Trucking owner wears heavy fine for underpayments

Trucking operator who underpaid a driver and then restructured the business to avoid reimbursing him cops $42,000 fine

Trucking owner wears heavy fine for underpayments
Trucking owner wears heavy fine for underpayments
July 3, 2013

The owner of a Victorian trucking company who underpaid a driver and then restructured the business to avoid reimbursing him has copped a heavy fine for his actions.

Federal Court Judge Grant Riethmuller fined Malcolm Garry Leech $42,075 for failing to pay driver Robert Farley the minimum cents-per-kilometre rate, wages, annual leave entitlements, public holiday pay and wages in lieu of notice.

Leech, who ran the Newstead-based Foure Mile with his wife in Victoria’s Goldfields region, was responsible for Farley being underpaid $41,303 between November 2004 and August 2010.

The Fair Work Ombudsman, which took legal action against Leech, could not go after Foure Mile because it was placed in liquidation last year.

However, Riethmuller says Leech started a new entity in 2011 called Foure Mile Holdings and transferred the vehicles from Foure Mile over to it. Leech told the court his motives were purely about asset protection, but the judge saw it differently.

He says Leech "actively engaged in what is loosely described as asset stripping of the company in order to continue the business through a separate entity."

"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)," he says in his written judgment.

"There is clearly a need for a deterrence, not only with respect to the specific conduct in the underpayments and with respect to the conditions but also with respect to the conduct in operating the business in such a fashion as to result in an employee being left without any practical remedies for the underpayment."

Riethmuller ordered most of Leech’s fine to go towards rectifying the underpayment to Farley, who sparked an investigation into the company when he complained to the FWO about the underpayments.

Inspectors began legal action against Leech and Foure Mile in 2011. Leech faced a maximum penalty of $49,500. The FWO and Leech agreed the fine should be between 45 and 70 percent of the maximum penalty.

But Riethmuller set the penalty at 85 percent of the maximum fine, saying the proposal from the FWO and Leech did not adequately reflect the conduct involved.

He says Leech did not set out exploit Farley, describing his actions as "a product of recklessness".

Leech has been given one year to pay Farley.

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