The Fair Work Commission has given the nod of approval to the Kimberley Ports Authority after it sacked a former employee for turning up to work with alcohol in his system the day after Australia Day.

    Lee Ward worked as a casual welder for Kimberley Ports Authority and, as part of his role, he was occasionally required to operate a forklift.

    Operating a forklift requires a high-risk work licence and Ward was required to turn up to work with a zero blood alcohol reading.

    The Fair Work Commission heard on January 27, Ward was subjected to a random alcohol breath test at around 8.30 in the morning, shortly after he had been operating a forklift.

    The test showed a blood alcohol reading of 0.026%, with a subsequent reading showing similar results.

    While Kimberley Ports Authority has alcohol self-testing facilities available onsite, Ward did not self-test on the day he was caught with the blood-alcohol reading of above zero.

    Ward was sent home after the breath test and decided to drive himself, despite being offered a taxi by his employer.

    A week later, the employer notified Ward he would be dismissed because he had breached the company’s workplace policies.

    Ward took the matter to the Fair Work Commission, claiming his dismissal was unfair because he had made a “genuine mistake” and didn’t intend to turn up to work with a blood-alcohol reading above zero.

    Ward told the commission the day before the incident he had family visiting from Perth and had consumed 20 cans of full-strength beer over a 12-hour period.

    Ward said he went to bed at 10.30pm that night and woke up at 3am feeling fine.

    However Commissioner Danny Cloghan pointed out just because Ward felt fine doesn’t mean he was fit to work.

    “To accept feelings, of itself, as a proof of a matter, invites, in my view, a real concern,” Cloghan said.

    “Such feelings are possibly self-serving evidence and a reconstruction of events, rather than a recollection. If Mr Ward’s evidence was put to the ‘front bar’ that after 20 cans of full strength beer, and 4.5 hours of sleep, he felt fine – it would be greeted with that very Australian saying relating to animal manure.”

    As a result, Ward’s unfair dismissal application was dismissed and Cloghan ruled in favour of Kimberley Ports Authority.

    Workplace relations expert and partner at Swaab Attorneys, Warwick Ryan, told SmartCompany Kimberley Ports Authority has followed an “orthodox disciplinary process”.

    “Firstly, they had a policy in place which had been explained and was explicitly agreed to by the staff member and presumably all staff members,” Ryan says.

    “That’s just critical. The second thing they had in place was they had an option for the staff to test themselves before they started. The other thing they did well was had in place processes to help staff access help if they needed it.”

    Ryan says Kimberley Ports’ drug-testing policy is important because forklift drivers work in an inherently dangerous workplace.

    “Forklifts are such a common source of accidents in workplaces,” he says.

    “They actually perform dangerous work. He [Ward] didn’t dispute any knowledge of the policies and didn’t take any common sense steps to assess whether or not whether he was breach of the policies before commencing work.”

    SmartCompany contacted Kimberley Ports Authority but did not receive a response prior to publication.

    SmartCompany was unable to contact Ward for comment.


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    The owner of two cafes in Sydney has paid back former workers more than $40,000 after an investigation by the Fair Work Ombudsman found the business had been paying them as little as $5 an hour.

    Kyung Jun Kim and his company Marsil Pty Ltd were found to have significantly underpaid three workers who had been employed at his two Incanto Coffee outlets on Kent and George Streets in Sydney’s CBD.

    The underpayments took place over a period of nine months, the Ombudsman found.

    As well as being paid below the minimum wage, the former employees had also not been paid correct leave or entitlements.

    The owner/operator has agreed to sign an enforceable undertaking as a result of the investigation and to engage an independent expert to audit the company’s compliance.

    Fair Work Ombudsman Natalie James said the trio raised their concerns with the Ombudsman after returning to South Korea, while the owner was a Korean national himself.

    “Anyone owning or operating a business, including migrants, needs to ensure they take the time to understand the workplace laws applicable to their business,” she said.

    Will Snow, senior associate at Finlaysons, told SmartCompany this morning the case highlights that the Ombudsman is a powerful tool at the disposal of employees who believe they are being underpaid.

    “If you are in a situation where you believe you’re underpaying people, it’s always open to that employee to seek to be paid back through the FWO,” he says.

    Snow says in this case the workers raised concerns after returning to their home country but the door is still open to them to seek redress.

     “There are lengthy time periods in which employees can make claims they’re being underpaid,” he says.

    “Equally, with the assistance of the Ombudsman, those claims can be made after someone may have returned to their country of origin.

    “(In this case) they have gone on with their lives back in Korea; in the meanwhile the FWO does this on their behalf.”

