It is a basic moral principle that telling lies (or generally being conniving, misleading and deceptive) is the wrong thing to do. We try to justify the telling of untruths or even attempt to pass off some lies (white lies) as not so bad as others but deep down, we all know that lying is the hallmark of the ‘bad guy,’ or in other words, the villain of the film. Just as Darth Sidious misled an entire galaxy, the Wicked Witch of the West was just generally nasty, and a DC Comic’s villain is actually known as The Trickster, the message is clear – you just can’t trust the ‘bad guy’ and the bad guy never wins!
The business world is no different. The basic moral principles of honesty, integrity and trustworthiness should still be upheld and whilst it might be a bit harder to spot the lie, truth and justice (just as in the films) will eventually prevail.
This is borne out in a recent report by THE AUSTRALIAN, where the Federal court found that the supermarket giant Coles, had engaged in misleading and deceptive conduct, due to a misrepresentation of their baked bread, (see the full article here).
Westfarmers-owned Coles supermarkets were found to be engaging in misleading or deceptive conduct due to having labelled bread as “freshly baked in store,” when this wasn’t the complete truth. In fact Coles was promoting bread as “Baked Today. Sold Today,” when it was actually partially baked and then frozen off-site before being shipped to stores, and then being baked “fresh,” again in-store.
Although this may be seen as partially true, the law is not only concerned with obvious and blatant lies which are misleading or deceptive, but also any conduct that is likely to mislead or deceive. This means that some of the more subtle things that businesses do that might give others the wrong impression, whether intentionally or not, could be in breach of the law.
Under the Australian Consumer Law, there can be heavy penalties for businesses, like Coles, that breach the law in this manner. If your business is a corporate entity, this could involve penalties of up to $1.1million per misrepresentation, while individuals could face penalties of up to $220,000 per misrepresentation.
Consequently it is important that your business operations are systematically scrutinised and reviewed and that proactive steps are taken to avoid any conduct that may be misleading or deceptive.
For the areas in which a business may be at risk and practical steps that you and your business can take to avoid them please refer to our past blog, The Whole Truth and nothing but the Truth: 6 steps to Avoid Misleading & Deceptive conduct in Your Business.
Remember it’s not just about whether you are telling blatant lies like the ‘bad guy,’ but also if there is a likelihood of others being misled due to the representations made by your business. It may be in how you communicate your monthly sales, consumer rights or materials in a product, or it may even be in how you are promoting your baked goods.
At Tri-meridian we are aware that it can be hard to make sure you are fully aware of your business’ obligations under the Australian Consumer Law as well as make sure that you are being compliant. Therefore if you are not sure, ask! The ACCC website is a good place to start, although if you require help in identifying the risk areas in your business as well as ways to avoid deceptive conduct then please contact us so we can be of assistance.
Ensuring that you are avoiding any dishonest conduct could save you a lot of time in dealing with infringements of the law. Not to mention how much it may save you in the penalties that may be incurred; and to me, that alone seems better than sliced bread.
For further information, please contact the author.
This article is posted in Adelaide, South Australia by Tri-meridian Corporate & Commercial Law and is intended to be used as a guide only. It is not, and is not intended to be, advice on any specific matter. We do not accept responsibility for any acts or omissions resulting from reliance upon the content of this article. Before acting on the basis of any material in this article, we recommend that you consult your professional adviser.