Timesheet fraud – is lying about time worked on your timesheet ever ok?

Question: Is lying about time worked on your timesheet ever ok?

Answer: I want to scream at you NO. NO. NO. It is never ok to put incorrect times on your timesheet. Not only is this dishonest (which should be deterrent enough), but there is always the risk your timesheet discrepancies will be sufficient reason to justify immediate termination of your employment. However, instead of lecturing you, I am going to provide examples from case law to highlight how important accurate timesheets are to keeping your job.

The most recent unfair dismissal case on falsified timesheets

Lacase v Neon Group Ltd Ltd [2016] FWC 3058

Mr Lacase worked for Neon Cosmetics, an Australian cosmetics manufacturer, as a Compounding Supervisor. Mr Lacase was dobbed in by a fellow employee who Mr Lacase had told about claiming overtime without actually working the overtime hours. Mr Lacase’s ordinary hours were 7:45am to 3:51am. Mr Lacase had been claiming morning overtime payments of about 1 to 1.5 hours a day, which would put his start time to 6:45 or 6:15am so that in a normal week Mr Lacase would claim 38 normal hours and 6 overtime hours in his time sheets. The company’s Production Planner checked to see whether Mr Lacase was at work at these times by observing whether Mr Lacase’s car was in the staff carpark. It was not. When the allegations were put to Mr Lacase he denied he was lying about time worked on time sheets and that he was not working the overtime he was claiming. His employment was then terminated. Mr Lacase made an unfair dismissal application to the Fair Work Commission within the 21 day limitation period.

Commissioner Wilson decided that the termination was justified and Mr Lacase had not been unfairly dismissed:

·         In deciding on the balance of probabilities whether the alleged misconduct (fabricated timesheets) actually occurred the Commission will take into account whether it is satisfied of the proofs of the conduct and the need for honesty on the part of the applicant during the course of an investigation. Commissioner Wilson found that Mr Lacase had both claimed overtime on timesheets that had not been worked and had not been truthful when allegations were put to him. This is reason for dismissal.

·         Mr Lacase claimed that he worked overtime on various days and then aggregated his claims for overtime payment into a single period. Commissioner Wilson commented that this may be a potential defence where corroborative evidence of the matter is put forward, but Mr Lacase did not put such evidence forward in this situation.

Claiming time where you were actually working on your own business is sufficient reason for summary dismissal

Eghlima and another v Winco Systems Pty Ltd [2012] FWA 10836

Two brothers, David and Hamid, were employed as electricians by Winco Systems. They had worked on a number of projects including at the University of Sydney and the Star City Casino prior to being dismissed. David and Hamid had started their own electricians business without notifying Winco and had been conducting work in direct competition with Winco Systems in the time they had recorded as working for Winco. There were issues with the timesheets David and Hamid had completed in time claimed when the timesheets were compared to objective evidence such as phone, site and toll records and the discrepancies can be explained by time spent working on their own business. Deputy President Sams found the discrepancies “alarming and most disconcerting”. The discrepancies were very large for some projects, with 33 days being claimed for one particular project, but site access records showing David only worked 12 days and Hamid only worked 6 days. Given the evidence, Deputy President Sams found that even if the brothers resignation could be characterised as a dismissal, it would not have been unfair.

What if I am only claiming a little bit extra on my timesheet?

No. No. No. Even small amounts of additional time claimed on a timesheet may form a sufficient reason for dismissal, especially when combined with other conduct, such as if the employee acts deceptively towards an employer when the discrepancy is put to them.

