An operator of a 7-Eleven store has been handed a record penalty of over $400,000 after being found to have systematically exploited their workers.
Brisbane businessman Sheng-Chieh Lo was fined $68,058 and his company, Mai Pty Ltd, $340,290 after he was found to have short-changed more than $82,000 12 of his 7-Eleven employees.
Although some of the money owed to the workers was paid, Lo requested his staff to secretly pay back thousands of dollars to him and his wife, according to the statement released by the Fair Work Ombudsman.
Michael Jarrett, Federal Circuit Court judge, said the 7-Eleven franchisee had shown “contemptuous disregard” for Australian workplace laws and had sought to deceive the Fair Work Ombudsman.
According to the Fair Work Ombudsman, it is the largest ever Court-imposed fine they have achieved, eclipsing a ruling in Perth in 2013 by almost $65,000.
The decision was the the latest outcome of a string of compliance actions by the Fair Work Ombudsman aimed at addressing systemic non-compliance within the 7-Eleven network.
Natalie James, Fair Work Ombudsman, said her office is currently in discussions with 7-Eleven about a robust and transparent arrangement that will satisfy the Agency that the head office is taking the necessary steps to build a franchise operating model that ensures workers employed in its network are correctly paid in the future.
The 7-Eleven franchisee had underpaid his 12 employees, including a number of international students, between September 2013 and September 2014.
Lo’s Brisbane store was one of 20 7-Eleven outlets targeted by Fair Work inspectors for surprise night-time visits as part of a tri-State operation in September 2014.
Meanwhile the National Retail Association has declared today’s record fine for a 7-Eleven store to be a double-edged sword for small businesses, with the potential to help those who do the right thing but also highlighting the complexity of the workplace relations system.
NRA acting CEO Ian Winterburn said the overwhelming majority of employers in the retail sector tried very hard to meet all their obligations to their employees, and struggled to compete when a small number of business owners failed to do the right thing.
“There’s no doubt that this is a highly complex area of regulation, and we know from experience that many small business owners struggle to understand their obligations and comply with the volumes of workplace law,” he said.
“So it’s certainly frustrating for those who do the right thing and ensure they pay their employees all their entitlements when others do not comply and are able to gain a market advantage for themselves as a result.
“In that sense, retailers will welcome the moves to ensure there is a level playing field.
“At the same time, however, this highlights just how complex the employment landscape is for retailers, and why many of them simply opt to close their doors or only use family members behind the counter at times when penalty rates may apply.
“So while we by no means condone underpayment of staff, we understand that this is a difficult area for small business.
“That’s why the NRA urges business owners to seek advice if they are in any doubt about their legal responsibilities in relation to wages and conditions for their employees.”
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