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Episode 113 - What happens when leadership sours?
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Episode 113
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Transcript
AI Recruitment Tools: Revolutionizing Hiring?
00:00:09
Speaker
Meet Bullhorn Amplify, the AI game changer for recruitment teams. It works 24-7 to match the skills of your top performers so you can fill roles faster, boost productivity and grow your business without growing your team.
00:00:22
Speaker
Amplify delivers 70% faster submit times, 22% higher fill rates, 49% better candidate matches. Visit the Bullhorn website for more information.
Australia's Wage Increase: Impact and Implications
00:00:33
Speaker
And this is the news for the 10th of June, 2025. I'm Adele Last.
00:00:39
Speaker
The national minimum wage in Australia will increase by 3.5% after a decision by the Fair Work Commission. The move announced last Tuesday following an annual wage review will mean 2.9 million of the lowest paid workers will receive a pay rise from 1 July.
00:00:56
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the Commission said higher inflation in the past four years meant living standards for employees dependent upon modern award wages has been squeezed and the low paid have experienced greater difficulty in meeting their everyday needs.
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The raise in pay has been supported by the Albanese government and has previously urged the Commission to back a real wage increase that is economically sustainable, with the Federal Budget forecasting a 2.5% inflation rate this financial year rising to 3% 2025-26.
Unfair Dismissal Case: Employer vs. Contractor
00:01:28
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An outsourced worker in the Philippines has won her case against an Australian business for her unfair termination after her former employer recently lost an appeal to the full bench of the Fair Work Commission.
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The Commission heard Joanna Pasquia's contract with Dossil Group required her to investigate credit claims and liaise with Australian banks and credit agencies on behalf of clients of a related business, MyCRA Lawyers.
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In February last year, Prescure's contract was terminated after the Brisbane-based law firm accused her of unlawfully copying company and client information to her personal drive, allegations she denied.
00:02:06
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Dossel Group argued she was an independent contractor outside Australia's jurisdiction. However, last September, FWC Deputy President Tony Slevin found that this belied that actual nature of the contract and that Ms. Prescure was not conducting her own business.
00:02:22
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He ruled that Pascua was an employee of an Australian company and entitled to national minimum work standards, which included a wage of at least $24.87 an hour, even though Pascua had signed an independent contractor agreement at a flat hourly rate equivalent to $18 Australian dollars.
00:02:39
Speaker
Key pieces of evidence presented to the FWC in persuading them that Pasquale was an employee, not a contractor, included her fixed hourly rate and the hours being exclusively provided to Docile Group, her inability to delegate or subcontract her work, her use of the firm's internal systems, including an email address with the firm's domain name, her attendance at regular firm Zoom meetings, her fixed weekly hours and the way she was presented to others as being part of the firm's legal team.
00:03:13
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The upholding of the appeal by the full bench of the Commission in February has cleared the way for Paschua to continue her unfair dismissal claim and to pursue unpaid wages through the Fair Work Ombudsman, although it's unknown whether she intends to pursue these options.
Australia's Economic Status: Growth or Stagnation?
00:03:29
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Australia's economy expanded just 0.2% in the March 2025 quarter and 1.3% over the year, marking one of the weakest quarterly results since the 1990s recession, excluding the pandemic, according to the latest ABS National Accounts data.
00:03:46
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Catherine Keenan, ABS Head of National Accounts, said public spending recorded the largest contraction since the September quarter of 2017. Extreme weather events reduced domestic final demand and exports.
00:03:59
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where the impacts were particularly evident in mining, tourism and shipping. GDP per capita fell 0.2% for the quarter and is down 0.4% annually.
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Construction was the standout performer, rising 2.2% and preventing the economy from sliding into negative territory, according to Master Builders Australia. Household consumption lifted 0.4%, with gains in food, rent, utilities and recreation.
00:04:26
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However, spending growth remained below population growth and many households chose to save rather than spend, with the household saving ratio climbing to 5.2% up from in December.
Labor Law Violations: Cameron Workforce's Penalties
00:04:40
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The Supreme Court of Victoria has imposed penalties totaling just over a quarter of a million dollars on a horticultural company and two individuals for failing to comply with labour hire laws following legal action by the Labour Hire Authority.
00:04:54
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The court found Cameron Workforce contravened the Labour Hire Licensing Act by providing workers to pick grapes and chestnuts to several farms in the Benalla region without a Labour Hire licence.
