CompliSpace Blog
Australian Governance Wrap – Summer Edition December 2009 – January 2010
In 2009 CompliSpace produced a series of weekly governance wraps. In 2010 we have decided to change tack slightly and publish a series of comprehensive monthly governance wraps starting with this one which covers December/January. For those readers who would like more frequent updates we invite you to follow CompliSpace on Twitter where you will find key media and regulatory feeds and posts on governance items of interest during the day.
So what happened in the governance space whilst most Australians were enjoying the festive season? In this bigger than usual blog we cover:
- ASIC – The Losses, the Reaction and the Resolve
- Confusion Reigns as Modern Awards and National Employment Standards Commence
- ATO Urges Crack Down on Sham Contractor Arrangements
- ASX Company Directors Behaving Badly
- ASX Executive Remuneration – Two Strike Rule Softened
- Federal Government silent on AML/CTF Tranche 2 Rollout
- New Gender Diversity Requirements for ASX Entities
ASIC – The Losses, the Reaction and the Resolve
Whilst the last quarter of 2009 was a public relations disaster for ASIC with high profile losses against Andrew Forest (Fortescue), Jodee Rich (OneTel) and Andrew Lindburg (AWB), it seems the Federal Government and the corporate regulator are not backing away from the fight. To the contrary, December 2009 and January 2010 saw a range of new laws proposed and a clear signal of ASIC’s resolve to crack down on insider trading, market manipulation and director’s who breach their duties http://ow.ly/10IW3.
With the Federal Government pushing for ASIC to take over the role of share market supervisor from ASX by September 2010, in December 2009 it announced new fines of up to $A5 million for market breaches by stockbrokers and a new system of infringement notices. Not surprisingly the broking industry is up in arms claiming that the new laws are harsh and oppressive and will prompt an exodus from the profession http://ow.ly/Z8uJ. Brokers’ nerves were probably not calmed by ASIC’s decision to invest in a powerful new technology infrastructure to manage its new market surveillance powers. http://ow.ly/LHNi
In December 2009 ASIC also released a draft consultation paper on handling confidential information for listed companies and their advisers in an effort to make it easier for the regulator to investigate possible insider trading http://bit.ly/9glUuI. This time it was the investment bankers turn to scream at new requirements that would require them to keep a log of investors contacted http://ow.ly/Ovyu.
This was all followed up in January 2010 with Minister Chris Bowen announcing a dramatic increase in criminal penalties for market offences as well as increased powers for ASIC to conduct raids on premises and to tap phones http://ow.ly/11xFV.
All this action seems quite timely with a recent research report finding that Australia’s record on insider trading and market manipulation is getting worse with the “information leakage” ratio at the ASX doubling in the past 4 years http://ow.ly/11CIK.
Whilst ASIC has a miserable “mega-litigation” track record it seems that the regulator is kicking some goals at the small end of town including:
- Banning two Moore Stephens audit partners over their role in the Estate Property Group collapse http://ow.ly/T4TA
- Grounding the founders of failed fund manager LKM Capital as they prepared to travel to the UK http://ow.ly/10i0Y
- Securing insider trading convictions against a former Citigroup stockbroker http://ow.ly/ZPMd, a former KPMG manager http://ow.ly/MsHX, the COO of Genetic Technologies http://ow.ly/10hXv and a Sydney man dealing in Sam’s Seafood shares http://ow.ly/MxnS.
Expect these types of prosecutions to continue in 2010.
Fair Work: Modern Awards and National Employment Standards (NES) Commence
Given the lack of government advertising regarding the second stage of the Fair Work Act it is not surprising that confusion reigned went it commenced on 1 January 2010. Fair Work Australia’s help line went into overload. The Retail Industry Association came out swinging saying that 90% of its members were considering reducing staff hours. Having not said a word in anger prior to Christmas, the Opposition has finally arisen from its slumber with newly installed Leader Tony Abbott calling for a moratorium on prosecuting small businesses that breached the new laws.
Expect IR to once again be a key issue in the upcoming election.
The big elephant in the room is that, under the old system, many businesses used to simply ignore awards believing, mistakenly, that if they paid “above award wages” the awards didn’t apply. The reality is that because the new system is simpler, it is also easier to enforce and employers who don’t comply will find themselves at high risk of fines, penalties and employee claims.
Whilst it is easy to see the logic of Julia Gillard’s position, namely, that the new system will reduce compliance costs for small business in the long run, the stark reality is that you can’t reduce compliance costs if you weren’t complying in the first place. There is also no getting away from the fact that, irrespective of the employers’ previous levels of compliance, they will need to undertake work to upgrade their policies, procedures and employment contracts in order to comply with the new regime.
