7-Eleven back in court as franchisee is caught short-changing staff

Another 7-Eleven store in Brisbane is facing court for allegedly short-changing its workers, including international students, thousands of dollars.

The Fair Work Ombudsman has announced legal action against the operators of the 7-Eleven outlet at 80 Vulture St, West End.

Facing legal proceedings is franchisee, Jim Chien-Ching Chang, and his company, JS Top Pty Ltd, for allegedly underpaying eight staff a total of $19,397.

The store was one of 20 7-Eleven outlets targeted for surprise night-time visits as part of a tri-state operation in September, 2014. The litigation takes to eight the number of 7-Eleven operators to face court since 2009.

Earlier this year, the Fair Work Ombudsman announced legal proceedings against the operators of three other 7-Eleven outlets in Brisbane.

It is alleged that Mr Chang paid flat hourly rates as low as $13 an hour, resulting in significant underpayment of the minimum hourly rate, casual loadings and penalty rates for shift and weekend work.

It is alleged one employee was underpaid $13,962 between July, 2013 and August, 2014, while the others were underpaid amounts ranging from $203 to $1835 for shorter periods of work.

Mr Chang allegedly created false employment records when making false entries into the 7-Eleven head office payroll system. He and his company allegedly also knowingly provided false time-and-wage records to the Fair Work Ombudsman. The false records allegedly misstated the hours of work and rates of pay, which effectively concealed the underpayment to employees.

The alleged underpayments have now been rectified.

The Fair Work Ombudsman is seeking court orders for JS Top Pty Ltd to display an instore notice informing employees of entitlements, to undertake an audit of its compliance with workplace laws and report the results to the Fair Work Ombudsman, and to promptly resolve any future underpayment matters.

A directions hearing is listed in the Federal Circuit Court in Brisbane on May 23. Mr Chang faces maximum penalties of up to $10,200 per contravention and JS Top Pty Ltd up to $51,000.

Fair Work Ombudsman, Natalie James, says the findings of the agency’s national inquiry into 7-Eleven will be published soon.

Company restructure progressing: 7-Eleven

Claims of worker exploitation throughout 7-Eleven were first uncovered in August 2015 following a joint investigation by Fairfax Media and the ABC’s Four Corners program.

The investigation revealed widespread underpayments by 7-Eleven franchisees to employees and became the focus of a broader Senate Committee inquiry into temporary work visa programs and the Australian labour market.

Following the program, 7-Eleven launched a strategic reform program. The company hired its own consultancy firm and set up its own independent panel chaired by Professor Allan Fels to examine claims of staff underpayments by franchise operators.

The Fels Wage Fairness Panel is understood to have reached out more than 20,000 past and present employees in what has been described by 7-Eleven as an “exhaustive campaign”.

Speaking to C&I in the April/May issue of C&I Retailing Magazine, 7-Eleven chairman, Michael Smith, said he believes the changes currently taking place throughout the Australian operation will become “the foundations of a new future”.

“I think in the next 12 months we’re going to be progressively understood as a new 7-Eleven,” Mr Smith said.

“We will have a new franchising model, a new CEO, and we will have a new relationship with our franchisees and franchise staff. Between all of us we have turned clearly what a weakness into what I think the Australian business community, particularly the retail community, will see as the leading example of how to manage this issue.

“One of the ways of winning trust back is to be the example of how you make this work. I don’t think our customers would tolerate us going backwards in this regard so we can’t let them down.”

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