Inside the million-dollar wage theft case against a Perth security business

The Fair Work Ombudsman (FWO) has initiated legal action against the former operator of the Perth security business Griffon Alpha Group Pty Ltd (Griffon Alpha Group). The FWO alleges that Sergey Stanislavovich Navasardyan committed serious contraventions under the Fair Work Act (FW Act) by deliberately underpaying employees close to $1 million in wages and entitlements.

Here, our experts explain the details of this case and how a wave of surprise FWO inspections in 2021 uncovered that this now-deregistered company knowingly underpaid 44 security guards, some of whom were visa holders from non-English speaking backgrounds.

The details of the underpayment case against Griffon Alpha Group Pty Ltd

It’s alleged that between December 2019 and May 2022, Mr Navasardyan was directly involved in underpaying 44 security guards his company employed by a total of $911,292.

Griffon Alpha Group employed workers on a casual basis for roles at events and venues such as concerts, sporting events, shopping centres, nightclubs, and construction sites. However, it’s alleged staff were paid flat hourly rates of $21 to $25, falling short of the entitlements outlined in the Security Services Award 2010 and 2020. This ultimately led to underpayments in casual loadings, penalty rates for weekends and public holidays, overtime, and shift allowances, leaving workers without their rightful earnings.

A significant portion of the alleged underpayments occurred on Sundays when workers were entitled to $49 to $51 per hour. Employees were underpaid, ranging from $33 to $78,787, with 22 employees reportedly underpaid by more than $10,000 each. These claims highlight the importance of meeting award conditions to ensure fair treatment and proper compensation for employees.

What are the penalties for wage theft?

With evidence that suggests that these underpayments were deliberate and systematic, the FWO alleges that the contraventions qualify as serious contraventions under the FW Act. This means the offences are subject to penalties 10 times higher than the maximum penalty ordinarily applicable and that Mr Navasardyan faces penalties of up to $133,200 per contravention.

This case is yet another stark reminder for business owners that it doesn’t matter where your organisation operates, if you’re doing the wrong thing like underpaying staff, you can expect the FWO to come knocking.

How Citation HR can help

While most business owners wouldn’t dream of intentionally committing wage theft, mistakes can and do happen – this is where Citation HR can help. Our workplace relations experts can complete a thorough HR compliance audit of your business – and the best part is that this service is included in our monthly, cost-effective subscription, which is designed to protect your business from costly risks.

For our clients, if any of this information has raised any questions about workplace underpayment penalties or you’ve got another matter you need assistance with, reach out to our experts via our 24/7 HR Advice Line.

Not a Citation HR client? Why not give our advice a try? Arrange a complimentary workplace compliance consultation with our friendly team today, and we’ll help you identify potential risks and address them before they turn into costly challenges. Get in touch with our friendly team for a confidential, no-obligation chat here.

About our author

Amanda Curatore is a qualified Senior Associate at Citation Legal and Citation HR. Amanda is highly experienced in providing workplace relations advice and assistance to clients in a wide range of matters including employment contracts, modern award interpretation, managing performance, bullying and harassment, terminations and managing risk. Amanda is also a Nationally Accredited Mediator through the Australian Mediation Association.