Business Advice

Rio Tinto to pay small suppliers in 30 days … Kmart director not worried about Amazon … Malaysian restaurant back in court for underpayment allegations

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Kmart

Source: AAP Image/Paul Miller

By Dominic Powell and Emma Koehn

Rio Tinto has pledged to introduce 30-day payment terms for suppliers with invoices of $1 million or less, starting July 1, 2017.

The managing director of the Australian arm of the mining giant, Joanne Farrell, said in a statement this morning the multinational wants to relieve cashflow pressures for SMEs.

“Faster payment terms will help our smaller suppliers better manage their cashflow and help our local business partners to grow. A supply chain of strong local suppliers is good for our business, good for local communities and good for the economy,” she said.

Rio currently offers 30-day payment times to 300 of its suppliers and says the new policy will extend that to more than 5,500 SMEs providing $600 million in services each year.

Amazon arrival keeps us “focused”, says Kmart boss

Kmart managing director Ian Bailey believes Amazon pending arrival isn’t a threat to the popular Australian retailer, telling Fairfax he views the online shopping giant as a “foil” rather than a problem competitor.

“I can’t say I have an Amazon list of things to do, but equally it’s another great stimulus for improvement. We’ve had that luxurious position of being good performer for a while and the risk is always complacency and not changing the status quo,” Bailey told Fairfax.

“Amazon is a great little foil for keeping us focused on the gaps in what we do.”

Despite Kmart being viewed as one of the more successful discount retailers, Bailey told Fairfax there’s still room for improvement around price and in-store experience, giving the store a “five or six out of 10”.

“Whilst we are doing so much better than some of our competitors we don’t feel like we’re at the top of our game,” he said.

Although he acknowledged Amazon’s potential impact on the $300 billion Australian retail market, Bailey maintained the American e-commerce giant’s share would be “tiny”.

“Even if they became a $5 billion business in five years … it’s still only $5 billion, it’s not that much in the scheme of retail,” he said.

Malaysian restaurant returns to court for underpayment allegations

The Fair Work Ombudsman has commenced legal action against Australian Malaysian cuisine restaurant Mamak, alleging it underpaid two Sydney workers and then used false employment records to attempt to hide the underpayment.

The employees worked at the business between 2014 and 2016 and were reportedly paid between $12-13 per hour. Both employees were waiters, with one an Australian citizen and the other in Australia from Singapore on a student visa.

This is the second time the restaurant has faced court over allegations of underpayment. It was ordered to pay nearly $300,000 in penalties last year for underpaying six employees more than $87,000. In a statement at the time, the Fair Work Ombudsman highlighted comments made by Judge Justin Smith, who told the court “all of the respondents knew that there was an Award but deliberately chose to ignore it in order to maximise profit”.

The company’s three directors could face penalties of up to $10,800 per contravention, and the business could face $54,000 per contravention, in the latest case. The Fair Work Ombudsman is also seeking an injunction against the directors to prevent them from underpaying workers in the future.

SmartCompany has contacted Mamak for comment.

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