Sex with junior staff ‘routine horseplay at top of Ferrari’

Ferrari’s former Australasian head claims it was a ‘notorious fact’ that executives ‘routinely’ engaged in sex with subordinates.

Herbert Appleroth, former CEO of Ferrari Australasia. Picture: Bloomberg

The former Australasian head of Ferrari who alleges he was sacked for having an affair with a female subordinate claims it was a “notorious fact” within the company that senior executives “routinely” engaged in sexual relationships with more junior staff.

Herbert Appleroth, the former chief executive and managing ­director of Ferrari Australasia, alleges he was wrongfully sacked last October because of a consensual relationship he had with a junior colleague.

The 47-year-old — an heir to the Aeroplane Jelly fortune — launched Federal Court action in May, seeking about $3m from Ferrari in remuneration, entitlements and penalties, before discontinuing the proceedings about two weeks later.

The relationship between Mr Appleroth and his co-worker lasted from about 2016 to late 2017.

Mr Appleroth, who has a six-year-old daughter, alleged in his Federal Court statement of claim that the relationship was “not inconsistent with the expected behaviours of the CEO” or the company’s code of conduct.

Instead, it was a “notorious fact” among senior officers of the company that “very senior officers of the Ferrari group of companies routinely conducted con­sensual sexual relations with subordinate employees without adverse consequence for their employment”.

Mr Appleroth said he became aware last September that the woman had lodged a worker’s compensation claim.

This was after she had earlier contacted the company in February following a period of leave to discuss her potential return to work.

Her allegations included that she was subjected to verbal abuse by Mr Appleroth, not given fair performance assessments and that Ferrari had been looking at ways to “get rid of” her if she returned to work.

According to Mr Appleroth’s statement of claim, all communications related to the woman’s employment had been directed to the finance director to ensure there was no conflict of interest.

Mr Appleroth was marched from Ferrari in October and told not to return to its offices or dealers. At the time, he said he had left to pursue his venture capital fund and philanthropic foundation.

However, he was told at a meeting with global executives on October 22 that Ferrari had lost confidence in his ability to perform as CEO because of the loss of confidence of staff “demonstrated by the number of complaints” against him; the company’s exposure to legal claims arising out of his conduct towards “certain staff”, including sexual intercourse with a subordinate; and other alleged “inappropriate conduct towards staff members”.

Mr Appleroth said in his statement of claim that he was not informed of the context or source of any of the allegations, other than his relationship with the woman, and that he was not given an opportunity to respond.

The consensual sexual relations did not affect any of Ferrari’s legitimate business interests and no other allegation “had been investigated for veracity or accuracy”, he said.

Mr Appleroth alleged that Ferrari’s termination of his employment was “dishonest” and caused him to forfeit his interests in performance stock units and restrict­ed stock units that had been due to vest in March this year, next year and the following year.

He had been head of Ferrari Australasia since June 2014, and was on a base annual salary of $320,000, an annual bonus of $160,000, plus super and the use of a company car. He received five weeks’ pay in lieu of notice.

He launched legal action in the Federal Court after attempts at resolving the dispute at the Fair Work Commission failed.

Mr Appleroth’s legal representative and spokeswoman, Rebekah Giles, principal of Company Giles, said her client had chosen to discontinue the proceedings “to put his family’s privacy ahead of seeking justice from his former employer”.

She said after almost 20 years of loyal service, and his acknowledgment as an outstanding leader in the group’s Australian and international business divisions, Mr Appleroth had been “denied any natural justice relating to his departure from Ferrari”.

“For the record, as many others including his former employer were well aware, my client had previously had a consenting relationship with a co-worker,” she said in a statement.

“Mr Appleroth is distressed at his former employer’s lack of due process, the basis of his initial legal action.

“However, he has since instructed his lawyers that he wishes to place his family’s privacy ahead of holding his former employer to account, and will now focus on the future, including pursuing his philanthropic passions.”

A spokesman for Ferrari said: “The company does not comment on pending litigations.”

Mr Appleroth tried unsuccessfully to have his court documents, which had not yet been served on Ferrari, suppressed.

However, Federal Court judge John Snaden agreed to release them to the media on Thursday afternoon, following an application by Nine newspapers.

Justice Snaden said he was not “unmoved” by Mr Appleroth, who had sought to shield himself and his family from “the potential distress and embarrassment public consumption of his short-lived suit against Ferrari might occasion” but it was not “reason enough to depart from the foundational principle of open justice” so he dismissed his application.

Mr Appleroth, whose great grandfather Bert Appleroth founded Aeroplane Jelly, has previously spoken of his job at Ferrari as his lifelong passion.

Under his leadership, Ferrari’s annual sales in Australia, limited by supply, grew from 106 vehicles in 2013 to 257 in 2019.

He has previously said in an interview that he worked seven days a week and survived on about 4½ hours of sleep a night.

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