Sarah Danckert, 07 April 2016

The Fair Work Ombudsman has launched legal action against a 7-Eleven store owner who allegedly underpaid staff as little as $13 per hour and kept false records.

Store owner Jim Chien-Ching Chang through his business JS Toy Pty Ltd allegedly underpaid one staff member $13,962.14 over a 13-month period between July 2013 and August 2014.

Seven other employees working at Mr Chang’s store were assessed to have been underpaid $5435.01 over a four-week period between June 22, 2015 and July 19, 2015.

The alleged underpayment occurred at Mr Chang’s 7-Eleven store on Vulture Street in Brisbane’s West End.

The ombudsman is in the midst of a crackdown on 7-Eleven store owners which could spell major ramifications for other stores owners and potentially head office.

Last year, a joint media investigation by Fairfax Media and ABC’s 4 Corners program uncovered systemic underpayment of workers at 7-Eleven stores across Australia and the complicity of head office in the exploitation of workers.

7-Eleven set up a compensation scheme last September after the revelations chaired by former competition tsar Allan Fels and so far workers have been compensated $10 million in unpaid wages.

FWO alleges Mr Chang kept false records and filed false payroll data with 7-Eleven head office. The court documents detail how Mr Chang allegedly participated in what is known as the half pay scam by only recording half the hours the staff worked while simultaneously doubling the per hourly rate.

According to the FWO, this tactic meant the workers received the same gross pay and Mr Chang could allegedly pass his payroll filings off as legitimate.

It is alleged the eight workers never received shift worker allowances despite working on a gruelling 24-hour roster. Mr Chang also allegedly failed to pay penalty rates for Saturday and Sunday shifts worked by his staff.

One employee, Ashish Singh, who is alleged to have been underpaid by $13,962.14 over a 13-month period between 2013 and 2014, received only $13 per hour as a flat rate regardless of what shifts he worked over a six-month period. He then received a “pay rise” and earned $14 per hour over the next seven months.

The minimum wage for an adult retail worker not engaging in shift work or working shifts that incur penalty rates at the time was between $17.98 and $18.52.

FWO is seeking fines for Mr Chang and declarations his business JS Top Pty Ltd breached employment legislation.

Mr Chang did not return messages left for him at his store.

A spokesman for 7-Eleven head office said the company did not condone the underpayment of franchisee employees “in any form”. He said 7-Eleven would consider the outcome of the proceedings against Mr Chang and his business before making a determination about whether to terminate its agreement with Mr Chang.

“The company has enhanced its in-house capabilities through a special investigations unit, store audits, a compulsory centralised payroll system and new time and attendance processes to detect and investigate irregularities and where appropriate impose sanctions including termination,” the 7-Eleven spokesman said.

“7-Eleven always co-operates with the Fair Work Ombudsman and will do so if requested in this instance as part of closer co-operative effort with the regulator on compliance and governance issues,” the spokesman added.

Extracted in full from the Sydney Morning Herald.