Matthew Dunckley, 13 January 2016

A 7-Eleven operator faces court action after allegedly failing to pay correct wages to 21 staff including penalties rates on Christmas Day, Good Friday or Anzac Day.

The Fair Work Ombudsman has launched legal action against the franchisee, Jason Yuan, and his businesses claiming that they underpaid the workers more than $31,000 in just one year.

As well as failing to pay public holiday penalty rates, court documents show the ombudsman alleges the franchisee failed to pay shift penalties and casual loadings.

It is also claimed the franchisee gave the workers at the two Brisbane stores false pay slips and kept incomplete and incorrect records.

Fairfax Media revealed systemic wage abuse at 7-Eleven’s 620 Australian stores last year, prompting the resignation of the chain’s co-owner Russ Withers as well as its chief executive Warren Wilmot, and a series of investigations.

Former consumer tsar Allan Fels is also running a compensation scheme for workers who believe they have been ripped off. The company has denied knowing workers were being underpaid.

The ombudsman’s new case is the sixth such litigation launched against a 7-Eleven operator since 2009.

Mr Yuan operates the stores at 231 George Street and 174 Adelaide Street, which are owned by two companies he also part-owns, Vipper and Viplus.

If found culpable Mr Yuan faces maximum penalties of up to $10,200 a breach while the companies face penalties of up to $51,000 per contravention.

In a statement the ombudsman’s office said the employees included a number of international students who were allegedly paid flat rates as low as $17.74 an hour well below the minimum rates once penalty rates were considered.

The minimum wage for relevant adult workers for most of the period was $17.98 an hour. Penalties such as casual loading ($4.43 an hour), Saturday penalties ($1.44 per hour) and Public Holiday Penalties ($27.22 per hour) would significantly increase that amount.

The ombudsman alleges that workers in the stores were paid the flat rates, without appropriate penalties, through 7-Eleven’s payroll system, which is provided by head office.

One worker, Ashok, at the George Street store was underpaid a total of more than $4300 having worked Christmas Day, Boxing Day, New Year’s Day, Good Friday, Easter Saturday and Easter Sunday. He was paid a flat rate of $22.41.

Individual employees were allegedly owed amounts from $98 to $5080.

A 7-Eleven spokesman said the company had already made significant interim changes to its payroll systems to help ensure compliance by franchisees including wage rates. A completely new system was also under development.

The spokesman said workplace law breaches were taken very seriously but that action would not be taken towards stripping the franchise from Mr Yuan until the case was completed as a matter of due process.

he ombudsman also alleges some employees were paid below award wages in cash. The stores were among those targeted in surprise night raids across three states in late 2014.

The ombudsman had already warned Mr Yuan in 2013 about his obligations to pay lawful minimum penalty rates.

A directions hearing is listed in the Federal Circuit Court in Brisbane on February 22.

Fair Work Ombudsman Natalie James said 7-Eleven was the subject of a national inquiry by the ombudsman into allegations of systemic underpayments and false record-keeping practices.

Ms James said a final report was expected in the first quarter of this year.

Mr Yuan was unavailable for comment.

Extracted in full from the Sydney Morning Herald.