Liquidators of the company at the centre of Australia's largest tax fraud case say workers chasing almost $1 million in unpaid income are not entitled to payment before others owed money.
More than 300 workers paid through Plutus Payroll have told liquidators the company owed them before federal police swooped on it and charged 10 people.
Deloitte Financial Advisory has asked the Supreme Court of NSW to clear the way for it to deny workers payment before other creditors, saying many claimants were not Plutus employees and evidence was lacking to identify others as staff employed by the company.
Claimants could be out of pocket thousands of dollars once Plutus is wound up, if the Supreme Court of NSW agrees with liquidators.
Workers have reported missing payments after the Australian Federal Police closed the business in May 2017 and arrested alleged parties to a scheme prosecutors say involved signing contracts with employers to process gross wages and entitlements for their contractors, and then skimming taxes.
Of $997,000 in claims, workers are chasing $557,000 in superannuation, $196,000 in wages and $132,000 in salary sacrifice deductions claimed among other missing payments. An earlier Deloitte estimate given to the court in September 2017 put the total claims figure at $740,000, saying workers were claiming an average of $3277.
The claims are a small fraction of the $142 million tallied by liquidators in total, including $138 million from the ATO, as Deloitte winds up Plutus Payroll and a pool of companies operating underneath it.
Liquidators say before the arrests, Plutus was making payments to more than 4500 workers, many using the company as a paymaster and working at Australian Public Service agencies in Canberra through labour hire firms.
Investigating whether they were Plutus employees entitled to payment before other creditors, liquidators found the company appeared to have treated the workers who directly subscribed to its services as employees for taxation and superannuation purposes, and paid their remuneration.
Despite searches of the company's records and statements from workers, liquidator Tim Norman said in an affidavit sworn in November he could not determine that workers were directly employed by Plutus, and in other cases found they were not employees.
Many claimants had signed documents identifying them as both Plutus employees and contractors without employee status. Further questioning revealed they were not employed by the company but labour hire firms or businesses using contractors, Mr Norman said.
Plutus' books and records indicated workers appeared to have only been paid their wages and entitlements by the payroll service, and liquidators had found no documents that showed those workers performed any services for the company or its affiliates.
"None of the workers who supplied information to the liquidators were directed in the performance of their work by an employee of the worker companies," Mr Norman said.
"None of the workers who supplied information to the liquidators had ever attended the worker companies' premises.
"There are missing or incomplete records maintained by the companies. The directors, former directors and employees have not adequately explained the relationship between workers and the companies."
For contractors claiming unpaid income but who didn't respond to questions from liquidators, Mr Norman said his team found documents in the companies' records that did not identify their employer.
"My team could not locate any documents in respect of some of the workers and there appears to be a lack of information in the companies' books and records evidencing their employment by one of the companies."
Deloitte had not gained access to all of Plutus' books and records, and were told those in the control of the AFP may be subject to multiple warrants and legal professional privilege claims.
"There is a lack of information and an apparent inability on the part of the directors and the former directors of the companies to explain the companies' affairs including the existence, nature and amount of any employee claims," Mr Norman said.
The Supreme Court adjourned the matter until July 9.