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A $200,000 penalty was imposed on the business. In addition, Director Lina Chiem was ordered to pay a penalty of $40,000, while Cameron Maugham, who was involved in the contravening conduct, was ordered to pay $15,000. The workers were also accommodated in overcrowded and substandard housing owned by Chiem.
00:05:25
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Many of Cameron Workforce's workers were in Australia as part of the Pacific Australia Mobility PAM scheme, Under the program, workers can only work for their approved employer. The court found Cameron Workforce was not approved by the federal government to employ any Palm Scheme workers.
Hybrid Work: Productivity Friend or Foe?
00:05:43
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The significant increase in Australians working from home during and after the pandemic is not to blame for the country's persistent productivity struggles, the Productivity Commission has declared.
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The Commission released a research paper, Productivity Before and After COVID-19 this week, focusing on the productivity bubble that Australia experienced during and after the pandemic.
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Australia's productivity rates reached record highs from January 2020 to March 2022, but by June the following year had returned to the pre-COVID levels of late 2019. Following a survey of available studies and research, the Productivity Commission concluded that hybrid work is often advantageous to productivity and that working from home cannot be blamed for a decline in workplace productivity.
00:06:31
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Workers do not need to be in the office full-time to experience the benefits of in-person interactions, the report said. As a result, hybrid work tends to be beneficial to productivity or at least is not detrimental to productivity.
00:06:43
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The evidence on working from home is still evolving. However, given most studies find hybrid work to be either neutral or positive for labour productivity, there is no evidence to suggest that the trend towards hybrid working has contributed to the productivity loss, according to the report.
Leadership Changes: Hayes UK and Ireland
00:07:01
Speaker
Hayes has appointed Thomas Way to succeed Simon Winfield as CEO of Hayes UK and Ireland. Most recently, Way served as Senior Managing Director for the yeah UK, France and Belgium region at publicly listed recruiter S3.
00:07:15
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His 20-year career at S3 has included establishing the company's life sciences division in the US and later overseeing its expansion across Europe. Winfield departs after heading up the UK and Ireland region for the past seven years, having started at Hayes in Perth in 2006, where he was based for just over seven and a half years as Senior Regional Director for WANT and ANZ Director for the Hayes Resources and Energy Division before returning to the UK in late 2013.
00:07:45
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No explanation was given for Winfield's departure.
AI or Human Developers: Builder.ai's Controversy
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It's been revealed that UK AI company Builder.ai is has been tricking customers and investors for eight years, selling an advanced code-writing AI that is actually an Indian software farm employing 700 human developers.
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Builder.ai CEO Sachin Devdugal built the house of cards based on the purported capabilities of the company's AI assistant, Natasha, which is said to be a no-code tool that could build apps six times faster than traditional development processes and be 70% cheaper.
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It all came undone after revelations the company would declare bankruptcy. Company insiders confirmed that Natasha was not, in fact, an AI at all, but a team of 700 human India-based developers who were not only writing customer software but tasked with behaving like bots.
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One former employee described the company as all engineer, no US federal prosecutors are reporting to commence a formal criminal investigation into the company.
Global Job Growth Forecast: ILO's Perspective
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The International Labour Organization cut its 2025 global employment forecast for job growth to 1.5% amid percent ah mere worsening economic outlook and trade tensions. In an update released at the end of May, the agency now expects about 53 million jobs to be created this year, 7 million fewer than its previous projection of 60 million.
00:09:12
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And economic growth forecasts were revised down to 2.8% from 3.2%. from three point two percent The ILO also warned that nearly 84 million jobs across 71 countries linked to US consumer demand are at growing risk of disruption due to trade tensions.
00:09:28
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A majority of these jobs, 56 million, are concentrated in the Asia-Pacific region, while Canada and Mexico have the highest exposure rate at 17.1%.
US Job Growth: Trends and Challenges
00:09:38
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The US economy added 139,000 jobs in May, a slowdown compared with recent months as American businesses cope with uncertainty around Donald Trump's continuing trade war, according to the May jobs update from the Bureau of Labor Statistics.
00:09:53
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The unemployment rate remained steady at 4.2% unchanged from last month. Total job openings in the US fell 4% in May and have declined 5% since the end of March and 11% since November.
00:10:06
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Wage growth, on the other hand, remained robust with annual pay growing at a 4.5% rate for those staying in their roles and 7% for job changes. Economists expected a downward slump after data earlier in the week suggested a cooling job market.
