RECORD FINE FOR 7-ELEVEN OPERATOR
Written on the 3 May 2016
A 7-ELEVEN store owner has been hit with a record fine of more than $200,000 after deliberately short-changing two migrant employees and falsifying records.
The Fair Work Ombudsman found Harmandeep Singh Sarkaria, who owns and operates the 7-Eleven fuel outlet in Blacktown, underpaid two staff members $49,426 and often made false entries into the 7-Eleven head office payroll system about the number of hours the employees had worked.
Most of the underpayment relates to a migrant employee from Pakistan, aged in his late 30s, who was short-changed a total of $43,633 over two years.
The other employee, also from Pakistan and aged in his mid-20s, was underpaid $5793 over seven months.
For the offences Sarkaria was penalised $35,700 and his company Amritsaria Four Pty Ltd has been penalised a further $178,500.
They are the largest penalties secured against a 7-Eleven franchisee by the Fair Work Ombudsman, which has undertaken a range of compliance actions aimed at addressing systemic non-compliance by 7-Eleven nationally.
In his Federal Circuit Court judgment, Judge Justin Smith said Sarkaria had deliberately flouted his legal obligations and engaged in a sustained and deliberate process of deception.
Smith says that despite being aware of legal obligations relating to pay and record-keeping, Sarkaria had used records to hide the fact that he was not paying two employees properly.
"The contraventions were not accidental, but, rather part of a deliberate scheme aimed at maximising financial benefit to the respondents," says Smith.
"In other words, this was part of the respondents' business model. In my view, this approaches the worst type of each contravention."
Smith says that despite Sarkaria admitting the contraventions and apologising in Court, he did not accept Sarkaria was contrite.
"He appeared to me still to be denying real responsibility for his actions,' says Smith. "I am not convinced that he is truly sorry for his conduct."
The underpayments were the result of the employees often being paid rates equivalent to $10 an hour.
The employees were entitled to receive normal hourly rates of more than $22 an hour and up to $29.27 an hour for some weekend, public holiday and overtime shifts.
Sarkaria made false entries into the 7-Eleven head office payroll system often stating that the employees had worked only 10 hours a week, despite them working significantly more hours.
The entries gave the appearance that the employees were paid about $25 an hour.
Sarkaria also provided Fair Work inspectors investigating the underpayments with false time-and-wages sheets.
Sarkaria and his company admitted contravening workplace laws and back-paid the two employees only after the Fair Work Ombudsman advised it was commencing legal action.
In addition to the penalties, Sarkaria and his company must commission professional audits of their compliance with workplace laws and undertake training on complying with workplace laws.
Fair Work Ombudsman Natalie James says the Court's decision sends a message that employers who set out to exploit workers face serious consequences.
"Anyone tempted to implement a business model that revolves around deliberate exploitation of workers should think again,' says James. "This type of conduct has no place in Australian workplaces and will not be tolerated."
The Fair Work Ombudsman recently released a report on the findings of its Inquiry into the 7-Eleven franchise network.
The Inquiry found that a number of franchisees have been deliberately falsifying records to disguise the underpayment of wages.
Since the Fair Work Ombudsman was created in July, 2009, the Agency has placed eight matters involving 7-Eleven franchisees before the courts.
Three of the matters have resulted in the Courts imposing penalties and five of the matters remain before the Courts.