Convenience store operators fined $150,000 for underpaying international students

27 April 2011

The former operators of two 7-Eleven stores in Melbourne and Geelong have been fined a total of $150,000 for deliberately exploiting six international students.

Melbourne Magistrates' Court imposed the penalty following an investigation and prosecution by the Fair Work Ombudsman.

Toorak couple Hao Chen and Xue Jing have been fined $20,000 and $10,000 respectively, and their private company, Bosen Pty Ltd, a further $120,000.

Magistrate Kate Hawkins also ordered Bosen to back-pay the six students almost $90,000.

Fair Work inspectors discovered the underpayments when they investigated complaints from the employees.

The six employees were underpaid amounts of $40,583, $25,341, $15,845, $4263, $1882 and $1342.

Through their company Bosen, Chen and Jing formerly owned and operated 7-Eleven stores on Park Street, South Yarra and Moorabool Street, Geelong.

Magistrate Hawkins found that Chen was the "directing mind and will" of Bosen when the company underpaid six employees - all international students from Zimbabwe and India - a total of $89,256 between 2005 and 2009.

Magistrate Hawkins found Jing was also involved in the underpayments of two of the students.

"The conduct was a systematic and significant exploitation of highly vulnerable workers," she said.

"The exploitation affected young international students, four teenagers at the time, who had only recently arrived in Australia.

"This was a deliberate and calculated campaign to pay the employees less than what they were legally entitled to and to obtain free labour and therefore a competitive advantage in the marketplace."

Fair Work Ombudsman Executive Director Michael Campbell says the penalty and back-payment of wages Order send a very clear message that the community will not tolerate deliberate exploitation.

"International students and other foreign workers can be vulnerable because they are often not fully aware of their workplace rights in Australia, so we take instances of exploitation very seriously," he said.

Magistrate Hawkins found that false information about hours the six students worked and the rates they were paid was transmitted to the 7-Eleven head office and that written store records showing actual hours worked and rates paid were "deliberately thrown out".

The six students - aged 18 to 26 - were paid flat rates of between $9 and $12 an hour when were entitled to receive more than double those rates for many of the shifts they worked.

The conduct resulted in underpayment of the students' minimum hourly rates and penalty rates for weekend, night and public holiday work.

The workers were also not paid annual leave entitlements and some were unlawfully required to do periods of unpaid 'training' before starting paid employment.

"This 'training period' equated to several weeks of free labour in most instances", Magistrate Hawkins said.

Magistrate Hawkins said there was a need to set a penalty that "serves as a warning to others". "There is a need to send a message to the community at large, and small employers particularly, that the correct entitlements for employees must be paid," she said.

The Fair Work Ombudsman devotes considerable resources to educating international students and foreign workers about their workplace rights.

Information translated into more than 20 languages is available at www.fairwork.gov.au. The website also includes a page with resources tailored specifically for international students.

Materials in language of origin have also been sent previously to ethnic media and community groups working with migrants and there has been a focus on international students when Fair Work inspectors attend University O-Week activities.

Recently, the Fair Work Ombudsman has conducted a series of auditing campaigns in industries employing significant numbers of foreign workers, including horticulture, hospitality, cleaning and retail.

The Fair Work Ombudsman audited 56 7-Eleven stores throughout Melbourne and Geelong last year and recovered $32,300 for 62 underpaid workers.

Employers or employees seeking assistance should contact the Fair Work Infoline on 13 13 94 or visit www.fairwork.gov.au. A free interpreter service is available on 13 14 50.

Media inquiries:

Ryan Pedler, Senior Adviser, Media & Stakeholder Relations
(03) 9954 2561, 0411 430 902
ryan.pedler@fwo.gov.au

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