The Fair Work Ombudsman has initiated legal action against a New Zealand company in the country’s high court, in an attempt to recover hundreds of thousands of dollars in pay allegedly owed to 14 workers from Western Australia.
The case is the first instance in which the FWO has taken action against a company based outside of Australia.
The company in question is named as direct marketing firm Omegatrend International, owned by New Image International. The firm is associated with the New Image Group, which is listed on the New Zealand stock exchange.
Omegatrend went into liquidation in July 2007 and the FWO alleges 14 staff based in Perth are owed over $600,000 in pay and entitlements.
“When it is appropriate to do so, the Fair Work Ombudsman will not shy away from pursuing these matters in overseas jurisdictions if the legal regime exists to do so and there is some reasonable hope of recovering unpaid entitlements,” FWO executive director Michael Campbell said in a statement.
The FWO hopes to secure court orders that would allow Omegatrend’s liquidator to examine documents, and to interview New Image International founder and executive chairman Graeme Clegg, along with other directors.
“In particular, the liquidator is investigating the circumstances relevant to the purchase by New Image International of Omegatrend’s assets for an amount that appears to have been below the market value of the assets,” he said.
“It is believed that the sale of the assets left Omegatrend with no means to meet its commitments or earn further income.”
New Image Group has responded to the accusations, saying in a statement that it is “disappointed” with the direction the FWO has taken.
“The closed door legal chambers hearing had been arranged to enable the facts to be clarified surrounding the financial affairs of Omegatrend International,” it said.
New Image Group deputy chairman Alan Stewart also said the company has been cooperating with legal counsel.
The FWO says New Image closed its Perth Office in 2007 and subsequently informed staff they would be paid entitlements in fortnightly instalments. However, it then sent staff correspondence a few months later saying those entitlements would no longer be paid.
Action was then taken in the WA Supreme Court by the staff, which appointed Ferrier Hodgson as Omegatrend’s liquidator.
“Despite repeated attempts by the Fair Work Ombudsman and the liquidator to resolve this matter, New Image International and its directors have refused to discuss rectifying the outstanding entitlements,” Campbell said.
Both the Fair Work Ombudsman and New Image International were contacted for further comment, but no reply was received before publication.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
