Sydney company owner fined $13,000 over sham contracting, underpayment
29 March 2012
The owner-operator of a Sydney truck company has been fined $13,024 for sham contracting activity and underpaying an employee, following a prosecution by the Fair Work Ombudsman.
The Federal Magistrates Court in Sydney has imposed the penalty against Sydney man John Mineeff, who owned and operated Fairfield-based company Villtruck Pty Ltd before it went into liquidation in 2010.
Villtruck was involved in purchasing, repairing and selling second-hand trucks.
Mineeff admitted being responsible for the company breaching the sham contracting provisions of workplace laws in relation to an employee who performed panel beating and vehicle detailing duties.
The employee, aged in his 30s, was dismissed in early 2009 and was not paid out his accrued annual leave entitlements.
He was then immediately re-hired as an ‘independent contractor’ to perform the same duties, when he should still have been classified as an employee.
The man was subsequently underpaid a total of $13,592.
Under the sham contracting provisions of workplace laws, it is unlawful to dismiss an employee in order to engage them as an independent contractor to perform the same duties.
It is also unlawful to misrepresent an employment relationship as an independent contracting arrangement.
Federal Magistrate Shenagh Barnes said Mineeff had shown a “careless disregard” for workplace laws and ordered him to pay his fine to the underpaid employee to partially rectify the underpayment.
Fair Work Ombudsman Nicholas Wilson says the Court penalty sends a message that misclassifying employees as contractors is a serious matter.
The Fair Work Ombudsman cannot prosecute Villtruck because the company is in liquidation.
Employers and workers seeking advice or assistance regarding independent contracting and sham contracting can visit the Fair Work Ombudsman’s website at www.fairwork.gov.au/contractors or call the Infoline on 13 13 94.
Follow the Fair Work Ombudsman on Twitter @fairwork_gov_au or find us on Facebook
Ryan Pedler, Assistant Director, Media & Stakeholder Relations,
(03) 9954 2561, 0411 430 902