Australia’s workplace watchdog, the Fair Work Ombudsman, has commenced legal action against the operator of a Queensland transport business, alleging he implemented an unlawful cashback arrangement involving JobKeeper payments.

The JobKeeper programme was a stimulus package, first announced in March 2020, which aimed to help keep Australians in jobs and tackle the significant economic impact of the coronavirus. The programme ended on 28 March 2021.

Facing the court is Khan Andrew Buchanan, a sole trader. He operates a business trading as RiverCity Bus Service, a school and charter bus business servicing passengers in and around the Brisbane and Logan areas in Queensland, Australia.

Fair Work Inspectors investigated after a worker that Buchanan had employed on a casual basis as a bus driver, between 2017 and 2020, lodged a request for assistance.

Between March and September 2020, Buchanan received fortnightly AUD 1,500 (USD 1,115) JobKeeper payments from the Commonwealth Government for the driver and transferred these payments in full to the driver’s bank account.

Each fortnight, the driver’s usual wages were never more than the AUD 1,500 (USD 1,115) JobKeeper payments.

It is alleged Buchanan breached the Fair Work Act by requiring the driver to enter into a cashback arrangement. As a result, the driver was required to pay Buchanan each week to an amount that equated approximately to the difference between the net JobKeeper payment he received into his bank account and his wages for hours worked in the previous week.

It is alleged that in total, Buchanan unlawfully required the driver to repay him a total of AUD 5,805 (USD 4,315) in JobKeeper payments. It is also alleged that Buchanan also committed a further breach of the Fair Work Act on one occasion, in September 2020, when he received AUD 1,500 (USD 1,115) JobKeeper payment from the Commonwealth Government but paid the driver only AUD 1,035.60 (USD 769) of the payment.

Buchanan rectified the alleged underpayments in full earlier this year after being contacted by Fair Work Inspectors, back-paying the employee a total of AUD 6,270.40 (USD 4,661).

Fair Work Ombudsman Sandra Parker said the regulator was prepared to take action to uphold the integrity of government programs.

“Cashback allegations are treated particularly seriously by the Fair Work Ombudsman, and we will not tolerate any employers unlawfully requiring workers to pay back any of their wages or entitlements,” Parker said.

The Ombudsman is seeking court-imposed penalties against Buchanan. He faces maximum penalties of up to AUD 13,320 (USD 9,901) per contravention for two alleged contraventions of the Fair Work Act.