Melbourne, May 2: A 7-Eleven operator in Sydney has been penalised a record $214,200 for deliberately short-changing two migrant employees and falsifying records, following legal action by the Fair Work Ombudsman.

Harmandeep Singh Sarkaria – who owns and operates the 7-Eleven fuel outlet at 354 Flushcombe Road in Blacktown – has been penalised $35,700 and his company Amritsaria Four Pty Ltd has been penalised a further $178,500.

They are the largest penalties secured against a 7-Eleven franchisee by the Fair Work Ombudsman, which has undertaken a range of compliance actions aimed at addressing systemic non-compliance by 7-Eleven nationally.

In his Federal Circuit Court judgment, Judge Justin Smith said Sarkaria had “deliberately flouted his legal obligations” and engaged in “a sustained and deliberate process of deception” aimed at maximising financial return.

“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 said.

“There was evidence of substantial non-compliance by other 7-Eleven franchisees.”

Sarkaria underpaid two console operators at his Blacktown outlet a total of $49,426. Most of the underpayment relates to a migrant employee from Pakistan, aged in his late 30s, who was short-changed a total of $43,633 between March, 2012 and March, 2014. The other employee, also from Pakistan and aged in his mid-20s, was underpaid $5793 between August, 2013 and March, 2014.

The underpayments are the result of the employees often being paid rates equivalent to $10 an hour.

The employees were entitled to receive normal hourly rates of more $22 an hour and up to $29.27 an hour for some weekend, public holiday and overtime shifts.

Sarkaria made false entries into the 7-Eleven head office payroll system about the number of hours the employees had worked. He also routinely made entries that the employees had worked only 10 hours a week, despite them working significantly more hours.

The entries gave the appearance that the employees were paid about $25 an hour. He also provided Fair Work inspectors investigating the underpayments with false time-and-wages sheets.

Sarkaria and his company admitted contravening workplace laws and back-paid the two employees only after the Fair Work Ombudsman advised it was commencing legal action.

Judge Smith said that despite being “perfectly aware” of legal obligations relating to pay and record-keeping, Sarkaria had used records to “hide the fact that he was not paying two employees properly”.

“The contraventions were not accidental, but, rather part of a deliberate scheme aimed at maximising financial benefit to the respondents,” Judge Smith said.

“In other words, this was part of the respondents’ business model. In my view, this approaches the worst type of each contravention.”

Judge Smith said that despite Sarkaria admitting the contraventions and apologising in Court, he did not accept Sarkaria was contrite.

Source: facebook
Source: facebook

“He appeared to me still to be denying real responsibility for his actions,” Judge Smith said.

“I am not convinced that he is truly sorry for his conduct.”

In addition to the penalties, Sarkaria and his company must commission professional audits of their compliance with workplace laws and undertake training on complying with workplace laws.

Fair Work Ombudsman Natalie James says the Court’s decision sends a message that employers who set out to exploit workers face serious consequences.

Earlier, in a report of its Inquiry into the 7-Eleven franchise network, the Fair Work Ombudsman found that number of 7-eleven franchisees have deliberately falsified records to disguise the underpayment of wages.

Expressing concern about 7-Eleven’s compliance posture since 2008, the report said that there have been persistent reports from 7-Eleven employees alleging significant underpayment of wages.

“On the basis of continuing concerns and intelligence, we began a strategic Inquiry into a sample of 7-Eleven stores across Victoria, NSW and Queensland in June, 2014.

“An assessment of 20 stores provided us with further opportunity to identify the root causes of non-compliance so we could approach 7-Eleven to make changes to address them,” Ms James said.

7-Eleven franchisees are predominantly from non-English speaking backgrounds, particularly China, Pakistan and India; while employees in 7-Eleven stores are typically male international student visa-holders.

Last financial year, visa-holders accounted for almost 12 per cent of all requests for assistance received by the Ombudsman.

DIBP makes it clear that employers are obliged to check and confirm that any foreign national working for them has a valid visa with work conditions that provide permission to work.

“To aid our investigations, it was agreed between the two agencies that international students who assisted the Fair Work Ombudsman would have no action taken against them by DIBP for breaches of their visa conditions”, Ms James said.

Fair Work is now working with the Department of Immigration and Border Protection, Australian Tax Office and the Australian Competition and Consumer Commission to implement a fair system for employers and employees.

Those seeking assistance can visit or contact the Fair Work Infoline on 13 13 94.

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