Articles on this Page
- 06/19/14--08:33: _Aussie airlines tar...
- 06/23/14--08:06: _Government to help ...
- 06/23/14--08:18: _Aussie supplier stu...
- 06/23/14--09:19: _Textile union defen...
- 06/24/14--08:41: _Fair Work finds mak...
- 06/29/14--08:29: _A guide for small b...
- 06/29/14--09:26: _NSW businesses raid...
- 06/30/14--08:23: _ACCC cracks down on...
- 06/30/14--08:37: _Coles “categoricall...
- 06/30/14--09:22: _“Go and get f---ed”...
- 07/01/14--08:37: _ACCC takes Electrod...
- 07/02/14--09:24: _“Shabby, appalling,...
- 07/03/14--09:11: _Fitness industry as...
- 07/03/14--09:26: _GE Money fined $1.5...
- 07/06/14--08:43: _Number of businesse...
- 07/06/14--09:07: _Former JBWere chief...
- 07/07/14--08:59: _Fair Work awards co...
- 07/08/14--09:25: _Super A-Mart hit wi...
- 07/09/14--08:56: _Fair Work rules dis...
- 07/09/14--09:13: _Court fines Stratto...
- 06/19/14--08:33: Aussie airlines targeted by competition watchdog for ‘drip pricing’
- 06/23/14--08:06: Government to help SMEs resolve disputes with launch of online tool
- 06/23/14--08:18: Aussie supplier stung with $30,000 fine for honey not made from bees
- The definition of personal information and new requirements around transparency.
- The way businesses must notify individuals when information has been collected, how it’s used and where it’s stored.
- The ‘opt-out’ function of marketing communications.
- The requirements around data going overseas.
- 06/29/14--09:26: NSW businesses raided over USB chargers after woman dies
- 06/30/14--08:37: Coles “categorically” denies bullying suppliers
- 06/30/14--09:22: “Go and get f---ed”: Bunnings brawl ends in unfair dismissal claim
- 07/01/14--08:37: ACCC takes Electrodry to court over fake online review claims
- 07/06/14--08:43: Number of businesses raided over deadly USB chargers rises to 260
- 07/06/14--09:07: Former JBWere chief executive fails in redundancy claim against NAB
- 07/08/14--09:25: Super A-Mart hit with $30,000 fine after warehouse forklift accident
The Australian Competition and Consumer Commission has initiated separate proceedings against Jetstar and Virgin Australia in the Federal Court for allegedly engaging in misleading and deceptive conduct.
The ACCC alleges the airlines advertised on their websites that certain domestic airfares were available at specific prices, while at the same time failing to “adequately” disclose additional booking fees.
According to the competition watchdog, Jetstar charged a booking and service fee of $8.50 per passenger, per flight if the purchase was made with a non-Jetstar branded credit card or by PayPal. Similarly, the ACCC alleges Virgin charged an additional fee of $7.70 per passenger if payment was made by a credit card, debit card or PayPal.
ACCC chairman Rod Sims said in a statement the competition watchdog was concerned with the practice of separate fees and charges.
“The ACCC is concerned about advertising that draws consumers into an online purchase process but fails to provide sufficient upfront disclosure of additional fees and charges that are likely to apply,” said Sims.
“Drip pricing practices, such as those alleged by the ACCC in these proceedings, have the potential to cause both competition and consumer detriment. Not only can this practice lead to consumers potentially being misled, it may also make it difficult for businesses with more transparent pricing practices to compete on a level playing field,” he said.
Drip pricing is a term used to describe a business luring online customers with competitive prices, but then adding additional costs when the customer begins to process their payment.
In a statement, Jetstar said it would defend the action brought by the ACCC in the Federal Court.
“The booking and service fee is clearly disclosed and the total price that people pay is shown before they finalise their purchase,” said Jetstar. “Our customers have the option to choose one of four free payment methods, and that’s how a large number of them book.”
A spokesperson for Virgin Australia told SmartCompany separate booking and service fees have been a long-standing practice for all Australian airlines.
“Virgin Australia offers its customers a number of fee-free payment options and remains committed to providing a choice of payment options for customers making bookings,” says the spokesperson.
“We welcome an industry-wide approach to booking and service fees to ensure consistency across all the airlines. We are currently reviewing the proceedings commended by the ACCC and will be considering all options.”
In its Compliance and Enforcement Priorities 2014, the ACCC said drip pricing was a key priority.
Resolving disputes is set to become a whole lot easier for SMEs with today’s launch of Dispute Support, a government-backed online information and referral tool.
Housed on the Australian Small Business Commissioner’s website, Dispute Support provides information about the dispute resolution services available to small businesses and the cost of the services.
SMEs can also use the site to access tips and advice for managing disputes and avoiding them in the future.
While the services have been available for some time, Small Business Minister Bruce Billson told SmartCompany this morning the tool is designed to increase awareness about the options available to small businesses when embroiled in disputes with customers, other businesses or government.
“We’ve had very positive feedback about these services from small businesses who have used them but our research shows a vast majority of small businesses are not aware they exist,” says Billson. “That’s why we’ve taken this step.”
Dispute Support has been developed by the federal Small Business Commissioner along with representatives from state and territory governments and the state Small Business Commissioners. Billson says it is just one of the first steps in the government’s budget commitment to change the role of the federal commissioner into a Small Business and Family Enterprise Ombudsman.
“We’re evolving the role into the Small Business and Family Enterprise Ombudsman, adding real power and tools and teeth, and adding a concierge function to communicate early and affordable dispute resolution options,” says Billson.
While Billson says the powers of the ombudsman’s office are still being developed—a discussion paper was released at the start of May—the Dispute Support tool will complement the ombudsman’s role.
“We don’t want to overstep or compete with the existing resolution services,” says Billson. “We want to highlight existing services and improve small business awareness and ability to access them.”
Billson says one of the overriding themes which comes through in his discussions with small businesses about disputes is small business owners fear ending up in court and losing legal battles because “their pockets are not as deep” as the other party’s.
“Most small businesses also want to resolve disputes quickly so they can get back to their business, and they want to continue to have good working relationships with the other parties,” says Billson.
An Australian supplier of Mediterranean and Turkish food products has been stung with a $30,600 fine for misrepresenting its “Victoria Honey” product, which is neither derived from bees nor made in Victoria.
The penalty is the most recent result of a string of actions taken by the Australian Competition and Consumer Commission over false or misleading products, including those recently brought against Maggie Beer’s daughter.
The ACCC found Melbourne-based distributor Basfoods to have made misrepresentations on its product labelling and its website that suggested its “Victoria Honey” was produced by honey bees, when it was mainly comprised of sugars from plants including corn and sugar cane.
