A former franchisee of a 7-Eleven retail outlet in Melbourne’s CBD is facing court for allegedly exploiting three international students through a cash-back scheme.
A spokesperson for 7-Eleven commented on the action: “7-Eleven welcomes the FWO’s legal actions against this former franchisee, and has fully supported their investigation since 2016.
“We have zero tolerance for wage fraud, have implemented the most comprehensive reforms in the sector to eradicate it, and will act in the strongest available ways against it.”
Facing Court are Xia Jing Qi Pty Ltd, which operated a 7-Eleven retail store on William Street until March 2017, and the store’s former manager, Ai Ling “Irene” Lin.
It is alleged that after 7-Eleven head office set up a high-tech payroll system in 2015 aimed at ensuring employees were paid lawful minimum rates, the company and Lin tried to disguise underpayments of three employees by requiring them to pay back thousands of dollars in wages.
The three employees were Chinese students, aged between 21 and 24, who were in Australia on student visas. Lin, from Taiwan, was also in Australia on a student visa.
From 2015, Xia Jing Qi was required by 7-Eleven Head Office to use a biometric system that recorded hours of work by scanning employees’ fingerprints to sign in and out, with head office then processing the payroll.
The Fair Work Ombudsman alleges Lin told the three employees in late 2015 they would be paid through this payroll system but then specified a weekly sum for each of the workers to pay back via a safe box in the store or to Lin’s bank account.
It is alleged that after returning this portion of their wages, the employees were left with hourly rates ranging from $8.53 to $26.52.
Under the General Retail Industry Award 2010, the employees were allegedly entitled to ordinary hourly rates including casual loading of up to $24.30, up to $38.88 on Sundays and up to $48.60 on public holidays.
The three employees were allegedly underpaid a total of $6674 for various periods of work between November 2015 and October 2016. They have now been back-paid.
It is alleged that Xia Jing Qi also contravened workplace laws by providing the Fair Work Ombudsman with false or misleading records in relation to the 7-Eleven outlet.
The matter is the 11th legal action by the Fair Work Ombudsman against a 7-Eleven franchisee. More than $1 million in penalties have been ordered in 7-Eleven cases to date.
The Fair Work Ombudsman has also started a second litigation against Xia Jing Qi Pty Ltd, as well as the company’s sole director Jing Qi Xia, for allegedly underpaying an overseas worker at Ajisen Ramen in the Melbourne Central Shopping Centre.
The worker has now been back-paid.
Xia Jing Qi Pty Ltd faces penalties of up to $54,000 per contravention in each of the matters, while Lin and Xia each face maximum penalties of up $10,800 per contravention.
An injunction restraining the company from underpaying retail and restaurant employees in future is also being sought. If the injunction is granted, the company could face contempt of court proceedings for any further contravention proven in court.
The matters are listed for a penalty hearing in the Federal Circuit Court in Melbourne on 5 October 2018.
NOTE: Xia Jing Qi Pty Ltd no longer owns or operates the William Street 7-Eleven store in Melbourne. The Fair Work Ombudsman makes no allegations against the current operator.