One hour of overtime claimed on timesheet not actually worked – sufficient reason for dismissal
Ferris v Water-It Queensland Pty Ltd T/A Dig It Landscapes Pty Ltd [2013] FWC 7158
Mr Ferris was employed as a leading hand landscape gardener by Water-It. Water-It alleged that Mr Ferris had incorrectly completed his timesheet entry for 13 March 2013, adding an hour of overtime in which he had not worked. The previous day, Mr Ferris has received a reminder that timesheets were to be completed accurately and no overtime was to be performed without prior approval on that particular project and that failure to accurately complete start and finish times could lead to disciplinary action. The timesheet said Mr Ferris finished work at 5:30, but GPS evidence showed he finished work at 4:18 and arrived home at 4:55pm. Mr Ferris did not justify his conduct or seek an opportunity to review the timesheet, diary or other documents in this meeting where the discrepancy was put to him. In the course of the hearing Mr Ferris indicated that he claimed the additional hour in lieu of a call out he attended to later that evening. However, this overtime claim had not received the required prior approval.
 In considering whether there was a valid reason for dismissal relating to Mr Ferris’ conduct, Senior Deputy President Richards noted:
·         Mr Ferris had filled in his timesheet incorrectly despite the previous day being reminded of the importance of accurately completing timesheets and being provided with examples of how to correctly fill out a timesheet;
·         Although Mr Ferris claimed the hour was for a call out he attended later that day, he did not disclose this to his employer when given the opportunity – Mr Ferris did not avail himself of the opportunity to explain his defence. Regardless, the overtime claim had not received prior approval;
·         The 1 hour discrepancy alone was sufficient reason for dismissal when combined with the deceptive manner in which Mr Ferris acted when confronted with the discrepancy and seeking to mislead his employer about the time he arrived home, as the issue of trust and confidence arose when the matter was not openly and honestly explained by Mr Ferris when the employer was making inquiries.
 

Legal action against Belle Gibson – is there a cause of action that would succeed?

Introduction

You would have heard of Belle Gibson, the charismatic cancer survivor behind The Whole Pantry app, Instagram account and book which were launched with immense success in 2014. The wellness empire was based on Belle Gibson’s alleged cancer story of abandoning chemotherapy and radiotherapy in 2009 and curing herself through natural healing processes. She further reported the cancer had returned in 2014 to her liver, brain, spleen and uterus. Belle Gibson was also revered for her supposed donations to charity including $300,000 she said had been donated to a number of charities from the income of sales. In early 2015 Belle Gibson’s story was exposed as a web of lies, and she admitted in an April 2015 interview that none of it was true. She had never had cancer. She only donated about $7,000 of the purported $300,000 to charity. There has been bitter public outrage ever since. While scathing criticisms have been written of Belle Gibson all over the internet, no one seems to have seriously contemplated if legal action would even be successful. In this article I consider the criminal and civil causes of action that may be available and why they are unlikely to provide the public with satisfaction. While Belle Gibson is a resident of Victoria, I will consider NSW law, as this is what I am familiar with.

CRIMINAL

Belle Gibson’s case is not the first

This is not the first case of an individual falsely claiming they have cancer to obtain financial benefit from the public. There have been many before, including:

1.       Angie Emma Walsh

As a 36 year old, Walsh convinced people in Victor Harbour and Adelaide she had thyroid cancer and acute myeloid leukaemia, raising $10,000 for herself. In 2013 the Magistrate’s Court convicted Walsh of fraud and sentenced her to six months imprisonment suspended on condition of a $500, 18 month good behaviour bond. In the process of sentencing, Magistrate McGrath considered the seriousness of the offence to be significant given Walsh completed high school and university, was a capable person, and exposed her daughter to potential life without her through her lies.

2.       Vanessa Barry

Vanessa Barry lied about having a brain tumour, and through creating fake medical documents and holding a fundraiser, raised over $20,000. She later spent this on clothes and shoes. In May 2014 Barry pleaded guilty to obtaining property by deception but was sentenced without conviction due to her prior good behaviour and mental health. She received a 9 month community corrections order under a mental health assessment.

3.       Elizabeth Edmunds

In April 2014 Elizabeth “Elle” Edmunds claimed to have ovarian cancer. By September 2014 she claimed it had spread to her lungs. Edmunds raised $2,500 through social media exposure until her partner revealed on Facebook that Edmunds was a fraud. The NSW police showed a willingness to take action and Edmunds was charged with fraud in April 2015. Edmunds is yet to appear before the Local Court.