00:10:22
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Payroll firm ADP reported that private sector payrolls increased by just 37,000 in May, the lowest gain in more than two years. US jobs growth in the first five months of 2025 is 26% below the same period last year.
Leadership Conflicts: Lessons from Trump and Musk
00:10:36
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After a strong start to the year, hiring is losing momentum, said Nella Richardson, Chief Economist at ADP. And that's the news for the 10th of June, 2025. I'm Ross Clennett.
00:10:49
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Stay tuned for Question of the Week.
00:10:58
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Question of the Week is, what happens when leadership relationships turn sour? i think I think I know why we're talking about this. Adele. Unless you have been locked in a dark room for the weekend, you will obviously know about Trump and Musk's bromance being over, the split.
00:11:21
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That's all over the news. Yes. It's um completely fallen apart. So the week before last, the ah end of Musk's tenure as a special government employee came to an end.
00:11:37
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as his role as head of Department of Government Efficiency finished and the president had some warm words to say about Elon.
00:11:49
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And then um the beginning of last week, things went quite ah south because Elon elon Musk... tweeted out, in fact, I'll read out the tweet, which was June the 3rd, which was Wednesday, Tuesday.
00:12:07
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I'm sorry, I just can't stand it anymore. This massive, outrageous, pork-filled congressional spending bill is a disgusting abomination. Shame on those who voted for it.
00:12:18
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You know you did wrong. You know it. And, of course, you know what happened next. Yes. So his big, beautiful bill seems to have been the thing that set Musk off, which is really interesting because There was a lot of crazy well before that that didn't seem to set him off.
00:12:33
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And this one finally did. And then it got really ugly. It's a slinging match now. ah Yes, it got very ugly because then Musk went on to ah on the, what day is it? I think, yes, on Thursday, his tweet was, time to drop the really big bomb Real Donald Trump is in the Epstein files. That is the real reason they have not been made public.
00:13:00
Speaker
Have a nice day, DJT. And, of course, he's referring to the um famous pedophile who took his own life, Jeffrey Epstein, and there have been numerous photos circulated of Trump and Epstein together, of which Musk circulated one of those again,
00:13:21
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to make it very clear that he believes, he certainly wasn't saying it explicitly, but certainly suggesting that Donald Trump is a pedophile and has engaged in inappropriate relationships with underage girls, I think is a fair way to say it.
00:13:36
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And then it doesn't end there. Trump took another swipe back ah in relation to Musk's electric cars, right? The Teslas? Yes, well, as part of the bill, was very unhappy about the um subsidies for electric vehicles being removed, hence making it more expensive to buy them.
00:14:03
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And clearly, given his tenure as the majority owner and CEO of the world's most famous electric car company, he was not very happy about that.
00:14:15
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I heard he lost something like $50 billion in a day, um which is pocket change or something like that. Yeah, certainly on paper, given he's worth apparently about $400 billion.
00:14:25
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Anyway, it it really points to the fact that when leadership relationships go sour, they can go really
Handling Leadership Departures: Best Practices
00:14:33
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sour. Yeah, this is obviously a really dramatic case, you know, across the media and it's very public and and the public...
00:14:40
Speaker
and media are really um interested in making this as as you know dirty as possible. But you know how does it relate to recruitment? Do we have examples of something similar in our own industry, Ross?
00:14:51
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Oh, look, I mean, it happens all the time, Adele. I had my own experience of being effectively fired out of the company. i mean, technically I resigned, but really the relationship I had with the CEO had broken down and it was a very awkward ending.
00:15:08
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Everyone in the company knew what was happening and I and effectively signed a contract, no disparagement contract to leave and that that sort of thing happens. mean, previously it had happened at the same company.
00:15:25
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um Greg Savage was one one of the directors and he and the managing director didn't see eye to eye about the future that greg forced that Greg saw that he had in the company. And so Greg finished up leaving. And again, that was quite awkward because Greg was the one who had all the relationships with the recruiters.
00:15:43
Speaker
And i mean, Greg was very, very professional about it. He didn't say a single negative word to anyone. about what had happened, but I mean, everyone kind of knew that um that that relationship had blown up and unfortunately that that was the beginning of the end for that company. So that that was, well, there are a couple of examples from my own recruitment career where it's been very awkward and it's ultimately not been for the long-term benefit of the company.
