The Fair Work ombudsman began legal action on May 19 against a 7-Eleven store operator in Geelong who owed hundreds of hours in unpaid wages to four workers.
The decision came after a two-year campaign by the Unite union, which organises workers in part-time and casual work.
The ombudsman alleges that four workers were owed a total of $85,408 for work over 2005-09. One worker alone was underpaid $40,583.
The franchise owners, Hao “Eddie” Chen and Xue Jing, sold the store after the Ombudsman took up the case, but are still liable for the unpaid wages. Chen still owns a South Yarra 7-Eleven store franchise.
The case has been adjourned until September to include the cases of a further two workers.
Unite secretary Anthony Main, told Green Left Weekly he does not understand why the Fair Work ombudsman isn’t taking up the cases of other 7-Eleven workers who have been underpaid. Unite knows of at least 12 at the store whose total underpayment is about $100,000.
Main said the legal process has been “very frustrating” because the workers first lodged their complaint with the Fair Work ombudsman in December 2008. “By the time they get their money, it will have taken two years”, he said.
Because most of the workers are international students, “this process is too slow” said Main. One worker’s student visa expires in October.
The 7-Eleven chain of franchise stores is built on exploitation of international students, who make up 90% of the 7-Eleven workforce, says Unite
Because these workers are paid below their legal entitlement, many are forced to work more than 20 hours a week, breaking their student visa regulations.
Most workers do not want to work more than 20 hours a week, but can’t afford to live otherwise. 7-Eleven franchise owners can then threaten to expose the breach to bully workers if they complain about unpaid wages or unfair shifts.
The ombudsman alleges the Geelong workers were paid flat rates of between $9 and $11.50 an hour, regardless of how many hours or what time of the day or night they worked. It is also alleged that Chen entered false information into the 7-Eleven payroll system.
Chen also listed the workers’ pay rates at double what they were paid and recorded half the number of hours, to make it appear the employees were paid correctly. Unite refers to this as 7-Eleven’s “double-hours scam”.
Penalty rates were not paid for work on weekends, night-time or work on public holidays. Workers were not paid annual leave entitlements and some were required to undertake unpaid training.
Unite says all 20 of the workers at the Geelong store had done unpaid trial work and one worker went unpaid for two months.
Unite also said Chen refused to issue pay slips, shredded records of underpayment, tried to make workers pay for their own security on late-night shifts and bullied workers for speaking to the union.
Through its campaign, Unite has exposed a widespread practice of underpaying workers by 7-Eleven franchisees, especially with the double hours scam. Main said: “They might show worker X logging on at 9am on Monday and then logging off at 9pm the same day, but the slips say he only worked six hours.”
The evidence presented by Unite resulted in 168 workers receiving back pay of $162,000 in July 2009 and the Ombudsman auditing all 7-Eleven stores in Victoria. Many more workers that were getting paid cash in hand are now on the books and being paid properly.
[Click here for more details about the campaign.]