If you need help in this area CompliSpace has developed a comprehensive range of publications and compliance tools that are available free on our website at http://bit.ly/4uXjDC. If video is your thing you can click on the following links to view CompliSpace director David Griffiths, being interviewed in relation to the changes on the ABC Midday Report http://ow.ly/MA5r and Sky Business News Channel http://ow.ly/OMYp.
ATO Urges Crack Down on Sham Contractor Arrangements
There are 1 million contractors in Australia and a recent Australian Tax Office (ATO) audit found that 84% breached tax rules. This has prompted the ATO to call on the Federal Government to crack down on sham contractor arrangements. As if to prove the point, in December 2009 a Sydney real estate company and its director were fined almost $30,000 for underpaying a salesperson more than $20,000 as a result of sham contracting http://ow.ly/NeSV. IT workers, professional consultants and construction workers are those likely to be hit by any tightening of contractor rules.
ASX Company Directors Behaving Badly
Despite efforts by the ASX to minimise the risk of insider trading by board members during 2009 it seems that some ASX listed companies and their directors just don’t get it. ASX research found that out of 713 active trades by directors last year a staggering 31% took place during blackouts involving 151 individual directors in 129 listed companies http://ow.ly/Z8xk. Believe it or not this was down from 33% in the previous reporting period.
ASX chief supervision officer Eric Mayne summed it up nicely when he said “whichever way you slice it or dice it, it’s not a good look for a director to trade during a period when the books are closed until the profit results are announced”.
Given this apparent disregard for market sensitivities it comes as no surprise that the ASX is proposing to change to its listing rules making it mandatory for companies to adopt and disclose trading policies including market sensitive blackout periods.
ASX Executive Remuneration – Two Strike Rule Softened
Whilst there was much written during the AGM season, on the potential impact of the proposed “two strike rule”, it all came to nothing when the Productivity Commission released its final report on 4 January 2010. The original draft recommendation that directors be required to stand for re-election if remuneration reports were twice rejected by 25% of shareholders was softened so that 50% of shareholders are needed to approve a resolution for a board spill.
However, the report did recommend strengthening governance processes for setting executive pay by requiring institutional investors to disclose how they voted on remuneration reports and banning executives in top 300 companies from sitting on remuneration committees. Only time will tell if the “softened” recommendations will actually become law.
Federal Government Silent on AML/CTF Tranche 2 Rollout
For some time now the government has been working on Tranche 2 of Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) reforms. The aim of these reforms is to extend regulatory obligations to a range of small to medium sized businesses including dealers in precious metals and stones, lawyers, accountants, real estate agents and trust and company service providers.
Tranche 2 of the reforms was originally scheduled to roll out in 2009 however this was put on hold as a result of adverse economic conditions. If the Attorney General’s website is to be believed http://bit.ly/9P89BB the government was to revisit the timing of Tranche 2 prior to Christmas. There has been no announcement yet as to the revised schedule. With many thousands of businesses likely to be affected, this will be a big “watch this space” for 2010.
New Gender Diversity Requirements for ASX Entities
In a December, the ASX Corporate Governance Council announced http://ow.ly/12Ncd that from 1 July 2010 all listed entities will be need to:
- Establish and disclose in the annual report their gender diversity policy. As with other corporate governance principles and recommendations, this requirement will be on an “if not, why not?” basis.
- Include in their nomination committee charter a requirement to continuously review the proportion of women at all levels in the organisation
- Ensure the criteria for board performance reviews and new board appointments include diversity in addition to skills.
What are the National Employment Standards (NES)?
The Fair Work Act provides for a two-part safety net protecting minimum wages and conditions. The NES provide 10 minimum entitlements that cannot be modified to an employee’s detriment by a contract, award or workplace agreement. The Modern Awards provide additional minimum entitlements (such as minimum wages, overtime and penalty rates) that are tailored to industries and occupations (refer to separate blog entry re how to comply with Modern Awards).
In a nutshell the NES covers:
| 1 | Hours of work |
| 2 | Flexible working arrangements for parents of pre-school children |
| 3 | Parental leave |
| 4 | Annual leave |
| 5 | Personal/carers & compassionate leave |
| 6 | Community services leave |
| 7 | Long service leave |
| 8 | Public holidays |
| 9 | Notice of termination & redundancy payments |
| 10 | Information in the workplace |
Why Do National Employment Standards Affect Me?
