7-Eleven cops record $400000 in fines

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The chairman and chief executive of 7-Eleven convenience stores in Australia resigned on September 30 last year, following allegations that franchises systematically underpaid workers. Picture: William West

MASSIVE fines being handed out to rogue 7-Eleven operators mean rival small retail businesses will no longer be at a competitive disadvantage, says the National Retail Association.

Yesterday, a Brisbane 7-Eleven store owner and his company copped record fines of more than $400,000 after being found by the Federal Circuit Court to have systematically exploited workers.

The penalty is the latest in a number of actions against 7-Eleven franchisees following a Fair Work Ombudsman investigation last year.

The Federal Circuit Court on Monday fined West End store owner Sheng-Chieh Lo $68,058 and his company Mai Pty Ltd $340,290 after he was found to have short-changed 12 staff more than $82,000.

Judge Michael Jarrett found Lo had shown contemptuous disregard for Australian workplace laws and had sought to deceive the Fair Work Ombudsman.

The penalties against Lo and his company are the highest ever achieved by the ombudsman, eclipsing a ruling in Perth in 2013 by almost $65,000.

Lo underpaid 12 employees, including several international students, a total of $82,661 between September 2013 and September 2014.

The court ordered Mai Pty Ltd rectify more than $35,000 in underpayments that remain outstanding.

Mr Jarrett said Lo and his company had systematically exploited his employees by paying flat rates as low as $13 an hour and trying to cover up the low wages through a sophisticated system of data manipulation and false record keeping.

Mr Los contempt is demonstrated by his persistent attempts to deceive the Fair Work inspectors investigating the relevant complaints, Mr Jarrett said.

And his insistence, undertaken in a secretive way, that any amounts he paid to the relevant employees to make good ... (his companys) defaults should be immediately paid back to him. Los store was one of 20 7-Eleven outlets targeted by Fair Work inspectors in surprise late-night visits in September 2014.

Ombudsman Natalie James said the record penalty should serve as a warning to employers.

We will continue to be persistent with our compliance activities, even when confronted by employers who deliberately seek to mislead us with false records and where vulnerable employees are involved, Ms James said.

Even if they themselves are too afraid to talk to us.

NRA acting chief executive Ian Winterburn said not only would migrant and youth workers benefit but so would small retail businesses, which may have had trouble competing with a nearby 7-Eleven business.

Certainly people have been exploited and the business following the regulations properly are now no longer disadvantaged, Mr Winterburn told AAP.

It (systemic exploitation of workers) doesnt create a level playing field and has given an unfair advantage to those (unscrupulous) people.

Weve done quite a bit of work with our franchise members and weve been engaged in a lot of audits to make sure they are compliant.

Mr Winterburn said the NRA had been conducting wages seminars to educate its members for the past six months and expressing the need to be diligent in following workplace regulations.

He said any discrepancies they had discovered were only minor.

But Mr Winterburn did admit the fines also highlighted the complexity of the workplace relations system.

Theres no doubt that this is a highly complex area of regulation, and we know from experience that many small business owners struggle to understand their obligations and comply with the volumes of workplace law, he said.

(Its) why many of them simply opt to close their doors or only use family members behind the counter at times when penalty rates may apply.

Source: http://www.news.com.au/finance/business/retail/7eleven-cops-record-400000-in-fines/news-story/7ea2b72abe80c90e1fc4f927e5b27f0a

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7-Eleven store cops record penalty for exploitation of workers

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Widespread wage abuse at 7-Eleven

Joint Fairfax / ABC Four Corners investigation reveals widespread wage abuse at 7-Eleven stores across Australia.

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The operatorof a 7-Eleven store involved in rampant exploitation ofits workers has been handed arecord court penalty of more than $400,000.

The penalty follows revelations in Fairfax Media about systematic underpayment of workers in 7-Eleven stores around the country.

The Fair Work Ombudsman said the court-imposed penalty was the largest it hadwonafter itsinvestigationfound 12employees in Brisbane had been short-changed more than $82,000.

7-Eleven has attracted scorn over its behaviour. Photo: Paul Jeffers

The Brisbane store owner had allegedly asked his staff to secretly repay thousands of dollars after they had beenpaid back some of the money they were owed.

The workers werepaidas little as$13 an hour and the store owner, Sheng-Chieh Lo, had tried to conceal theunderpayments throughfalse payroll records. Federal Circuit Court judge Michael Jarrett described the false records as "a sophisticated system of data manipulation".

Judge Jarrett saidthe 7-Eleven franchisee had shown"contemptuous disregard" for Australian workplace laws and that it had tried to deceive the fair work regulator. The$408,348 he issued in penalties is$65,000 more than the previous record of $343,860 awarded against aPerth store in 2013.

7-Eleven has been subject to a massive crackdown by the Fair Work Ombudsman.

Brisbane businessman Mr Lo, who owns and operates the 7-outlet on Boundary Road, West End,was penalised $68,058 and his company, Mai PtyLtd,$340,290.Mai Pty Ltd has wasordered to correctthe underpayment.

Mr Lo was found to have underpaid 12 employees, includinginternational students, $82,661 over 12 months toSeptember2014.More than $35,000 of the underpayment is stilloutstanding.

The court heard that Mr Lo initially providedinspectors with false records tocover up theunderpayments, and showed inspectors selective bank records as evidence that hisemployees had received back-pay. He later admitted he had made arrangements for the employees to pay back thousands of dollars to him and his wife.

"Mr Lo"s contempt is demonstrated by his persistent attempts to deceive the Fair Workinspectors investigating the relevant complaints and his insistence, undertaken in asecretive way, that any amounts he paid to the relevant employees to make good [MaiPty Ltd"s]defaults should be immediately paid back to him," he said.

Judge Jarrett said theunderpayments were"substantial amounts for low-income earners who were reliant on theminimum award wage".

Most of the employees received just over half what they were entitled to, with individualunderpayments ranging from $1673 to $21,966.

Mr Lo was said to have expressed no regret, instead trying to justify his actions "without accepting responsibility for them".

"Employers should be in no doubt that they have a positive duty to ensure that theycomply with the obligations which they owe to their employees under the law," Judge Jarrettsaid.

The courtpenalty is the latest in a numberof actions targetingsystemic exploitation of workerswithin the 7-Eleven network, which has been the subject of a national inquiry.

Fair Work Ombudsman Natalie James saidher office was in talkswith 7-Eleven to ensure it wastakingsteps toensureworkers were correctly paid infuture.

The Brisbane outlet was one of 20 targeted by Fair Work inspectors duringsurprise night-time visits last year.

7-Eleven announced on Tuesday the approval of the first round of payments under itsin-house wage repayment program and said it was happy to be judged on its actions.

It released a statement saying21 claims, totalling $686,000, have been approved. It has received4,008 repayment claims.

7-Eleven chief executive officerAngus McKay said it had takenthe wage repayment program process in-house "to deliver a robust and efficient process that puts money in the hands of claimants as quickly as possible".

"We have spent the past few weeks building a claims assessment process that places legitimate claimant interests at its centre and responds to feedback from all key stakeholders," he said.

"We are confident that our Wage Repayment process delivers against these objectives, and are now absolutely focused on ensuring it meets our commitment to pay legitimate claims as quickly as possible.

"7-Eleven is happy to be judged on our actions, and will continue to publicly report our progress as we move forward."

Source: http://www.smh.com.au/business/workplace-relations/7eleven-store-cops-record-penalty-for-exploitation-of-workers-20160621-gpo026.html

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