Vic transport business operator fined for underpayment to driver

3 July 2013

The operator of a transport business in Victoria’s Goldfields has been fined $42,075 after he underpaid a truck driver and then restructured the business in an attempt to avoid back-payment.

Malcolm Garry Leech has received the fine in the Federal Circuit Court in Melbourne, as the result of legal action by the Fair Work Ombudsman.

Leech was responsible for a truck driver at Newstead-based freight transport business Foure Mile, which he owned with his wife, being underpaid $41,303 between November, 2005 and August, 2010.

Judge Grant Riethmuller has ordered that most of Leech’s fine go towards rectifying the underpayment of the employee.

The employee, a Harcourt man aged in his 50s, was underpaid the minimum cents-per-km rate, wages, annual leave entitlements, public holiday pay and wages in lieu of notice.

After the employee lodged a complaint, the Fair Work Ombudsman investigated and launched legal action in 2011 against both Leech and the company he operated the business through, Foure Mile Pty Ltd.

Foure Mile Pty Ltd was subsequently placed into liquidation, preventing the Fair Work Ombudsman from seeking fines and back-payment orders against it.

However, in his judgment on the case, Judge Grant Riethmuller said it appears that the transport business has continued to operate through a new entity, with Leech still as the controlling person.

“It also appears that the restructure of the business was to avoid the consequences of these proceedings, and that the underpayments remain outstanding,” Judge Riethmuller said.

“It appears that arrangements were put in place to ensure that any underpayments and penalties would not be able to be recovered from the First Respondent (Foure Mile Pty Ltd).”

Judge Riethmuller said Leech had “actively engaged in what is loosely described as asset stripping of the company in order to continue the business through a separate entity."

In imposing a penalty that was 85 per cent of the maximum available, Judge Riethmuller said: “there is clearly a need for deterrence”.

Acting Fair Work Ombudsman, Michael Campbell, says the Court’s decision sends a strong and important message that attempting to avoid paying an employee’s minimum entitlements is a serious matter and will not be tolerated.

“Successful legal actions such as this also benefit employers who are complying with workplace laws because it helps them to compete on a level playing field,” Mr Campbell said.

Employers and employees seeking assistance should visit or contact the Fair Work Infoline on 13 13 94. A free interpreter service is available by calling 13 14 50.

Media inquiries:

Ryan Pedler, Assistant Director, Media & Stakeholder Relations,
(03) 9954 2561, 0411 430 902

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