Economy

Do Not Call chaos… IR info sheet fines… Midas outrage… Labor’s sole trader/contractor pitch… Dollar soars… Crazy Vodafone

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Do Not Call chaos

The Do Not Call Register is causing havoc for business. Poorly drafted legislation means that thousands of large and small businesses have been listed on the register, directly breaching guidelines that state the register should only list home or mobile numbers.

And businesses could find themselves listed on the register without their knowledge, says Australian Direct Marketing Association (ADMA) chief executive Rob Edwards. “Anyone can put a business on the register because the registration process over the internet does not require any verification.”

The register was designed to stop telemarketers pestering people at home, but Edwards says all sorts of companies have found themselves listed. “The main switchboards of Rural Press and News Ltd are listed,” he says. Big telecommunications companies are also finding problems, he says. A Telstra division checked its telemarketing lists and found that 5% of businesses (about 25,000) on that list are on the register.

If Telstra or another business calls those numbers they are breaching the law and liable for minimum fines of $1100 and maximum fines of $1.1 million. The businesses that are on the register could also face fines because it is illegal to register a business.

So why are there business numbers on the Do Not Call Register?

“It could be a competitor putting a business on the register, or someone having a laugh,” Edwards says. It could be an employee who doesn’t understand the guidelines and wants telemarketers to stop calling their number. But it is now at the stage where all businesses need to wash all numbers before they call. “That was never the intention of the register,” Edwards says.

He says that ADMA warned this would be a problem six months ago. If you register by phone or mail it is not a problem as verification is sought. (People registering by mail need to send a phone bill, and when registering by phone the number can be checked.)

“But they obviously wanted to keep costs down by scrapping the need to verify a registration online,” Edwards says. He says one solution is for business-to-business calls to be excluded from the definition of telemarketing that is in the legislation.

So far 1.35 million numbers have been registered and 106 million numbers have been “washed” (checked) during the last month.

– Amanda Gome

 

Businesses face fines if they don’t give out IR info sheet

Businesses will face fines of $110 for every employee they fail to provide with a fact sheet, which is to be produced by the Federal Government, that explains details of the new AWA fairness test.

All Victorian employers and companies in other states operating under the Federal system are affected.

Once the fact sheet has been officially gazetted by the Government, employers will have three months to give it to existing employees and one week for new employees or face the fine.

It is not yet clear when the fact sheet will be gazetted and made available to employers. A spokeswoman for Workplace Relations Minister Joe Hockey says a date has yet be set for the release of the fact sheet, and reports that it would be made available this week are incorrect.

A substantial campaign to inform employers of their obligation to provide the fact sheet to employees will be run in concert with the release of the fact sheet, the spokeswoman says. “We are certainly not looking to try and catch anybody out. We believe most employers want to do the right thing and we want to make it as easy as possible for them to do that.”

There will be a sharp edge to the campaign, however, with the Workplace Ombudsman set to conduct random audits of businesses across the country to check that employees have received the fact sheet.

Employers who are found to have not met the requirement could receive fines of one penalty point, currently set at $110, per employee who has not received the fact sheet.

A reported increase in workplace inspectors from 210 to 300 over the next six months will help the Workplace Ombudsman increase its scrutiny of employers.

Once gazetted, employers will be able to have the fairness test fact sheet sent to them by calling the Government’s workplace information line, or they will be able to download the sheet from the workplace.gov.au website.

– Mike Preston

 

Midas outrage rekindled

Fury has been reignited in the Midas franchising community over the ACCC refusal to take proceedings against car care franchise Midas Australia in response to a complaint by a number of Midas car care franchisees and former franchisees.

In a letter dated 26 June 2007 (seen by SmartCompany) Bob Weymouth, ACCC Victorian regional director, advised former Midas franchisees David Turner and Heather Shearer that after investigating their complaints (and those on behalf of a “number of franchisees” ) he “does not propose recommending that the ACCC pursue this matter any further at this time”.

Turner and Shearer complained to the ACCC that Midas Australia has acted unconscionably. They claimed, among other things, that Midas was guilty of: corporate bullying; making threats and intimidation against franchisees; providing inaccurate information in disclosure documents; lack of support and training for franchisees; misrepresentation of company profitability; misuse of marketing funds and refusal to give access to accounting records; failure to pay rent on head leases; and misuse of product rebates. Midas Australia has previously denied the allegations.

Emails have been flying throughout the franchise community, expressing outrage with the ACCC for its failure to pursue Midas Australia in court. Government ministers, including small business Minister Fran Bailey, have also come in for criticism and been included in the email barrage.

One disgruntled franchisee of another system writes: “I personally feel the Parliamentarians need to forget about the ACCC giving consideration to the plight of Australian families/franchisees. The ACCC appears to be more interested in the big end of town stuff that builds reputations. Yet they know there are many franchisees going to the wall through no fault of their own. If the ACCC continues to delude itself that this is not occurring, then one can only suggest it is a case of incompetence at the highest levels within Government.”

