Penalties to be imposed upon Winit
89 It is agreed (and I find) that, over the course of the 12-month Relevant Period, the Relevant Employees were collectively underpaid nearly $370,000.00 - or an average of $12,289.47 - relative to what ought to have been paid to them under the Award. On any measure, that is a substantial amount.
90 Overwhelmingly, the Relevant Employees hail from migrant backgrounds. The majority of the approximately 175 employees that Winit employed over the Relevant Period were temporary visa holders. I have no hesitation in inferring that few, if any, would have enjoyed much in the way of knowledge of the Award system or their entitlements under the FW Act. All the more readily might that be inferred given Winit's failure to provide to them a Fair Work Information Statement.
91 Winit's conduct in contravening the Award was, on any view, troubling. Particularly is that so insofar as concerns the Serious Contraventions, which were deliberate and systematic. On the evidence, it is clear that Winit knew that it had obligations under the Award but made a decision regardless to set flat rates of pay for its employees that were not sufficient to meet them. It rostered the Relevant Employees to work hours that attracted liability for penalty rates, which were then deliberately not paid.
92 Indeed, it is apparent that all of Winit's contraventions occurred against the backdrop of at least some degree of executive appreciation - at least on the part of Mr Cheng - that the Award applied.
93 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).
94 Worse still (although it cannot factor into present calculations), it is clear on the evidence that Winit's Award misfeasance extended beyond the Relevant Employees and the Relevant Period. The underpayments in respect of which the court is to impose appropriate penalties are not the whole picture.
95 Perhaps some of Winit's conduct can be explained - although not excused - by its rapid growth. Winit is the local emanation of a larger business based in China, from which it receives all of its funding. It began its Australian operations in 2013 and opened the Regents Park warehouse a little over 12 months later. At that point, its operations spanned just 12 employees.
96 In the years leading to the commencement of the Relevant Period, its headcount would expand more than ten-fold. It seems uncontroversial to observe that that increase in activity must have visited some corresponding increase in the demands upon its payroll function. Regrettably, such efforts as were made to bolster that function, if any, appear not to have had the desired (compliance) effect. Despite its rapid growth, Winit did not seek professional assistance or advice concerning its employment or remuneration arrangements.
97 One measure that was implemented - at the start of 2016 - was a move from permanent to casual employment. That, so Mr Cheng deposed, was engineered partly because Winit's employees had indicated that they were not particularly interested in accruing leave entitlements. Plainly, there was some consciousness on the part of Winit that that was something that could be achieved by changing the basis upon which Winit's employees were engaged.
98 There are, though, some redeeming features inherent in Winit's conduct. Broadly, it has shown a healthy measure of cooperation toward the applicant and her office's attempts to investigate its non-compliance with the Award. It ensured that it was competently represented over the course of those efforts by reputable law firms, which have assisted it in putting in place mechanisms to ensure that its Award transgressions will not be repeated.
99 It has also, at considerable cost, engaged specialist auditing assistance to ascertain for itself the scope of its Award underpayment. By February 2019, those efforts had seen it back-pay its employees a total of $245,500.00. Toward the end of 2019, a bleaker picture emerged: it appeared that, between 2014 and 2019, Winit had underpaid nearly 400 employees a collective sum of more than $3.6 million. Throughout 2020, Winit took steps to contact those employees (or a majority of them) and pay them what the audit had identified.
100 Winit has also invested in specialist payroll technology, which is now deployed in its Sydney and Melbourne warehouses. Its efforts in those regards disclose a commendable consciousness of wrongdoing, a level of regret that it occurred and a determination to correct it into the future. By his affidavit, Mr Cheng expressed what I have no doubt was his genuine regret that the Relevant Employees were underpaid as they were.
101 None of that, though, undermines the scale of Winit's misconduct. It remains that a significant number of employees were underpaid significant amounts over a relatively short period of time; in each case, at the direction of (if not with the knowledge of) its management. That it is funded entirely by receipts from its Chinese parent company may be accepted; but it does not appear to want greatly for funds when they are needed, as its remediation efforts have made clear.
