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Logistics company fined for underpaying hundreds of migrants $3.6m

Regulation

Federal Court imposes a $558,000 penalty on the business for deliberately short changing holiday visa holders over five years.

By Philip King 11 minute read

A Sydney-based logistics company that engaged in “obnoxious conduct” by deliberately and systematically underpaying hundreds of migrant employees more than $3.6 million has been slapped with a fine of $558,190.

The Federal Court heard that Winit (AU) Trade, a Hong Kong-owned company that provides warehousing and distribution services for online sales platforms including eBay, had shortchanged nearly 400 staff from 2014–19.

The company’s sole director and general manager at the time of the contraventions, Song Cheng, was fined an additional $8,190.

The Fair Work Ombudsman pursued the case against Winit by focusing 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.

Individual underpayments ranged from $446 to $28,202, with 19 of the employees underpaid more than $10,000.

Three of the contraventions were sufficiently deliberate and systematic to attract the tenfold multiplier of normal penalties under the Protecting Vulnerable Workers laws.

The court heard the 30 employees involved in the 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.

They regularly worked 60–70 hours a week over six or seven days but most were paid a flat hourly rate of $24.41 with none of the penalty or overtime entitlements they were owed under the Services and Wholesale Award 2010.

Winit also failed to provide payslips or meet various other award obligations concerning shift allowances, meal allowances and frequency of pay.

Shortly after the FWO commenced its investigation, at least two employees had their shifts cut following their refusal of a Winit offer to pay only 25 per cent of their outstanding entitlements.

Justice John Snaden described Winit’s conduct as “obnoxious” and its serious payment contraventions 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.

He also said it was “difficult to overstate how concerning Winit’s response [was] to the refusal of the two employees in question to sign its proposed compromise”, referring to the company’s settlement offer of 25 per cent of the underpayments.

“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).”

The FWO said all 30 employees had now been paid back in full along with most of the other underpaid employees.

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

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

Fair Work Ombudsman Anna Booth said the penalties showed that employers who exploited migrant workers would face serious consequences.

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

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

The FWO said it had 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.

The FWO has an agreement with the Department of Home Affairs, called the Assurance Protocol, where visa holders with work rights can ask for help without fear of their visa being cancelled.

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Philip King

Philip King

AUTHOR

Philip King is editor of Accountants Daily and SMSF Adviser, the leading sources of news, insight, and educational content for professionals in the accounting and SMSF sectors.

Philip joined the titles in March 2022 and brings extensive experience from a variety of roles at The Australian national broadsheet daily, most recently as motoring editor. His background also takes in spells on diverse consumer and trade magazines.

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