7-Eleven Brisbane fined more than $400K for exploiting workers’ wage payment

A homeless man sleeps under a blanket on the pavement outside a convenience shop in central Sydney March 15, 2012. Reuters/Tim Wimborne

A Brisbane 7-Eleven branch has been fined more than $400,000, the largest-ever Court-imposed penalty achieved by the Fair Work Ombudsman. Businessman Sheng-Chieh Lo was penalised $68,058, while his company, Mai Pty Ltd, was fined $340,290 for “contemptuous disregard” for Australian workplace laws.

Federal Circuit Court Judge Michael Jarrett handed the decision on Monday, imposing penalties totalling $408,348 to the 7-Eleven franchisee. The branch in question is the one on Boundary Road, West End.

According to the court, Lo underpaid 12 employees a total of $82,661 between September 2013 and September 2014. Although some of the owed money was paid to employees, which included a number of international students, the 7-Eleven store requested the staff to secretly pay back thousands of dollars to Lo and his wife. More than $35,000 is still outstanding.

The court heard that Lo paid his employees as low as $13 an hour flat rate. He created false records and entries into the company head office payroll system to hide the anomaly.

The branch was one of the 20 7-Eleven outlets targeted by Fair Work inspectors for surprise night-time visits as part of a tri-State operation in September 2014. Lo provided inspectors with false records at first, then he showed them selective bank records as proof of payment to his employees.

However, Lo already told his employees to pay him and his wife back thousands of dollars. So when the inspectors learnt of his actions, he initially denied he required the employees to back-pay their wages. He later admitted his conduct.

“Mr Lo’s contempt is demonstrated by his persistent attempts to deceive the Fair Work inspectors investigating the relevant complaints and his insistence, undertaken in a secretive way, that any amounts he paid to the relevant employees to make good (Mai Pty Ltd’s) defaults should be immediately paid back to him,” the judge said.

Judge Jarrett also said there had “been no suitable credible expression of regret” from Lo, who continued to justify his actions without accepting responsibility for them.

Fair Work Ombudsman Natalie James said the record penalty sends out a strong message that the employer’s conduct has no place in Australian workplaces. Her office is currently in discussion with 7-Eleven about a transparent arrangement that will ensure workers are correctly paid in the future.

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