Melbourne 7-Eleven operators given $150,000 fine for underpaying workers, court hears
The former owner-operators of a Melbourne 7-Eleven store have agreed to pay a $150,000 fine for underpaying 12 “vulnerable” workers, a court has heard.
A Federal Circuit Court hearing has been told husband and wife Haiyao Xu and Yiran Gu have repaid employees of their former Parkville store $84,000 in wages they were owed.
The Fair Work Ombudsman (FWO) took legal action against the couple after an audit revealed they paid their staff as little as $12 an hour in the year to September 2014.
The amount is well below the minimum casual wage of more than $22 an hour, and as much as $46 an hour for overnight and weekend shifts.
FWO lawyer Fiona Knowles told the court 11 of the 12 employees were on visas and had recently arrived in Australia.
“Those employees worked all hours of the day and night … but they did not receive the minimum wage, let alone any additional penalties,” she said.
The court was told the couple also manipulated the 7-Eleven pay roll system by entering that employees had worked fewer hours than they actually had in order to pay them less.
During the time they were underpaying staff, the couple bought another 7-Eleven store on Spencer Street in the CBD. An audit has revealed staff at that store were owed $106,000.
Couple apologised to underpaid staff, court told
Ms Knowles said the couple had made full admissions and cooperated with the FWO’s investigation fully.
They had also sent letters of apology to the employees who had been underpaid.
Defence lawyer Matthew Minuchi said at the time of the offending, 7-Eleven’s head office was taking 57 per cent of its franchisees gross profits.
“The profit of the store of $27,000 for that year was not enough to cover the underpayments,” he said.
Mr Minuchi told the court 7-Eleven had since changed their franchise agreement to allow for the appropriate payment of employees.
The couple and the FWO have agreed on the $150,000 fine but a Federal Circuit Court judge is yet to agree to the penalty.