PAYROLL OFFICERS GIVEN SUBSTANTIAL FINES FOR PAYROLL MANIPULATIONS
Three payroll officers who “reverse-engineered” false records during an FWO investigation have been fined a total of $121,000 as part of the largest penalty order won by the workplace watchdog.
Federal Court Justice Geoffrey Flick in signing off on agreed penalties totalling $891,000 noted one director’s admission that the financial documents had been concocted at his bidding in an effort to hide three Hero Sushi outlets’ deliberate underpayment of 94 employees over a 15-month period in 2015 and 2016.
Underpayments totalling $700,832.88 resulted from the companies’ “target” of keeping workers’ wages – many of them young international students or working holiday visa holders – between 20% and 25% of sales, the judge observed.
“There can be no doubt. . . that the failure to maintain records and the failure to provide pay slips to employees was part of a deliberate strategy pursued by the respondents.” Justice Flick said.
“The failure to provide pay-slips to employees provided them with no ability to check their hourly rates of pay.
“The provision of deliberately false records to the Fair Work Ombudsman was also part of the strategy to avoid scrutiny of the rates which had in fact been paid and to avoid scrutiny of the failure to pay loadings for (for example) week-ends and public holidays.”
The Ombudsman received the “false and misleading” documents after making nine requests of HSCC Pty Ltd, HSCK Pty Ltd and HSPF Pty Ltd between March and August 2016.
“It was during the course of a meeting at the Hero Sushi head office in Chatswood on 23 August 2016 that [one director] ultimately admitted that he had ‘reverse engineered‘ the documents produced,” said Justice Flick.
On one occasion some 91 pages were provided to the Fair Work Ombudsman; on another occasion some 99 pages were provided.
One director continued to persist at the meeting on 23 August 2016 that there had been compliance in circumstances where he knew that not to be the case.”
The Ombudsman found in favour of the Fair Work Office.
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