Truck company owner fined $13,000 over sham contracting, underpayment

The owner-operator of a Fairfield, Sydney-based truck company, Villtruck Sydney, has been fined $13,024 for sham contracting activity and underpaying an employee, following a prosecution by the Fair Work Ombudsman. John Mineeff owned and operated the company Villtruck before it went into liquidation in 2010.

Villitruck 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. He 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 said the 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.