All employers must comply with the NES. Whilst some of the standards will be familiar, others are completely new, or contain subtle changes, which create significant obligations on employers or increase their risk exposure. New obligations include:
- An entitlement for carers of preschool children (and children under the age of 18 with a disability) to request flexible working arrangements.
- The extension of unpaid parental leave that an employee can request from 12 to 24 months.
- The introduction of an entitlement to redundancy pay for all workers (not just those covered by awards) except those employed by small business (being those with fewer than 15 staff).
Those employers who fail to properly understand their obligations under the NES may find themselves subject to regulatory action or legal claims from disgruntled employees as a result of denying their employees their minimum workplace entitlements.
The following steps are designed to assist businesses comply with the NES.
Step 1 – Familiarise Yourself with the National Employment Standards
The full text of the NES are contained in Sections 59 to 131 of the Fair Work Act 2009 http://bit.ly/4WOpyQ. A high level summary can be down loaded at http://bit.ly/77j31s.
Step 2 – Review and Upgrade Your Employment Contracts
Given that some older style employment contracts contain detailed policies relating to matters such as employee leave entitlements it is imperative that you review your employment contracts to ensure that they do not contain provisions that are inconsistent with the NES.
At this point it should be noted that this is also an exercise that should be undertaken by those employers who are currently utilising common law agreements to manage award employees (refer to separate blog entry re how to comply with Modern Awards).
Step 3 – Review and Upgrade Your Existing Human Resources Policies & Procedures
Most employers will have existing policies and procedures in place to address many of the matters covered by the NES. Examples include existing policies relating to Parental (maternity, paternity and adoption) leave; Personal/Carers leave; and Compassionate leave.
The NES has created changes to employers’ legal obligations including subtle changes such as:
- The extension of the definition of defacto spouse/partner to include same sex couples.
- The removal of the restriction, previously contained in the Workplace Relations Act 1996, which only allowed an employee to take a maximum of 10 days carers leave in any 12 month period, notwithstanding the fact they may have accrued a greater entitlement.
- The increase of the age of a child to which adoption leave applies from 5 years to 16 years.
In order to ensure compliance it is imperative that employers have properly documented policies and procedures and that these policies and procedures are amended to reflect the changes introduced by the NES.
The NES also introduce some new obligations such as flexible working arrangements for parents of preschool children which will require the development of new policies and procedures. There is also the obligation to provide all new employees with a copy of the Fair Work Information Statement http://bit.ly/4pU8E4 which should be built into existing induction procedures.
Step 4 – Communicate Changes to Staff
The final step in the process is to ensure that all staff are made aware of the changes to their terms and conditions.
For new employees this is achieved, at least in part, through the provision of the Fair Work Information Statement. It is also a key clause of all Modern Awards that employers ensure that copies of relevant awards, and the NES, are available on a noticeboard which is conveniently located at, or near the workplace, or through electronic means, whichever makes them more readily accessible.
What Can CompliSpace Do To Help?
CompliSpace has developed a comprehensive suite of human resources policies and procedures that have been updated to ensure compliance with the NES. These policies are delivered on-line and are updated as and when they are impacted by significant legal changes.
If you are looking for a holistic explanation of the changes brought about by the Fair Work Act and Modern Awards we invite you to download a copy of our whitepaper From Workchoices to the Fair Work Act & Beyond – What You Need to Know to Manage Your Business Risk http://bit.ly/8qjMgg.
CompliSpace has also recently completed an in-depth survey of over 350 Australian businesses to ascertain their levels of preparedness for the industrial relations changes. A copy of The Road Ahead – Human Resources Risk Survey can be downloaded from http://bit.ly/4ycRWg.
Finally if you wish to undertake an assessment of your businesses human resources risk we invite you to undertake our on-line Human Resources Risk Assessment which will immediately provide you with feedback as to your businesses risk rating. Follow the link http://bit.ly/I4xzY.
For more information with respect to the National Employment Standards, or any of our other services, visit www.complispace.com.au or contact David Griffiths or Phyllis Peterson on Sydney +61 (2) 9299 6105 or Perth +61 (8) 9288 1827.
Regulator Follow Up Action
Predictably, this week, ASIC was ordered to pick up the tab for Rich and Silbermann. Not so predictably ASIC got another kick in the teeth with a Victorian Supreme Court Judge delivering a broadside as to the regulator’s handling of its case against former AWB executive Andrew Lindberg. Not surprisingly numerous “we told you so” commentators have come out to advise ASIC that it should change its litigation strategy to avoid mega claims and keep future actions “short and sweet”. James Hardie has been put forward as an example of ASIC successfully taking a more defined approach.