Belle Gibson’s case is far more complex than those described above. She created a far more comprehensive fake public and literary identity and created a wellness App and recipe book that consumers inspired relied upon. While Angie Walsh and Vanessa Barry appear to have gotten a light non-custodial sentence, this may not be the case for fraud of Belle Gibson’s size.

What is the relevant criminal offence?

The two most relevant offences under the Crimes Act 1900 (NSW) are:

1.       Fraud simpliciter – maximum penalty 10 years 

“192E Fraud

(1) A person who, by any deception, dishonestly:

(a) obtains property belonging to another, or

(b) obtains any financial advantage or causes any financial disadvantage,

is guilty of the offence of fraud.”

2.       Intention to defraud by false or misleading statement – maximum penalty 5 years

“192G Intention to defraud by false or misleading statement

A person who dishonestly makes or publishes, or concurs in making or publishing, any statement (whether or not in writing) that is false or misleading in a material particular with the intention of:

(a) obtaining property belonging to another, or

(b) obtaining a financial advantage or causing a financial disadvantage,

is guilty of an offence.”

Pending appropriate evidence, Belle Gibson’s fraud appears to satisfy the elements of both s192E and s192G. The prosecution would attempt to prosecute under s192E given the larger maximum penalty, but in the process of plea bargaining may settle on s192G in exchange for a guilty plea. If the elements of the offence are all there, then where is the problem in convicting Belle Gibson?

Potential problems:

1.       Discretion of prosecutorial authorities

There is no indication Victoria Police, who has the jurisdiction to undertake the investigation into Belle Gibson as she is a resident of Victoria, is investigating the matter or instigating criminal proceedings. The public cannot control which matters the police decide to prosecute. Even if the police manage to gather admissible evidence for each element of the offence and there is a reasonable chance a jury will convict, there are a number of discretionary factors police prosecutors and the DPP can take into account in deciding whether or not to prosecute, including:

·         whether the alleged offence is a matter of public concern

·         prevalence of the alleged offence and need for personal and general deterrence

·         the likely length and expense of a trial

·         the likely outcome in the event of a finding of guilty, looking at the sentencing options available; and

·         whether proceedings would be unduly harsh or oppressive.

For example, if a consumer affairs body initiates proceedings which result in what is perceived to be sufficient punishment and deterrence, commencing criminal proceedings may be unduly harsh.

2.       Mental health

S192E and s192G offences are to be tried summarily unless the prosecution elects otherwise (Schedule 1 Criminal Procedure Act 1986 (NSW)).  Section 32 of the Mental Health (Forensic Provisions) Act 1990 (NSW) can therefore apply (see also s31). Section 32 provides a procedure for Magistrate’s dealing with a defendant suffering a mental illness. If it appears to the Magistrate the Defendant is suffering from a mental illness but is not a mentally ill person, the Magistrate can:

a.       Adjourn proceedings, grant the defendant bail or make any other appropriate orders; and

b.      Dismiss the charge and discharge the defendant into the care of a responsible person or require the defendant attend a person or place for assessment and/or treatment of their mental condition.

There have been claims that Belle Gibson’s mental health is unstable. In particular, Elle magazine had this to say about what happened when they published an article on Belle Gibson:

"When the December issue came out, we had a ton of positive feedback from both long-time and new supporters of Gibson. And then we got this anonymous email:

It has come to my attention that you have published a story about a girl I have known my whole life. Her name is Belle Gibson, creator of "The Whole Pantry" app + book. And a so called "Terminal cancer patient" Unfortunately, there are a few things you might need to know before you consider publishing more about this woman. She's a compulsive liar. In fact, she got so tangled in her own web of lies living in Brisbane, she moved to Melbourne to start a new life of lies – "the cancer lie" this time. For one – This girl isn't 26 years old.

She was born in 1991, class of 08, Wynnum High School in Queensland. My younger brother was in her form class. Secondly, she never had/nor does she have currently any form of cancer (Where's the proof?) I've known Belle since her childhood (and am close with her mother) and she has always had a problem with fabricating stories from nothing on a regular basis. It's one thing to act as if she can cure "her cancer" by eating organic (which simply isn't true) but to give false hope to people who are ACTUALLY fighting cancer is nothing short of evil. You MUST be aware of this before you publish stories about this woman. She is selling her fake sob story in order to profit from her app + book sales. She is a wolf in sheep's clothing & a master manipulator.

