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7-Eleven Penalised $336,000 For Illegal Cash-back Scheme

7-Eleven penalised $336,000 for illegal cash-back scheme

A 7-Eleven operator has been penalised $336,000 for running an illegal cash-back scheme.

This one involved three international students made to withdraw and pay back part of their wages.

Workers ripped off at two separate businesses

The Federal Circuit Court today penalised Xia Jing Qi Pty Ltd, and its owner and store manager Ai Ling “Irene” Lin, a total of $335,664.

In addition, the court penalised Lin a further $145,000 for ripping off another worker at another business, the Ajisen Ramen franchise restaurant.

The wage theft involved Lin paying that worker an illegal flat rate of $11.50 an hour, and sometimes as little as $3.98 an hour.

Another 7-Eleven penalised

The cash-back scheme involved Lin forcing three Chinese nationals to pay back thousands of dollars in wages while working at a 7-Eleven in Melbourne’s CBD.

Lin used the cash-back scheme to disguise underpayments following widespread media coverage of wage theft at 7-Eleven outlets.

Lin told the employees in late 2015 they will be paid through the payroll system, but then will be required to pay back a weekly sum either into a safe drop box in the store or into Lin’s bank account.

As a result of the cash-back scheme, the workers ended up with hourly rates ranging from $8.53 to $26.52.

Lin consequently failed to pay the workers:

  • lawful ordinary hourly rates;
  • casual loadings; and
  • weekend and public holiday penalty rate entitlements.

The underpayments totalled $6,674 for work between November 2015 and October 2016.

The court also found Xia Jing Qi Pty Ltd and Lin breached record-keeping laws by providing false records to Fair Work inspectors.

The Ajisen Ramen restaurant rip off

The employee underpaid at the Ajisen Ramen restaurant is also from China working on a 462 working holiday visa.

The company underpaid her a total of $9,616.

During her final week of work, the company paid her just $3.98 an hour, significantly below the minimum hourly rate.

What the court said

Judge Norah Hartnett said the use of the cash-back scheme at the 7-Eleven store is “particularly egregious”.

“It 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.

“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.”

Judge Hartnett described the conduct of the company and Ms Lin as “deliberate and grave”.

What the experts say

Industrial advocate Miles Heffernan from IR Claims once again called for criminal sanctions for wage theft.

“This is a particularly egregious case of wage theft, because it is deliberate and systematic,” he said.

“Wage theft is theft – and therefore should be treated the same as theft – reported to police and prosecuted as a criminal offence.

“Those found guilty should receive criminal convictions, and in some cases, sent to jail.”

Note:  Xia Jing Qi Pty ltd no longer owns or operates the William Street 7-Eleven in Melbourne.

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1300 045 466

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