The ATO hit back at those that criticised its handling of its $678 million dollar claim against international private equiteers TPG, explaining in detail, to those that were interested, the difference between revenue and capital gains. Tax practitioners say that the ATO is preparing three separate rulings which are expected to redefine the ATO’s treatment of such deals. These rulings are expected to force fundamental changes to the way private equity, and other international finance transactions are structured.
In other regulator news AUSTRAC continued its strong compliance stance accepting an enforceable undertaking from PayPal Australia after its investigations revealed deficiencies in the systems PayPal had in place to assess and manage its money laundering and terrorism financing risk.
Ripoll Report Falls Flat
The Ripoll report into financial products and services was finally released after months of hearings and came up with 11 key recommendations (http://ow.ly/FoWt). The initial response was a flurry of headlines noting its criticism of ASIC’s handling of Storm and its call for sweeping reforms of the financial planning industry. Once the commentators had a chance to dig a bit deeper the general consensus appears to be that Bernie and his mates have missed a golden opportunity to actually do something to address the basic conflict of interest in the industry, being the fact that most planners are not being rewarded for providing good advice but rather for flogging products with nice trailing commissions. The fact that the report was almost universally welcomed by the financial planning industry should give up some clues as to who are the winners here.
Workplace Relations
Whilst the politicians and the press focus on the ETS / liberal leadership debate, there has been very little comment or analysis around the new Modern Awards and the National Employment Standards which are due to commence on 1 January 2010. Given that these new laws will affect nearly every employer in the country is it remarkable that there hasn’t been at least some government advertising of the changes. A cynic would suggest that the Rudd government doesn’t need to advertise at the moment. It’s ironic that in the background the Fair Work Authority continues to successfully pursue employers who are underpaying workers largely because they didn’t understand their legal obligations under the old award system.
The gender equality debate continued during the week with the traditionally conservative Australian Institute of Company Directors finally coming out and calling for companies to set goals and report annually on policies and progress in increasing gender diversity on boards and at senior management level. Almost simultaneously the Federal Government Agency for Equal Opportunity for Women published the names of 12 companies including Rivers & Tyrrell’s Wines for breaching national Equal Employment Opportunity laws. It seems some directors and senior managers simply don’t get it.
According to the newly formed Rule of Law Association, if Australia keeps making new laws at the current rate, there will be 830 billion pages of tax legislation by the turn of the next century. In the past year alone Federal Parliament passed 9042 pages of new law. If we are going to write all these laws we need to ensure our regulators are up to the task of enforcing them.
To say that it was a bad week for the regulators would be somewhat of an understatement. When laws become so complex that no one appears to understand them power is shifted away from the average person to faceless bureaucrats and those privileged corporate high fliers who happen to have the money to pay lawyers to work out what actually is going on.
ASIC
Highlight of the week was, of course, the Jodee Rich show with ASIC on the wrong end of a $ 15 million cost order. Add to that ASIC’s own $25 million legal bill and that’s just about half of the additional money allocated to ASIC to increase enforcement activities lost on one poorly conceived bet. Ian Verrender in the Sydney Morning Herald summarised things pretty well:
“The case against the One.Tel founders was ill-conceived, poorly conducted and riddled with errors at almost every step. Its arguments to the court were embellished and exaggerated, its evidence and analysis of the company’s financial situation deeply flawed and it failed comprehensively to convince the judge of the fundamental basis of its case – that the defendants misled the board and the market”.
ATO
It doesn’t get much worse than that ……. unless, of course, you’re with the Australian Tax Office. As retail investors are still waiting for the Myer share price to hit the $4.10 float price the ATO boys were left chasing their tails as Texas Pacific Group (TPG) squirreled $1.4 billion in profits out of Australia, via a circuitous route, to … wait for it … Luxembourg. Why the ATO is complaining isn’t clear, given that TPG don’t appear to have broken any laws. Yes that’s right they were just playing by the rules the Howard Government established in 2006. Which ever way you look at it the whole thing is just one big embarrassing mess.
ASX
Whilst we are on embarrassing we can’t leave out our friends at the ASX. Figures published during the week show that of 3077 directors’ interest notices lodged with the Australian Securities Exchange in the three months to September 30, some 250 – about 20 a week – breached ASX listing rules, being late or incomplete. These results follow an ASX report in July 2009 which studied directors’ trading during blackout periods – the time before a company’s half- or full-year results are announced – and found that of 1047 active trades by directors in the three months to the end of March, one third took place during blackout periods. Its basic psychology, if there are no significant consequences, directors will keep on doing the things that the ASX don’t want them to do.
