Fair Work Ombudsman takes legal action against former D365.Group owner

The Fair Work Ombudsman has commenced legal action against David Mark Blumentals, who it described as the former owner-operator of IT services company D365.Group Pty Ltd, alleging he was involved in underpaying workers almost $150,000.

According to the Ombudsman, Blumentals was the sole director, shareholder and company secretary of D365.Group, which was placed into liquidation in 2023.

The company provided services in relation to Microsoft enterprise products, including Dynamics 365 and Power BI.

The Fair Work Ombudsman investigated the company after receiving what is stated were requests for assistance from several workers. The Ombudsman alleges the investigation found that Blumentals was involved in his company underpaying 16 workers a total of $149,240 under the Fair Work Act between October 2021 and December 2022.

According to the Fair Work Ombudsman, the allegedly underpaid workers were IT consultants based in Sydney, Melbourne and Brisbane. Seven of the workers were allegedly visa holders.

The Ombudsman alleges that 16 workers were not paid their accrued annual leave entitlements at the end of their employment and 12 of them were not paid their wages in full for the final weeks of work they performed.

One was allegedly also underpaid payment in lieu of notice of termination entitlements.

Alleged individual underpayments range from $4,581 to $23,749.

Blumentals faces penalties of up to $13,320 per breach for multiple alleged breaches of workplace laws.

The Fair Work Ombudsman is seeking that the court impose penalties against Blumentals as well as an order that he personally rectify the alleged underpayments in full plus interest.

A directions hearing is listed in the Federal Circuit and Family Court in Sydney on 15 September 2025.

Employees “never underpaid”

Blumentals told techpartner.news that during 2020-2021, and due to COVID, several hires were made via Microsoft Teams meetings without the standard in-person interviews or reference checks. 

“Sadly, this practice resulted in what can only be called “phony” hires as applicants “fluffed” their resumes to get a job in difficult times. These fakes were identified quickly with employment terminated and subsequent recriminations,” he stated.

“All our employees were working from home. To ensure viability, we required all employees to ensure work activities were recorded as time entries linked to customer and project accounts in our ERP software. 

“Of course, we continued to pay according to contracted 38 hour or 40 hour work weeks. Unfortunately again, some employees “gamed” the system either submitting fake time entries, partial entries or nothing at all – many coming to light only during audit at time of offboarding.

“I can assure you that in all cases employees were never underpaid, if anything they were overpaid! (paid hours far exceeding worked hours). Also worth noting is the significant investment made in every employee – tens of thousands of dollars spent on training, examination and certification.”

According to Blumentals, throughout 2020-21, every employee received their pay fortnightly “without fail”, regardless of whether they were on sick leave, taking leave for COVID vaccinations and recovery or on annual holiday leave.

“Unfortunately, these failings did take their toll on the business and in 2022 I sought, with our lawyers at the time, a Solvency Report into the business,” he told techpartner.news.

“While concluding that the Company was solvent, the continued external funding for this business did become an issue along with its business model. The business subsequently ceased trading and was placed in Administration during September 2023."

“All employees at the time were offered, and accepted, new roles," according to Blumentals.

“The good news since then is that the team has worked hard to support our customers, doing great work both in Australia and internationally. We value our team highly and are proud of the fact that many have worked together now for 5 years or more.”

According to Blumentals, the company’s Australia-based team members subsequently joined its global businesses, focussed on servicing overseas customers.

Detering breaches

Fair Work Ombudsman Anna Booth stated that business operators need to be aware that they can be pursued in court even in circumstances where their company has been wound up.

“There is a strong public interest in demonstrating our commitment to taking enforcement action to ensure individuals are held to account for alleged involvement in significant employee underpayments,” she stated.

“Whether against directors, owners or any other individual accessory, we will continue to take court actions to help employees and to seek penalties to deter breaches.