BLO1105 Business Law: Pop Up Sports Bar Case Analaysis
Pop Up Sports Bar
You and your friend Nick have decided to open a ‘pop up’ sports bar in your local area. You have not yet done anything about the business structure. You have each invested $50,000 into the business by depositing money into a newly created bank business account, which thus has $100,000 in it. The account is in the name ‘Pop Up Sports’.
You, and not Nick, have negotiated the leasing of a disused 19th century factory building in your name. You have paid the first six month’s rent from the ‘Pop Up Sports’ bank account.
Again from the bank account you have purchased equipment and materials for the pop up bar so you are ready to go when the lease documentation is finalised. But the furniture that you are going to use belongs to you (from a previous business venture). Nick has written up your business and marketing plan including asking his mate David Beckham to be the ‘face’ of your bar. He has spoken to David Beckham who has agreed to do that (the bar will have a soccer theme) but at this stage there are no contracts with him, nor, indeed between you and Nick.
You set an opening date for 3 weeks hence.
Dealing with Customers & Competitors
The opening night was a great success. David Beckham was there and you had a very large turnout. Three weeks later, however, you have received a letter from the ACCC asking you to address some matters that have been brought to their attention.
- You have run a number of full page advertisements stating “Come and have a drink with David Beckham.” David Beckham has not been there but you have large life size cardboard cut-outs of him in the bar.
- You continue to advertise on local radio that on Friday nights there are a number of special drinks available. One that is mentioned in the advertisement is a cocktail called “Beckham Strikes” which is available at the special price of $5.00. But this drink is not available yet because you have not been able to source the special ingredient needed. You offer an apology for this state of affairs on a chalkboard at the back of the bar.
- Your signature dish is “Beckham’s Balls” which are meatballs done in a spicy sauce. The restaurant two doors away has a special signature dish called “Beck’s Special Meatballs” and the owners of the restaurant have accused you of engaging in misleading and deceptive conduct.
Employing Staff
You have employed a total of 7 staff of which three are:
Sarah – Waitress - University Student who works for $150.00 a day but only when she is available, which is usually 1 day a week, or three days a week during university breaks.
Jully – Mixologist – expert at making cocktails, employed on a regular employment contract 5 nights a week.
Richard – Cleaner.
Address the following issues in relation to these staff members.
- Sarah has slipped over on some meatball meat spilt (by someone unknown) on the floor and has broken her wrist. Nick does not think she is an employee. Is she? What are the consequences for Nick and you if a court determines that she is an employee?
- Jully keeps turning up to work in very revealing clothing including short skirts and low cut tops. You do not feel this is appropriate and want her to stop wearing revealing clothes. You give her an ultimatum: change her outfit to something more acceptable or lose her job. Can you do that?
- You also find that Jully has been sharing your special Beckham cocktail and Beckham Balls recipes with another bar at which she works, and you have some evidence to show that there has been a downturn in your customer numbers since that started happening. You decide to terminate her employment on the basis of breach of confidence. Can you do that?
- Richard the cleaner has complained to you about Sarah making sexist comments including telling him “he is hot” and “he is cute” all the time. You think he is overreacting and want to get rid of him. So you ignore his protests, telling him he should know “how to take a joke.” He complains to the Equal Opportunity Commissioner. Are there any likely consequences for you and Nick?
Answer:
Background
Every business is governed by the rules and regulations. Some rules are made by the organisational itself that includes organisational rule, moral rules and behavioural rules where as some rules are defined by the state known as legal rules or Law (Farrar, 2008). In Australian legal system, a rule is defined by the government by either judiciary or legislature. The legal rules are backed by criminal law or civil law by the process of prosecution and litigation respectively (James, 2009). The disputes related to the business activates are government by the business law of Australia. The main purpose of the business law is to resolve any kind of disputes or conflict between two or more parties. IRAC (Issue, Rule, Application and Conclusion) considers as accepted methodology for legal analysis.
Task-1:
Case 1: Issue:
We have promoted out business (‘pop up’ sports bar) with advertisements stating” Come and have a drink with David Beckham”. In absence of David Beckham we have been using big life size cut-outs of David Beckham.
Rules:
The Tort of passing off applies, when a business is using a person’s name, image, and identity, belongs or service without their consent (Van Caenegem, 1990). The tort of passing includes using of visual images, slogans, name for using goodwill or reputation of the company and its product. Trade Practices Act prohibits a business for misleading the customers(Latimer, 2011).
Application:
In this case we have used the name of David Beckham for our business purpose which is actionable form of passing off. In this case ‘pop up’ sports bar have used the celebrity’s image and name therefore there is possibility that David Beckham can sue against Nick and me. At the same time there is allegation of misleading the customers by using name of Beckham. There is the violation of Trade Practices Act prohibits a business for misleading the customers.
