Media release

25 July 2009

Watchdog’s random audits recoup $112,000 for city convenience store workers  

Five convenience stores in Melbourne’s CBD will reimburse 88 workers $112,000 after an investigation by the Fair Work Ombudsman found the employees were being underpaid.

The underpayments were identified by inspectors after they made a series of surprise night-time visits to 7-Eleven stores.

A sixth 7-11 store has been instructed to credit almost 1000 hours of annual leave back to 12 staff who were not accruing the entitlement but should have been.

The random audits followed public allegations by a retail union that young employees were being exploited and that some employers were forging employment records.

Fair Work Ombudsman Executive-Director Michael Campbell says many of the underpaid workers were considered to be “vulnerable” because they were young foreign students.

The underpayments found at each store were $32,134 for 18 workers, $27,053 for 25 workers, $24,987 for 25 workers, $23,671 for 16 workers and $3615 for four workers.

The major problem was the underpayment of penalty rates for weekend and night shift workers.

Mr Campbell says the results are concerning, but is pleased the 7-Eleven franchisor has taken an active interest in addressing the issue.

“The franchisor wants to work co-operatively with the FWO on a program to ensure its Victorian stores comply with federal workplace laws,” he said. 

“And it will make it clear that franchisees risk termination of their contracts if they do not comply.”

The Melbourne outcome follows the recent recovery of $50,000 for 80 workers at 15 convenience stores in Sydney’s CBD.

Similarly, Mr Campbell says the mostly 24-hour, seven-days-a-week stores were paying staff a flat hourly rate without weekend and late-night penalties.

He says that where breaches are inadvertent, employers are cautioned and educated about the need for ongoing compliance.

However, Mr Campbell said rogue employers caught deliberately ripping off young vulnerable workers faced severe financial penalties.

“We will not hesitate to throw the book at unscrupulous bosses who think they can exploit young workers,” he said.

"My simple warning to those who want to risk it is simple - don't! There's a tough watchdog on the beat and there's a high price to be paid.

"Any worker who fears they're being treated unfairly should pick up the phone and call us on 13 13 94. You can speak to our inspectors confidentially and we will treat every allegation seriously.

"That's why we're here - to educate and inform the workforce and employers alike and to monitor and enforce compliance with workplace law.”

Mr Campbell said employers thinking of short-changing employees from a non-English speaking background should look at the hefty penalties being dished out by the Courts, which had shown quite clearly they would not tolerate such shabby behaviour.

The highest-ever penalty achieved by the Fair Work Ombudsman was $288,000  earlier this year against a small Adelaide cleaning company Saya Pty Ltd, which underpaid two vulnerable workers - an 18-year-old female and a newly-arrived migrant from Iraq - less than $4000.

"For the sake of saving $4000 from its wages outlay, this employer now has to mop one heck of a lot of floors to make up that sort of penalty," Mr Campbell said. Breaches of federal workplace law carry a maximum penalty of $33,000.

Other penalties achieved by the Fair Work Ombudsman for exploitation of foreign workers include:

• $183,400 plus back-payment against Melbourne restaurant operator Penang Kayu Nasi Kander Pty Ltd and company co-owner Poh Meng Hong for underpaying a Malaysian chef more than $75,000,

• $48,000 plus back-payment against Sydney labour-hire company Healthcare Recruiting Australia and its sole director Michelle Lloyd for deliberately underpaying three Filipino nurses on 457 visas more than $15,000,

• $85,750 against WA construction company Hanssen Pty Ltd for breaching the workplace rights of fifteen 457 visa holders from the Philippines and Ireland,

• $30,000 plus back-payment against Canberra restaurant owner Greenstone Pty Ltd for underpaying a Chinese chef on a 457 visa $47,000,

• $18,200 plus back-payment against NSW restaurant operator Yoga Tandoori House Pty Ltd for underpaying an Indian worker on a 457 visa $11,500,

• $9000 plus back-payment against Melbourne businessman Dor Tu for his involvement in underpaying four Chinese workers $93,000,

• $29,800 plus back-payment against Canberra hospitality businesses Squaw Valley Pty Ltd and Telluride Pty Ltd for underpaying 141 employees, including 457 visa holders, more than $80,000,

• $26,730 against two directors of Adelaide company Risborg Services Pty Ltd for their involvement in underpaying 64 trolley collectors, including many with limited English skills, more than $170,000, and

• $6600 each against Brisbane businessmen Gregory Wayne Nicholson and David Mark Young for breaching the workplace rights of five Chinese construction workers on 457 visas.

Current Fair Work Ombudsman compliance activities aimed at protecting foreign workers include:

• The launch of a prosecution against Sydney businessman Frank Huang for allegedly underpaying seven of his former staff, including two Chinese migrants, more than $80,000, and

• A campaign in Newcastle, NSW, aimed at ensuring the workplace rights of foreign students.

Mr Campbell said youth, language and cultural barriers made it difficult for foreign workers to negotiate their employment conditions, and so it was important that the Fair Work Ombudsman was pro-active in ensuring they understood their minimum rights and that these were protected.

The FWO website - www.fwo.gov.au - now contains translated information in 23 different languages aimed at helping those from a non-English speaking background and the Agency runs a free translating and interpreter service on 13 14 50.

The Fair Work Ombudsman promotes harmonious, productive and co-operative workplaces.

 

Media inquiries:

Craig Bildstien, Director Media & Stakeholder Relations,
0419 818 484
craig.bildstien@fwo.gov.au

Ryan Pedler, Media & Stakeholder Relations Senior Adviser
(03) 9954 2561, 0434 365 924
ryan.pedler@fwo.gov.au

 

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Page last updated: 25 Jul 2009