Employer says wrong ATO information 'caused damage' to staff's security benefits
A finance manager recently defended his position before the Fair Work Commission (FWC) about the records that he sent to the Australian Taxation Office (ATO) about his employer’s payroll, which eventually triggered his termination.
The company said that his submissions were “false,” which consequently harmed its staff since the alleged inaccuracy affected their social security benefits.
Refused to change ATO records
Raju Narendranathan Vetiyatil held the position of finance manager at Agripower Australia Ltd from November 2021 until his termination on July 7, 2023.
Among his responsibilities was overseeing the employer’s payroll processes. However, his employment was abruptly terminated via email due to his refusal to modify information provided to the ATO regarding Agripower's payroll.
Agripower alleged that the information supplied to the ATO was "knowingly false and caused damage" to other employees.
The company mines, processes, markets and globally exports diatomaceous earth, a silicon fertiliser and soil amendment product, from its open-cut mine near Greenvale, in the Charters Towers region in central outback Queensland, processed at its processing facility at Greenvale.
Agripower employs between 14 and 30 staff depending upon its ability to recruit and retain suitable staff and its own operational and financial constraints and considerations.
Payments ‘not yet disbursed’
According to records, in 2023, Agripower had significant cash flow issues and, for a period of weeks, did not pay its staff any wages, including Vetiyatil. During the period where no wages were paid Agripower’s fortnightly payroll was still processed by Vetiyatil.
Agripower provided information to the ATO through the Single Touch Payroll (STP) system. Vetiyatil was authorised by Agripower to access the ATO portal and to report on behalf of Agripower on matters pertaining to the STP system.
Vetiyatil held the belief that reporting wages as soon as they were processed, irrespective of actual disbursement to employees, was necessary, in line with the ATO's guidelines.
The finance manager’s point of view led him to report payments to employees that had not yet been disbursed, causing complications for some individuals whose social security benefits were adversely affected by Centrelink adjustments based on the STP portal information.
An exchange of emails between Agripower's senior management and Vetiyatil occured, wherein he was instructed to rectify the STP report.
His refusal resulted in his immediate dismissal by Agripower's founder and managing director, Peter Prentice. On July 26, 2023, Vetiyatil lodged an application, alleging unfair dismissal.
Employer’s lack of ‘accounting knowledge’
In the employer's termination letter, Prentice wrote that he was "appalled" that he had "advised false information to the ATO and that he continued to act against instructions."
"Acting recklessly like this and providing knowingly false information to the ATO, leaves me no choice than to terminate you on these grounds," Prentice said. Meanwhile, the finance manager stood by his decision.
"The [employer's] mistaken position was (and continues to be) that staff’s pays are to be paid when there is money, and the pays are to be accounted and reported to ATO only when actually paid and not when they are due in accordance with employees' contracts," he said.
"I understand that it is unlawful not to pay staff on the due date of their salary payments (or ‘pay event’ pursuant to ATO requirements and the Fair Work Act)."
He emphasised that "as a qualified and chartered accountant," he "believed [he] had discharged his job duties to the best of my efforts."
"Unfortunately, [the employer] does not have the necessary accounting knowledge and there was no one else within the [company] t having the same level of accounting knowledge as me who could stand by my side," he added.
Was there unfair dismissal?
The FWC noted that there “were real, tangible and immediate consequences of Vetiyatil’s conduct upon employees who relied heavily on Centrelink benefits such as sole parent allowances and the like.”
However, it said that Agripower’s evidence was not able to establish malicious intent that Vetiyatil “knew that the information he provided to the ATO was false.”
“The simple version of Agripower’s argument is that Vetiyatil lodged an STP report indicating that certain monies had been paid to employees when, in fact, the payments had not been made,” the FWC said.
“Vetiyatil refused to change the reports sent to the ATO because he genuinely thought that he had made the initial lodgments correctly and that he was not, therefore, allowed to alter those reports,” it added.
The FWC said that it was “not satisfied” that he “lodged reports to the ATO that he knew to be false.”
It also said that the employer “could have invited [him] to a meeting upon his return to work and given him the opportunity to respond to the employer’s concerns at that meeting.”
It further said that “Agripower could have referred the matter to its taxation advisers. [It] chose to simply dismiss Vetiyatil, and as a result, it did not give him the opportunity to respond to the reasons for his dismissal.”
Thus, the FWC found that he was unfairly dismissed. It then ordered the employer to pay him compensation.
