Liquidation didn't save him - the court chased the director who ran payroll himself
Liquidating the company did not wipe the slate. A director just paid for that the hard way.
On May 26, 2026, the Federal Circuit and Family Court of Australia ordered David Blumentals, the sole director of D365.Group Pty Ltd, to personally pay penalties for breaching the Fair Work Act: $12,654 for unpaid wages, $12,654 for unpaid annual leave, and $10,000 for an unpaid payment in lieu of notice. The penalties come on top of $148,812.82 in underpayments to 16 former employees that the court had already pinned on him.
The breaches ran from October 2021 to December 2022. According to the judgment, none of the 16 employees were paid their accrued annual leave when they left. Twelve never received their final wages. One was not paid a week's pay in lieu of notice. The court found Blumentals was responsible for the company's human resources and payroll functions and had actual knowledge of the shortfalls.
For HR and payroll leads, the first lesson is personal liability. The company is in liquidation, yet the regulator chased the individual behind it - and won. Fair Work Ombudsman Anna Booth said operators can be pursued in court even after a company is wound up, pointing to a "strong public interest" in holding individuals to account for "alleged involvement in significant employee underpayments."
The second lesson is the offboarding trap. When staff chased their money, the judgment says, their complaints were "either ignored or met with an unlawful demand to sign an offboarding letter." A Fair Work inspector's file note records that she told Blumentals withholding pay until staff finished extra offboarding steps was not allowed - once an employee resigns, "they are within their rights to refuse to sign further contracts." Tying final pay to fresh paperwork after someone leaves is a compliance hazard, full stop.
The third lesson is history. The same company was found to have breached the same sections of the Act in 2019, in a matter involving another former worker and $9,604.11 in underpayments. Those orders were made against the company, not Blumentals personally, but he was its sole director then too. The court treated the repeat as aggravating and accepted the regulator's submission that the lack of earlier personal findings against him was "likely to have been the result of good luck, rather than good management."
The judgment also raised what it called the "real possibility" of a "Phoenix-style venture." A creditor lodged a wind-up notice, and days later Blumentals registered a near-identically named entity, which was later renamed again. The court said it was "very difficult to avoid the impression" that he was shifting the identity of his enterprise to blur the link to his conduct.
Blumentals did not appear at the penalty hearing. In earlier emails and in comments attributed to him in a trade publication, he denied underpaying anyone and said some pandemic-era hires were "phony" and had "fluffed" their resumes, while others "gamed" the time-recording system. The court found those remarks showed no contrition and, with his refusal to engage, justified a stiffer penalty.
The bottom line for HR: final entitlements outlast insolvency, restructures, and rebrands. Conditioning final pay on extra sign-offs invites a regulator's attention. And a director who personally runs payroll can personally foot the bill.