The watchdog also considered by naming and labelling its product “Victoria Honey”, Basfoods had represented the product as originating from Victoria, Australia when in fact it was a product of Turkey.
The product was supplied to independent supermarkets, speciality retailers, online stores, delis, restaurants and cafes across Australia, as well as through Basfood’s retail stores and via its website.
Three infringement notices were issued to Basfoods before the ACCC fined the company.
In response, Basfoods has provided an enforceable undertaking to the ACCC in which it has admitted its conduct contravened Australian Consumer Law and has undertaken to only sell a product as “honey” if it is entirely produced by honey bees.
The company also agreed to regularly test its products, including its honey, and publish a range of corrective notices.
“It is difficult for consumers to test claims by traders that a certain product is actually ‘honey’ or is from a certain place of origin,” ACCC chairman Rod Sims said in a statement.
“False claims of this kind not only mislead consumers but can also disadvantage competing honey suppliers, particularly those who source honey locally within Australia,” he said.
Sims said the ACCC is putting honey suppliers on notice as it has concerns with other honey suppliers and products, which it may pursue similar action against.
Sally Scott, partner at Hall & Wilcox, told SmartCompany when considering if a label or advertisement is misleading, many businesses just consider whether the actual words used are misleading, such as a specific claim to have been ‘Made in Australia’.
“However, when assessing misleading conduct, the ACCC looks at more than just the actual words used,” says Scott. “It looks at the overall impression that is conveyed to consumers.”
The ACCC considers any representations that are implied by words or pictures, as well as what knowledge, expectations and experience consumers already have, says Scott.
“This means that when businesses are considering labels and advertising, they need to turn their mind to the overall impression that consumers may have. They then need to consider whether the overall impression is likely to be misleading,” says Scott.
Scott says in this case, it is fair to assume a product labelled ‘Victoria Honey’ would be made in Victoria and mainly or entirely comprised of honey made from bees.
“That is not because the label specifically says that it is ‘Made in Victoria’ or that it contains honey made from bees,” says Scott. “It is because of the overall impression conveyed to consumers as a result of implications and consumers’ broader knowledge, expectations and experience.”
Basfoods was contacted for comment but SmartCompany did not receive a response prior to publication.
Australia’s textile union has defended a decision to offer Australian fashion labels the option of settling their legal stoush out of court, but some brands say they will stand their ground.
The Textile, Clothing and Footwear Union of Australia recently began proceedings in the Federal Court against 23 Australian companies it said breached laws protecting outworkers.
Labels including Driza-Bone and Nevenka were among those said to have not met minimum legal standards relating to the provision of awards, but both Driza-Bone executive director Mark Mackinnon and Nevenka owner Rosemary Masic told SmartCompany at the time they paid above award rates.
Masic said she had excellent relationships with outworkers, while Mackinnon said Driza-Bone did not use outworkers at all. He went on to say the action by the union appeared “to be a smear campaign”.
It has since been revealed the union offered each brand the opportunity to settle out of court for $30,000, prompting Employment Minister Eric Abetz to publicly attack the unions in the media and Parliament for attempting to "blackmail" brands to make up for shortfalls in funding.
“This kind of extortion by the TCFUA isn’t to support workers, it’s to prop up the union bosses at head office,’’ Abetz told The Australian.
The union responded in a statement, saying Abetz’s comments were an attack upon vulnerable workers in the industry and upon the industry itself.
“Senator Abetz is the cheer squad for companies that are now attacking the proceedings against them. Notably, Senator Abetz has not claimed that the award breach allegations are untrue,” said the TCFUA national secretary Michele O’Neil in the statement.
“It is completely normal and appropriate for parties to resolve legal proceedings by reaching voluntary settlement agreements,” she said.
O’Neil said the union is now working with a number of companies who are committed to supply chain transparency and compliance with the award.
“If other companies prefer to have these matters heard and any associated penalties determined by the Federal Circuit Court then the union is fully prepared to take this course,” she said.
O’Neil pointed to the last occasion the Federal Court heard a similar matter and imposed a penalty payable to the union of $110,550.
Mackinnon told SmartCompany this morning Driza-Bone is one such company standing its ground and refusing to settle.
“Either we have to pay the union for something that didn’t happen or we defend it,” says Mackinnon.
“The fact is we haven’t used any outworkers to make our clothing, we never understood the whole thing,” says Mackinnon.
“We’ve been accused of using outworkers and paying them $5 an hour and that hasn’t happened.”
Mackinnon says all Driza-Bone products are made in state-of-the art factories by well-paid workers.
“They are trying to make us give them some money when we haven’t done anything. We’re stuck between a rock and a hard place,” he says.
Mackinnon says despite the huge cost of fighting a legal battle in the Federal Court, the company will defend itself.
The Textile, Clothing and Footwear Union of Australia was contacted for comment, but SmartCompany did not receive a response prior to publication.
The Fair Work Commission has found it is “reasonable” for an employer to nominate which doctor an employee needs to visit when assessing a medical issue.
The issue was raised in a case recently before the Fair Work Commission by a call centre employee named Shirley Menegola, who complained that triggers in the workplace were causing her to have asthma problems.
While Menegola provided her employer, West Australian power company Synergy, with medical reports from her own physician, Synergy insisted it needed medical assessments from a physician of its own choosing. Fair Work found the request to be reasonable.
In late 2011, Synergy managers met with Menegola to discuss her health issues and following the meeting Synergy took steps to try to alleviate possible triggers, including moving workstations, organising for the Asthma Foundation to deliver training sessions on the condition, and changing the cleaning products used by the company.
Despite these steps, Menegola continued to suffer health issues, such as hoarseness, which she linked to triggers such as the use of strong colognes and perfumes by her colleagues.
After raising concerns about these ongoing health problems with her workplace health and safety representative, Synergy held a series of meetings with their employee.
But on July 30, 2013, Menegola was stood down on full pay with a request to visit a doctor of Synergy’s choosing, despite providing information to the employer from her regular doctor.
Menegola provided further updates from her own doctor in September and was allowed to return to work. However, upon her return she complained the issue hadn’t been resolved and contacted the Australian Services Union (ASU).
During a series of meetings that followed, the ASU requested that Synergy should ban the use of colognes and perfumes in its workplace and that Menegola should be given the opportunity to work from home.
In response, Synergy stood down Menegola in order to investigate the union’s proposals and on November 6 told the ASU that the further medical assessments it requested were necessary.