    Snow says many employees and employers might not realise underpayment cases can be fought even if the former worker is abroad.

    “I think there’s an assumption someone needs to remain in country to fight these matters, this part case demonstrates clearly that assumption is wrong,” he says.

    Snow says in this case, the Ombudsman has chosen not to prosecute as the employer “did the right thing and fully back paid the workers”.

    “It has signed an enforceable undertaking, the effect of which is if it commits any future breach of workplace laws, it’s going to be of even more significant consequence for them,” he says.

    Snow says the cafe owner will need to be vigilant in ensuring it is doing the right thing in the future.

    “If they did the wrong thing again, it’s much easier for FWO to prosecute them,” he says.

    Snow says the lessons for other small business owners are clear.

    “It’s very risky to try and make margins by underpaying staff,” he says.

    “There have now been a number of these decisions, many of which involve workers which may be vulnerable because of language abilities or their need to work.”

    SmartCompany contacted Marsil Pty Ltd and Incanto Coffee but did not get a response prior to publication.

     


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    The corporate watchdog has issued a warning to Australian companies about dealing with a company director who has been convicted and imprisoned in the US on banking fraud offences.

    Yesterday the Australian Securities and Investment Commission removed New Zealand born Shaun Gregory Morgan as a director from eight Australian companies, including Australian Capital Investment Group, citing concerns he may be approaching Australian companies offering financial services despite being banned from doing so.

    According to ASIC, Morgan has been automatically banned from managing a corporation under the Corporations Act because of his US criminal convictions but he is allegedly still approaching ASX-listed companies that are seeking to raise capital.

    After approaching the companies Morgan has allegedly requested an “advance fee” in exchange for helping find ways to raise capital.

    ASIC Commissioner John Price yesterday issued a warning to any Australian companies approached by the director.

    “Due to Mr Morgan's unlicensed status and criminal history, ASIC strongly advises companies seeking to raise capital as well as other financial consumers to avoid dealing with him or companies associated with him,” Price said in a statement.

    It is not the first time Morgan has drawn the ire of the watchdog, with ASIC having issued a warning in February for the public to avoid dealing with unlicensed financial services he allegedly offered through various websites.

    As a result of his US conviction, Morgan was permanently banned from providing financial services in Australia in June.

    Ian Ramsey, professor of commercial law at Melbourne University, told SmartCompany the case is unusual as the alleged conduct appears to be continuing despite enforcement action.

    But for Ramsay, given the series of enforcement orders against Morgan this year, ASIC’s recent action is not surprising.

    “ASIC does have power under corporate law to ban someone of being a company director when they’re convicted of something in foreign country,” he says.

    Ramsay says while the series of actions resulting in the recent ASIC ban represents a “very powerful sanction”, there are questions about whether it would be sufficient.

    “The order in June this year might have been sufficient, but clearly not...even though Morgan is overseas it is alleged he has continued to offer finance services,” he says.

    “There must be a real prospect this (current order) won’t be sufficient, because he’s already breached previous orders.

    “There’s the question about what ASIC can do in these circumstances.”

    Ramsay says if ASIC has sufficient evidence and co-operation from international authorities, it could potentially initiate criminal proceedings against Morgan and possibly extradite him to come back to Australia.

    “Regulators will have memorandums of understanding with many regulators overseas, aimed at facilitating enforcement for actions that allegedly breach law which cross over borders,” he says.

    Ramsay says also raises concerns about the importance of undertaking due diligence when dealing with financial services companies.

    “Before your company pays an advance fee, you really need to do due diligence to ensure you are dealing with someone that is credible and that that person or organisation has a successful track record of raising capital for other companies,” he says.

    SmartCompany contacted Shaun Morgan and Australian Capital Investment Group but did not receive a response prior to publication.

     


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    The South Australian Industrial Relations Commission has awarded a reduced unfair dismissal payout to a librarian who sent “damaging and derogatory” text messages about his employer.

    In the decision handed down in August the commission awarded Warren Winship only six weeks’ pay as compensation for the dismissal from the Corporation of the Town of Walkerville in Victoria when he had sought six months’ pay.

    Winship was frustrated that his bosses didn’t appreciate his work to restructure the library and felt that he wasn’t respected by his team.

    He took sick leave and sent text messages to four other employees that were critical of his bosses.

    In the text messages Winship claimed management was trying to get rid of him and was narcissistic and egotistical. 

    “It is very highly likely you will have a new team leader soon, or at least have me gone because it is evident I’m not wanted or needed there and management are plotting for my demise,” the text said.

