The operator of a former transport company has been penalised after the Federal Court found 12 of the company’s casual drivers had been short-changed a total of $143,600 over three years.
Judge Justin Smith imposed a total penalty of $41,208 against Sumerdeep Singh, including a penalty for record-keeping contraventions that is 90 per cent of the maximum.
Singh’s former company, Sumer Bagri Pty Ltd, previously delivered groceries on the NSW North Coast. Sumer Bagri delivered groceries ordered online under a contract it had with Linfox Australia, which had been contracted by Woolworths.
Judge Smith found Mr Singh’s contraventions to be “serious” and “deliberate”.
“Mr Singh … deliberately falsified records to avoid being caught …” Judge Smith said.
The court heard Mr Singh doctored his employee records in an effort to cover up the underpayments.
Both the contract price paid by Woolworths to Linfox and the sub-contract price paid by Linfox to Sumer Bagri was well above the amount required for Singh to pay minimum employee entitlements.
While both Woolworths and Linfox had no involvement in the contraventions, acting Fair Work Ombudsman, Mark Scully, noted that better oversight of their supply chain may have avoided the significant underpayments.
“Outsourcing is a legitimate business arrangement – but in our experience, in highly competitive markets, it also increases the risk that workers will be underpaid, sometimes quite deliberately,” Mr Scully said.
“Businesses at the top of the supply chain should maintain a level of control and oversight that enables them to be confident that the workers at their worksites and in their supply chains are receiving their full lawful entitlements.”
Company directors held to account
The Fair Work Ombudsman investigated and substantiated a compliant from a driver but was unable to take legal action against the company after it went into liquidation.
Judge Smith noted that it was a serious matter to undermine the efficacy of the powers given to the Fair Work Ombudsman.
“It is central to the Ombudsman’s functions that there be a reliable way of determining whether the minimum conditions of employment are being maintained. That way is to keep accurate records.”
“There is no excuse for deliberately falsifying records in order to deceive inspectors … and so divert them from their duty,” Judge Smith said.
Mr Scully said the decision against Mr Singh shows how seriously the courts are treating the conduct of those who seek to profit at the expense of their employees.
Mr Scully says the agency is prepared to hold company directors to account for their actions in the event that companies are wound up.