$550,000 penalty for Sydney company that deliberately underpaid migrant workers

Under the Protecting Vulnerable Workers laws, the maximum penalties for serious contraventions are 10-times the penalties which would ordinarily apply.

The Fair Work Ombudsman has secured a total of $558,190 in penalties in court in a case that involved a Sydney-based company deliberately and systematically underpaying migrant employees.

The Federal Court has imposed a $550,000 penalty against Winit (AU) Trade Pty Ltd, a Hong Kong-owned company that provides warehousing and distribution services in Sydney for products sold on online platforms, including eBay.

In addition, the Court has imposed a $8,190 penalty against the company’s sole director and general manager at the time of the contraventions, Song Cheng.

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Between 2014 and 2019, Winit underpaid nearly 400 employees – most from migrant backgrounds – a total of more than $3.6 million.

The Fair Work Ombudsman’s litigation against Winit focused on a sample of 30 migrant employees who were underpaid a total of $368,684 under the Services and Wholesale Award 2010 between July 2017 and June 2018.

Three of the underpayment contraventions met the definition of ‘serious contraventions’ under the Protecting Vulnerable Workers laws because of the deliberate and systematic conduct.

Under the Protecting Vulnerable Workers laws, the maximum penalties for serious contraventions are 10-times the penalties which would ordinarily apply.

Fair Work Ombudsman Anna Booth said the penalties imposed demonstrate that employers who exploit migrant workers in Australia will face serious consequences.

“Lawful minimum rates apply to all employees in Australia and they are not negotiable. All workers in Australia have the same rights, regardless of nationality and visa status,” Ms Booth said.

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“We will continue to pursue serious contraventions in court so that companies like Winit that deliberately and systematically exploit their employees face significant penalties.

“Anyone with concerns about their pay or entitlements should contact us for free assistance.”

FWO investigated Winit after receiving requests for assistance from several employees.

The 30 underpaid employees involved in FWO’s legal action were all working-holiday-visa holders, mostly from Taiwan and aged in their 20s, who performed various duties associated with sorting, loading and packing goods at Winit’s warehouse at Regents Park in western Sydney.

The employees regularly worked up to 60 to 70 hours per week over six or seven days, but most were paid a flat hourly rate of $24.41 with no penalty or overtime entitlements that were owed under the Services and Wholesale Award 2010.

Winit also failed to comply with laws relating to pay slips, providing new employees with a Fair Work Information Statement, and various other Award obligations, including shift allowances, meal allowances and frequency of pay.

The company also contravened adverse actions laws by reducing at least two employees’ shifts after they refused Winit’s settlement offer, made shortly after FWO commenced its investigation, to pay only 25 per cent of their outstanding entitlements.

Individual underpayments between July 2017 and June 2018 for the 30 employees ranged from $446 to $28,202, with 19 of the employees being underpaid more than $10,000.

All 30 employees have now been back-paid in full. Winit also back-paid the large majority of other employees underpaid between 2014 and 2019 after engaging an external auditor.

Mr Cheng was involved in Winit’s contraventions concerning overtime rates, penalty rates and frequency of pay. Serious contraventions were not alleged against Mr Cheng.

Justice John Snaden described Winit’s underpayment contraventions as “troubling”, particularly the serious contraventions, which he described as “deliberate and systematic”.

“The court must exact a heavy toll: not merely to ensure that Winit is brought to account for its obnoxious conduct; but also to serve as a warning to other employers who might be minded to ignore their own important Award and statutory obligations in the way that Winit did,” Justice Snaden said.

In relation to the adverse action contraventions, Justice Snaden said it was “difficult to overstate how concerning was Winit’s response to the refusal of the two employees in question to sign its proposed compromise.”

“When alerted to its wrongdoing, Winit’s initial response was not to correct it or take steps to ensure that it wouldn’t be repeated: it was to negotiate a monetary compromise. Worse, when two of its employees pushed back on that course, it took reprisal action against them in the form of reduced working hours (over and above reductions imposed upon other employees),” Justice Snaden said.

The FWO filed 138 litigations involving visa holder workers, and secured $15 million in court-ordered penalties in visa holder litigations, in the six financial years to June 2023.

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