Earlier this year, Heinz was found guilty of engaging in misleading and deceptive conduct. As a consequence, it has now been fined $2.25 million and received a number of court orders.
Heinz made several claims on its ‘Shredz’ product, aimed at one- to three-year-olds, that the snacks were healthy and nutritious. In fact, they contained over 60% sugar. The court upheld that Heinz could not reasonably have believed that the product had nutritional value for young children, and that it would reasonably have known that its statements and images were misleading.
One of the court orders was for Heinz to implement a full compliance program in Australian Consumer Law. The court was specific about this program’s requirements, meaning that other organisations now have some insight into what the courts expect.
How does this breach relate to compliance training?
Most notably, in compliance training, the court has confirmed that Heinz must:
- conduct a comprehensive competition and consumer law risk assessment and implement effective policies to address the identified risks
- roll out compliance training in response to the risk assessment and in conjunction with its new policies
- ensure that all employees, directors, officers, representatives and agents complete this training at least once a year. New workers must complete the training during induction
- use a suitably qualified legal practitioner (with expertise in competition and consumer law) to conduct or write the training
- keep evidence of the training’s completion. It must also make this evidence available to the court or regulators if required.
If your organisation follows these guidelines, it will have a compliance program that can help it avoid breaching consumer law. If it does still breach the law, an effective program will help it to receive fewer penalties.
The benefits of effective and comprehensive compliance training
Although a court-mandated compliance training program is not unusual, this case emphasises how closely a court will examine an organisation’s compliance training. Heinz’s $2.25 million fine is also clear evidence of the benefits of proactivity. It’s always best to have a program that incorporates these key features already, helping you to avoid any legal action in the first place!
Litmos provides five styles of courses, including foundation and refresher training, that cover misleading and deceptive conduct. For more information, contact us on 1300 133 151, or sign up for an obligation-free trial today.
