Former Linfox sub-contractor fined for underpayments


Former operator of now-defunct company Sumer Bagri fined $41,200 for 'deliberately' underpaying employees

Former Linfox sub-contractor fined for underpayments
The court has heard that Singh doctored his staff records in an attempt to cover up his actions.

 

The Federal Circuit Court imposes a $41,200 fine on the former operator of a road transport business for underpaying 12 casual drivers a sum of $143,000.

Judge Justin Smith says the fine includes a penalty for record-keeping disputes that is "90 per cent of the maximum".

Woolgoolga man Sumerdeep Singh’s now-defunct company Sumer Bagri delivered groceries ordered online as part of a contract with Linfox Australia, which had been contracted by Woolworths, in the north coast of NSW.

The court rules that the contract price paid by Woolworths to Linfox, and the sub-contractor price paid by Linfox to Sumer Bagri was well above the amount required for Singh to pay minimum entitlements to all his employees.

A Fair Work Ombudsman (FWO) investigation, which was launched following a complaint from one of the underpaid drivers, found that Singh had underpaid 12 casual employees over a period of three years.

However, the FWO was unable to take legal action against the operator after the company went into liquidation.

Singh later admitted underpaying his staff and accepted a claim that he withdrew $45,000 from the company funds to pay a deposit on a house.

The court has heard that Singh doctored his staff records in an attempt to cover up his actions.

Judge Smith orders the penalty to be paid to the truck drivers to "partially rectify their underpayments, which were not paid before the company went into liquidation.

"Mr Singh … deliberately falsified records to avoid being caught," the Judge says while noting that it was a serious matter to undermine the efficacy of the powers given to the FWO.

"… there is no excuse for deliberately falsifying records in order to deceive inspectors … and so divert them from their duty.

"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."

Acting Fair Work Ombudsman Mark Scully says the decision against Singh shows how seriously the courts are treating the conduct of those who seek to profit at the expense of their employees.

Scully says the company directors can be held accountable for their actions in the event that the companies are wound up.

While both Woolworths and Linfox are noted to have no involvement in the contraventions, Scully says 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.

"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."

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