Reseller liquidated after $500,000 fine for underpaying workers

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Reseller liquidated after $500,000 fine for underpaying workers

Darwin reseller Hallmark Computers has gone into voluntary liquidation a month after being slapped with a $516,000 fine by the Department of Immigration and Border Protection for underpaying workers on the 457 skilled visa scheme.

The penalty is not the collapsed firm's only outstanding debt – Hallmark also leaves a string of trade creditors, including $28,000 owed to Synnex, $10,200 to Leader Computer Systems, $4,900 to Bluechip Infotech, $4,000 to Ingram Micro and $2,000 to Dicker Data.

Hallmark called in liquidators GS Andrews Advisory on 12 July, with the insolvency practitioner closing down the business and terminating all of its staff. The liquidator's report did not indicate whether creditors were likely to see a return through the liquidation process.

In June, a federal court found the company had engaged in "deliberate, deceptive and systematic" abuse of workers employed under the 457 skilled visa scheme.

The court heard that Hallmark owner Ashok Alexander coerced employees from India and the Philippines into returning a significant pay packet every fortnight in cash under threat of losing their job and deportation.

This meant that employees' annual salaries were pushed below the minimum threshold for 457 visa holders, while appearing to the Immigration Department to be making legitimate wage payments.

Alexander previously claimed to CRN's sister title, iTnews, that he had reached an agreement with the workers to pay them $45,000 per annum – under the 457 threshold but in line with the salaries earned by organisation’s local staff, he said.

The company and its owner were hit with fines at the top end of the sentencing threshold, which Judge Robert Buchanan said would ensure the risk of being caught breaking 457 rules is "not seen by those who commit civil penalty offences as an acceptable cost of doing business".

Alongside the $516,000 fine, Hallmark and Alexander were also told to pay back the three 457 visa workers still employed at the company a combined $66,000, and the Commonwealth another $17,500 in taxes.

GS Andrews has been contacted for comment. Ashok Alexander would not comment. 

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