A 7-Eleven franchisee in Sydney has been hit with a whopping $214,200 penalty for short-changing two migrant employees and falsifying records, even after legal action by the Fair Work Ombudsman. 

Harmandeep Singh Sarkaria, who owns a 7-Eleven franchise in Blacktown, has been penalised $35,700 and his company Amritsaria Four Pty Ltd has been fined a further $178,500.

They are the largest penalties placed against a 7-Eleven franchisee by the Fair Work Ombudsman.

In his Federal Circuit Court judgment, Judge Justin Smith said Sarkaria had “deliberately flouted his legal obligations” and engaged in “a sustained and deliberate process of deception” aimed at maximising financial return.

“One of the aims of imposing a penalty is to mark a warning for others who might be tempted to engage in similar conduct,” said Judge Smith.

“There was evidence of substantial non-compliance by other 7-Eleven franchisees.”

This development comes as widespread reports of underpayment and systemic non-compliance are exposed at the Fels Wage Fairness Panel.

Sarkaria short changed two employees a total of $49,426.

Most of the underpayment relates to a migrant employee from Pakistan, in his late 30s, who was underpaid a sum of $43,633 between March 2012 and March 2014.

The other employee, also from Pakistan and aged in his mid-20s, was underpaid $5793 between August 2013 and March 2014.

The workers were paid rates equivalent to $10 an hour, while Sarkaria made false entries to the 7-Eleven head office payroll system, making the rates appear to be $25 an hour.

Judge Smith said that despite being “perfectly aware” of legal obligations relating to pay and record-keeping, Sarkaria had falsified records to “hide the fact that he was not paying two employees properly”.

“The contraventions were not accidental, but, rather part of a deliberate scheme aimed at maximising financial benefit to the respondents,” said Judge Smith.

“In other words, this was part of the respondents’ business model.”

On top of the penalties, Sarkaria and his company must commission professional audits of their compliance with workplace laws and undertake training on complying with workplace laws.

Fair Work Ombudsman Natalie James said the Court’s decision sends a serious message to employers who deliberately exploit workers.

“Anyone tempted to implement a business model that revolves around deliberate exploitation of workers should think again,” said James.

Did you know?

Employers are required to provide every new employee a copy of the Fair Work Information Statement before or a soon a possible after they begin their new job.