Things To Think About

First: does the law provide appropriate franchisor liability for franchisee misconduct?  We considered this previously, when Rod Sims called for an expansion of the the definition of “accessory” to avoid the type of problems the FWO faced when litigating against 7-Eleven earlier in the year.  This fortnight consider Fair Work Ombudsman v Yogurberry World Square Pty Ltd [2016] FCA 1290, which, according to FWO Natalie James and Chief Counsel of the Fair Work Ombudsman, Janine Webster, represents the “first time that a master franchise was [found to be] an accessory to breaches of workplace law by one of its franchisees.”  The franchisor in question admitted it was ‘involved’ in the misconduct, within the meaning of s550 Fair Work Act 2009 (Cth), which is the section the FWO complained it could not use to hold the 7-Eleven franchisor responsible for its franchisees’ misconduct.  Misconduct by franchisees may be particularly widespread where “foreign guest workers” are employed: Adele Ferguson and Mario Christodoulou report on oil giant Caltex and its franchisees underpaying and threatening service station employees.  She notes that the FWO gave Caltex forewarning of planned raids, intending that Caltex should notify its franchisees of impending inspections, and that, naturally, it did so.  Some employees told The Age that after the notification, they were told to lie about their rates of pay and threatened with deportation if they din’t comply.  So the story also raises questions about whether forewarning is an appropriate or effective regulatory technique.  There are alternative liability models to accessorial liability, and it seems to me they would do a better job to promote compliance, if the legislature is serious about reducing the exploitation of vulnerable workers.

And here’s an interesting story, as told to the Corporate Crime Reporter, about whistleblower, convicted white collar criminal and author, Bradley Birkenfeld.  It raises some interesting questions about whistleblower protections across agencies, and whether there ought to be restrictions on state prosecutors moving to work in-house for the companies investigated by their offices.  As for whistleblower protection in Australia, some might ask, ‘what protection?’

Notable Litigation Actions

The ACCC has filed its second round of cartel charges, this time in the NSW Local Court, indicating that, unlike its first prosecution, this one is, for the moment, contested.

Over in the US, HSBC and the DOJ are appealing a court order made in January, allowing public access to a redacted version of a compliance monitor’s report on HSBC’s efforts to comply with the deferred prosecution agreement it entered with the DOJ in 2012.  Law professor and author of Too Big to Jail Brandon Garrett has filed a brief as amicus arguing in favour of unsealing the monitor’s report. So have a group of media outlets. Given the recent adoption of deferred prosecution agreements in the UK, and their current consideration here in Australia, this is an important appeal to keep an eye on, raising an important practical consideration for deferral regimes.

Law & Policy Updates

The Paris Agreement entered into force on 4 November 2016; Australia ratified the agreement five days later.  Noel Hutley SC and Sebastian Hartford-Davis have published a useful opinion on the topic “Climate Change and Directors’ Duties“.

The “Labour Hire Industry” is set to become a licensed industry in Victoria.

The Federal Court has replaced all its practice notes, effective immediately.

The ACCC has “released guidance for platform operators in the sharing economy, along with guidance for consumersservice providers and sellers outlining their rights and obligations under the Australian Consumer Law.”

ASIC has updated Regulatory Guide 228 Prospectuses: Effective disclosure for retail investors (RG 228) “to improve the quality and quantity of historical financial information disclosure in prospectuses as part of their disclosure obligations.”

Over in the US, Mary Jo White is stepping down as SEC chair at the end of the Obama presidency, despite three years left in her tenure.  “According to the SEC, White’s tenure resulted in over 2,850 enforcement actions—the highest number of actions for a three-year period in the history of the SEC—and brought in $13.4 billion in monetary sanctions. The SEC also stated that under White, more than 3,300 companies and over 2,700 individuals were charged.”

Event Calendar

The ACCC is calling for responses to its statement of issues on the proposed merger of Dow and DuPont by 24 November 2016.  “The ACCC’s final decision will be announced on 2 February 2017.  The Statement of Issues is available on the public register: DowDuPont Inc – proposed acquisition of EI du Pont de Nemours and Company and The Dow Chemical Company.”

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