00:16:14
Speaker
What about public cases? Are we aware of anybody out in probably one of the most public spats was um the Harrier Group. Harrier Group terminated Kelly Quirk, who was the CEO, allegedly um because she'd misused company company credit card or her company credit card, and then Kelly Quirk had then ah sued and it's, well, it was a very long and drawn out process because Kelly Quirk was alleging that she'd been bullied and because she complained about workplace discrimination.
00:16:58
Speaker
Ultimately, she finished up losing the case. A court upheld Harrier Group's um their their right to fire her for the misuse of the company credit card.
00:17:12
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I mean, it was a very small amount in the end, and you could argue that it was probably nitpicking, but it's ah you know it's a classic example. When relationships sour, then relatively small things can become the straw that breaks the camel's back and used as a justification to terminate someone when they're no longer required.
00:17:35
Speaker
Yeah, that's what I think is a really interesting thing with these sorts of cases is exactly like you said. Sometimes it can be a really benign um element whilst the person's working there. You know, in this case, as you mentioned with Kelly Quirk, she was using um the company card. And let's be clear actually about what the specifics of that case.
00:17:54
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She had a company credit card. She was using the card which accumulated some points. She asked for those um points benefits to be transferred to her personal account. of which she then cashed in some gift vouchers to another retailer.
00:18:08
Speaker
So she wasn't stealing money um in the sense of of, you know, buying things ah of a personal nature on a company card or taking money out of the bank accounts of the company. But, you know, in the in the scheme of it, it, it you know, it does look like that on the other side of the fence. But while she's there, it was probably a really normal thing to do. Hey, the company's accumulating these points. No one's going to use them.
00:18:28
Speaker
Let me transfer them over and let me buy some other things with them. um So, you know, as I said, it can be something so benign, but then it turns when the relationship's sour. It's interesting just how how these things, you know, are changed around and turned around.
00:18:43
Speaker
Well, it points to the fact that when you have a relationship like breakdown, there's a legal element and a PR element to it.
00:18:54
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And the PR ah element could be just simply your internal employees and maybe your clients and candidates. But if you're a a public company, then you've got greater responsibility because there's the share price to consider.
00:19:08
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And you've got to be mindful of the obligation you have to disclose material facts, facts that could affect the share price. So this is an area where you can get into deep water very quickly and having professional advice is ah highly advisable in these circumstances.
00:19:27
Speaker
Yeah, I think that's really good advice, obviously, from a corporate perspective. Not sure it would have helped um Trump or Musk in the end because they wanted to obviously take each other down. But most people aren't wanting to have that sort of exit and that sort of relationship, nor that sort of attention. So ah you're right, having um having controlling the narrative yourself is a really important part of this.
00:19:50
Speaker
What you don't say is the part that people will make up, right? Completely. i mean it's i mean, it's human nature. In the absence of information, people just make stuff up and they'll make up stuff that could be a long, long way from the truth.
00:20:06
Speaker
So it is important to take control of the narrative. It is important not to lie, but that doesn't mean you need to provide all the information about what's happening. You just need to provide sufficient information. And in most cases, both parties don't want to drag the company down. i mean, there are exceptions to that.
00:20:30
Speaker
um there's very little to be gained by having a public spat. And I know, like me, feel aggrieved and there were certainly things that i maybe felt like saying, but you know I kind of took the view of, well, I'll just be the bigger person here and I'll just keep my mouth shut.
00:20:51
Speaker
And ultimately, I'm glad that I did, that someone like Musk doesn't have a contract to sign. He wasn't an employee really in the first place. And so he didn't care.
00:21:04
Speaker
What he said, he didn't care the impact on Trump. In fact, I suppose he cared because he wants it to have a negative impact because he feels slighted that Trump didn't appreciate what he was doing or took him for granted after he paid or allegedly donated $288 million dollars to Trump's re-election campaign.
00:21:25
Speaker
Well, yeah, we've got two very specific questions. types of people um in terms of their personality, Trump and Musk. And so that is a bit of an unusual unusual situation. And I'm looking forward to seeing what the next chapter in that story he tells us or shows us. It'll be very interesting to see what happens next in in you know in the States overall.
00:21:46
Speaker
um Some good advice there around and thinking about leadership um departures at a senior level within our own industry. Well, it's certainly something that is rarely easy, but if both parties are committed to working it through and seeing out their side of the agreement and there's ah benefit for each party in seeing out their side of the agreement, then in most cases they can be handled the complete opposite way to what's happened with Trump and Musk.