7-Eleven store owner given record fine for exploiting workers

7 elevenThe owner of a Brisbane 7-Eleven store who systematically exploited workers has been fined more than $400,000, the largest penalty imposed in Australia by a court after action by the Fair Work Ombudsman

 

 

Background

This case related to the underpayment of 12 employees, including a number of international students, a total of $82,661 during a period of one year. Employees were paid as little as $13 per hour.

The case was brought to the attention of Fair Work by the employees, and investigators conducted an investigation into the complaints. During the investigation, the owner provided inspectors with false records to try to cover-up underpayments, providing selective bank records as evidence that his employees had been back-paid. However, the owner had secretly arranged for the employees to pay the money back to him and his wife.

Court Decision

The Court imposed fines of more than $400,000, the largest fine on record against a 7-Eleven franchisee. The Court made orders as follows

  • A fine of $68,058 was imposed on the owner
  • A fine of $340,290 was imposed on the company, Mai Pty Ltd
  • The company must back-pay the wages of all impacted workers
  • An injunction was imposed, restraining the owner and company from underpaying workers and from seeking any back-payment of wages.
  • The company must display an in-store notice informing employees of entitlements
  • The company must conduct an audit of its compliance with immigration workplace laws.

Why was the penalty so high in this case? The Judge found that there was “no suitable credible expression of regret” on the part of the owner, who went to great lengths to conceal the breaches and continued to commit breaches during and after the investigation.

Lessons for business

This is the fourth case against a 7-Eleven franchisee to be adjudicated by a Court, and investigations by Fair Work against the 7-Eleven group are ongoing.

Most 7-Eleven workers are foreign students on restricted visas, allowing them to work 20 hours per week, but are being forced to work longer hours than they are allowed. This puts the visa holder at risk of visa cancellation and the business at risk under Employer Sanctions legislation for allowing the employees to work in breach of their visa conditions.

It is important that organisations take the necessary steps to ensure compliance within its operations – including in franchise groups or within its supply chain.

Next steps

If you are unsure whether your business is compliant or need to clarify the work rights of your workers, please contact us on (02) 8896 6056 or email info@themigrationagency.com for a confidential discussion.

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