102 I turn, then, to the individual contraventions and what should suffice by way of penalty to deter their repetition, both by Winit and by others. I shall address the contraventions in the order that they are listed above.
103 Insofar as concerns Winit's failure to pay overtime rates of pay (above, [50(1)], I consider that the penalty proposed by the applicant - between 50% and 70% of the maximum (discounted by 20% to reflect Winit's cooperation) - is more severe than is warranted, albeit not considerably so. Whilst I should be very careful not to excuse the scale or undoubted enormity of its transgressions, Winit is a first-time contravenor of s 45 of the FW Act, which has responded to its misdeeds in a way that bespeaks an acceptance of wrongdoing and a determination to ensure against its repetition in the future. I consider that a penalty set at 30% of the (undiscounted) maximum is appropriate to deter repetition of Winit's conduct; both by it and by other employers who might be minded to emulate it.
104 As concerns Winit's failure to pay Sunday penalties (above, [50(2)]) and public holiday penalties (above, [50(3)]), I am of substantially the same opinion (namely, that what the applicant proposes, though lower than what is proposed in respect of overtime penalties, is nonetheless slightly higher than what is appropriate). I consider that penalties set at 25% and 20% (respectively) of the (undiscounted) maximum are appropriate to deter Winit's misconduct, both generally and specifically.
105 In relation to the non-payment of sufficient casual loadings (above, [56(1)]), the lower boundary of the penalty range proposed by the applicant is appropriate, particularly given the modest amount of the collective underpayment. I will set a penalty for that contravention equal to 12% of the maximum that is available.
106 The applicant proposes that the court should impose a penalty of between 70% and 80% of the maximum (discounted by 20%) in respect of Winit's failure to pay rest period penalty rates (above, [56(2)]). Respectfully, that range is well above what I consider to be appropriate having regard to the nature and seriousness of Winit's misconduct (and what might be thought to be appropriate in order to deter its repetition). True it is that the amount that was collectively underpaid is substantial - more than $70,000.00 - but, again, I would reserve penalties within that range for conduct more egregious than what has here occurred. I am, in particular, conscious of Winit's efforts to remediate its conduct and ensure against its repetition in the future. I consider, in all of the circumstances, that a penalty set at 27.5% of the maximum available is appropriate for deterrence purposes.
107 The applicant does not invite the court to impose any penalty in respect of Winit's failure to pay in accordance with the minimum engagement periods applicable on Saturdays, Sundays or public holidays (above, [56(3)], [56(4)] and [56(5)]). That is said to reflect the overlap between the conduct that gave rise to those contraventions and Winit's related failures to pay weekend and public holiday penalty rates. In the case of minimum Saturday engagement periods, it likely also reflects the relative triviality of the amount that was underpaid (a little over $200.00). I am satisfied, in the circumstances, that what is proposed is appropriate.
108 Insofar as concerns Winit's failure to pay shift allowances (above, [56(6)]), the applicant submits that a penalty of between 40% and 50% of the maximum (discounted by 20%) is appropriate. I am not persuaded that that is so. Again, the amount of the underpayment in question, while not immaterial, is not egregious. It averages just shy of $325.00 per affected employee over the Relevant Period. I consider that a penalty set at 20% is appropriate in all of the circumstances.
109 No penalty is sought in relation to Winit's failure to pay meal allowances. That is because, although it failed to pay the allowance, Winit did, in fact, provide meals to employees when they were required to work evenings. It appears to be accepted that, although technically in breach of the Award, Winit nonetheless operated consistently with its spirit. In all of the circumstances, I consider it appropriate that no penalty be imposed in respect of that contravention.
