7-Eleven owner fined over $200,000 for employee underpayment

by Victoria Bruce05 May 2016
A NSW 7-Eleven operator has been fined more than $200,000 for underpaying employees and falsifying records.

A Federal Court fined the western Sydney 7-Eleven operator for his intentionally underpaying two migrant employees a total of $49,426.

Judge Justin Smith fined Harmandeep Singh Sarkaria, who operated a 7-Eleven outlet on Flushcombe Road, Blacktown, $35,700 and his company Amritaria Four Pty Ltd copped a further $178,500, Fairfax Media reported on Monday.

The fine is the largest penalty decision to be made against a 7-Eleven store owner, the latest in a string of underpayment cases to have come before the courts.

In his ruling, Judge Smith said Sarkaria had "deliberately flouted his legal obligations".

The store owner had also engaged in "a sustained and deliberate process of deception", to maximise his own financial return.

Last year the ABC's Four Corners program and Fairfax uncovered that 7-Eleven convenience store workers were systematically underpaid, with many of those affected being foreign workers.

Judge Smith said the hefty penalty should serve as a warning for other employers that employee underpayment will not be taken lightly by the courts.

"One of the aims of imposing a penalty is to mark a warning for others who might be tempted to engage in similar conduct," Judge Smith was quoted saying in Fairfax Media.

"There was evidence of substantial non-compliance by other 7-Eleven franchisees,” he said.

The court heard that a migrant employee from Pakistan, aged in his late 30s, was underpaid a total sum of $43,633 between March 2012 and March 2014.

Another employee, also from Pakistan and aged in his mid-20s, was underpaid $5,793 between August 2013 and March 2014, Fairfax Media reported.

The court found Sarkaria had falsified his entries to the 7-Eleven head office payroll system about the number of hours the employees had worked, giving the appearance that the employees were paid around $25 per hour, when in reality they were paid much less.

The court also heard that Sarkaria had provided Fair Work inspectors with false time sheets.

Judge Smith said Sarkaria had botched his record keeping to "hide the fact that he was not paying two employees properly", despite being "perfectly aware" of his legal obligations.

"This was part of the respondents' business model. In my view, this approaches the worst type of each contravention,” Judge Smith said.

Sarkaria admitted his wrongdoing and apologised in court, however Judge Smith said he did not accept he was contrite.

A spokesman from the Fair Work Ombudsman, Craig Bildstein, said such conduct had no place in Australian workplaces.

"Anyone tempted to try to implement a business model ... which revolves around the deliberate exploitation of workers, and workers from non-English speaking backgrounds, vulnerable workers, international students should clearly think again,” Bildstein told Fairfax Media.

"Since July 2009, we've put eight matters involving 7-Eleven franchisees before the courts, part of a number of enforcement actions we've taken into these stores.

"And this is by far the largest penalty decision to come down thus far and in the words of the judge in the court it's to mark a warning for others, who might be tempted to engage in similar conduct."
 

Similar stories:

FWO continues minimum wage crackdown
Commission rejects 7-Eleven pay deal
Are your workers being exploited? HR could be held liable
7-Eleven terminating franchises
 

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