7-Eleven store fined nearly $200,000 for underpaying workers

The employer was short-changing overseas workers and creating false records to cover it up

BY HRD 07 Jun 2018

A 7-Eleven outlet in Brisbane has been penalised $192,780 for short-changing overseas workers and creating false records to cover it up.

Inspectors found that the employees - both students from India aged in their mid-20s – had been underpaid a total of $5593 for short periods of work in 2014.

Fair Work Ombudsman Natalie James said that 7-Eleven has “learnt the hard way” what happens when you neglect workplace compliance in your network or supply chain.

“Franchisors must now take reasonable steps to stop non-compliance with work laws in their businesses or risk being found directly liable under the new laws,” said James.

She added that business operators should be aware that the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017has also introduced significantly higher penalties for a range of contraventions.

HRD contacted 7-Eleven for comment and a spokesperson said that 7-Eleven welcomes the FWO’s legal actions against these underpayment practices from back in 2014, and assisted their investigation.

“We have zero tolerance for wage fraud, have implemented the most comprehensive reforms in the sector to eradicate it, and will act in the strongest available ways against it,” said the spokesperson.

Avinash Pratap Singh, the manager and part-owner of the 7-Eleven store, admitted paying the employees flat hourly rates as low as $14.14 an hour, resulting in the underpayment of minimum hourly rates, overtime rates, casual loadings and penalty rates for weekend and public holiday work.

One of the workers was underpaid $4439, which was 25% of his entitlement over a five-month period.

The other was underpaid $1154, which was 41% of his entitlement over a seven-week period. The underpayments have since been rectified.

Moreover, Singh made false entries into the 7-Eleven head office payroll system and he knowingly provided false time-and-wage records to the FWO.

Judge Vasta said the entering of false hours and pay rates into the payroll system “created records that appeared to show that the employees were paid at the rates of pay prescribed by the modern award,

including penalty rates and overtime rates of pay, which actually bore no relation to their hours of work or actual hourly rates”.

Judge Vasta added that the record keeping contraventions were “an appalling breach of the standards that are needed for businesses to operate fairly in this country”.

“But not only did that mean that there were false records that were kept, it meant that when the Fair Work Ombudsman wanted those records, they were given false records, which, as I have already pointed out, has meant that the investigation was a lot more arduous and tedious than it should have been.”