Appco Group hit with claims salespeople were forced into “pseudo sexual acts” for not meeting targets, as 700-person strong class action continues

Charity fundraising business Appco Group Australia has been forced to respond to claims that salespeople were made to engage in “pseudo sexual acts” and potentially humiliating workplace rituals because they failed to meet sales targets.

The claims have emerged as part of a class action lawsuit against the company, which centres around separate allegations of sham contracting and worker conditions at the company.

Chamberlains Law Firm is launching the class action, which is reportedly the largest ever of its kind, and is calling for individuals to join the claim, along with a group of 730 claimants already signed on.

“You may have experienced bullying, intimidation, public shaming, undue pressure and unreasonable work hours for little pay. The claim will outline these tactics to demonstrate the control that Appco had over its workers, and ask the court to recognise that control makes those employees entitled to minimum wage,” Chamberlains explains in a callout for individuals to joining the class action.

However, videos have surfaced this week showing workers for Appco subcontractors being forced to engage in “pseudo sexual acts”, and other activities designed to humiliate workers, for failing to meet sales targets, reports the ABC. 

One of the videos was reportedly filmed in April 2014 at one of Appco’s contracted companies.

“The video depicts a series of pseudo sexual acts performed on men by other men in a room’s morning meeting which we’re instructed was orchestrated by the managing director of that company,” Rory Markham, a lead partner at Chamberlains Law Firm, told the ABC.

“It’s a video that can’t be explained in any employment or any business context,” Mr Markham said.

SmartCompany contacted Appco Group Australia and was sent a copy of the statement the company provided to the ABC this week regarding the claims of “offensive games” being carried out by contractors with sales staff.

“Any such activities were conducted without the knowledge, permission or encouragement of Appco Australia. These activities have now been banned and represent a breach of contract with Appco,” the statement says.

“All marketing companies sub-contracted by Appco Australia must now confirm in writing that they have comprehensive anti-bullying, anti-harassment and workplace health and safety policies in place and that all members of staff and independent contractors are aware of those policies and receive training about them.”

A media release from November 2016 from Appco expressed disappointment that the ABC reported at that time that bullying and harassment formed part of the class action against the business.

The claim summary from Chamberlains includes references to alleged instances of of bullying, public shaming, undue pressure and unreasonable work hours as ‘aspects’ of the claim. 

Sham contracting

As part of the potential class action, Appco is facing claims that it engaged in “sham contracting” by hiring workers as independent contractors rather than employees, which could have preventing them from receiving minimum entitlements.

“The claim will allege that Appco, the incorporated Marketing Companies (MCs) that sit under it, and all the Independent Contractors (ICs) who were engaged to sell Appco products, are not a group of small businesses contracting with each other. The evidence indicates that the MCs and ICs were all controlled by Appco to such an extent that it was actually a single integrated business,” Chamberlains explains in its notes on the action.

Sham contracting has been a key area of focus for the Fair Work Ombudsman, which provides a checklist for businesses and workers on when a worker can be classified as a contractor.

“Sham contracting can be done intentionally or carelessly by an employer. These types of arrangements are sometime set up by employers who are seeking to avoid responsibility for paying legal entitlements to employees,” the Ombudsman explains in an information note on its website.

Concerning sales practices

In a statement, Appco Australia says it has never tolerated sales practices that have been raised in reports as distasteful or offensive.

“Regardless of their original intent, these practices are and have always been completely unacceptable to Appco Australia and it has never tolerated them,” the company said.

Sales expert Sue Barrett believes Australia still has a problem with some companies’ approach to motivating sales staff and encouraging competition between them, and businesses should scrutinise the approach of any third parties they might be considering to help with their sales to avoid concerns down the line.

“Whenever you’re looking for a new sales person to joining your team and you go to a recruiter to help you, my advice has always been to recruit the recruiter first. Do they know that area well? Do they represent the same values as you and do you want them representing you as a rep of your organisation?”

Good sales practices should never make staff or customers feel uncomfortable, so ensuring processes that will let everyone benefit from the experience is key, says Barrett. And this means tracking the details closely, Barrett believes.

“Ask, “Would you like that [practice] done to yourself? If the answer’s no, then walk away,” Barrett says.

Steering away from any practices that could make staff feel as though they are pitted against each other or in a “boiler room” situation will only take away from the goals of your brand, she says.

“Self-interest will reign supreme and they’ll do anything they can to get something over the line.”

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