Credit: Piotr Makowski via Unsplash
Adtech Cartelux had “difficulty meeting its debts” and didn’t pay its head of sales for eight months, according to a ruling by the Fair Work Commission.
The case centres on the employment of Hervé Genin as global head of sales from February 2021 until his resignation on March 6 this year.
Genin argued, and the commission agreed, that he was forced out of employment because Cartelux didn’t pay him.
The Sunshine Coast-based, self described startup, Cartelux started life in 2012 as a digital video agency, founded by Joshua Williams. It relaunched in 2020 as a platform to help retail networks create, reproduce and measure digital marketing campaigns.
The case in the Fair Work Commission outlines regular delays in payment which Genin had to repeatedly chase with Cartelux.
His salary package was the equivalent of $248,000 plus commission.
“As a self described ‘start up’, Cartelux appears to have had difficulty meeting its debts as and when they fell due for some time,” said Fair Work commissioner Sarah McKinnon in a ruling against Cartelux.
The CFO of Cartelux, Stephen Burns, and the CEO, founder Joshua Williams, each gave evidence about deferring their own salaries in early 2024.
They say there was a similar agreement reached with Genin for him not to be paid until December 2024, January 2025 or February 2025 when they received anticipated revenue from sales of about $750,000.
Genin told the commission the tension was putting his health at risk. "I lost 12kg. When you cannot pay your bills, you are obliged to sell your own assets or borrow money to friends / family too… you have to make a stop. It was no longer sustainable”.
The commissioner said Cartelux left Genin with no income to support himself and no way of mitigating his losses in the near term.
“The contract of employment required him to perform work on a full-time basis in the best interests of Cartelux and prevented him from obtaining alternative employment as a means of mitigating his loss,” the commissioner said..
“The situation caused him undue stress, compounded by his personal legal exposure to the increasingly unmet financial obligations.” Genin had formed a company in Switzerland, Cartelux SARL, to hire a local and on the basis that it would be purchased by Cartelux.
In September 2024, Cartelux offered Genin a “convertible note” in lieu of salary. Genin declined the offer, saying in an email that the situation was no longer sustainable. He proposed a payment plan to address the more than $234,000 owing to him, including interest.
He wrote to Cartelux in February this year under the heading: “Urgent demand for payment of unpaid salary, social taxes & pensions, other benefits & expenses.”
And: “Immediate Action Required I request full payment of the outstanding amount within 10 working days from the date of this letter. If I do not receive payment by March 6th, 2025 I will have no choice but terminate my work contract with immediate effect and to consider additional actions.”
Williams replied that he was surprised at the use of legal terms and mentioned avoiding legal costs.
Genin replied: “I had no choice, Josh, the situation is no longer sustainable. You know it. I asked you and Stephen numerous times to come back to me. I have no money, I have been working for over 6 months not being paid.”
The Fair Work commissioner said she was “comfortably satisfied” that Cartelux’s failure to pay a salary for such a prolonged period made it probable Genin had no effective or real choice but to resign.
“This was no underpayment of the ordinary kind, for which a separate claim could be made and dealt with through the appropriate channels while the employment relationship continued,” the commissioner said.
“It was the wholesale failure to pay any wages for an eight month period, with no certainty as to when, how, or to what extent, the failure would be remedied.
“It followed earlier repeated failures to pay salary over the period of employment. It is no answer to these failures to say that Cartelux is a ‘start up’ or that Mr Genin had an important role in revenue generation for the business.
“The responsibility for meeting its contractual obligations ultimately lay with Cartelux, including in relation to payment of employee salaries.”
The Fair Work Commission will now deal with Genin’s application that his dismissal contravened the Fair Work Act.
Cartelux two years ago announced that TEN13, an Australian venture capital firm, and the Queensland Government through Queensland Investment Corporation (QIC), both invested in the Sunshine Coast-based company.
The post-seed investment of $3 million was put down to support the company's continued growth and further development of its software solutions for the advertising industry.
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