Franchisee penalised for underpayment

By Lina Le

A former franchisee of a 7-Eleven retail outlet in the CBD faced court for underpaying three international students a total of $6674 between November 2015 and October 2016.

The Fair Work Ombudsman has taken legal action against Xia Jing Qi Pty Ltd, which operated a 7-Eleven retail store on William St until March 2017, and the store’s former manager, Ai Ling “Irene” Lin, who was in Australia on a student visa.

The three employees were Chinese students, between the age of 21 and 24.

Details have emerged that after a high-tech payroll system was installed by the head office to ensure employees were paid lawful minimum rates, the three employees were required to pay back a weekly sum to a safe box in the store or to Ms Lin’s bank account.

The employees were then left with an hourly rate ranging from $8.53 to $26.52.

Xia Jing Qi also violated workplace laws by providing the Fair Work Ombudsman with false or misleading records in connection with the 7-Eleven outlet.

Xia Jing Qi Pty Ltd and its sole director Jing Qi Xia also faced a second charge for allegedly underpaying another foreign employee at Ajisen Ramen in the Melbourne Central shopping centre by a total of $9616.

It is alleged that the employee was paid $11.50 per hour between May and October 2016, which was reduced to just $3.98 per hour in her final week of work.

These rates were significantly below the legal minimum hourly rate, casual loading, and penalty rates specified under the Restaurant Industry Award 2010.

In both cases, the outstanding amounts were paid back.

The franchisee was penalised up to $54,000 per contravention in each case, while Ms Lin and Ms Xia each face maximum penalties of up to $10,800 per violation.

In order to curb similar contravention, an injunction restraining the company from underpaying retail and restaurant employees in future is being sought.

Once granted, the company could face contempt of court proceedings for any further contravention proven in court.

According to the Fair Work Ombudsman’s Natalie James, the use of cash-back schemes requiring workers to pay back part of their wages is a serious form of exploitation.

“We know that workers from overseas backgrounds may be reluctant to speak up or may be unaware of their rights. We make no apologies for targeting businesses who seek to take advantage of these vulnerabilities,” she said.

The Fair Work Ombudsman has previously taken 10 other legal actions against 7-Eleven franchisee with more than $1 million in penalties imposed on the chain to date.

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