Appco case reveals dark underbelly of charity
When a company becomes embroiled in headlines that include young adults taking part in humiliating simulated sex act rituals, cross-dressing or slithering on their bellies in a "sluggie" race as punishment for not meeting sales targets, it grabs attention.
Appco Group Australia hit the headlines last October when a group of "independent contractors" joined a class action against the global marketing giant.
The stories that accompanied it included videos of young people placed in compromising positions. Some were forced to take part in disturbing rituals if their names were placed on the whiteboard for missing their weekly target for raising money.
It was squirm-worthy viewing. There were examples of charity workers being forced to lick underwear. One news article wrote the "punishment for not hitting their target was to shove a cigarette up your bottom, pull it out and then smoke it".
But at the heart of the class action is the allegation that Appco engaged in sham contracting or "sole trader" arrangements – hiring workers as independent contractors rather than employees – and gross wage underpayment, with some "independent contractors" alleging they worked for as little as $2.50 an hour, up to 80 hours a week.
CLAIMANTS SIGN UP
Since Chamberlains Law Firm initiated the action more than 950 claimants around the country have joined up, with a value of $80 million being touted.
In the past few days the case took an interesting twist when Appco applied to the Federal Court to stop it being brought as a class action.
It said the claims against it were weak and the allegations of sham contracting had no legal basis. It said the case didn't meet the criteria to continue as a class action "and that this should be determined before the parties incur further costs".
The application will be heard on May 16, 2017.
In an attempt to turn up the pressure it said it was also considering applying to have "elements" of the lead claimant, Jacob Bywater's individual case against Appco struck out. Bywater joined the Appco sales force in April 2014 and won the "top sales performer award" in 2015.
Bywater alleges he worked seven days a week, putting in an average of 80 hours each week over the 22 months that he worked, until finishing in February 2016.
Bywater was one of the group's star performers, topping the monthly top leader competition. Despite this, he alleges he was short-changed more than $100,000 over the course of his employment.
Chamberlains seems nonplussed. It describes the latest move by Appco as an act of "sheer desperation" to try and save its business model from collapse in the courts.
"We are very confident in our legal position. We fully expect that Appco will go to enormous measures to delay the inevitable conclusion that a large class of Australians, especially young people, have been grossly underpaid in an act of sham contracting the likes of which we have never seen before," Chamberlains told Fairfax Media.
There is a lot at stake not just for Appco and the workers, but also the companies that have used them to raise funds or flog products.
These companies aren't being tapped for compensation, but they certainly won't want their names associated with a legal action that alleges underpayment and media articles that highlight some horrifying and belittling rituals.
The explosive allegations made in the statement of claim coupled with the videos that have been released to the media suggest there is a disturbing underbelly to the business of raising money for charities and other companies outsourcing the flogging of products.
It no doubt explains why Appco has quietly removed the names of companies it has worked with from its website.
In response to a series of questions Appco said a small number of clients had asked for their names to be taken off the website.
"Understandably, they were disturbed by the videos. Appco Australia decided to take all names off to treat our clients equally," the statement said.
It has also lost a few clients.
In the meantime, the National Union of Workers (NUW), which has been campaigning hard on the labour practices of some fundraising companies linked to charities, is ramping up the pressure with a rally outside Star City.
The rally coincides with an annual conference being held by Appco to celebrate the achievements of individuals.
For some the rally will be bittersweet.
Tracey Bowker is one of those.
"It will be the first time I lay eyes on anyone from Appco (or Torque Global, the subsidiary Michael worked for before he died) so it is quite confronting" she said in a email.
Bowker's son Michael was struck down and killed by a high-speed train after leaving a work function when working at Torque Global, one of 64 marketing agencies contracted to global fundraising giant Appco. He died in December 2015.
Bowker joined the class action to seek justice for her dead son, who she says was paid $60 some weeks for working more than 50 hours – equivalent to $1.20 an hour – and was treated shabbily in the lead up to, and the aftermath of, his untimely death.
"This is especially meaningful to me as Michael's workers compensation case was rejected on the grounds that he was a 'contractor' not an employee. We are now appealing the workers compensation decision on the back of the sham-contracting class action case," she said.
Appco, for its part, says when it comes to humiliating rituals, it is confident all relevant marketing companies have stamped out these practices. It also tries to play down what has occurred. "The unacceptable motivational games captured in videos are quite old and confined to a small number of businesses."
But that isn't really the point. It did happen and it happened in more than a few marketing companies.
- Sydney Morning Herald