Conclusion:
The against ‘pop up’ sports bar can be done under 129 of the Trade Marks Act 1995(Cth). There is strong case against ‘pop up’ sports bar for deceptive or misleading conduct by the business. If the case goes to the court then there is the chance the business may accused any of these act:
Case 2:
Issue:
We advertise on local radio that we would provide cocktail called “Beckham Strikes” at $5.00. But we unable to deliver the product due to unavailability of ingredient required. Therefore we offer an apology for this on chalkboard at the bar.
Rules:
Under the Australian Consumer Law, businesses should not offer for products or services if:
- The business in not intend to provide them.
- They intend to supply different products or services instead of offered product.
- The business aware or should have aware they would not be able to supply the products or services which they have offered within the timeframe (Corones, 2011).
Application:
In this case ‘pop up’ sports bar have failed to provide the service which has been offered to the customers. The case seems like misleading a customer under Australian Consumer Law.
Conclusion:
It must be noted that an advertisement promoting by ‘pop up’ sports bar, a Beckham Strikes” at $5.00 may seems to be an offer to the customer, but it is not a written offer therefore can be categorised as an invitation to treat. After all we have displayed the apology notice at the board on chalk bar therefore there is negligible change for any kind of legal action against us.
Case 3:
Issue:
Our signature dish, Beckham’s Balls”- a spicy meat ball has similar name of the “Beck’s Special Meatballs”- product offered by the restaurant two doors away. Therefore the owner of that restaurant has accused us of misleading the customer and giving deceptive products.
Rules:
A business can be accused of committing tort of passing off, if a business uses similar trade mark, logo or product name of other business or products’ without permission(Davies, 1998).
Application:
In this case there is strong case of tort of passing off against ‘pop up’ sports bar since the name Beckham’s Balls is almost similar to Beck’s Special Meatballs provided by the restaurant two doors away. There is the allegation of misleading the customer with brand name and copycat passing off.
Conclusion:
The restaurant two doors away have potential scope to take legal action under Consumer protection legislation and passing off for their trademark is being copied and ripped off by us. However, to justify their claim, they need to put evidence that customers are likely to be misled (James, 2009). The two door step away restaurant can only take legal action against us only if customers are being misled.
Task-2
Case 1: Issue(s):
In this case Sarah is a university student who only works when she is available. She has slipped over a meat spilt by some worker within the bar and broken her wrist. There are two issues a) Nick don’t recognise Sarah as employee b) consequence of Nick if court treated Sarah as employee of ‘pop up’ sports bar.
Rule(s):
- a) In this case Sarah is a university student who only works when she is available therefore the she come under the employment category of Casual (Under Common Law). National Employment Standards (NES) defined that casual workers are entitled to get some of the benefits that a full time workers gets.
- b) If court treated Sarah as employee than Nick and I commits the tort of negligence. The Civil Liability Act 1936 used to access tort of negligence.
Application:
The employment law of Australia also defines that casual workers also have some right to within the organisation. There is clear case for tort of negligence. Since Sarah has broken her wrist due to negligence at workplace she can claim for damage for personal injury within 3 years.
Conclusion:
There can be some serious consequences for Nick and me if a court determines that Sarah is an employee. The court will assess the damages or injury and defendant(I and Nick) may have to pay the compensation to Sarah. Law of Negligence and Limitation of Liability Act 2008 (NI) entitled to provide legal guarantee of monitory compensation and sick leave (Farrar, 2008).
Case 2:
Issue:
Can we terminate Jully for violating the organisation’s code and conduct? We have repeatedly warned her to change her outfit and not to wear revealing clothing including short skirt and low cut tops.
Application:
Employers has right to set rules regarding dress code , behavioural code and other code of conduct and it is expected to maintain the dress code in the workplace. Employers need to ensure that any kind of dress code should not enforce any kind of discrimination. Australia law defines discrimination as against the law; if an employee is treated unfairly on the basis of dress and characteristics is regards as Australia’s anti-discrimination law breach. Dress code could be discriminatory if it point out some employee for biased treatment due to their dress (Chapman, 2009). If the employer imposes the dress code such as not to wear revealing dress for female employee but not apply to male could be regards as sex discrimination.
Rules
Employees in Australia are protected by various federal, state and territory anti-discrimination legislation. Fair Work Act (2009) or FW Act ‘general protections’ protects the employee in Australia against any kind of discrimination and unusual obligations (Gaze, 2005). There are two general used formulations regarding constitutes unlawful discrimination in Australia; direct discrimination; and indirect discrimination (Forsyth and Stewart, 2009). There is an obligation for employer to provide uniform allowance or free uniform to their employee if they want their employee to wear a particular uniform.
In Australia employer has also right to provide a guideline about dress and appearance but it should be logical, reasonable. Reasonable is comprehensive legal concept since it depends on various circumstances (Bray and Stewart, 2013). Business can provide a guideline for employee to project a specific image and dress code. There can be an office dress code policy in order to meet safety and hygiene standards.