“In order to consider either of the further significant adjustments suggested by Ms Menegola, our client needs to fully understand Ms Menegola’s medical condition, the limitations placed on her as a result, and the adjustments that would need to be made to the particular workplace in order to accommodate her condition and allow her to perform her role safely,” said the company in the letter.
“Only when our client has this information can it determine whether the adjustments are reasonable and practicable in all the circumstances.”
The Fair Work Commission sided with Synergy and found it was reasonable in the circumstances for Synergy to ask its employee to visit a doctor of its choosing.
“My decision is that, [Synergy’s] requirement for [Menegola] to attend a medical assessment, for the purposes of managing [Menegola’s] health and safety at work is reasonable,” the ruling states.
Employment lawyer Peter Vitale told SmartCompany a key issue in the case is an employer’s obligations in terms of occupational health and safety (OH&S) in the workplace.
“I think it recognises that employers have an overriding statutory duty on OH&S and that one measure it may need to take to satisfy those obligations is to get an independent assessment on an employee’s ability and fitness for work,” says Vitale.
“That may require directing an employee to visit a particular doctor.”
In a statement to SmartCompany, ASU WA branch secretary Wayne Wood says an appeal has been lodged over the decision, with a stay order issued pending finalisation of the appeal.
“[The] appeal applicant has sought further advice following the Decision by the Full Bench in Brisbane on 18th June 2014 [in regards to] Darrin Grant vs BHP Coal (C2014/3771). Parties are in discussions about the way forward in light of the Full Bench Decision,” says Wood.
SmartCompany contacted Synergy this morning for comment but no reply was available before publication.
It’s that time of the year − not only do SMEs have to get ready for tax time, they have to prepare for a raft of legal changes that will affect smooth sailing in the year ahead.
We’ve already covered off the changes to the tax system in the new financial year so today SmartCompany takes a look at the major legal changes you have to look out for after July 1.
Minimum wage increase
The new national minimum wage will increase to $16.87 an hour, or $640 a week, on July 1 and will apply from the first pay period on or after that date.
“A lot of employers in the small business space will pay employees in accordance with an award, so it will be up to them to actually pass on the rate increase to employees,” K&L Gates special counsel Belinda Copley told SmartCompany.
Casual loading for award-free employees is also going to increase on July 1, up from 24% to 25%.
“This will apply to employers who employ casual staff who are award-free but get casual loading,” says Copley. “It will be slightly easier now than it was in the past, because 25% will bring it in line with all the award-covered employees.”
Copley also says it’s a good time of year for employers to do a modern awards compliance audit. She says it is particularly important to have an annual review if any staff are paid an annual salary, such as admin staff covered by the clerk’s private sector award.
“Employers need to annually review the salary paid to those employees and make sure that it is sufficient to cover the amount of overtime they’re doing and the amount of weekend work, etc. It’s a good a time of year to say, OK, the rates are increasing, so let’s make sure the rates we’re paying across the board are covered.”
Fair Work Ombudsman Natalie James says Australian employers now have a national system of modern awards.
“What this means is that calculating wages is about to become a whole lot simpler,” James said in a statement.
“This makes it easier for employees to work out what they should be earning. Employers, too, can access the Fair Work Ombudsman’s simple online pay tools to work out the correct pay rates for their staff.”
From July 1, the high-income threshold for unfair dismissal will increase from $129,300 to $133,000 per annum.
“What that means is, award-free employees who earn more than $133,000 won’t be eligible for unfair dismissal application,” says Copley.
She says this is particularly important for any employers who are currently performance managing high earning individuals and considering an exit strategy for them.
“They might just want to make sure that somebody who they thought didn’t have rights for unfair dismissal, might just gain them overnight.”
From July 1, the tax free threshold that applies to a genuine redundancy payment will increase, which is relevant if you have made or intend to make an employee’s position redundant and will have to pay them a redundancy.
The base limit has increased from $9246 to $9514 and the limit per year of service has increased from $4624 to $4758.
For Victorians, the Accident Compensation Act, which is the work cover legislation that’s been in effect since 1986, will be repealed on July 1 and will now only relate to injuries which occurred before July 1 2014.
If there is an injury to a worker on or after July 1, the new Workplace Injury Rehabilitation and Compensation Act will take effect.
Kim Cunningham, senior associate at M+ K lawyers, told SmartCompany it is important for employers to be aware of a section of the Accident Compensation Act that covers employers if an employee starts a job with pre-existing injuries, and fails to disclose that injury.
“If they fail to make a disclosure of a pre-existing injury and they suffer an aggravation of that injury in their employment, they may not be covered under workers’ compensation,” says Cunningham.
She says with the introduction of the Workplace Injury Rehabilitation and Compensation Act, employers will have to change the name and section number of the act in their pre-employment declaration when asking employees about existing injuries.
From July 1, the super guarantee rate will increase from 9.25% to 9.50%.
Brad Twentyman, director of superannuation at Pitcher Partners, told SmartCompany it is important for employers to note the change in superannuation guarantee, to protect themselves from any possible claims of compensation that may arise from over contributing.
“As an employer, if you’re aware that your employee might contribute above the contribution limits, it would be prudent to point out to the employee that they might want to seek some advice. If they think there’s a problem, employers should get on the front foot,” says Twentyman.
While employers must pay attention to this year’s rise, they will have some respite from increases in the coming years, with the next increase not due until June 30, 2018.
If you are in the hospitality or building industries, be aware that chefs, bricklayers and wall and floor tilers will be added to the Skilled Occupation List from July 1.
Andrew Douglas, principal at M&K Lawyers, told SmartCompany that although privacy law changes already came into effect in March this year, they have only really started to impact business now, as we see substantial fines placed on companies who breach the laws.
The laws make it more difficult for businesses to collect information about consumers without their knowledge, and include changes to:
Douglas says many workplace ‘wellbeing’ programs may be at odds with these laws and urges employers to take a closer look to avoid the possibility of being prosecuted.
Intellectual property laws
Although none of the changes in the Intellectual Property Laws Amendment Bill 2014 will be in effect by July 1 as the bill is yet to be passed by Parliament, it is worth keeping on your radar that, if passed, some of the changes in the bill may come into effect in the next financial year.
K&L Gates partner Jane Owen told SmartCompany the most significant amendments in the bill relate to the compulsory licence provisions of pharmaceuticals and the creation of a single governance body for patent attorney registration and patent prosecution for Australia and New Zealand.
Other amendments include an extension of the jurisdiction of the Federal Circuit Court to include plant breeder's rights matters, a repeal of unnecessary document retention provisions in the Patents, Trade Marks and Design Acts and minor technical amendments to the Patents Act to correct oversights resulting from the Raising the Bar Act.