Sincerely, Sick of seeing her lies published :)”

If Belle Gibson claims the protection of s32, she could like Vanessa Barry, avoid a prison sentence if the Magistrate believes it would be more appropriate to deal with her fraud through the s32 process.

CIVIL

It was reported in March 2015 that Consumer Affairs Victoria is investigating the nature of the fundraising appeals, including details of beneficiaries and net proceeds given.  There is no indication a Consumer Affairs body is investigating the fraud and misleading conduct behind Belle Gibson’s fraud. An investigation does not mean a prosecution would occur. If a consumer affairs body did decide to prosecute, which cause of action could it rely upon?

Misleading and deceptive conduct

Section 18 of Schedule 2 to the Competition and Consumer Act provides:

“18   Misleading or deceptive conduct

(1)  A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

(2)  Nothing in Part 3-1 (which is about unfair practices) limits by implication subsection (1).”

Belle Gibson’s business in selling the App and recipe book would come under the broad concept of “trade and commerce” described in Re Ku-ring-gai Co-operative Building Society (No 12) Ltd (1978) 36 FLR 134 (at 167) and Larmer v Power Machinery Pty Ltd (1977) 29 FLR 490 at 493. The “conduct” which was misleading and deceptive would be numerous announcements across her App, in her cook book and through media outlets that she was a cancer survivor who had healed herself through natural methods including her diet. Her fake identity was so comprehensive and calculated it would pass the threshold of deception required. A breach of s18 can result in a variety of remedies including injunctions, damages, and compensatory orders.

Who can bring action under the Competition and Consumer Act?

No consumer affairs bodies have brought civil action against Belle Gibson to date. The ACCC usually only have the resources to prosecute cases of national importance and are unlikely to prosecute Belle Gibson. Consumer Affairs Victoria has instigated an investigation, but this is unlikely to proceed to civil prosecution. Individuals can take action under the Competition and Consumer Act and class action is also possible. Section 236(2) creates a 6 year limitation period. However, the real issue is establishing damages. A consumer may have spent a few dollars on the App and the recipe book, but on an individual level there is a real feeling of betrayal and outrage at being deceived rather than any real loss.

Ancillary liability

The Competition and Consumer Act 2010 (Cth) provides for the possibility of suing third parties who were “knowingly concerned” in the breach (s75B). However, the relevant third parties claim to not have been in the know and took action as soon as they became aware of the fraud. The Australian publishers of the cook book Lantern Books (Penguin) never asked for evidence about Bell Gibson’s medical condition. They claim they published the recipe book “in good faith” and withdrew it from bookstores and publishing as soon as the story came out and Belle Gibson failed to respond to their requests satisfactorily. Similarly, Apple, who was responsible for publishing the App, removed the App from Australian and US App stores and soon after, removed the App from the Apple Watch. It is unlikely the publishers could be held ancillary liable in this situation.

Conclusion

While the elements for a criminal conviction for fraud and a civil conviction of misleading and deceptive conduct exist, the legal outcome of such cases is likely to be unsatisfactory for the outraged public. If criminal action is taken by a prosecutorial body, it is unlikely Belle Gibson will go to prison as she may come under s32 of the Mental Health (Forensic Provisions) Act 1990 (NSW). While Belle Gibson may be ordered to pay damages if civil action is taken by a consumer affairs body, it is very unlikely a consumer affairs body will take the case on. Individuals taking civil action under the Competition and Consumer Act 2010 (Cth) will face the difficult hurdle of establishing their loss. In the end though, it may not even matter. Belle Gibson created her alternative reality to feed her desire for public sympathy and attention. The emergence of the truth is perhaps a greater punishment for Gibson than anything the criminal or civil legal system can offer. There is probably nothing worse for a person who is addicted to public approval to be the subject of public hate.