7-Eleven operator fined $335,000 in wage scandals

18 January 2019
Sydney Morning Herald


Another 7-Eleven operator has been implicated in the convenience store chain’s “cash-back” wage exploitation scandal, in which workers were forced to withdraw and hand back part of their pay to their employer.      

The former operator of the 7-Eleven outlet in the heart of Melbourne’s legal precinct, near the corner of William and Little Lonsdale streets, has been found to have underpaid retail workers thousands of dollars throughout 2015-2016.


The Fair Work Ombudsman has prosecuted a string of 7-Eleven stores for wage exploitation in recent years.   

On Friday, Xia Jing Qi Pty Ltd, its owner and store manager were collectively fined $335,664 for the 7-Eleven underpayments, and a further $145,000 for paying an employee at another one of its businesses, the Ajisen Ramen franchise restaurant inside Melbourne Central, an illegal flat rate of $11.50 an hour and sometimes as little as $3.98 an hour.

Company director Jing Qi Xia and her 7-Eleven store manager Ai Ling Lin were penalised in the Federal Circuit Court for a slew of violations of workplace law, including failing to pay the minimum hourly rates, failing to pay casual loadings, failing to pay weekend and public holiday penalty rates, and for providing false and misleading pay records, following legal action brought by the Fair Work Ombudsman.   


Investigations by the Ombudsman into the exploitation of the three 7-Eleven workers, who were international students aged 21-45, revealed Ms Xia, in late 2015, implemented the “cash-back” scheme, informing her staff via Chinese messaging app WeChat that their wage would be a flat $15 an hour, and they would need to return the portion of their electronically transferred wages in excess of $15 into a safe drop box located in the store.

Sometimes, the court heard, the underpaid staff transferred the money directly into the bank account of their manager, Ms Lin, who would subsequently provide it back to the owner.
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After returning the portion of their wages, the employees were left often with hourly rates as little as $8.53, the Ombudsman found.   

The cash-back scheme was implemented at many 7-Eleven franchise outlets Australia-wide after The Age and Sydney Morning Herald revealed systemic underpayment of wages and doctoring of pay records across the convenience store giant’s network of stores, as part of a joint investigation with the ABC.

In the 7-Eleven case before the Federal Circuit Court, the three staff at the William Street store were underpaid $6674, which the company paid back in August 2017 following intervention from the Fair Work Ombudsman.

In the second case against the company, the court found the worker at the Ajisen Ramen restaurant had been underpaid $9616, from May and October 2016. The underpayments left the worker struggling to meet living expenses despite working four to six days per week, the Ombudsman said. She was back-paid in August 2017.

The company was fined $154,225 for the 7-Eleven breaches, the 7-Eleven manager was fined $9590, while Ms Xia was fined $26,049 for her involvement in both underpayment cases.

Judge Norah Hartnett, who presided over both cases, said the use of the cash-back scheme at the 7-Eleven store was “particularly egregious”.

“[I]t involved a deception of 7-Eleven head office and circumvented attempts by head office to stamp out the underpayment of employees by 7-Eleven franchisees,” Judge Hartnett said.

“The court recognises that conduct such as implementing a system requiring employees to repay wages they are owed, and making, keeping and producing false records to disguise employees’ true employment situation, is reprehensible conduct and denies to all employees the minimum wage standards that they, in Australia, should expect and are entitled to.”

Acting Fair Work Ombudsman Kristen Hannah said employers who exploited migrant workers would be discovered and face serious legal consequences.

“The Fair Work Ombudsman will not tolerate any employers requiring any workers to pay back any of their wages,” she said. “This cash-back scheme was particularly deplorable as it undercut migrant workers, who can be vulnerable due to language and cultural barriers, or are reluctant to speak up.”