AUSTRAC
Finally it is worth repeating a little snippet from CompliSpace’s interview this week with John Schmidt, the new CEO of Austrac, who compared the obligations of small to medium sized businesses under the AML/CTF Act as being ‘no different, in general terms, to meeting the OHS requirements of your business’. Time will tell, however we suspect that business managers will have a lot more difficulty in understanding the complexities amd vaguaries of the money laundering and terrorist financing risk assessment process, than establishing a workplace safety program. News of the timing of the second tranche of the legislation is due in December.
AUSTRAC Turns Up The Heat On Small Business
Austrac kicked off the week with a press release noting that its remedial actions were up 104%. The regulator issued 1,140 requirements for remedial action and 491 recommendations to address non-compliance last financial year. New CEO John Schmidt followed up with a warning to all reporting entities that Austrac is about to get tough on those that failure to comply with the AML/CTF Act. To enforce his point, on Thursday, Austrac issued a press release advising that it had issued its first remedial direction for non-compliance against a small remittance service provider. Mr Schmidt warned “other small businesses should also note that AUSTRAC’s enforcement activity will extend beyond large, well-known financial institutions”.
ASIC Pursues Former Firepower Boss Tim Johnston
Remember the Austrade backed “fuel pill” that was going to change the world. Firepower must be one of the most audacious frauds in Australia’s corporate history with celebrity investors fleeced of over $100,000,000 as ASIC sat back and did absolutely nothing, despite whistleblowers screaming from the hill tops. Remarkably its mastermind Tim Johnston simply upped and left Australia and has been living in Europe for the past few years apparently untouchable by Australian authorities.
In a move that caused Firepower liquidator Bryan Hughes to remark ”maybe .. he is cocky.. maybe his is incredibly stupid. I really don’t know” Johnston flew back into Australia last week only to have his passport confiscated. This will be a great side show to watch in coming months / years.
Class Action Action
Last week we noted that the Multiplex decision was a nice technical point that wouldn’t affect the long term viability of class actions. These words bore fruit this week when ASIC stepped in and exempted lawyers and litigation funders from having to register as managed investment schemes. It seems however that you just can’t hold a good lawyer down, when it comes to arguing technical points, because as soon as ASIC made its move AWB’s lawyers pick up on the fact the Legal Profession Act (NSW) prevents lawyers from running managed investment schemes and are again challenging the validity of the action not withstanding the ASIC exemption. All good stuff from AWB’s lawyers however, just maybe, if AWB had focused on getting its corporate governance house in order they wouldn’t be in this mess in the first place.
In other class action news:
- Litigation funder IMF announced this week that it expected to achieve a 15% increase in profits and that it is now targeting an “investment portfolio” (that’s class action claim value) of $2 billion by June 30 2011. That’s more than double the annual value of annual Director & Office insurance premiums just on IMF’s books. You don’t have to be Einstein to work out where this is all heading.
- Centro have set up a “special matters committee” just to deal with the ASIC and class action claims the company, its directors and executives are facing. Apparently these claims have been distracting the board from attending to day to day business. Funny that.
- Finally, late last week, the Commonwealth and State Attorney’s General agreed to a federal government review to consider whether or not ASIC should regulate litigation funders.
Commonwealth and States to Review of Director’s Liability Provisions
Federal and State governments have agreed on a set of principles by which all states and territories will audit their legislative provisions that deal with the personal liability of company directors, as the next step towards achieving consistency of laws across Australia. Upon completion of the audit, the next step for all jurisdictions will be to move to amend any laws that do not adhere to the agreed principles.
8 November 2009
IPO Governance Action
Kathmandu announced details of a $440 million float only to be given a scare when reclusive founder Jan Cameron, who had sold out in 2006 for $280 million, announced her apparently well advanced plans to set up a new venture in direct competition. Whilst Kathmandu’s CEO pointed out that Cameron was subject to a restraint, here’s betting that they don’t do anything about it. The restraint only runs until May 2011 and the publicity from any legal action would only play right into the hands of Cameron’s new venture. Smart tactical move some might say.
On a more sedate note this week ASX released its Supervision Report with Chief Supervision Officer, Eric Mayne, warning that the ASX will intensify its surveillance of IPO’s and backdoor listings as the market bounces back. Hidden in the body of the document was the fact that only 123 of 278 matters referred by ASX to ASIC in the last 4 years have been resolved. This might be about to change with the additional money that has been allocated to ASIC to support its enforcement activities.