Conclusion:
This case is quite tricky one and not suppose to under section 139 of the Fair Work Act (2009), since there is not specific uniform in pop up’ sports bar. Men and women have different clothing style. If we give her an ultimatum to change her outfit otherwise leave the job than a hypothetical situation may arise regarding reasonable business attire for men and women. If Jully would decide to legal help and resolve the matter in court than the tribunal would decide if the ultimatum to change the outfit is reasonable or not. If we able to provide valid reason to change her outfit in order to maintain safety then tribunal could allow as to compel her to change her outfit otherwise the judgment could go in favour of Jully.
Case 3:
Issue:
We found that Jully is sharing out special Beckham cocktail and Beckham Balls recipes with another bar therefore we decided to terminate her on the basis of breach of confidence. Can we do that?
Application:
Every business want to protect their valuable information if there is any kind of breach of confidence, business can take action to contractual rights. There are few requirements to set up that information is confidential information.
The information should be specific.
The information should not available in public domain.
The information should be valuable and secret for organisation.
In order take action against breach of confidence, the valuable information must be received by the respondent in conditions implying confidentiality or stated confidential (Williams, 2009). In this case, court is flexible and takes account of the situation in which the breach of confidence occurs. The breach of confidence would considers if Jully has misused the information for personal gain, an individual has threatened to disclose the organisation’s information or a person is likely to disclose the organisational information.
Rules:
Breach of confidence can be described as misconduct and an organisation can take legal action against the individual for the same (Williams, 2009). While taking action it must be ensured that the employment contract has mentioned guideline about organisational security and informational asset.
Conclusion:
We can terminate Jully for breach of confidence as well as legal action or a penalty can be imposed. Special Beckham cocktail and Beckham Balls recipes are the integral property of pop up’ sports bar and Jully has no right to disclose the confidential information to others.
Case 4:
Issue:
Sarah who is working as a Waitress at pop up’ sports bar made sexist comments against Richard. The sexist comments include “you are hot” and “you are cute”. However as a employer I ignored his allegation and advice to take the comment as a joke but he complains to the Equal Opportunity commissioner. Is there possible any consequences for me and Nice?
Application:
In this case Richard feels that there is a sexist comment against him by Sarah .however telling someone hot or cute may not be such a sexist comment. But Sarah makes the comment all time which can irritate Richard and he complains to the equal opportunity commissioner. In my option Richard is overreacting but law may see this in different angle.
Rule:
Equal Opportunity Act 1984 protects an individual against discrimination, racial harassment, sexual harassment in area of work or public area (Hatton and Trautner, 2011). The human right commission in Australia has a range of fact sheet that provides best practice guideline at workplace. Section 28A of the Sex Discrimination Act 1984 defines sexual harassment if a person makes unwilling comments against someone (Thornton, 2002). Section 18C of the Racial Discrimination Act 1975 defines the prohibition of offensive behaviour that includes humiliate, insult and offend a person because of their sex, race, colour or ethnicity (Gaze, 2005).
Conclusion:
If Richard complains to the Equal Opportunity commissioner of sexist comment there are some possibilities that we (I and Nick) may liable for failing to take all necessary steps to prevent harassment at work place. Section 18C of the Racial Discrimination Act 1975, defines the duty of senior management and employer to implement of comprehensive policy to mitigate any kind of harassment or discrimination at work place.
Referencse:
Bray, M. and Stewart, A., 2013. From the arbitration system to the Fair Work Act: the changing approach in Australia to voice and representation at work. Adel. L. Rev., 34, p.21.
Chapman, A., 2009. Protections in Relation to Dismissal: From the Workplace Relations Act to the Fair Work Act. UNSWLJ, 32, p.746.
Corones, S.G., 2011. The Australian consumer law. Thomson Reuters Lawbook Co.
Davies, G., 1998. Retail brands and the theft of identity. International journal of retail & distribution management, 26(4), pp.140-146.
Farrar, J., 2008. Corporate governance: theories, principles and practice. Oxford University Press.
Forsyth, A. and Stewart, A. eds., 2009. Fair work: The new workplace laws and the work choices legacy. Federation Press.
Gaze, B., 2005. Has the Racial Discrimination Act contributed to eliminating racial discrimination? Analysing the litigation track record 2000–04. Australian Journal of Human Rights, 11(1), pp.171-201.
Hatton, E. and Trautner, M.N., 2011. Equal opportunity objectification? The sexualization of men and women on the cover of Rolling Stone. Sexuality & culture, 15(3), pp.256-278.
James, N., 2009. Critical legal thinking. Pearson SprintPrint.
Latimer, P., 2011. Australian Business Law 2012. CCH Australia Limited.
Thornton, M., 2002. Sexual harassment losing sight of sex discrimination. Melb. UL Rev., 26, p.422.
Van Caenegem, W., 1990. Different approaches to the protection of celebrities against unauthorised use of their image in advertising in Australia, the United States and the Federal Republic of Germany.
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