Other things to consider:
Experts also told SmartCompany that SMEs should keep the following on their radar over the next 12 months:
A number of businesses operating in New South Wales have been raided by the NSW Office of Fair Trading in relation to unsafe USB chargers, travel adaptors and power boards.
The raids follow the death of a woman in North Gosford on the state’s central coast in April. According to the ABC, the woman was electrocuted after plugging in a faulty USB charger to her computer.
The Office of Fair Trading said in a statement it has raided a Campsie mobile phone accessory shop in relation to the incident, removing from sale a number of chargers, travel adaptors and power boards which did not meet Australian safety standards.
The trader of the unnamed business is now being questioned by authorities and could face prosecution.
A spokesperson for the Office of Fair Trading told SmartCompany this morning two stores in Wollongong have been raided in relation to the devices, along with four stalls at the Dapto Markets and two stalls at Paddy's Markets in Haymarket. Further raids are expected to be carried out in coming weeks.
The Office of Fair Trading said corporations face a maximum penalty of $875,000 for selling the unapproved products, while individuals face a maximum fine of $87,500 and two years’ imprisonment.
According to Fairfax, a Wollongong woman has also reported that a USB charger she purchased at Paddy’s Markets exploded near her son’s head.
Fair Trading Commissioner Rod Stowe said in the statement the unapproved products are often made from inferior plastics and other insulation materials, and the particular devices seized by the Office of Fair Trading had no insulation pins or approved marks.
“Consumers must avoid these products and retailers should not be selling them,” said Stowe. “These devices pose a serious risk of electrocution or fire.”
Stowe is calling for anyone with knowledge about the products to contact the Office of Fair Trading, and said anyone in possession of the products should bend the pins on the charges and dispose them immediately.
The spokesperson told SmartCompany the products appear to be imported "as there are no Australian approval marks and they are not made to Australian standards".
The spokesperson says if businesses are concerned they may be selling the products they should remove the devices from sale until they can confirm the devices are approved for sale.
"People can check the Fair Trading website for approval marks required on all declared electrical articles," says the spokesperson, who also suggests contacting the Office of Fair Trading directly with any concerns.
The Australian Competition and Consumer Commission has initiated Federal Court proceedings against daily deals site Spreets, which it alleges misled consumers in 2011 and 2012.
The crackdown by the competition watchdog comes just six months after online group buying site Scoopon was hit with a $1 million penalty for making false or misleading representations to businesses and consumers.
The ACCC released a statement yesterday saying it will allege Spreets made false or misleading representations about the price of certain deals, the ability of consumers to redeem vouchers and the applicability of consumer guarantees under the Australian Consumer Law in relation to the right of consumers to receive refunds during 2011 and 2012.
At the time, Spreets operated one of Australia’s largest consumer-facing online group buying sites. The site has since changed its focus and now publishes deals offered by third party group buying sites including Scoopon, Groupon and Living Social.
Amanda Millar, director of trade marketing and corporate affairs for Spreets’ parent company Yahoo!7, told SmartCompany this morning Yahoo!7 “has been in discussions with the ACCC about these matters for some time” and has “already, of our own accord, made substantive changes to the Spreets business model”.
Millar says the changes were in part “to ensure that the Spreets businesses practices protected our users against breaches to consumer law”.
“Beyond this, it is not appropriate for us to comment any further on matters that are before the courts,” says Millar.
The ACCC said it has received “a significant number of complaints” about online group buying sites in Australia since the industry emerged in 2010 and regulators have been working to improve the practices of the industry.
“Businesses selling to consumers online have the same obligations under the Australian Consumer Law as all other businesses, and consumer guarantees, including refund rights, apply when consumers purchase online,” said ACCC chairman Rod Sims in the statement.
“Online businesses must ensure that they do not mislead consumers and that the price and any restrictions on a deal being offered are clearly and accurately stated,” he said.
Sally Scott, partner at Hall & Wilcox, told SmartCompany the maximum penalty for misleading conduct by a company is $1.1 million per offence. While Scott says she has not seen documents relating to this particular case, if the ACCC is alleging three offences from Spreets, the maximum penalty could reach as high as $3.3 million.
Scott says it is essential for businesses to ensure any representations they make are not misleading.
“[Businesses] need to check all communications and representations such as those in advertising, communications with suppliers, warranty terms, statements made in a shop and statements on a website,” says Scott. “Businesses need to think out of the box as to where they might make representations.”
Scott says companies also need to be aware of their obligations towards other businesses, including suppliers.
“The Scoopon and Spreets cases show that businesses can be targeted for misleading representations made to consumers and to other businesses, including suppliers,” says Scott.
“Whilst many businesses are now more aware of the risk of making misleading representations to consumers, there is less awareness of the risk of making misleading representations to other businesses.”
“The ACCC has proved over the last four years or so that it is willing to pursue businesses that engage in misleading conduct,” says Scott.
A directions hearing for the case is scheduled for July 30 in the Federal Court in Brisbane. The ACCC is seeking declarations, pecuniary penalties and costs.
Supermarket giant Coles has “categorically rejected” allegations it engaged in unconscionable conduct towards 200 of its small suppliers.
Although the company has previously defended itself against the legal action brought against it by the Australian Competition and Consumer Commission in May, Coles officially lodged a 34-page defence in the Federal Court in Melbourne yesterday.
In the latest development in the case, Coles has defended its Active Retail Collaboration program, which asked around 200 suppliers for additional and ongoing rebates.
The ACCC alleges the program breached Australian Consumer Law by providing misleading information to suppliers about the savings and value of the program; using undue influence and unfair tactics against suppliers to obtain rebates, and in some cases threatening commercial consequences when rebates were not paid; taking advantage of its superior bargaining position; and requiring its suppliers to agree to rebates without sufficient time to assess the value of the deal.
In a statement, Coles said supplier participation was at all times voluntary.
The supermarket chain also said it consulted with suppliers regarding the value of the expected benefits of the program and responded to supplier queries concerning those benefits.
Coles said it maintained trading relationships with suppliers irrespective of whether or not they decided to participate in the program, with 32 of the 200 suppliers not agreeing to participate in the program. The company said it continued a trading relationship with each of those suppliers.
Suppliers said to have been approached to join the program include Carman’s Fine Foods, Maggie Beer Products, Nudie Foods, Bic, Mattel, Weis Frozen Foods and Yakult, although none have been drawn to comment on the case.
