What can I do about bad online reviews – if my business has 10 employees or less?
Online reviews are of increasing importance for all businesses, but what if they are bad, or wrong?!
If an online review is disparaging of a person’s reputation, identifies or is about your business, or damages the reputation of your business, you could in some circumstances sue that person for defamation. Courts have the power to force a person to remove content from the internet, or pay damages to a business for harm done to their reputation. Damages can be significant if defamation causes an actual loss of business, or even a loss of opportunity, or for consolation for hurt and distress.
Large companies generally cannot sue for defamation, however not-for-profits and small businesses with 10 employees or less can do so.
Not all online criticism will be regarded as defamatory – it will not be defamatory if it is substantially true, an honest opinion or on a matter of public interest and based on fair information. To an extent, proportionality is key in determining whether the law has been breached – a scathing review for, for example, a failure to smile at a customer, will likely be grounds for damages for a business, and removal of the bad review.
You only have one year after publication to pursue publication, so consult a lawyer if you have any concerns.
Privacy Obligations for Customer Information
Privacy, particularly of electronic information, has been newsworthy of late. I wrote in the last Update for Small and Medium Enterprises in March about the increased obligations for businesses of more than $3m turnover under the Privacy Act 1998 (Commonwealth), with penalties for non-compliance of up to $420,000. Now, there is a further obligation for any businesses that may have customers in Europe.
In late May, the General Data Protection Regulation took effect. It requires companies to offer ways for clients to pull their data out and take it to a new service.
Importantly, customers do not have to give their information to businesses if it isn’t essential information, and customers cannot be denied the service.
These stringent privacy obligations are likely to spread to Australia. If you would like to ensure your business follows them, a lawyer can advise.
New Requirements for Business Websites
Sham Contracting – is your sub-contractor actually an employee?
In early June, Online food delivery company Foodora faced legal action over alleged underpayment of staff. Foodora, and many other companies in the ‘sharing economy’ are facing investigation for so-called ‘sham contracting’, however many traditional businesses are as well.
A sham contracting arrangement is when an employer attempts to disguise an employment relationship as an independent contracting arrangement. This is usually done to avoid responsibility for employee entitlements.
Under the Fair Work Act, an employer cannot:
- misrepresent an employment relationship as an independent contracting arrangement
- dismiss or threaten to dismiss an employee for the purpose of engaging them as an independent contractor
- make a knowingly false statement to persuade an employee to become an independent contractor.
There are serious penalties for contraventions of these provisions. Employees and independent contractors can request assistance from the Fair Work Ombudsman and get legal assistance.
Therefore, if your business classifies any staff as independent contractors, it is crucial you have a watertight Contractors’ Agreement, and clear guidelines. Conversely, it may be beneficial to treat some staff as employees, both to avoid these penalties, but also for cost savings. Consult a lawyer to assist.