Recent case saw business manager dishonestly claiming work compensation – how should HR try to prevent such fraud or watch for red flags?
An Australian employment lawyer says newsworthy allegations of fraud are a reminder for HR and employers to make sure correct procedures are in place – and followed – by all staff.
The comments come after a business manager was convicted of fraud in February 2025 after dishonestly claiming over $100,000 in workers compensation payments whilst secretly working a full-time job.
“You’ve got to look out for the red flags,” said Andrew Tragardh, Managing Director of law firm Duxton Hill.
The man, from Lynbrook, was placed on an 18-month Community Corrections Order with a condition to perform 180 hours of unpaid community work, according to Work Safe Victoria.
The court heard that in April 2021, the man slipped and fell while working for a plant hire company, injuring his leg, shoulder and lower back. His injury claim was accepted in June 2021, but he continued working while submitting suitable employment certificates until May 2022, when he underwent surgery.
It was found that he did not return to work following the surgery and started receiving payment when he formally resigned in June 2022 and began submitting medical certificates stating he had no capacity to work – despite a WorkSafe investigation finding he took up a new role earning a $200,000 annual salary.
The worker has since paid back the full restitution amount of $114,952.
Speaking on the case, Return to Work Victoria Executive Director, Jason Lardelli, labelled it a “breach of… trust” – something echoed by Tragardh, who told HRD that this wound could cut much deeper.
“Reputational harm is a direct consequence of something like this – both internally and externally. No one likes someone doing this, if your co-worker is off pretending they're sick and the employer hasn't stopped it from occurring — it makes the employer look bad.”
The extent to which reputational harm can be minimized to the outside world is something important as well, he explained.
“If you've got a bookkeeper and they've stolen a million dollars and it's reported in the newspaper, do you want all your customers and your suppliers knowing that you've been asleep at the wheel with a million-dollar fraud? I don't think so."
With fraud affecting everyone, Tragardh told HRD there are limitations to contacting police about it.
“Instinctively, employers will refer this matter to law enforcement – but that’s not what I’d recommend. It’s to obtain convictions for offending conduct and not for something like recovering losses,” he said.
The best chance is going to the civil court with the employee being the plaintiff and the employer the defendant, Tragardh said.
“That's by far and away the most desirable way for employers to obtain justice, in the sense of getting financial relief for the loss. regrettably, the law enforcement takes a long time to complete their investigation.”
In this case relating to medical certificates, why weren’t doctors consulted to see if this was a valid case?, asks Tragardh.
People in positions of responsibility or handling money may decide not to take annual leave, which is another thing to keep an eye out for, he says.
“If they don't take holidays, that can be a red flag because people who are doing the wrong thing don't want anyone looking at their work. So how do you avoid that happening? One, don't take holidays, and two, don't respond fulsomely to request for information.”
Since the incident, WorkSafe say they have “stepped up monitoring and compliance checks.”
