Court imposes $335,664 penalties against 7-Eleven outlet and restaurant

Penalties have been secured by the Fair Work Ombudsman against a company in Melbourne for $335,664 and two individuals for the underpayment of international students. This brings the total amount to $1.8 million in penalties involving 7-Eleven franchisees.

The Federal Circuit Court has handed down its judgement and penalised Xia Jing Qi Pty Ltd a total of $335,664 for its workplace breaches. A fine of $154,225 was imposed for an unlawful cash back scheme in a 7-Eleven outlet operated by the company.  The three international students, aged between 21 and 24 from China, were required to pay back part of their wages by depositing a specified weekly sum to a safe drop box or to their Manager’s bank account. Additionally, the company was fined $145, 800 for underpaying a Subclass 462 Work and Holiday visa holder at an Ajisen Ramen franchise.

In total, the three international students were underpaid a total of $6,674 for work between November 2015 to October 2016. The Subclass 462 visa holder was underpaid $9,616. Amounts equating to $11.50 per hour between May and October 2016 and a shocking $3.98 per hour in her final week of work was significantly below the minimum hourly rate, penalty rate and casual loading. All individuals were back paid in August 2017.

The company was found to have also breached record-keeping laws by providing false records to Fair Work inspectors during their investigation of the 7-Eleven convenience store.

Penalities imposed on individuals

Individual penalties were also secured against the Manager, Ai Ling “Irene” Lin for $9,590 for her involvement in the breaches at 7-Eleven.

Following public exposure of 7-Eleven underpayments in 2015, the company and Ms Lin tried to disguise underpayments of three employees by requiring them to pay back thousands of dollars in wages.

Ms Lin told the three employees in late 2015 they would be paid through the payroll system but then specified a weekly sum for each of the workers to pay back via a safe drop box in the 7-Eleven store or to Ms Lin’s bank account.

Interestingly, Ms Lin was also in Australia on a student visa.

The company’s director, Jing Qi Xia was penalised $26,049 for her involvement in the breaches at Ajisen Ramen.

Judge Norah Hartnett stated in her judgement:

“The Court recognises that conduct such as implementing a system requiring employees to repay wages they are owed, and making, keeping and producing false records to disguise employees’ true employment situation, is reprehensible conduct and denies to all employees the minimum wage standards that they, in Australia, should expect and are entitled to”.

Employing workers on visas

Acting Fair Work Ombudsman Kristen Hannah stated in a medial release that employers who exploit migrant workers will be discovered and met with serious legal consequences.

“The Fair Work Ombudsman will not tolerate any employers requiring any workers to pay back any of their wages. This cashback scheme was particularly deplorable as it undercut migrant workers, who can be vulnerable due to language and cultural barriers, or are reluctant to speak up,” Ms Hannah said.

“All workers in Australia have the same rights at work, regardless of citizenship. We will continue to take enforcement action when businesses undercut migrant workers.

“We have an agreement with the Department of Home Affairs where visa holders can contact us for help without fear of their visa being cancelled.”

Reference: https://www.fairwork.gov.au/about-us/news-and-media-releases/2019-media-releases/january-2019/20190118-xia-jing-qi-penalties-media-release

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