The former owner-operators of a Melbourne 7-Eleven store will face court for allegedly underpaying 12 employees by more than $84,000, with some allegedly paid flat rates as low as $11 an hour.
Fair Work Ombudsman Natalie James has announced legal action against Balwyn North husband and wife Haiyao Xu and Yiran Gu and their company Hiyi Pty Ltd.
The couple owned and operated a 7-Eleven store on Royal Parade, Parkville, until it was sold earlier this year. The store was one of 20 outlets targeted by Fair Work inspectors throughout Melbourne, Sydney and Brisbane late last year.
Ms Gu and Mr Xu currently own and operate another 7-Eleven store on the corner of Flinders and Spencer Streets in Melbourne’s CBD. This is also under investigation.
The couple allegedly 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.
Ms James said that while it was pleasing all but $500 of the underpaid wages bill had now been rectified by the employer, legal action was initiated because of the alleged deliberate exploitation of vulnerable overseas workers.
The agency alleges the store operators were aware of their lawful obligations, but initially chose to ignore them and tried to cover up their actions. 7-Eleven is the subject of a national inquiry by the Fair Work Ombudsman into allegations of systemic underpayments and false record-keeping practices.
Ms James says preliminary results from the inquiry are concerning, with contraventions identified at most of the outlets recently targeted for investigation.
A statement of findings on the 7-Eleven inquiry will be issued early next year, including recommendations for the company’s head office.
“The findings will be designed to ensure 7-Eleven takes steps to bring about sustainable change in culture in the 7-Eleven network in relation to compliance with workplace laws,” Ms James said.
She added that although it was encouraging that former ACCC chairman Professor Allan Fels would head a 7-Eleven panel to review and resolve wage claims, she was committed to continuing Fair Work’s own, independent investigations.
“It’s important that there’s transparency and accountability to the Fair Work Ombudsman and the community around the steps taken by 7-Eleven head office to bring about sustainable change in culture among its franchisees,” she said.
In the past six years, the Fair Work Ombudsman has recovered more than $600,000 in underpaid wages and entitlements for 182 workers at 7-Eleven outlets.