Midas Australia has been plagued by troubles with several franchisees for several years. Owner Philip Bonney is believed to be trying to sell Midas Australia to Tyrecorp, but the sale has been delayed several times over the past few weeks. See our earlier stories about the unravelling of the franchise, as well as the negotiations this prompted, and also the consequent allegations of a campaign against Bonney. The latest twist was covered in last week’s Briefing about the sale delay.

Franchisees that are currently in litigation with Midas Australia are concerned that the firm’s liabilities will not be transferred to the new owners, if the sale goes through.

– Jacqui Walker

 

Labor considers cheaper legal options for sole traders and independent contractors

Labor is considering improving its pitch to sole traders and independent contractors by making it easier for them to take legal action if they are forced into unfair contracts by big businesses.

SMEs will be in the political spotlight tonight and tomorrow, with Prime Minister John Howard, Small Business Minister Fran Bailey, Labor leader Kevin Rudd and Labor Small Business spokesman Craig Emerson all set to address the Small Business Summit in Sydney.

While Howard and Bailey are expected to focus on the exemption from unfair dismissal laws for business with less than 100 employees introduced by the Government last year, Labor is considering highlighting what it sees as problems with the independent contractors laws introduced last year, according to an Australian Financial Review report.

Those laws broadened the scope for service providers to be deemed independent contractors instead of employees and provided extra protection for independent contractors by allowing them to bring claims in the Federal Magistrates Court if they had been forced into “unfair or harsh” contracts.

In May this year Emerson said the laws were flawed because independent contractors were being deterred from making unfair contract claims because of legal costs up to $5000 to take legal action.

A spokesman for Emerson says the cost for independent contractors of making unfair contracts claims is an issue Labor is looking at, but would not confirm if it would be raised by Rudd or Emerson in their speeches to the summit.

– Mike Preston

 

Dollar soars to new record

The Australian dollar has shot to a new 18-year high of US85.27c at 12.26pm, driven primarily by the widening gap between Australian Government two year bonds and their US equivalents.

This is partly explained by new signs of inflation easing in the US. The US personal consumption expenditure index, a key measure of inflationary pressures, grew just 1.9% in the year to May. This is the first time the core personal consumption expenditure index has dropped below the US Federal Reserve’s 2% yearly inflation target in three years and vindicates the Fed’s decision not to raise interest rates last week.

 

It’s Crazy Vodafone

Vodafone, Australia’s third largest mobile phone network, has joined forces with the Crazy John network and yesterday started reselling Vodafone mobile services through its retail store network. Crazy John expects to offer its own mobile service to clients in the next few months.

The move follows Crazy John’s bitter fight with Telstra. Crazy John officially ended its reseller agreement with Telstra on Saturday, although the two companies are still battling it out in the courts.

Vodafone, which has about 200 branded retail outlets, will add about 120 Crazy John outlets, taking its retail network to about 320.

Telstra in turn has signed a distribution deal with JB Hi-Fi and other retailers.

 

SMEs battle to maintain workplace culture

SMEs are struggling to hire workers who match their workplace culture, with 74% of respondents to a survey by business advisory firm Shirlaws citing it as a key challenge.

Although 70% of all businesses surveyed say establishing a clear business culture is the most important factor in recruiting and retaining key staff, SMEs spend only 10% of their time developing workplace culture, the study found.

Maintaining their businesses culture as it grows was also cited as a big challenge by 73% of SMEs surveyed.

“As the skills shortage worsens and ‘flighty’ Gen-Y workers dominate the employment landscape, business culture is going to be invaluable for retention and attraction of staff,” Shirlaws CEO Jeff Herrick says.

– Mike Preston

 

Economy round-up

The market has priced in the likelihood of the Reserve Bank of Australia raising interest rates when it meets tomorrow at just 2%, despite most economists citing inflationary pressures as the key risk for the Australian economy in 2007/08.

Most market watchers believe the RBA will wait to see June quarter CPI figures to be released on 25 July before seriously considering whether rates need to rise at its August meeting.

Those figures could show a rise if the TD Securities-Melbourne Institute monthly inflation gauge released today is any guide. Inflation probably rose in June due to the higher consumer prices and rent cost, according to the gauge.

The Australian Industry Group – PricewaterhouseCoopers Australian Performance of Manufacturing Index fell slightly in June, although at 53.1 points in remains above the key 50 point mark separating expansion from contraction.

The moderation in activity largely reflected a much smaller rise in new orders, while export growth also was flat due to the very strong Australia dollar, AI Group Chief Executive, Heather Ridout, says.

The S&P/ASX is down 0.1% on last night’s close to 6270 at 12.22pm today.

– Mike Preston

 

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