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7-Eleven wage scandal continues as another franchisee faces court

Another 7-Eleven store in Brisbane has allegedly been short-changing its workers tens of thousands of dollars.

The Fair Work Ombudsman has launched legal action against franchisee Sheng-Chieh Lo and his company Mai Pty Ltd. which operates a 7-Eleven outlet on Boundary Road, West End.

The Fair Work Ombudsman claims 12 staff, including international students, were underpaid a total of $82,661 in the year to September 2014. The Boundary Road store was one of 20 7-Eleven stores targetedĀ in random evening visits as part of a tri-State operation in September, 2014. The litigation takes to seven the number of 7-Eleven operators to face court since 2009.

Earlier this month, the Fair Work Ombudsman announced legal proceedings against the operators of two other 7-Eleven outlets in the Brisbane CBD.

In a separate incidence last week, 7-Eleven Australia announced it had taken control over another two stores and terminated the franchise agreements for both stores with the franchisee after he was found to have been underpaying staff during independent investigations.

It is alleged that Lo paid flat hourly rates as low as $13 an hour and tried to conceal the underpayments by creating false employment records. Lo allegedly made false entries into the 7-Eleven head office payroll system.He and his company allegedly also knowingly provided false time-and-wage records to the Fair Work Ombudsman.

When Fair Work inspectors confronted Lo with evidence of the underpayments, he provided bank records to indicate he had back-paid the employees, according to documents filed with the Federal Circuit Court.

It is alleged that these documents were false or misleading because they did not show that many of the employees had allegedly repaid those amounts to Lo. In one instance, Lo allegedly received money from an employee in advance, which he then transferred into their account.

Fair Work Ombudsman Natalie James said the alleged breaches are extremely serious, as is the involvement of vulnerable overseas workers.

7-Eleven is currently the subject of a national Inquiry by the Fair Work Ombudsman into allegations of systemic underpayments and false record-keeping practices, with a final report expected in the first quarter of this year.

Lo faces maximum penalties of up to $10,200 per contravention and Mai Pty Ltd faces penalties of up to $51,000 per contravention. The Fair Work Ombudsman is also seeking court orders for Mai Pty Ltd to fully back-pay the workers any outstanding amounts. It is alleged the employees were underpaid total amounts ranging from $1673 to $21,966.

The Fair Work Ombudsman is also seeking injunctions restraining Mr Lo and his company from underpaying workers in future and from seeking or accepting any back-payment of wages from current or former employees.

Orders are also being sought for Mai Pty Ltd to display an in-store notice informing employees of entitlements and to undertake an audit of its compliance with workplace laws and report the results to the Fair Work Ombudsman.

A directions hearing is listed in the Federal Circuit Court in Brisbane on February 29.

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