The director of a Japanese restaurant has been fined almost $25,000 for serious contraventions of the Fair Work Act including “reverse engineered” pay records and asking a short-changed employee not to “sell me out”.
Federal Circuit and Family Court Judge Chris Kendall imposed fines on both the director and his company, Quickpoint Pty Ltd. For contraventions relating to two casual employees at the Perth restaurant who received flat rates of between $15 and $16 an hour. “Well below” their minimum entitlement.
After learning he was being investigated by the Fair Work Ombudsman investigation, the employer provided the employees with 18 and 27 “reverse engineered” pay slips respectively, and further supplied the Fair Work Ombudsman investigation with records of hours and payment summaries.
“Context matters and to characterise the conduct relevant to the contraventions in this matter as being ‘serious’ is, frankly, an understatement,” the judge observed.
“In effect, the approximate amount that the employees were paid was ‘reverse engineered’ – with false hours so that the amount [they] were paid would appear to be legitimate.
“In other words, the [company and director] contrived to record a reduced number of hours worked by their employees so that a calculation of those hours as against the award rates would equal the amount of money that was actually paid to the employees.”
Not only was this “not a straight forward task”, but it required “a fair degree of deception”, Judge Kendall said.
While this led to the creation of false payment summaries, he continued, the false payroll and time records amounted to a “far more dastardly contravention”.
“The latter contravention is extremely dishonest conduct whereas the former contravention is an attempt to cover up this dishonest conduct when records had to be produced.
“Overall, in that context, the [director’s and company’s] conduct is reprehensible.”
Judge Kendall said that the employer’s previous failure to provide the two workers with payslips meant that when it handed them the false ones it “made it more difficult for them to discover how their rights had been treated in such a cavalier fashion by [the company and director]”.
“This conduct is bad enough.”
“However, on two separate occasions, [the company and director] then provided this false information to [Fair Work inspectors].
“This only compounded a systemic pattern of dishonest conduct.”
Relevantly, the judge said, “all of this occurred against the backdrop of what the court interprets as a blatant attempt by [the company and director] to manipulate or threaten their employees with their jobs should they not support [the company and director] and support a concerted attempt to deceive the [FWO].”
Examples of such conduct included the director advising the husband of one of the workers that his wife should “not say anything” and “if thing goes bad there may not be a shop to work in”, and warning the other worker “Don’t sell me out”.
“These actions, contextually, make it clear that the breaches of Fair Work Act the subject this proceeding were calculated and very serious.”
Given that the frequency of underpayments in the hospitality industry made the need for general deterrence “high”, Judge Kendall penalised the director $24,580 out of a maximum $50,400 and Quickpoint Pty Ltd $168,415 out of a maximum $378,000.