Aussie ombudsman takes NZ company to High Court

New Image founder Graeme Clegg in a 2006 file photo. Photo / Supplied

An Australian ombudsman is taking a New Zealand company to court to recover hundreds of thousands of dollars it says is owed to 14 Aussie workers.

The Fair Work Ombudsman has started legal action in the New Zealand High Court against New Image International, the parent company of Omegatrend International.

It's the first time the Australian regulator has taken action outside Australia.

Omegatrend, a direct-marketing company selling health food products, went into liquidation in mid-2007 owing 14 of its Perth-based marketing and administration staff more than $600,000 in unpaid entitlements, Fair Work Ombudsman executive director Michael Campbell said.

The decision to pursue the company showed the lengths the agency would go to for "wage justice", he said.

"When it is appropriate to do so, the Fair Work Ombudsman will not shy away from pursuing these matters in overseas jurisdictions if the legal regime exists to do so and there is some reasonable hope of recovering unpaid entitlements," Campbell said.

He said New Image International was associated with the New Image Group, which is listed on the New Zealand Stock Exchange.

New Image International closed its Perth Omegatrend office in January, 2007 making its staff redundant. It had agreed to pay Omegatrend employees their entitlements in fortnightly instalments, but wrote to them in April, 2007, to advise that no further payments would be made, he said.

Campbell said the workers pursued their outstanding entitlements by going to the Western Australia Supreme Court, which appointed Ferrier Hodgson as liquidator to investigate Omegatrend's affairs.

The Fair Work Ombudsman decided to support the employees and the liquidator to look into the circumstances of New Image International's purchase of Omegatrend's assets.

Campbell said it hoped to secure court orders that would allow the liquidator of Omegatrend to examine documents and to interview New Image International founder and executive chairman Graeme Clegg and other current and former directors and employees.

"In particular, the liquidator is investigating the circumstances relevant to the purchase by New Image International of Omegatrend's assets for an amount that appears to have been below the market value of the assets," he said.

"It is believed that the sale of the assets left Omegatrend with no means to meet its commitments or earn further income," he added.

- NZPA