Fair Work Ombudsman takes action against small business that allegedly withheld $11,000 in government-funded parental leave

The Fair Work Ombudsman has commenced legal proceedings against the operator of a roadhouse in regional New South Wales who allegedly withheld more than $11,000 in government-funded parental leave payments from one of its employees.

Kulpreet Singh will face court as the former operator and part owner of Marrangaroo-based United Petroleum, as well as the director of Noorpreet Pty Ltd.

The Fair Work Ombudsman said the affected employee, who is now an Australian citizen, was on a 487 skilled visa working as a chef at the time she had her child.

But when the Department of Human Services transferred $11,538 to Noorpreet Pty Ltd in early 2015 for the business to transfer to the employee after she gave birth, the funds did not get through.

The issue was referred to the Ombudsman after the employee made a complaint to DHS that she did not receive her entitled payments under the Commonwealth Government’s Paid Parental Leave scheme.

In response, Singh is alleged to have forged a document to show he did in fact give the paid parental leave funds to the employee but that he did so in cash via her husband.

Singh ended up transferring the parental leave payments to the employee more than five months late.

With this being the first time the Ombudsman has taken action against an employer for this kind of breach, employment and industrial relations lawyer Peter Vitale says it indicates that employers generally do comply with their obligations to pass on parental leave entitlements to their workers.

“The employer’s [alleged] attempt to mislead the Ombudsman may have been a factor in the decision to commence proceedings in this case,” Vitale told SmartCompany.

With help readily available from the department and online, Vitale says passing on paid parental leave entitlements wouldn’t be harder for an employer than processing payroll.

“While there has always been some concern about the administrative burden the Paid Parental Leave scheme places on employers, it shouldn’t be an inherently difficult process,” he says.

Singh and Noorpreet Pty Ltd could now face penalties of more than $60,000 for both breaching the Paid Parental Leave Act by not paying entitled payments to the employee in time.

Additional breaches of the Fair Work Act regarding pay slips and records may see Singh and Noorpreet Pty Ltd also fined up to $5100 and $51,000 respectively.

“Employers who contravene the law and deliberately mislead investigators can expect to face legal action,” said Fair Work Ombudsman Natalie James in a statement.

SmartCompany contacted Marrangaroo-based United Petroleum, which shares the same contact details as Noorpreet Pty Ltd, but was informed that Singh has not worked there for a long time.

What your business can learn from this

With more and more information available online, Vitale says business owners should have a good handle on what all their legal obligations are.

“If you don’t understand what your legal obligations are, it is still your responsibility to find out,” he says.

“The information you need is becoming easier to find and if you are still in doubt, speak to an industry association, accountant or lawyer.”

If you are being investigated by the Fair Work Ombudsman, Vitale recommends seeking advice immediately.

“Co-operation with the Ombudsman – guided by expert advice – is often [the] best way to minimise the adverse consequences,” he says.

“You may be able to avoid litigation, but even if you can’t, the courts take cooperation into account in fixing penalties.”