A series of cases alleging underpayment, fraudulent payslips and records, lying to the regulators and the forcing of cash backs have been launched by the Fair Work Commission against United service stations in Tasmania and South Australia.  Within these serious allegations are clear warnings for all operators.

A series cases (some of which are connected persons/businesses) alleging underpayments and other unlawful conduct by The Fair Work Ombudsman, three in Tasmania and one in South Australia.

Tasmanian Case Review

KLM Foods Pty Ltd, which operated the United Petroleum Sandy Bay and United Petroleum Kingston outlets in Tasmania is facing court as well as the Director Mr Loveleen Gupta.  A connected business, Vizaan Pty Ltd, whose sole Director is married to Mr Lovleen Gupta, is also facing court as the employer of one of the workers from the Kingston location.

The Fair Work Ombudsman alleges the four impacted workers, all migrant workers on visas, one of who was a junior at the time, were unlawfully low rates resulting in a total of $20,230 underpayments in only 12 weeks.

The FWO alleges the workers were paid flat rates (ranging from $16-$23 per hour depending on the employee) for a capped number of hours per week.  It is alleged that the employees were required to work more than the capped number of hours without any payment at all.

The workers were provided with false payslips and false records were kept in an effort to hide the underpayments.

These false payslips and records were provided to the FWO when they began investigating.

One of the employee was underpaid a total of $6,353, which was paid to the employee as backpay when the FWO began investigating, however after the employee received the payment Mr Gupta forced the employee to return the money in the form of an illegal cash back payment in June 2023.

Award breaches are also alleged around the requirement for written agreements for part-time staff.

Fair Work Ombudsman Anna Booth said alleged underpayments of visa holders are treated particularly seriously.

“Employers need to be aware that taking action to protect potentially vulnerable workers, including visa holders and young workers, is among our top priorities,” Ms Booth said.

“Employees must be paid all entitlements – and pay must cover all hours actually worked.”

“The alleged providing of false records is serious and unacceptable conduct. Employers should be aware our experienced inspectors will test whether time and wages records are legitimate. If you use false records you will be found out.”

“Any employee with concerns about their pay or entitlements should contact the Fair Work Ombudsman for free advice and assistance.”

South Australian Case Review

In South Australia, the FWO has commenced a separate action against Sai Enterprises Pty Ltd and Director Raman Monga, which operated the United Petroleum at Queenstown in Adelaide in 2021, alleging that three workers, two of which were international students, were not paid a total of $2,668 in accrued but untaken annual leave entitlements at the conclusion of their employment.

The FWO also alleges Sai Enterprises breached workplace laws by failing to issue the workers with pay slips within one working day of making a payment and failing to have written agreements for part-time staff.

The impacted workers were back-paid in full after the FWO started investigating.

Penalties Review

“These cases are subject to the old penalty regime, not the new Wage Theft Laws.  Had the new laws applied the businesses would be facing $7.8 million in fines and individuals would be facing $1.5 million in fines, or equivalent jail time”  explains ACAPMAs Elisha Radwanowski.

“As it stands under the old penalty regime the businesses are facing $66,000 per contravention and the individuals between $13,320-$16,500 per contravention.  This is not an overall number, that is per contravention, which means per person, per payslip and per false record”, continued Elisha.

For more on the new Wage Theft Penalties see:  https://acapmag.com.au/2023/12/maximum-10-year-jail-term-for-wage-theft/

Learnings for all businesses

“These cases came to the Fair Work Ombudsman’s attention as part of a proactive compliance program that the FWO was running throughout the United Petroleum network.  That is to say that these cases were not the result of a complaint from any of the impacted staff, but rather were a result of concerns raised in the network generally”, explains Elisha.

“The FWO undertook proactive audits at 20 sites and uncovered a further $6,584 in underpayments to 20 workers, concerning which it issued Compliance Notices to the operators to pay back.  It is understood that these notices were all complied with and all backpay was paid.  An additional 5 operators were issued with cautions in regard to record keeping”, added Elisha.

It is understood that the FWO network investigations are ongoing.

“What every business needs to take away from this is a couple of pointed reminders, and a big dash of common sense.  This is a clear reminder to all operators that even if your staff are happy with ‘arrangements’ onsite, the regulator can, and likely will, visit you soon and will respond to any non compliances”.

“It is also a reminder that wage rates are part of the compliance picture, but so are records, timing of payslips and award requriements, such as the communication of guaranteed hours and any changes to them.  These requriements cannot be overlooked”, concluded Elisha.

Here to Help

ACAPMA members are reminded that ACAPMA has a series of resources from Quick Reference Guides to template letters and investigation and reporting checklists that can assist with ensuring compliant and consistent responses in this area, and can call on the advice and support of the ACAPMA Employment Professionals via employment@acapma.com.au .

HR Highlights are things to consider, implement and watch out for in your business.

They are provided as general advice and you should seek further advice on your situation by emailing employment@acapma.com.au it’s free for members.

ACAPMA Membership is affordable at only $860 per year for a single site and valuable with sites gaining HR advice support and representation as well as a raft of other benefits and discounts.  Click here to learn more about ACAPMA Membership.

Elisha Radwanowski BCom(HRM &IR)
Executive Manager Employment and Compliance