Legal

Another 7-Eleven franchisee faces court after allegedly underpaying 21 staff $31,000

Broede Carmody /

 

The Fair Work Ombudsman has commenced legal action against another 7-Eleven franchise operator for allegedly underpaying staff thousands of dollars.

The employer watchdog alleges two 7-Eleven stores in Brisbane’s CBD short-changed 21 staff more than $31,000 between September 2013 and September 2014.

The employees, which include international students, were allegedly paid flat rates as low as $17.74 an hour.

Read more: 7-Eleven’s franchisee financial arrangement is ‘unusual’

Individual employees are allegedly owed amounts ranging from $98 to $5080.

The George and Adelaide street stores are operated by Jason Yuan.

Yuan was spoken to by the employer watchdog back in 2013 and faces maximum penalties of up to $10,2000 per breach of the law.

The franchisee also part-owns two companies called Vipper Pty Ltd and Viplus Pty Ltd, both of which face penalties of up to $51,000 per contravention of workplace laws.

A directions hearing is listed in the Federal Circuit Court in Brisbane for 22 February.

This latest matter is the sixth time the employer watchdog has initiated legal proceedings against a 7-Eleven operator since 2009.

Fair Work Ombudsman Natalie James said in a statement 7-Eleven is currently the subject of a national inquiry by the employer watchdog.

A final report into allegations of serious underpayments and false record-keeping practises is expected in the next few months.

Former head of the Australian Competition and Consumer Commission, Allan Fels, is also conducting an independent inquiry on behalf of 7-Eleven in the wake of serious allegations of underpayments and even a cover-up by head office.

The 24-hour convenience chain overhauled its franchising agreement late last year after several franchisees claimed the company’s business model made it practically impossible to pay lawful wages and break even.

A spokesperson for 7-Eleven told SmartCompany this morning the convenience chain does not condone staff underpayments and is co-operating with the Ombudsman to “stamp out the practice”.

“The company has introduced tougher payroll, time sheet and rostering compliance measures with a new system to be introduced in 2016,” the spokesperson says.  

“More than 95% of stores are operating under a new agreement which allows greater compliance, oversight and governance measures.”

Sarah Lock, principal lawyer at Workplace Law Group, told SmartCompany there’s enough education out there for employers to be aware of things such as minimum wages and awards.

“When running a business, it’s integral that you have a good knowledge of that when you’re hiring somebody,” Lock says.

“There’s a pay calculator on the Ombudsman’s site, you can call them, there’s the internet. So ignorance of saying you didn’t know is no excuse. But clearly the Ombudsman is concerned about them [7-eleven franchisees] taking advantage of overseas students who are often happy to just have a job. The Ombudsman is clearly trying to protect the vulnerable.”

SmartCompany was unable to contact Yuan for comment. 

 

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Broede Carmody

Broede Carmody is a former senior SmartCompany reporter. Previously, he was a co-editor of RMIT University's student magazine Catalyst.

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