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Appco Australia to enforce “zero tolerance” after bullying claims

Appco Group Australia will insist on tougher new workplace health and anti-bullying policies, systems and training in the 64 independent marketing companies it contracts with for charity fundraising and other sales campaigns.

Independent marketing companies will be expected to review and implement new policies and protective measures for independent contractors as a priority, or face losing their contracts, said Appco Group Australia Chief Executive Officer Mr Martin Gaffney.

The moves follow the preliminary findings of an ongoing independent investigation into allegations of humiliation and intimidation of independent contractors engaged by the marketing companies.

The investigation by the law firm Baker & McKenzie has found evidence that unacceptable activities had taken place at one company, the managing director of which has stepped aside pending completion of the investigation.

The Baker & McKenzie investigation found the activities at this marketing company appeared to be designed for motivation and fun and were not aimed at intentionally causing discomfort or humiliation.

Many participants reported they regarded activities in the way they were intended, but Appco Australia accepts that the activities would have made some people uncomfortable and distressed – and therefore they were totally unacceptable.

Mr Gaffney said there had been no complaints to the marketing company or to Appco Australia before media reports appeared two weeks ago. “However, the initial findings reveal an urgent need for improvement in both the marketing company’s internal complaints processes and our auditing process, and this will be rectified,” Mr Gaffney said.

Alongside the independent investigation, Appco Australia last week demanded that all marketing companies come forward with any cases of behaviour that could be construed as bullying or intimidation. As a result, Appco has ascertained that some practices similar to those described in the media were taking place in a number of other companies. Again, it was determined in the investigation that the activities were intended to motivate.

Appco Australia has made it clear to these companies that these practices must be immediately prohibited within their businesses if they wish to continue contracting with Appco. The investigations are continuing.

“We want to make it absolutely clear that these practices are completely unacceptable regardless of their original intent,” Mr Gaffney said.

Separate allegations have surfaced about two marketing companies, which have stopped trading in the past two years. Appco Australia has limited capacity to investigate these matters because the companies no longer exist; however, we are using all of the information we have gathered to inform our response and the action plan.

Appco Australia’s zero-tolerance of bullying and harassment will include:

  • new policies to support independent contractors who experience or report inappropriate practices or behaviour in a marketing company

  • new workplace health and safety guides for marketing companies

  • new onboarding procedures to ensure contractors can exercise their rights to complain

  • information and training sessions for staff and contractors at least every six months.

Appco Australia will require written assurances from the marketing companies that the new policies are being implemented and laws are being followed. The companies will be audited regularly and those that don’t comply or provide written assurances will have their contracts terminated.

“Sham contracting” allegations

A separate investigation is being conducted into allegations of so-called “sham contracting”.

Mr Gaffney said Appco Australia provided guidelines and templates for the independent marketing companies on engaging independent contractors in a legal and compliant manner. Appco Australia requires the companies to operate within the law.

“Appco Australia operates on an entrepreneurial model that allows people to work independently and control their own careers,” Mr Gaffney said. “The independent contractor’s agreement with the marketing company clearly sets out the nature of their arrangement. Many people thrive in this environment, build their own businesses and get substantial rewards. But we recognise it does not suit everyone.”

Appco Australia will take severe action against independent marketing companies that have ignored their legal obligations and we would expect the regulators to do the same, Mr Gaffney said. There had never been a negative finding against Appco Australia by the Fair Work Commission, he said.

The regular-giving fundraising program

Appco Australia’s main fundraising activity is monthly direct-debit donor acquisition for our charity partners. Appco Australia is the largest operator in the face-to-face regular-giving sector.

Approximately 70% of all regular-giving donors acquired through face-to-face fundraising are signed up by agencies that use independent contractors.

The forms people sign to authorise their direct-debit donations include details of the fee paid to Appco Australia. Appco Australia receives a one-off fee per donor and no other payments. This fee averages 31% over the first three years of donating. There is also a “clawback” mechanism for charities if donors change their minds and cancel within the first four donations.

Mr Gaffney said this type of fundraising appeals to charities because it is extremely effective for both generating vital funds and, just as importantly, raising awareness among the public of the charities’ causes.

Charities only pay for donors who go on to make a regular-giving commitment, which makes it extremely cost effective. Charities can measure their exact ROI down to each individual donor. It is also highly accountable – all parties know exactly when a donor cancels, why a donor cancels and the precise costs associated with acquiring that donor.

Separate to the regular-giving program, Appco Australia operates other fundraising activities, such as selling vouchers and lottery tickets, which have slightly different payment models.

Appco Australia has been operating in Australia for nearly 30 years, and has been supporting charities in their fundraising activity since 1997.

Media enquiries: Michael Smith 0411 055 306

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