Sham contractor slapped with $13k fine

The owner of a NSW trucking business has been fined for sham contracting and underpaying an employee

March 29, 2012

The owner of a failed trucking business in NSW has been slapped with a heavy fine after he was found guilty of sham contracting and underpaying an employee.

The Federal Magistrates Court has fined Villtruck Transport Services owner John Mineef $13,024 for underpaying an employee who was dismissed in early 2009 and was not paid his accrued annual leave entitlements.

The driver 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.

Mineef was buying, selling and repairing second-hand trucks before the business went into liquidation this year.

Under the sham contracting provision of workplace laws, it is illegal to misrepresent an employment relationship as an independent contracting arrangement.

Federal Magistrate Shenagh Barnes says Mineeff has shown a "careless disregard" for workplace laws. He was ordered to pay the fine to the employee to partially rectify the underpayment.

The Fair Work Ombudsman launched the legal action against Mineef, saying it could not prosecute the company because it is in liquidation.

Fair Work Ombudsman Nicholas Wilson says the penalty sends a message that misclassifying employees as contractors is a serious matter.

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