October 6, 2015

7-Eleven Saga: Underpayment of Employees

Recently, a number of 7-Eleven operators have come under fire in light of allegations they have underpaid employees. As a result, the founders of 7-Eleven Australia could face a Senate inquiry over allegations head office was complicit in wage fraud against workers at 7-Eleven stores.

Whilst it appears there may be many more cases of underpayment taken up by the Fair Work Ombudsman, we have considered the facts surrounding two such cases published by the Fair Work Ombudsman.

7-Eleven Blacktown, Sydney
The Fair Work Ombudsman has commenced legal proceedings against 7-Eleven Blacktown owner/operator, Harmandeep Singh Sarkaria, both in his personal capacity and against his company, Amritsaria Four Pty Ltd.

Mr Sarkaria and his company allegedly underpaid two console operators a total of $49,426. Those employees were entitled to receive normal hourly rates of more than $22, and up to $29.27 an hour for some weekend, public holiday and overtime shifts.

In essence, it is alleged that the company made entries representing that the employees had only worked a minimal number of hours, and had been paid award rates, when in reality the shifts were significantly longer and the rates paid to the employees was equivalent to $10 per hour.

Mr Sarkaria faces maximum penalties of between $5,100 and $10,200 per breach, and his company faces penalties of $25,500 to $10,200 per breach.

7-Eleven Edward Street, Brisbane
The Federal Circuit Court has imposed a $6,970 penalty against the former operator of 7-Eleven Edward Street, Mubin Ul Haider for underpaying an overseas worker more than $21,000 and refusing to co-operate with the Fair Work Ombudsman.

Mr Ul Haider admitted his business underpaid the young visa-holder the minimum wage, casual loading and penalty rates he was entitled to.

The Court ordered that the fine be paid to the former employee.