The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has made the rare decision to name and shame a fitness training company for refusing to engage in dispute resolution with a small business owner.
Under federal legislation, the ASBFEO is empowered to provide alternative conflict resolution services to small businesses, with the intent of mediating disputes before aggrieved parties undertake costly, time-consuming legal action.
In a recent notice, the ASBFEO accused 20Volts, which offers electro muscular stimulation (EMS) training, of failing to engage with alternative dispute resolution processes brought forward by an unnamed small business.
20Volts operates four studios across Melbourne, Sydney, and the Gold Coast, where members exercise in ‘undergarments’ fitted with electrodes to deliver small electrical pulses.
The 20Volts also advertises ownership of personal EMS systems.
The ASBFEO has now issued a notice of refusal to participate in alternative dispute resolution, advising other parties that 20Volts chose not to engage with the Ombudsman or the small business owner.
“Despite my recommendation and the willingness of the small business owner to engage, 20Volts refused to participate,” ombudsman Bruce Billson said.
“Businesses involved with 20Volts are warned of this poor practice and the potential for 20Volts to repeat this behaviour in future disputes,” he added.
The ASBFEO did not disclose the nature of the dispute.
SmartCompany has contacted 20Volts for comment.
It is rare for the ombudsman to issue such a notice, and only a handful have been published since the ASBFEO was established in 2016.
When former ombudsman Kate Carnell published a similar notice of refusal in 2020, relating to short-term business lender Prudent Capital, it was only the second such notice published in the organisation’s history.
Their rarity is a result of the Ombudsman’s dispute resolution process, as the ASBFEO encourages aggrieved parties to launch negotiations themselves before it steps in to mediate dispute resolution sessions.
“It is rare for us to need to publish these notices, since our assistance team works hard with the parties to help them clarify what is in dispute, improve communications and de-escalate tensions,” Billson told SmartCompany.
Sharing such notices is important, he added, as they alert small businesses of potential power imbalances should their commercial relationship sour.
“Small businesses should think carefully about engaging with a party that will only resolve issues through the time, cost and inconvenience of formal legal action,” Billson said.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
