Following an investigation by the Fair Work Ombudsman surrounding staff underpayments, it has been revealed by the Herald Sun, that disgraced businessman Shane McGrath, owner of Rainbow Flag Directory, is to face the Federal Circuit Court on November 12.

The allegations of underpayments have been levelled at McGrath by five ex-employees for periods of work undertaken between June and August of 2019 and follows a compliance notice being served by the FWO in February of this year.

Three of these employees were young workers, and the FWO believe four of the employees were allegedly paid no wages at all, while one was allegedly not paid for all hours worked.

The compliance notice that was served, required the company to calculate and back-pay the workers’ entitlements. However, it is alleged that the company, without reasonable excuse, failed to comply within the requested time frame, spurring the FWO to commence further legal proceedings against McGrath.  

The FWO allege that business regularly engage with telemarketing employees to cold call businesses to try to get them to buy advertising space in the online directory.

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 PEBS Group Pty Ltd, with four separate business names attached, all registered in May 2016, claim to operate some of the most popular gay and lesbian websites. With emails sent to potential advertisers spruiking ‘saturation package includes four websites and three editions in the local Rainbow Flag magazine. Yet, these claims remain dubious at best, with not all online directories listed in these emails working.

In fact, a quick look online, reveals a number of disgruntled individuals and business who have alleged that the business was a scam, having received numerous spam calls, and being duped out of refunds.

Even despite these revelations coming to light, McGrath and PEBS Group as recently as October had the gall to advertise for a position on its sales team – stating they “wanted people who have the hunger to make some serious dollars and want to change their lifestyles and have some fun along the way” and that the company pay “big commissions.”

Victoria in June of 2020 becoming the first state in Australia to pass legislation making deliberate underpayment of workers a criminal offence. The PEBS Group is facing a maximum penalty of $31,500, while Mr McGrath is personally facing a maximum penalty of $6,300.

The FWO also seeks orders for the company to comply with the compliance notice, which includes rectifying any underpayments in full, plus superannuation and interest.

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