Coles reportedly trained its category managers to talk to suppliers with the use of scripts that included a threat to delete those who did not pay up. Fairfax reports that in its submission, Coles did not deny the use of scripts to encourage suppliers to participate.
There has been much talk recently about major supermarkets unfairly squeezing suppliers, after Australia’s other big player, Woolworths, recently came under fire for asking its fresh fruit and vegetable suppliers to help fund its Jamie Oliver marketing campaign.
Master Grocers Australia chief executive Jos de Bruin told SmartCompany this morningin most cases suppliers don’t have a choice how they deal with Coles or Woolworths.
“Coles and Woolworths always have the upper hand,” says de Bruin.
He says while the big two supermarkets do give suppliers the advantage of stocking a volume of their products, they will often play suppliers off against one another and will rarely turn suppliers much of a profit.
“In most situation [small suppliers] say, ‘we deal with Coles and Woolworths to recover our overheads’, but we deal with independents for profit,” says de Bruin.
“We have all known about Coles and Woolworth’s tactics for years.”
De Bruin says the idea that a leading ASX-listed Australian company can have such legal action brought against it is astounding.
“And it’s telling that at least 50 small suppliers needed to be given confidentially to speak out about it,” he says.
The Fair Work Commission has found a Bunnings employee was unfairly dismissed after he was sacked following a brawl with a co-worker.
The brawl started when another employee asked Michael Fitzpatrick for a customer order for a bath and Fitzpatrick told him to “go and get f---ed”.
The other employee told Fitzpatrick to “go and get f---ed himself” and then the brawl escalated when the pair went into an office.
Fitzpatrick claims he thought his Bunnings co-worker was going to hit him, so he grabbed the lapels of the co-worker’s jacket and told him to calm down.
The Bunnings co-worker claimed Fitzpatrick grabbed him around the throat and pinned him up against a desk.
The incident was partly overheard by other Bunnings employees and the pair were suspended on the day.
Bunnings asked for statements from Fitzpatrick and all the others involved in the brawl.
Two managers met with Fitzpatrick and then separately two other workers were used to carry out a re-enactment of the brawl.
The managers then dismissed Fitzpatrick for serious misconduct with immediate effect.
The Fair Work Commission found even though Bunnings had a valid reason for dismissing Fitzpatrick, the dismissal was harsh, unjust and unreasonable because the investigation and disciplinary procedure was not appropriately conducted.
“What is clear is that this incident was not ‘hand bags at ten paces’ but a sufficiently serious incident between two work colleagues which demanded swift and decisive de-escalation,” Commissioner Cloghan said.
But the Commissioner was not satisfied that all the allegations were properly put to Fitzpatrick and in particular he made the observation that the allegation should have been put in writing.
Cloghan also found the management personnel who conducted the investigation may have had some bias because of their previous involvement with the Fitzpatrick and also because one of them had been a witness to part of the incident that they were investigating.
He was critical of Bunnings human resources department for not taking control of the process.
In particular as Bunnings conducted a re-enactment of the incident without having Fitzpatrick present or giving any opportunity to comment on what was observed.
Although Fitzpatrick sought reinstatement as a remedy, the Commission agreed with Bunnings it was not appropriate.
Commissioner Cloghan took into account evidence Fitzpatrick regarded physical violence as a means to resolve conflict and some doubt about his honesty.
The Fair Work Commission found Fitzpatrick’s conduct had destroyed the fundamental trust and confidence expected in an employment relationship.
Employment lawyer Peter Vitale told SmartCompany the case shows even where employers think they have a clear cut case for termination, the commission will still look at the process that is followed prior to termination.
“The employer, particularly a large employer with a dedicated human resources department, needs to ensure its process is spot on,” he says.
But Vitale says it is unclear whether the same standard would be applied to a small business.
“If it wasn’t such a large and sophisticated employer it may have been cut a bit more slack,” Vitale says.
Bunnings has been ordered to compensate Fitzpatrick but the amount awarded has not yet been determined.
Andrew Macdonald, group manager of team capability at Bunnings, told SmartCompany as the matter has not yet been finalised it would be inappropriate for Bunnings to make any comment at this time.
The Australian Competition and Consumer Commission is taking the franchisor of the Electrodry Carpet Cleaning business to court, alleging it posted fake online testimonials.
Electrodry is a franchised business that provides carpet, drapery, grout, upholstery and mattress cleaning services with over 100 franchises in Australia.
The competition watchdog has commenced proceedings in the Federal Court against the franchisor, A Whistle (1979), alleging it made false or misleading representations through a contractor posting fake testimonials relating to Electrodry Carpet Cleaning on the internet.
The ACCC also claims the franchisor got Electrodry franchisees to post fake testimonials on sites including Google, True Local and Word of Mouth.
It alleges the testimonials were written and posted by people associated with, or contracted to, Electrodry, and not by its genuine clients as the testimonials implied.
The case follows the ACCC initiating proceedings against online deals site Spreets yesterday for similarly misleading statements.
“Consumer issues in the online marketplace continue to be an ACCC priority,” ACCC deputy chair Michael Schaper said in a statement.
“While online testimonials can be a useful and genuine marketing tool, it is important that online businesses understand that making or inducing false or misleading representations about testimonials breaches the Australian Consumer Law.”
Legal experts warn the law of misleading conduct applies to the internet in the same way that it applies to any other conduct by a business.
Sally Scott, partner at Hall & Wilcox, told SmartCompany the use of online testimonials is increasing, whether it’s on a business’s own website or on an independent review site.
She says she can understand some businesses might be tempted to post fake testimonials online but in doing so they are “falling foul of the misleading conduct law and exposing themselves to action by the ACCC.”
Scott says there tends to be a less formal approach to the internet, particularly social media.
“This can result in less care and a heightened risk,” she says.
“The law of misleading conduct does not discriminate between a business’s conduct online and conduct away from the internet.”
Melissa Monks, special counsel at King & Wood Mallesons, says the case reinforces the importance of businesses ensuring that any customer testimonial used is from someone who is actually a real customer that has actually used your product or service and that the view or opinion given is their own, based on their experience.
“In addition, the content of the testimonial itself must be correct – the fact that the customer believes it does not prevent it from being misleading if it is wrong or provide a defence to the business using the incorrect testimonial,” she says.
The ACCC is seeking declarations, penalties, injunctions and corrective notices.
SmartCompany contacted Electrodry for comment but did not receive a response prior to publication.
The Fair Work Commission has criticised the Australian Taxation Office for the way it treated an employee with mental health issues.
As the private sector looks at methods for tackling mental health in the workplace, the government agency has come under fire from Fair Work Commissioner Bernie Riordan, who labelled the ATO’s conduct “shabby”, “appalling and “unconscionable” in the case decided earlier this month.
