7-ELEVEN OPERATOR SLAPPED WITH RECORD FINE
Written on the 21 June 2016
THE Fair Work Ombudsman has achieved its largest ever court imposed penalty, fining a 7-Eleven operator and his company more than $400,000.
The penalty follows an investigation and litigation by the Fair Work Ombudsman which found 12 7-Eleven employees in Brisbane had been short-changed more than $82,000.
While some of the money was paid-back, the store owner requested his staff to secretly pay back thousands of dollars to him and his wife.
Federal Circuit Court judge Michael Jarrett found the 7-Eleven franchisee had shown contemptuous disregard for Australian workplace laws and had sought to deceive the Fair Work Ombudsman.
Handing down his decision, Jarrett imposed record penalties totalling $408,348 - eclipsing by $65,000 the Fair Work Ombudsman's previous highest penalties of $343,860 in Perth in 2013.
Brisbane businessman Sheng-Chieh Lo was penalised $68,058 and his company, Mai Pty Ltd, a further $340,290.
Lo owns and operates the 7-Eleven outlet on Boundary Road, West End.
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.
Jarrett found that Lo and his company had systematically exploited employees by implementing 'a business model that relied upon a deliberate disregard of the employees' workplace entitlements'.
Lo paid employees flat rates as low as $13 an hour and tried to conceal the underpayments by creating false records and making entries into the 7-Eleven head office payroll system.
Jarrett described it as a sophisticated system of data manipulation and false record keeping and the extent of the deception only came to light because of the persistence of Fair Work inspectors.
After initially providing inspectors with false records to try to cover-up the underpayments, Lo showed inspectors selective bank records as evidence that his employees had been back-paid.
However, when he provided the records to inspectors, Lo knew that he had already arranged for the employees to pay thousands of dollars back to him and his wife.
After inspectors learnt of the conduct, Lo again tried to deceive inspectors by denying he had required employees to back-pay wages, saying it 'would be wrong' to do so. He later changed his story and admitted to his deceit.
Fair Work Ombudsman Natalie James says the Court has marked its strong disapproval of the exploitation of vulnerable workers and deceitful behaviour with record financial penalties.
"This record penalty reinforces the message that this type of conduct has no place in Australian workplaces and will not be tolerated," she says.
James noted the extent of the deception on the part of Lo and his company only came to light because of the persistence of the Fair Work Ombudsman and its inspectors.
"Let me be very clear that we will continue to be persistent with our compliance activities, even when confronted by employers who deliberately seek to mislead us with false records and where vulnerable employees are involved, even if they themselves are too afraid to talk to us," she says.
The penalty against Lo and Mai Pty Ltd is now the highest Australian and Queensland penalty achieved by the Fair Work Ombudsman for any of its legal work.