7-Eleven underpayment penalties surpass $1m

7-Eleven underpayment penalties surpass $1m

The highest-profile example of worker underpayment in Australia continues to make waves, with a new judgment taking penalties issued against 7-Eleven operators above $1 million.

Brisbane resident Jim Chien-Ching Chang was fined $28,000 personally, and his company JS Top Pty Ltd fined $140,000, by the Federal Circuit Court after he was found to have underpaid eight staff at his 7-Eleven store in Brisbane’s West End and falsified records to cover his tracks.

The franchise has since been sold to an unrelated party.

Mr Chang admitted to paying workers flat rates as low as $13 per hour, the Fair Work Ombudsman (FWO) found. This resulted in one employee being short-changed to the tune of $13,962 between July 2013 and August 2014, while seven other workers were docked between $203 and $1,835 for shorter periods of employment.

Judge Michael Jarrett said Mr Chang was fully aware of his obligations under the relevant award, but had “established a business model that relied upon a deliberate disregard of the employees’ workplace entitlements and a course of conduct designed to conceal that deliberate disregard”.

FWO said that all of the employees have now been paid the outstanding amounts in full.

The 7-Eleven scandal has now resulted in penalties worth more than $1 million being issued to a number of franchise operators, according to FWO.

Legal action has been taken against nine separate 7-Eleven operators since 2009 for alleged underpayment of employee entitlements.

The $1 million figure is likely to climb further, given that three cases remain before the courts.

“Businesses should be in no doubt that lawful obligations to pay minimum wage rates, keep appropriate employment records and issue pay slips apply to all employers in Australia and they are not negotiable,” said Fair Work Ombudsman Natalie James.

Ms James said that following the payments scandal within its network, 7-Eleven has entered into a Proactive Compliance Deed with FWO, which is seeing a range of measures implemented to ensure workers receive accurate payments.

7-Eleven underpayment penalties surpass $1m
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