ASIC Puts IMF Executives In the Firing Line
Nice segway….. last week it was the Astarra Strategic Fund and Centro. This week ASIC have been busy pressing claims against the former executives of IMF (renamed Octaviar). Squarely in the headlights are former CFO David Anderson who is being pursued for a measly $147.5 million and former CEO Michael King. King is being pursued because he allegedly knew of the payment of $103 million in a related party transaction.
Class Action Action
Probably the biggest news this week in class actions was the Multiplex decision that ruled (in a split decision) that litigation funding arrangements comprise managed investment schemes under the Corporations Act 2001 (Cth), which must be registered, unless ASIC excuses it. This throws a spanner in the works of a whole load of class actions including the AWB case which is set down for hearing in Movember.
At the end of the day this is a nice technical point however it won’t affect the long term viability of class actions. It looks like they are here to stay and just to make sure you know it battered investors in Timbercorp launched a class action on Thursday against the company, the Responsible Entity and three directors.
New International Risk Management Standard To Be Published 15 December 2009
During the week we heard, on the grape vine, that the new international risk management standard ISO 31000 will be published in Geneva on 15 December 2009. If you have built your risk program with reference to the current Australian standard AS/NZ 4360 there is really nothing to panic about, as ISO 31000 is based on AS/NZ 4360, which it will replace.
Shareholders Protests Count for Nothing
Finally we put it at the end because week 2 of AGM season was pretty tame. The only real standouts were, Transurban which was saved by unprecedented institutional voting from the floor to finish with a remuneration report that scraped over the line with 52% in favour, and Suncorp whose shareholders vented their frustration at the board following a 40% fall in profits.
Well what a week it has been, angry shareholders, ASIC lawyers working overtime as the litigation funders and class action lawyers continue to feast on corporate carcasses.
Shareholders voice their anger at excessive executive remuneration
AGM season is well underway and the shareholders of EDI Downer and Qantas let their respective boards know in no uncertain terms what they thought about their executive remuneration strategies. In the US, the Obama administration has taken steps to slash executive salaries by up to 90%, in companies such as Citigroup, AIG and GM which were the beneficiaries of government bail-outs.
ASIC shakes off its corporate plod reputation
ASIC lawyers have been very busy. First it issued proceedings in the NSW Supreme Court against the managers of the boutique Astarra Strategic Fund as well as obtaining an urgent interim order forcing the responsible entity of the fund to remove its PDS from its website. Not much information flowing at this stage with ASIC being barred by the Judge from commenting on the case.
Then, in a move several commentators described as “terrifying for directors”, ASIC launched legal action against the entire 2007 board of Centro claiming that their accounts failed to classify more than $2 billion of debt. What’s $2 billion amongst friends?
With these types of strikes ASIC might even start to shake is reputation as “the corporate plod”.
Class action lawyers feast on corporate carcasses of Centro and ABC Learning
We often say to clients that “regulators are the least of your problems” and wasn’t this proved to be the case this week with the administrators of ABC Learning, backed by ligitation funder IMF, lining up former directors of ABC Learning, its auditor Pitcher Partners, as well as Com Bank (alleging a $500,000,000 preference payment).
On the same day Maurice Blackburn, class action lawyers acting for aggrieved Centro shareholders, announced that they are considering a direct claim against auditor’s PWC. PWC are already the subject of a counter claim by Centro.
Also during during the week the liquidators of Babcock & Brown took further steps towards investigating a possible breach of directors’ duties and insolvent trading claims arising from its collapse, as well as a $40 million loan to broking firm Tricom.
Fair Work Ombudsman keeps up the heat
No one can accuse the Fair Work Ombudsman of taking it easy. The FWO’s enforcement activities seem to be heating up in the lead up the transition to the Modern Awards on 1 January 2010. During the week it announced that it had successfully claimed $113,000 back-pay for 32 Casino workers accidentally underpaid since 2006. This followed its announcement that a Ballarat company and director were fined $105,000 for underpaying a young apprentice.
This followed news that unfair dismissal claims had nearly doubled in first 10 weeks of the remedy becoming available to small business employees on 1 July 2009.
National Health & Safety Laws Draft Exposure Released
Finally, if businesses didn’t already have enough on their plates a further draft of the new national health safety laws was released for comment. The new laws are due to commence on 1 Jan 2012.
