7-Eleven franchisee accused of terminating employee who didn’t repay leave entitlements

The Brisbane franchisee allegedly sought repayment of accrued annual leave that had been paid to the worker

7-Eleven franchisee accused of terminating employee who didn’t repay leave entitlements

A 7-Eleven worker was dismissed by a franchisee in Brisbane who allegedly removed him from the roster after he refused his employer’s request to repay his leave entitlements.

The worker was allegedly first employed in February 2015 as a casual and then engaged as a part-time employee between December 2015 and July 2016. During this period, the Indian national accrued annual leave entitlements equivalent to $731.06.

The current director and shareholder Madhav Ponnada and Balaji Australia Pty Ltd will also face the Federal Circuit Court concerning allegations that false and misleading records were created during the employment of two employees and were later provided to Fair Work Inspectors during the investigation.

The Fair Work Ombudsman (FWO) alleges that Ponnada, on behalf of the company, made several requests for the worker to return the $731.06 that had been paid.

It is also alleged that the day after the worker refused to repay this money, Ponnada instructed a store manager to remove the employee from a rostered shift and advised the store manager that the employee no longer worked at the store.

In a statement, 7-Eleven said they support the FWO’s investigation into the Brisbane franchisee.

“7-Eleven has fully cooperated with the FWO’s investigation into these alleged practices, and endorses the FWO’s action,” said the statement.

This is the tenth matter filed by the FWO involving a 7-Eleven franchisee, with more than $1 million in penalties ordered in cases to date.

Fair Work Ombudsman Natalie James said requiring workers to repay portions of their wages is an “insidious practice”.

“We are concerned that so called ‘cash-back’ schemes are being utilised to disguise the underpayment of some of the most vulnerable workers in our community,” said James.

“This is the type of behaviour that warrants serious enforcement action, such as litigation through the Courts.”

The FWO is asking the Federal Circuit Court to impose penalties against Ponnada and his company for multiple alleged contraventions of workplace laws, as well as seeking compensation for the worker who was allegedly terminated.

“Workers cannot be deprived of work for exercising their rights, regardless of whether they are engaged on a casual, part-time or full-time basis,” said James.

“We encourage anyone with information on alleged ‘cash-back’ schemes to come forward and assist us in our investigations.”

Late last year, the Fair Work Ombudsman and 7-Eleven signed a Proactive Compliance Deed which requires 7-Eleven to overhaul its systems and implement fully biometric time recording to prevent the falsification of records.

The alleged record-keeping contraventions in this litigation occurred prior to the signing of this deed.

In their statement, 7-Eleven added that they conducted their own investigation into the allegations, and were unable to find a level of evidence required for the company to take its own action under the industry codes.

“Unbelievably, underpayment (no matter what the amount) does not entitle a franchisor to terminate a franchise agreement under the existing industry codes,” said the statement.

“Termination for underpayment is only available to a franchisor if it can be demonstrated at the requisite level of proof that the underpayment has occurred in a way that involves fraudulent conduct.

The statement added that 7-Eleven’s experience demonstrates that the burden of proof is unreasonably difficult to meet.

“That’s why 7-Eleven has been calling for 18 months now for the two relevant industry codes – the Franchising Code of Conduct and the Oil Code - to be amended to give franchisors the right to terminate a franchise agreement in the case of serious non-compliance with Commonwealth Workplace Laws or Fair Work Instruments,” said the statement.

“While the FWO’s investigation is welcomed, the industry should be given the power to uphold the integrity of their own franchise networks in accordance with the increased responsibilities imposed by the Government’s Fair Work Amendment (Protecting Vulnerable Workers) Bill.”


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