FAIR WORK PENALISES ANOTHER 7-ELEVEN OPERATOR

Husband-and-wife duo Haiyao Xu and Yiran Gu have been penalised $20,000 each, while the Federal Circuit Court has also penalised their company Hiyi Pty Ltd a further $110,000.

This follows legal action taken by Fair Work against the franchisees in relation to the underpayment of 12 employees at their previously owned Parkville store in suburban Melbourne.  They now operate another store in the CBD.

The employees were underpaid a total of $84,047 between September 2013 and September 2014.  These amounts have now been paid back in full, however Fair Work has entered into an enforceable undertaking with the couple and their new store.

At the city store, employees were short-changed a total of $106,189 between June 2013 and August 2015, with 11 employees progressively being paid back.

The married couple and their company first came to the Fair Work Ombudsman's attention when the Parkville store was targeted for a surprise night visit by Fair Work inspectors late in 2014.

Inspectors discovered that employees were paid flat rates between $12-17 an hour.

However, Gu and Xu made false entries into the 7-Eleven head office payroll system to make it appear the employees had been paid award rates and that they had worked fewer hours than was actually the case.

The employees were entitled to receive more than $22 for normal hours and up to $46 an hour for some weekend, public holiday, night and overtime shifts.

Four of the employees were underpaid more than $10,000, with one short-changed $16,500.

Judge Suzanne Jones found deliberate and serious underpayment of vulnerable employees and contravention of fundamental minimum entitlements.

"Absent the audit of 7-Eleven stores engaged in by the Fair Work Ombudsman, it is likely that the underpayments would have continued unabated," she says.

"There can be no doubt that (Xu and Gu) understood their obligations, but set about a course of conduct to deliberately contravene the award and to disguise those contraventions.

"This conduct calls for full condemnation and approbation in determining the appropriate penalty."

The Fair Work Ombudsman conducted a national Inquiry into 7-Eleven and is currently in discussions with 7-Eleven about a robust and transparent arrangement that will satisfy the agency that head office is taking the necessary steps to build a franchise operating model that ensures workers employed in its network are correctly paid into the future.