Business & Finance |
Chamberlains

Class Action Against APPCO expanded

Press Release: 19/6/2017

Class Action Against Leading Charity Fundraiser Expanded Following Strong Response

Australia’s first and largest class action seeking damages for underpayments made to individuals under alleged sham contracting arrangements has been expanded following an avalanche of claimants joining the action.
Since Chamberlains Law Firm (CLF) initiated the Class Action against leading charity fundraiser, Appco Group Australia, last October, 1,205 claimants have been registered who may have been paid less than $5 per hour for up to 80 hours of work per week.
The class claimants span across the entire country, with 27% of individuals from NSW, 20% from Victoria, 19% from Queensland, 9% from Western Australia, South Australia and the ACT respectively, and 3% from Tasmania.
The average profile of each claimant is an individual aged 22 years old, who has worked in the Appco Business for 44 weeks and for 67 hours per week. The individual would have earned a total commission payment of $387 per week, but would then need to have paid work expenses of between $60 and $140 per week.
The individuals claim values identified in the class action to date range from $469.19 through to an individual who has lost $632,292.94.
Chamberlains has filed an amended statement of claim in the Federal Court to capture new issues identified by the expanded number of claimants.
Central to the class action allegations is that Appco Group Australia operates a single business across all of its divisions, which sells products for energy retailers and consumer brands, including Optus, AGL, Alinta Energy, Foxtel and Austar, Hello Fresh, Laurelle, FW1 Car Products and Cube Online.
Appco also enters into commercial funding arrangements with charities and other organisations, with contractors selling donations, subscriptions, raffle tickets, vouchers and merchandise on their behalf.
Partner at Chamberlains Law Firm, Rory Markham, said “the single business allegation is that Appco has used an elaborate and complex model of contracting that attempts to defeat basic employment entitlements of its workforce, while also reaping the benefits and profits of operating one of Australia’s largest marketing enterprises”.

The key contractual documents that underpin the single business allegation have being prepared by leading Australian law firms, KMPG Legal and DLA Piper. Chamberlains estimates that up to 8,000 young people over the last six years have entered contracts in the Appco business.
Chamberlains has also identified key documents that show Appco controls all aspects of the employment model within its business model and operations. This includes documentation that:
i. Requires its so called ‘independent contractors’ to work exclusively for Appco clients, on payment, hours and locations determined wholly by Appco and no one else;
ii. Forces each independent contractor to participate in an enterprise relationship – called ‘Building your Enterprise’ – that imposes eight levels of set career progression within Appco.
iii. Demands that people higher in the enterprise career progression receive a fixed percentage of profit from people lower in the career progression relationship;
iv. Demands that each independent contractor follows the set duties, progression goals and remuneration of the Appco Career Progression ; and
v. Imposes a disciplinary scheme across its business that disciplines or terminates contractors for failure to follow Appco directions, including not attending sales sites at the approved times, or not wearing an Appco approved sales badge.
Chamberlains says these documents allege that the issue of ‘sham-contracting’ is not a localised problem in the company. It is wide-reaching, systemic and has attempted to deny individuals basic work entitlements owed to them under Australian employment law.
Mr Markham said “The significant finding of our investigation is that the Appco model is a single business where independent contractors are not genuinely encouraged to build a sustainable business, but rather to participate in the “Building your Enterprise” Arrangement for the goal of receiving large profit payments from other contractors within the same business”.
It is alleged that that Appco’s engagement of young people constitutes sham “independent contracting” or “sole trader” arrangements resulting in under-payment of wages, totalling up to $85 million.
Appco receives performance and sales data from managers in the field and have regular oversight of the process of the campaigns, marketing, sales and performance of individual contractors.
Potential members of the class are urged to visit is www.appcoclassaction.com.au to join the litigation and discuss their rights.



For Further Information Call:
Rory Markham Tim Allerton
Director & Practice Leader – Litigation and Risk Management City PR
Chamberlains Law Firm (0412) 715 707/
Ph.-0430 716 544
Email- rory.markham@chamberlains.com.au

Media

880918