Brett McAuliffe, an employee of the investigations branch of the Sydney ATO, believed he had been bullied and harassed by managers after being absent from work due to “psychological issues” in August 2012.
As a result of the absences, McAuliffe was referred for a psychological assessment and was diagnosed with adjustment disorder, although he was later cleared by a psychiatrist to return to work by August 2013.
The decision, handed down by Commissioner Riordan, found ATO managers interfered with McAuliffe’s return to work; sending him home from work without reasonable explanation, deactivating his access pass and posting a photo of him at the security desk.
Riordan found McAuliffe’s manager, Jenny Giang, went on to deliberately misrepresent the opinion of the psychiatrist, mislead the employee, exceed her authority, ignore ATO policy and then “deliberately and mischievously delayed Mr McAuliffe’s return for another seven weeks”.
In his decision, Riordan slammed the conduct of Giang and the ATO as “appalling”.
“At a time when Australian society is focusing on the issues of mental health in the workplace, the actions of the ATO in this case were unconscionable,” said Riordan.
“I sincerely hope that an employee diagnosed with depression and anxiety in the future is not treated in the same shabby manner as Mr McAuliffe.”
The commissioner also criticised the ATO for bringing seven lawyers to a hearing.
“This can hardly be an appropriate expenditure of public money,” said Riordan. “The policy of the Commonwealth in refusing to consider conciliation in this proceeding was disappointing. This should be the subject of review.”
An ATO spokesperson said in a statement it was considering the decision.
“Due to privacy considerations we are unable to comment on individual staff members. We will review the case and our work practices to improve our processes where appropriate,” read the statement.
Andrew Douglas, partner at M&K Lawyers, told SmartCompany the ATO would have been successful if it had returned McAuliffe to work in a different section as recommended.
"A number of employers when they don’t like the response they get from a doctor try to shape that response into the evidence they want," he says.
Douglas warns doing so can result in bullying the employee, discriminating against them and potentially committing unlawful industrial action.
"Most employers don’t get this and just feel they are putting a gloss on something they have got from the doctor," he says.
"The lesson for employers is be honest when dealing with people who do assessments of your staff and live with the consequences."
The fitness industry has been warned against using the phrase ‘no contracts’ in advertisements when consumers in fact have to sign up to certain terms and conditions in order to join the gym.
The Australian Competition and Consumer Commission has put the industry on notice due to concerns businesses are requiring people to sign up to conditions around termination and payment of their gym membership despite using the words “no contracts” in order to attract customers.
ACCC deputy chair Michael Schaper said in a statement the competition watchdog considers this sort of advertising to be misleading.
“Gyms should not use attention-grabbing phrases like ‘No Contracts’ if they are misleading or deceptive,” said Schaper.
“If a customer sees an offer of ‘No Contracts’, there should be no conditions on terminating the service or further payments required.”
Schaper said the ACCC encourages those in the fitness industry to double-check their advertising material.
“The ACCC understands that using the phrase ‘No Contracts’ may be an attempt by some gyms to distinguish their short-term membership offerings from gyms which offer long-term memberships. However, using the phrase does not provide consumers with clarity regarding this distinction,” he said.
Several gyms have already agreed to stop using the phrase, according to the consumer watchdog. The ACCC says it will continue to monitor the fitness industry for those engaging in “potentially misleading advertising” of its membership contracts.
Businesses can be penalised up to $1.1 million per contravention under Australian Consumer Law.
This is not the first time the gym industry has come under scrutiny from the competition watchdog.
In 2012, GFC Berwick, trading as Genesis Fitness Club, paid a $6600 infringement notice after it offered new contracts to customers claiming it would help them avoid price increases due to the carbon tax. The ACCC determined the gym did not have a basis for claiming the carbon tax would increase costs, and therefore should not have encouraged customers to sign up to contract extensions.
The fitness industry has faced increasing competition over the years due to a shift towards 24/7 franchise models and flexible payment options.
Credit provider GE Money has been slapped with a $1.5 million fine by the Federal Court for forcing customers to consent to receiving invitations to increase their credit card limits.
The court found GE Capital Finance Australia, which trades as GE Money, was in breach of laws that ban credit providers from making unsolicited credit limit increase offers to customers.
The credit company told more than 700,000 of its credit card customers they had to consent to receiving such invitations in order to activate their credit card or apply for or obtain an increased credit limit, when it did not require such consent.
The conduct took place between January 5 and May 27, 2012, shortly before the government’s prohibition on unsolicited invitations.
Justice Peter Jacobson slammed the creditor’s conduct as “a systematic and deliberate attempt to mislead cardholders” and said GE Money’s motivation was to avoid projected losses of up to $6 million as a result of the tightening regulations.
In imposing a penalty of $1.5 million, the court said: “What was involved was an attempt to obtain consents in an unlawful manner, and the adoption of a cynical approach by seeking to make the cardholders’ choices less straightforward.”
GE Capital was ordered to pay the Australian Securities and Investment Commission another $50,000 for costs and to advise 210,000 affected cardholders what the decision meant via email or letter and by publishing a notice on its website.
GE Capital admitted it had broken the law during proceedings.
A spokesperson for the company told SmartCompany GE Capital had been working with ASIC for some time on the matter and had already sent the note to customers.
“We have also been working with the regulator and government and will continue to do so,” said the spokesperson.
Sally Scott, partner at Hall & Wilcox, told SmartCompany it was common for credit card holders to receive regular invitations to increase their credit limits prior to the new laws, which commenced on July 1, 2012.
Since that time, Scott says before sending out invitations for credit limit increases, credit card companies have been required to obtain consent from card holders to send out invitations.
“It appears that GE Capital sought to short cut this requirement by telling consumers that they needed to consent in order to activate their card,” says Scott.
“In fact, GE Capital did not require such consent for cards to be activated. For this reason, the court determined that the statement was misleading.”
Scott says for businesses it’s not just a matter of checking that their advertising is not misleading, they need to consider every aspect of their business and what representations they make, whether to consumers or other businesses.
“In a week where we have seen misleading conduct cases in relation to an online buying site and online testimonials/reviews, this case provides yet another example of the far reach of misleading conduct law,” says Scott.
“The golden rule is that you can’t mislead in business.”
Hundreds of businesses across New South Wales and Victoria have been raided as the fall-out over the death of a woman from a faulty USB charger continues.
Nine businesses in NSW were raided at the end of June in relation to unsafe USB chargers, travel adaptors and power boards, following the death of a woman in North Gosford on the state’s central coast in April.
