7-Eleven Franchisees Face Fresh Allegations Of Worker Abuse

An ongoing Fair Work inquiry into worker rip-offs has already claimed two employers. Thom Mitchell reports.

A Melbourne couple who own a 7-Eleven franchise have been accused of ripping off workers, as Australia’s Fair Work Ombudsman pursues a broader inquiry into the 7-Eleven chain.

Fair Work Ombudsman Natalie James has launched legal proceedings against owners Haiyao Xu and Yiran Gu, and announced plans to sue another 7-Eleven franchisee which has allegedly underpaid 12 employees by more than $84,000, at rates as low as $11 an hour.

Ms James will allege that one worker at the Parkville store in Melbourne was short-changed by more than $16,500 in the 12 months to the end of September last year.

The legal action forms part of an ongoing Fair Work inquiry into widespread rorting of workers in Australia’s most popular convenience store chain. It will hone in on the (now former) owners of the Parkville store, Xu and Gu, and their company Hiyi Pty Ltd.

The couple face maximum penalties of up to $10,200 per breach of workplace laws, and their company could also be dealt a blow of $51,000 per contravention.

Ms James said all but $500 of the $84,000 in unpaid wages had been belatedly paid by the employer, but legal action will be initiated nonetheless because it is alleged the store owners deliberately perpetrated abuses against vulnerable overseas workers.

According to a release from the office of the Fair Work Ombudsman, “Ms Gu and Mr Xu allegedly made false entries into the 7-Eleven head office payroll system to make it appear the employees had been paid award rates and that they had worked less hours than was actually the case.”

It is alleged that workers at the Melbourne store were paid flat rates of between $11 and $17.31, but this morning Ms James said they should have received more than $22 per hour at normal rates, and up to $37 at times when they were entitled to penalty rates.

The broader 7-Eleven chain has been plagued by similar allegations in recent months, particularly since a joint Four Corners-Fairfax investigation alleged in late August that a culture of abuse and deceit is widespread throughout the corner store empire.

The reports allege that workers throughout 7-Eleven’s Australian stores are so badly mistreated that their pay and conditions border on slavery, and suggest these arrangements are maintained by franchisees who blackmail and intimidate staff.

An undisclosed number of the 12 workers allegedly ripped off at Gu and Xu’s Melbourne store were international students, and are therefore subject to strict conditions around the hours they can work, and the wages they can earn. It’s a situation which can provide substantial leverage to unscrupulous employers.

According to the Fair Work Ombudsman, the couple continue to operate a 7-Eleven store on the corner of Flinders and Spencer Streets in Melbourne’s central business district.

The office of the Fair Work Ombudsman said the Parkville store was one of 20 outlets targeted by Fair Work inspectors throughout Melbourne, Sydney and Brisbane in late 2014.

James said that preliminary results from the Fair Work Ombudsman’s ongoing Inquiry into 7-Eleven stores is concerning, with contraventions identified at most of the outlets targeted for investigation.

The agency has already filed two litigations against 7-Eleven stores in the last financial year, and entered into an enforceable undertaking with a third. It has issued three Compliance Notices, 13 on-the-spot Infringement Notices and 16 Letters of Caution throughout the embattled 7-Eleven network.

A Statement of Findings on the 7-Eleven Inquiry will be issued early next year, including recommendations for the company’s head office outlining how to change the business’s culture.

• If you have a complaint, or believe you are not being receiving your full entitlements, you can find the Fair Work Commission here.