    “That’s been further highlighted in past two days. Not paranoia, fact. I’ll keep doing my job with resources we have (though it’s clear. No-one trust me anyway) but it’s nigh on impossible when someone new to management & no library experience or knowledge is on a ego trip and it’s evident what’s happening behind the scenes. I’m not ‘sick’, just fed-up. Keep this private or go running to FD, I don’t care. She says I need counselling when I can name several people in management that are narcissists & egotistical. Looks highly likely I’ll be out of your hair soon.”

    He also posted on Facebook complaining he was being undermined.

    “Can’t trust people. I have a mole in my team running to higher authorities about PRIVATE messages” Winship posted.

    When Winship’s manager found out the texts and Facebook posts he asked him to attend a meeting the next day and respond in writing to allegations of misconduct.

    At the meeting Winship claimed the texts were not willful, malicious or disparaging but were one-off expressions of frustration and fear of being undermined.

    On the basis the text messages contravened the Corporation’s code of conduct, management dismissed Winship.  

    The commission found because Winship’s use of social media and text messaging was deliberate his actions had amounted to wilful misconduct and that the Corporation had a valid reason for dismissing him.

    But the commission found the way Winship was sacked was procedurally unfair as he was given less than 24 hours notice to provide a written response to the allegations.   

    It awarded six weeks pay rather than the six months sought which it found was “unrealistic”.

    Andrew Douglas, partner at M&K Lawyers, told SmartCompany even though the courts may find unfair dismissal they can also adjust any award in light of behaviour.

    “This case failed because the organisation was unfair in the manner in which it dismissed a person, however the amount of compensation awarded was reduced because there was a finding of willful misconduct,” he says. 

    “When you are involved in an unfair dismissal case it is critical you put all the misconduct before the commission.”

    SmartCompany contacted the Corporation of the Town of Walkerville for comment but did not receive a response prior to publication.  SmartCompany was unable to contact Winship.

     


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    Nearly four in five foreign language advertisements offering Australian jobs to overseas workers are doing so at below legal wages, according to an investigation by Fairfax and Monash University.

    However, this does not seem to have shocked a workplace law expert who warned against “naivety” and said underpayments had always been a part of Australian society.

    The Fairfax and Monash University investigation has exposed a high number of foreign job ads openly referring to “black jobs”, or jobs that pay below legal rates, from businesses trying to attract cheap labour to Australia.

    The study, which targeted Mandarin-language websites and  looked at more than a 1000 job ads aimed at temporary foreign workers in China, Taiwan, Malaysia and Hong Kong, found 80% of the ads offered below legal rates.

    The expose follows recent revelations about widespread wage fraud across 7-Eleven stores across the country and a significant number of workers reporting underpayment claims to the Fair Work Ombudsman.

    Michael Smith, the new chairman of 7-Eleven, recently said he believes the company’s problems are part of a “very widespread problem” when it came to underpayments and Australian workers.

    Warwick Ryan, employment specialist at Swaab Attorneys, told SmartCompany this morning the Fair Work Ombudsman would have little jurisdiction over the posting of these international job ads themselves.

    “It can’t control what someone does overseas, it doesn’t have jurisdiction to do that,” he says.

    “If someone is posting in Australia, they would have the beginnings of jurisdiction.

    “There’s very little the Fair Work Ombudsman might be able to do.”

    Ryan is more concerned the system in Australia is far too complex for the foreign workers who eventually do come here and work, as well as the employers that employ them.

    “I act for both employees and employers and have sympathies for both,” he says.

    Ryan says the workplace relations system in Australia is complicated and no other country has the awards system Australia does.

    He believes the large majority of underpayments taking place are likely due to employers not understanding their obligations, rather than employers having malicious intent.

    “That accounts for a reasonable portion of underpayments but doesn’t account for the most egregious,” he says.

    And Ryan says some industries are more prone to wage pressures than others.

    “The industries that suffer are low-threshold industries,” he says.

    Ryan warns against what he calls the “screeching naivety” in current discourse about underpayments.

    “Underpayment has always been a part of our society,” he says.

    “Migrant workers come out here and get their first job below rates

    “Underpayments have always been a feature of business that have operated on weekends and late and night.”

    However, Ryan says the Fair Work Ombudsman has been “more effective than ever” in ensuring compliance.

    “What’s changed a little bit is compliance,” he says.

     


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    Unfair contracts legislation to be applied to business to business contracts will have a greater impact on the franchise sector if suggested investment thresholds are adopted in the final legislation.

     A report by the Senate Economics Legislation Committee has suggested that investment thresholds for business to business (B2B) contracts be raised to include a wider scope of B2B contracts than previously considered under the draft legislation.

