Double whammy? Fraud caught after prior investigation for unpaid wages
The Federal Circuit and Family Court of Australia recently dealt with the case of an employer who questioned the Fair Work Ombudsman’s (FWO’s) decision to impose penalties on his business.
The FWO said that after it investigated the wages of one of its workers, it also saw that the employer submitted a fraudulent payslip, committing multiple violations against the Fair Work Act.
The employer operated a cleaning business in Adelaide. It employed a part-time worker who would act as its administrative assistant between October 2020 and February 2021.
In early February 2021, the worker complained to the FWO’s office that the employer had dismissed him without proper notice. He also said the company failed to pay him his final wage installment and accrued annual leave when he was dismissed.
The FWO appointed a Fair Work inspector to investigate the complaints.
During the investigation, the employer gave her relevant bank records; emails with the worker; his timesheet; and a payslip dated 12 February 2021.
The inspector concluded that the worker had not been paid properly under his award. She also found that the worker’s final payslip indicated that the company employed him, but under the employer designation on the payslip was an Australian Business Number (ABN).
She searched the ABN and discovered it was registered to “Josef Neubauer,” born in 1951, and shared the same last name with the company’s owner.
In June 2021, the inspector contacted Josef Neubauer to ask about the business, and he told her that he had “no connection” with the employer. It was found later that Josef was the employer’s father, but they were “currently estranged.”
The inspector then found that the worker had not been paid the weekly rate under the award for the ordinary hours worked, and he had not been paid his accrued annual leave.
He also had not been paid the required amount, instead of notice, upon his dismissal.
The inspector issued a compliance notice to the employer which stated the following orders:
The compliance notice required the employer to calculate the said amounts and pay the worker on or before 23 August 2021. He was further required to submit proof of payment to the FWO after he had complied on or before 30 August 2021.
The FWO said that the employer did not comply with any of his obligations under the compliance notice, violating the Fair Work Act. It also said the employer had a false or misleading Australian Business Number on the worker’s payslip, which it cited as another violation.
Last month, an HR consulting firm was ordered to pay $3 million for making misleading Google advertisements.
The Fair Work Commission said the compliance notice is supposedly a “win/win for all concerned” since it would achieve the following:
And according to the court, the failure of the employer to comply has a corresponding penalty.
HRD previously reported on a case where a company was punished for failing to provide payslips to its employees.
The Fair Work Act states an employer must not give a pay slip that the employer knows is false or misleading.
“The provision of appropriate and correct payslips is an essential component of a fair system of wage regulation. Employees, particularly vulnerable ones, are entitled to know what they have been paid and by whom and specifically how their wages are broken down. They are also entitled to know the formal identity of their employer so that relevant queries about the terms of employment can be referred to the appropriate source,” the decision said.
“This is important so that in cases of dispute, the industrial regulator is able to quickly ascertain the identity of the relevant employer so that any misunderstanding can be expeditiously sorted out and any shortfall in entitlements remedied. In this context, it is central that those in authority can expeditiously search relevant official records so it can be known with whom they need to communicate,” it added.
Thus, since the employer failed to comply with the compliance notice and submitted a fraudulent payslip, the court imposed penalties against it.
It ordered a penalty of thirteen thousand, nine hundred and eighty-six dollars ($13,986.00) to the Commonwealth and for the employer to calculate the underpayments.
