Court finds 'intentional and systematic' breaches against migrant workers
The Federal Court of Australia recently imposed a hefty $558,190 penalty in a case involving a Sydney-based company that was found “intentionally and systematically underpaying its migrant employees.”
The employer, Winit (AU) Trade Pty Ltd, operated a warehouse located in Regents Park, New South Wales, from which it provided storage and distribution services for merchants that sold products on online retail platforms such as eBay.
Song Cheng was its general manager and sole director over that period, and Xiaodi Li was Winit’s payroll and human resources manager.
Between 2014 to 2019, it was found that Winit systematically underpaid nearly 400 employees, with the majority coming from migrant backgrounds. The total underpayment amounted to over $3.6 million.
According to records, the Fair Work Ombudsman (FWO) initiated the investigation into Winit following requests for assistance from several of its employees.
It filed its case from the complaints of 30 employees, who were all working holiday visa holders, primarily from Taiwan, and in their twenties. They performed various tasks related to sorting, loading, and packing goods at the employer’s warehouse.
The FWO said that these employees frequently worked long hours, often reaching 60 to 70 hours per week, spanning six or seven days. However, they were typically paid a flat hourly rate of $24.41, which failed to include the penalty rates or overtime entitlements stipulated by their award.
Additionally, the FWO said Winit failed to comply with legal requirements regarding pay slips, providing new employees with a Fair Work Information Statement, and various other award-related obligations, including shift allowances, meal allowances, and the frequency of payments.
Several of the company’s underpayment breaches qualified as “serious contraventions” under the Protecting Vulnerable Workers law due to their deliberate and systematic nature.
The court described the employer’s breaches as “troubling.” It also noted the employer’s misconduct after it was informed of its violations.
“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,” it said.
“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),” it added.
“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,” the court said.
Thus, in addition to the penalty imposed against the company, the court imposed an $8,190 penalty on the company's sole director and general manager during the time of the breaches.