     The legislation was referred to the committee in early August and given less than a month to report to government, including a brief public consultation period.

    Under the initial draft legislation, small businesses that enter into contracts worth an upfront investment of up to $100,000, or an upfront investment of up to $250,000 where the contract lasts longer than 12 months would be affected, potentially resulting in unfair terms of contracts being rendered unenforcable, or in extreme cases, a whole contract rendered void.

     The Senate committee heard evidence that these contract thresholds should be increased from $100,000 to $300,000 for upfront contract payments, and from $250,000 to $1 million for contracts lasting more than 12 months.

     If adopted in the final legislation, this will mean that almost all franchises will be impacted in future, whereas previously the threshold amounts would have primarily impacted service franchises, which have much lower investment levels than retail franchises.

     The new law defines a small business as employing fewer than 20 people, which means that it will also apply to small and developing franchisors who enter into agreements with larger organisations (such as suppliers).

    Although the small business minister has the discretion to exempt industries subject to mandatory industry codes of conduct from the effects of the legislation (such as the franchise sector in regards to the Franchising Code of Conduct), no exemption has yet been offered despite the sector still adjusting to the new vode which commenced on January 1 this year.

     Unless an exemption for the franchise sector is offered by the minister, it is possible that small businesses considering the future use of franchising as a growth strategy may instead chose alternative growth models that involve greater certainty and less litigation risk.

     The unfair contracts legislation will apply to contracts entered into, renewed or amended after its implementation date, which will commence at least six months after the legislation is approved by the Governor-General. 

     A full copy of the committee’s report can be downloaded here.

     

    Jason Gehrke is the director of the Franchise Advisory Centreand has been involved in franchising for more than 20 years at franchisee, franchisor and advisor level.

     He advises both potential and existing franchisors and franchisees, and conducts franchise education programs throughout Australia, and publishes Franchise News & Events, a fortnightly email news bulletin on franchising issues and trends.

     

     


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    The competition watchdog has released further information about the labelling of free range eggs in a bid to give producers a better understanding of their rights and obligations under the Australian Consumer Law.

    However, egg producers simply want the federal government to hurry up and introduce national guidelines.

    Farmers have been crying out for greater certainty from the government for many years, calling for a national standard on what free range actually means so that businesses big and small don’t get stung for inadvertently doing the wrong thing.

    There is currently no national definition of free range eggs in Australia, however state and territory ministers agreed mid-last year on the need for urgent reform.

    In the meantime, numerous businesses have been slapped with massive fines.

    Last month Queensland-based Darling Downs Fresh Eggs was hit with a $250,000 fine by the Federal Court after the Australian Competition and Consumer Commission alleged the business’s laying hens had been confined to barns.

    The court also ordered the company to introduce a compliance program and publish corrective notices.

    Geoff Sondergeld, the chief executive of R L Adams – the company behind Darling Downs Fresh Eggs – told SmartCompany in a statement his business was fined because it was trying to keep its chickens indoors during an avian influenza outbreak.

    Madelaine Scott, a producer of free range and organic eggs in rural Victoria and founder of Madelaine’s Eggs, told SmartCompany this morningegg producers just want certainty from the government.

    “There needs to be a lot more guidelines and even rules around how many birds by how many hectares,” Scott says.

    “Sometimes you do have to lock your chickens up for a period of time if something [like an influenza] is happening. To change your packaging for a few weeks is so expensive. “Guidelines coming in sooner rather than later would be very helpful.”

    The ACCC’s most recent guidelines say egg producers are making a claim that their eggs are free range if they use the words “free range” on their packaging or show pictures of chickens roaming freely – on a grassy field, for example.

    The competition watchdog says it considers “free range” to mean most hens move about freely on an open range on most days.

    ACCC chairman Rod Sims said in a statement the labelling of free range eggs requires a “common sense” approach.

    “If it is not normal for most of the hens to leave the barn and to move about freely on an open range on most days, making a free range claim is likely to be misleading,” Sims said.

    “The ACCC acknowledges that laying hens may spend periods indoors and we do not expect to always see hens on the range or expect every hen to be outside every day.

    “Indeed, the ACCC does not expect farmers to use a precise approach of tracking hens or head counts.

    “On the other hand, we reject claims that it is acceptable to tell consumers that eggs are from free range hens when the outdoor range is not regularly used by the hens – whether this is the result of farming practices or for any other reason.”

    Free range eggs account for more than 20% of the four billion eggs produced annually in Australia, according to IBISWorld.


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