It's unethical because he puts some errors to make the work look like human work and he also reports his employer 40 hours instead of 2 hours which is not acceptable.
On the other hand, he doesn't want to lose his job and even gave the example of "starving children" so it looks like he's stuck with it.
If he developed the software during the working hours and used the company resources while developing it but still tries to own the software and selling it to his employer, it's also unethical but I already told that "I would live with this lie" because his employer never asked his to automate the job, he did it himself. By selling the software, he can even save their money by avoiding the verification and also will have to lie once and then he can relax himself. So it's a grey area for him and probably better than trying to legitimate himself or losing his job.
On the other hand, he doesn't want to lose his job and even gave the example of "starving children" so it looks like he's stuck with it.
If he developed the software during the working hours and used the company resources while developing it but still tries to own the software and selling it to his employer, it's also unethical but I already told that "I would live with this lie" because his employer never asked his to automate the job, he did it himself. By selling the software, he can even save their money by avoiding the verification and also will have to lie once and then he can relax himself. So it's a grey area for him and probably better than trying to legitimate himself or losing his job.