Payslip forgery: disgruntled worker wins $250K payout


Payslip forgery: disgruntled worker wins $250K payout

A company that falsified payslips to cheat an employee out of entitlements has been ordered to pay more than $250K compensation.


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A case of sustained “malice” against the former COO of Signostics Pty Ltd has resulted in his complaint being upheld in the Federal Circuit of Australia, and his former employer – which falsified payslips to cheat him out of entitlements – ordered to pay more than $250,000 in compensation.

The company – formerly owned by Echonous Inc – which went into liquidation earlier this year, had repeatedly ignored and invalidated the employee’s concerns about the handling of a restructure over the period 2016-2017, causing “aggravated circumstances” which led to his resignation in August 2017, after 12 years of service.

He then brought a claim in court that Signostics – a producer of handheld medical diagnostic devices – had cheated him out of accrued leave, incentives and salary entitlements, and caused loss of reputation, pain and suffering; also seeking civil pecuniary penalties for contraventions of the Fair Work Act.

The employee had previously entered into an agreement with his manager to sustain two large paycuts during the period of the Global Financial Crisis in 2008, dropping his salary from $150,000 to $120,000 and then to $100,000.

The agreement was that he would be paid back the lost monies amounts, when one of two events occurred: a mergers and acquisitions transaction, or an influx of funding of $10m or greater. Despite these conditions being satisfied in 2015, the employee’s correct salary was never backdated. Furthermore, at the time of ending his employment, the worker was entitled to 431.5 hours of untaken annual leave, amounting to around $41,000 – yet was only paid out $7870.

Clear evidence of the falsification of his payslips by the company’s US-based external payroll provider – which listed an address he had only moved to after the date on the payslip, and a date in American format – added weight to the case which was upheld by Judge Heffernan.

Position untenable

The COO had become a “thorn in the side” of senior management, said Judge Heffernan, due to his demands that the company inform staff about an upcoming restructure that would lead to loss of employment Australia-wide.

Despite the fact a decision had been made to retrench the entire finance, quality, regulatory and customer support divisions to the USA, the senior team chose to keep this information quiet – in direct contravention of the Fair Work Act.

The worker fought for the rights of staff to know about the upcoming job losses by repeatedly raising the matter with the CEO and CFO, and was delayed and rebuffed, with the managers claiming that legal advice was being sought. His requset for a voluntary redundancy during the restructure, was denied, and he eventually tendered his resignation in February 2017, giving six months’ notice.

When he later requested evidence of his leave entitlements, management instructed its external US-based payroll provider, ADP, to adjust the leave hours owing from 426 down to just 13.2

“I accept that once the respondent (Signostics) realised that the applicant was, from its perspective, less co-operative than it would have liked, having been told of the respondent’s decision to drastically reduce the size of its Australian operations and retrench most of its local work force, it determined to make his position with it untenable and made a series of decisions aimed at avoiding its obligation to pay the applicant his full entitlements when his employment ceased, “ said Judge Heffernan.

The employee was awarded $110,000 in pecuniary penalty, $7000 under the Fair Work Act for loss of reputation, pain and suffering, plus more than $133,000 in lost entitlements.

“There is no evidence on which I could conclude that the respondent, now in liquidation, has at any stage accepted responsibility or expressed remorse for the breach,” said the judge.

Read the judgment

Bartlett v Signostics Ltd (In Liquidation) [2019] FCCA 2989 (21 October 2019) 
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