110 The applicant invites the court to impose a penalty set at between 15% and 25% of the discounted maximum in respect of Winit's failure to pay the Relevant Employees weekly or fortnightly (above, [56(8)]). That equates (at the lower end of that range) to a penalty of $7,560.00. It is to be recalled that the Relevant Employees were paid monthly, rather than weekly or fortnightly. There is no evidence before the court as to what, if any, impact that visited upon any of them but it is not difficult to imagine that there must have been at least some adverse impacts. Given Winit's contrition and efforts to ensure that its conduct is not repeated, I consider a penalty set at $7,560.00 is appropriate.
111 As concerns Winit's two general protections contraventions - that is, its subjection of two of the Relevant Employees to adverse action in breach of s 340(1) of the FW Act (above, [61]) - the applicant invites the court to impose a single penalty set at between 60% and 70% of the maximum (discounted by 20%). It is accepted that the two contraventions share common elements and that, applying the common law course of conduct test (see, for example, Construction, Forestry, Mining and Energy Union v Cahill (2010) 269 ALR 1, 12 [39] (Middleton & Gordon JJ), a single penalty is appropriate in respect of them.
112 The conduct constituting the contraventions of s 340(1) of the FW Act has already been rehearsed. It is difficult to overstate how concerning was Winit's response to the refusal of the two employees in question to sign its proposed compromise. Again, there is no evidence about the impact that the relative reduction in working hours visited upon the two employees; but it is obvious enough that it was unlikely to have been positive. Winit's conduct is deserving of a stern penalty; one set at a meaningful level that serves to deter both it and other employers from committing similar contraventions in the future.
113 Nonetheless, I consider that what the applicant proposes in that regard is beyond what is appropriate, albeit not by a significant margin. Having regard to the nature of the conduct, the cooperation that Winit has exhibited since the applicant's office began its investigations and the contrition that Winit has demonstrated by its actions since, I consider that a penalty set at 40% of the maximum available is appropriate.
114 Insofar as concerns Winit's failure to provide the Relevant Employees with Fair Work Information Statements (above, [62]), the applicant submits that a penalty set at between 30% and 40% of the (discounted) maximum is appropriate.
115 It is not immediately apparent what impact Winit's failure to provide its employees with Fair Work Information Statements might have visited. The statutory prescriptions as to the content that such statements must contain are not such as to suggest, or necessarily suggest, that its provision in this case might have alerted the Relevant Employees to their rights sooner than occurred. Perhaps it might have.
116 Nonetheless, the obligation to provide Fair Work Information Statements is one of many that comprise the National Employment Standards that are established by pt 2-2 of the FW Act. It is no mere triviality. Here, Fair Work Information Statements ought to have been provided and Winit's failure to provide them is deserving of a meaningful penalty. Appreciating Winit's acceptance of wrongdoing and its determination that it should not be repeated, I consider that a penalty set at 20% of the maximum available - or $12,600.00 - is appropriate.
117 Finally, as concerns Winit's failure to provide the Relevant Employees with compliant pay slips (above, [64]), the applicant submits that the court should impose a penalty set at between 15% and 25% of the (discounted) maximum. Again, there is no evidence that contextualises the impact that Winit's failure visited upon any of the Relevant Employees. It may be that it simply resulted in the employees being denied a record of the kind to which they were entitled under the FW Act. In the circumstances, I agree that a penalty set within the range that the applicant nominates is appropriate. I will impose a penalty set at 12.5% of the (non-discounted) maximum available.
118 By way of summary, then, I am minded to impose upon Winit the following penalties, namely:
For the contravention described above at: …a penalty equal to this percentage of the maximum: …which equates to a penalty of:
[50(1)] 30% $189,000.00
[50(2)] 25% $157,500.00
[50(3)] 20% $126,000.00
[56(1)] 12% $7,560.00
[56(2)] 27.5% $17,325.00
[56(6)] 20% $12,600.00
[56(8)] - $7,560.00
[61] 40% $25,200.00
[62] 20% $12,600.00
[63] 12.5% $7,875.00
TOTAL $563,220.00