The number of raids has now risen substantially, with reports the NSW Office of Fair Trading has carried out 260 raids in recent weeks.
According to Fairfax, inspectors in NSW carried out raids across 21 of Sydney’s suburbs last week, seizing 76 unsafe electrical items, including chargers and adapters.
At least two business owners are facing possible prosecution, with corporations facing an $875,000 fine as a maximum penalty. Individuals face a maximum fine of $87,500 and two years’ imprisonment.
A spokesperson for Energy Safe Victoria confirmed to SmartCompany this morning a number of Victorian businesses have also been raided for similar devices.
“Energy Safe Victoria has not had any reports of injuries from these devices in Victoria but unapproved and non-compliant chargers have been found for sale in Victoria and removed from sale,” says the spokesperson.
News Corp reports unapproved devices were seized from a number of convenience and phone stores in Melbourne’s CBD last week, as well as from stalls at the Queen Victoria Markets.
Victorian businesses that ignore requests to remove unapproved items from sale face fines of up to $2952 per item, while individuals can be fined $590 per item.
If a case is taken to court, the maximum penalty is $29,522 for a corporation and $5904 for an individual.
The spokesperson said Energy Safe Victoria audited 2154 products in the 2013-14 financial year, with 137 items found to be non-compliant with safety regulations. These included a battery charger, power board, blender, desk lamps and lights.
The spokesperson said the regulator audits shopping centres, large retailers, discount shops and markets and online sites, including eBay, Gumtree and Facebook, on a regular basis.
NSW Fair Trading Minister Matthew Mason-Cox said in a statement last week raids on businesses believed to be selling the devices will continue.
“Unapproved electrical goods can be potential death traps, putting consumers at serious risk,” said Mason-Cox.
“NSW Fair Trading won’t hesitate to take action against any trader found to be selling these items.”
Last week, inspectors from the Office of Fair Trading visited businesses in Haymarket, Chinatwon, Darling Harbour, Ashfield, Marrickville, Eastwood, Dapto, Wollongong, Auburn, Silverwater, Parramatta, Hurstville and Campsie.
The former chief executive of stockbroking firm JBWere has failed in a redundancy claim against NAB.
Paul Heath was chief executive of JBWere in 2009 and on a salary of $350,000 when it was bought by NAB.
His role was changed in a restructure in 2013 and Heath made a redundancy claim arguing the conditions in the union negotiated enterprise bargaining agreement applied.
He was offered a new role on a higher salary but declined the offer and claimed it was a demotion.
Heath’s base salary was $400,000 with potential for a bonus of $800,000 and the new position had a base salary of $550,000 and a potential bonus of $550,000.
Heath argued his role was “lessened” because he no longer had responsibility for profit and loss, strategy or project control.
He resigned a short time later.
The Fair Work Commission took into account that Heath was offered alternative leadership roles.
In ruling against Heath, Fair Work Commission deputy president Peter Sams said his contract clearly explained his duties may change and the changes to JBWere had not left him a "king without a kingdom".
“In my judgement, Mr Heath had a healthy, but rather inflated assessment of his own capabilities, skills and worth to the bank,” Sams found.
“He took it upon himself to be the best judge as to the worth of any new role he was offered.
"While there is nothing inherently wrong in having an exaggerated view of one’s self worth, it is not a reasonable basis to pick and choose what job you are prepared to take and insist on redundancy if none are acceptable, despite the roles being ‘comparable’ and available."
Alistair Salmon, workplace relations and safety partner at law firm Holding Redlich, told SmartCompany the case shows employers need to be aware of the risks of restructuring and redundancy of senior management.
“Employers engaging in restructuring and redundancy of senior management should carefully check whether the persons affected are bound by awards and enterprise agreements as this will affect the rights and obligations of the parties,” he says.
Salmon says senior management bound by awards and enterprise agreements may utilise dispute settlement procedures to press their claims even when they have ceased employment.
“Employers engaging in restructuring and redundancy should carefully plan effective communications to prevent misunderstanding by affected employees on what is going on and what flows from it,” he says.
“As the stakes are often high, always seek competent legal advice before acting."
NAB declined to comment.
The Fair Work Commission has awarded compensation to an employee of a Melbourne-based window business who was sacked while on sick leave and not given reasonable opportunity to contest the decision.
Darren Gadowski’s employment as a sales representative for EcoClassic Group was terminated in July 2013 due to alleged poor performance, following two meetings at which his performance was discussed in February and May 2013.
Gadowski had worked for the company, which produces energy efficient windows and doors, for 14 months.
However, Gadowski took the matter to the Fair Work Commission, arguing he was on sick leave when fired, and therefore should be protected from dismissal due to a temporary absence due to illness or injury.
Gadowski also argued he was not given an opportunity to contest the termination, previous meetings he had with his supervisors in relation to his performance did not make it clear his employment was at risk, and claims related to his sales records were related to the quality of the product and not his own personal performance.
The commission found EcoClassic had a valid reason for terminating Gadowski’s employment, upholding the company’s evidence of Gadowski not meeting his sales targets, and considering efforts by the managing director of the company, Ed Stelling, to encourage Gadowski to improve his performance.
But given Gadowski was on leave for a short period of time, the commission ultimately ruled his termination was “unreasonable”.
“Gadowski should have been given the opportunity to save his job and to see if he could have persuaded his employer to provide a further period in which to assist him,” said the commission.
The commission said given there was a valid reason for termination, it was not appropriate for Gadowski to be reinstated to his position.
Instead, EcoClassic was ordered to compensate Gadowski for two weeks’ work, which is the time the commission believes it would have taken for any further discussions about his performance to be concluded.
SmartCompany contacted EcoClassic Group but did not receive a response prior to publication.
M+K Lawyers partner Andrew Douglas told SmartCompany while it is permissible to terminate an employee while they are on sick leave, employers should proceed with caution.
This is especially the case when the employee is on leave for a short period of time. “Any allegations should be discussed when the employee returns to work,” says Douglas.
However, Douglas says it is different when the employee is suffering from a long-term illness. In these circumstances consideration must be given to the nature of the illness and the employer must give the employee appropriate or reasonable time to respond in writing.
In this particular case, Douglas says the court did consider the factors that led to the employee’s termination.
“The court found the dismissal was unreasonable. However, it only awarded compensation for two weeks as based on the employee’s performance, the termination process would have only likely continued for another two weeks had they not been on leave,” he says.
“The key issue is that what you can’t do, or can’t do easily, is start a termination process while someone is on sick leave,” says Douglas. “You need to take enormous care.”
