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Court rules in favour of Chinese staff dismissed by defunct Australian agency Activate Shanghai

Ardent Digital logoChinese courts have ruled in favour of the employees of now defunct digital agency Activate Shanghai, who sued their Australian former owner for allegedly dismissing them without pay.

The Shanghai office of Sydney-headquartered ArdentDigital was closed in November last year after the firm’s sister company BlueArc ran into financial trouble. All of its employees were sacked on the day of the closure without warning, and with pay owed to them, a Shanghai court has concluded.

The Shanghai Huangpu District Dispute Arbitration Committee has ruled that the 10 former staff of Activate Shanghai are owed one week’s pay, payment of one month’s salary in lieu of notice and layoff compensation.

However, no one from Activate Shanghai, or the company’s sibling company BlueArc, was in court for the hearing, so there will be a delay until the verdict is cleared by the Shanghai Municipal and Social Security Bureau.

If the verdict is not met with opposition, the group say they will use it to gain access to Activate Shanghai’s Chinese bank account, which was used to wire money from Australia to China to pay staff.

According to one former member of staff, the bank account – which was frozen when Activate Shanghai folded – contains approximately RMB30,000 or US$4,800. This money could be used to reimburse staff, although the amount falls short compared to what Australian staff were paid when they were let go before BlueArc went into administration, they said.

The former employee told Mumbrella: “Compared to what is promised to Australian employees, we feel that [the amount] is not only unfair, but it shows a lack of business ethics.”

The staff of Activate Shanghai were offered the sale value of company assets such as office computers and servers on the day the agency was closed by BlueArc Group CEO Scott Porter, but they rejected the offer.

In total, they say they are owed RMB370,000 (US$59,300).

Neither Scott Porter or Ian Purchas, the administrator speaking on behalf of BlueArc and Activate Digital, had not responded to Mumbrella’s request for comment.

The legal battle began after BlueArc went into voluntary administration in November 2013 to undergo “a proactive restructure due to the changing nature of the digital industry.”

However in December last year, with the China operation closed, BlueArc Group moved out of voluntary administration after the company agreed to transfer its Adobe practice to Razorfish, a rival agency.

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