Furniture retailer Super-A Mart has been slugged with a $30,000 fine after two employees were injured when an elevated work platform toppled.
The fine was handed down by the Perth Magistrates Court after Super-A Mart pleaded guilty to a charge of failing to provide and maintain a safe work environment.
The case related to an incident that took place in August 2011 in a dispatch warehouse connected to its store in the Perth suburb of Cockburn.
The incident occurred as the two employees attempted to load furniture, including a set of bunk beds, off a set of large metal shelves onto an elevated work platform.
While the equipment had a lifting capacity of 500 kilograms, this did not include the weight of either the platform itself (200 kg) or the two employees (at least 150 kg). This meant the true lifting capacity of the equipment was only around 150 kg.
At the time of the incident, the employees attempted to lift stock estimated at 682 kg, overloading it by at least 532 kilograms and causing it to collapse.
During the investigation, it was discovered one of the two employees did not have an appropriate licence to operate the equipment. Meanwhile, the second employee had only gained the appropriate licence the previous day, despite allegedly operating the equipment for up to three months.
The employees had also allegedly not been instructed in how to properly measure the weight of stock being carried, despite scales being located at the facility.
Joe Attard, the director of manufacturing, transport and service industries for WorkSafe WA, told SmartCompany there are a number of steps small businesses can take to avoid finding themselves in a similar predicament.
“It is terrible to see a business in the position where they are in what we would term a blatant breach of the regulations,” Attard says.
Attard encourages small business owners to create a culture of consultation around OH&S issues in their workplaces.
“For a small business, that might be electing or appointing someone from the shop floor to be an occupational health and safety representative, and have them take a five day course about OH&S issues. Even a business with quite a small workforce should be able to do that,” he says.
“For a larger workforce, we would recommend for them to set up an OH&S committee.
“Finally, I’d recommend anyone doing business in WA to become familiar with the Worksafe WA website, which is a great resource for finding out what a business’ obligations are.”
SmartCompany contacted Super-A Mart this morning for comment but did not receive a response prior to publication.
A former employee of construction and engineering firm John Holland has been awarded compensation and full redundancy entitlements after the Fair Work Commission found he was unfairly dismissed.
In a case that highlights the importance of workplace policies to support employees’ mental health, Fair Work found John Holland was aware the employee was suffering from serious mental health issues and should have taken more care when addressing his situation.
Ronaldo Salazar was employed by John Holland Aviation Services in Melbourne as a licensed aircraft mechanical engineer.
The company terminated his employment in December 2013 for alleged serious misconduct. This came after ongoing disputes regarding his work roster and emails, in which he claimed John Holland management was trying to harm him and his family. Salazar had threatened to take his story to Today Tonight or 60 Minutes and the then prime minister Kevin Rudd.
But Fair Work sided with Salazar and found it was unreasonable for John Holland to conclude the employee had engaged in serious misconduct when sending the threatening email, as the company had evidence of his illness and the medications he was taking in the form of medical certificates.
Commissioner Ryan found Salazar’s defence of his illness and medication provided a strong reason to excuse his conduct and John Holland should have given more consideration to this and his poor English skills when dealing with him.
Ryan ordered compensation be paid to Salazar as John Holland is no longer operating this division of its business and therefore reinstatement would not be possible.
Workplace lawyer Peter Vitale describes the case as “unusual” as Fair Work found “conduct which might ordinarily institute misconduct couldn’t be treated that way by the employer because the employee had engaged in that conduct while suffering from a mental illness”.
While Vitale says there are a number of other factors which influenced Fair Work’s decision, including some confusion between Salazar and John Holland about his qualifications, he says the suggestion an employer is not entitled to rely on the threatening email as serious misconduct “runs counter to the sort of approach taken by the High Court in relation to anti-discrimination laws in the Purvis case”.
Vitale says the Purvis case involved a teenager who was expelled from his school on the basis of aggressive behaviour that was due to a medical condition. The student claimed he was discriminated against because of his condition. However, the school argued it was not discriminating against him because anyone else acting in this way would have been treated in the same way. The High Court agreed and said the student’s behaviour should be treated in the same way as the behaviour of other students who do not suffer from an illness.
Vitale says there are parallels with the Salazar case.
“It may be that in the circumstances of an unfair dismissal case, the company should have had more regard to the state of the employees’ health. But it would be wrong to see this decision as a blanket endorsement for the proposition that conduct engaged in while suffering mental health issues should be completely disregarded for potential misconduct by any employer,” he says.
However, Vitale says this case highlights the importance of placing an employee’s behaviour in context.
“In the contest of the unfair dismissal regime regarding a fair go all round, it is incumbent on an employer to look at the nature of the conduct and the extent to which it may be influenced by ill health, and work with the employee and medical practitioners to determine whether or not it is likely to happen again,” says Vitale.
SmartCompany contacted John Holland but the company declined to comment.
Stratton Finance has been fined $124,000 for multiple breaches of employment law for an employee.
The Federal Court heard the car finance company only gave one of its employees, Peter Webb, five payslips in six years.
Stratton Finance employed Webb on a commission-based agreement which did not entitle him to a base salary, sick pay, annual leave and superannuation entitlements.
The court had earlier found Webb’s commissions had been underpaid and the employer had since repaid $146,291 to the employee.
Judge Raphael took into account numerous breaches of the law by Stratton.
In determining the penalty he took into account that Stratton is a medium-size business with over 100 employees and the deliberate nature of the breaches.
“Whilst it is true that no other employee has complained, a firm of that size should have sufficiently well-trained staff to recognise what obligations it has under the relevant statutes,” he found.
“The non-payment of these moneys suggests almost a wilful blindness to reality on the part of the company, which is exacerbated when after a Fair Work Ombudsman investigation and recommendation for payment, no payment was made.”
Workplace relations lawyer Enrico Burgio from Maurice Blackburn Lawyers told SmartCompany the decision provides a timely reminder that the court will treat underpayments of employee wages seriously and can impose significant penalties on employers who knowingly or recklessly breach their obligations."
"Employers should be very wary of using commission-only salary arrangements which purport to negate obligations to pay base salary and statutory entitlements," he says.
Burgio says as the decision demonstrates, such arrangements may not be lawful.
"In this case, the court found it particularly relevant that, the Fair Work Ombudsman had already concluded that underpayments existed, yet the employer still failed to pay or accept a reasonable settlement offer prior to the court proceedings being commenced," he says.
Stratton is appealing the case.
Carsales.com announced the acquisition of 50.1% of Stratton Finance earlier this month.
SmartCompany contacted Stratton but did not receive a response prior to publication.