7-Eleven franchisee faces court

7-Eleven store logo7-Eleven franchisee in Brisbane is facing court. The convenience store franchisee has allegedly dismissed one of its workers after he refused his employer’s request to repay an amount he had been paid prior.

Balaji Australia Pty Ltd and current director and shareholder Madhav Ponnada will also face the Federal Circuit Court on allegations that false and misleading records were created during the employment of two workers and were later provided to Fair Work Inspectors during the course of their investigation.

7-Eleven said they have fully cooperated with the Fair Work Ombudsman’s investigation. They also conducted their own investigation and the convenience store was unable to find evidence required for the company to take its own action under the industry codes.

According to 7-Eleven’s company statement, “the termination for an underpayment is only available to a franchisor if it can be demonstrated at the requisite level of proof that the underpayment has occurred in a way that involves fraudulent conduct.”

It is alleged that the Indian national worker became a convenience store employee of 7-Eleven in February 2015 as a casual and was a part-time employee between December 2015 and July 2016. During this time he has accrued annual leave entitlements of $731.06. In July 2016, it is alleged that he became a casual employee and was paid $731.06 in accrued annual leave and leave from the preceding period in which he was engaged on a part-time basis.

Fair Work ombudsman Natalie James said requiring workers to repay portions of their wages is an insidious practice.

“We are concerned that so called ‘cash-back’ schemes are being utilised to disguise the underpayment of some of the most vulnerable workers in our community,” James said. “This is the type of behaviour that warrants serious enforcement action, such as litigation through the Courts.”

The Fair Work Ombudsman alleges that Ponnada made multiple requests for the worker to return the $731.06 that had been paid. It is further alleged that the day after the worker refused to repay this money, Ponnada instructed a store manager to remove the employee from a rostered shift and advised the store manager that the employee no longer worked at the store.

The Fair Work Ombudsman is asking the Federal Circuit Court to impose penalties against Ponnada and his company for several alleged contraventions of workplace laws and also is seeking compensation for the worker who was allegedly dismissed.

“Workers cannot be deprived of work for exercising their rights, regardless of whether they are engaged on a casual, part-time or full-time basis,” James said. “We encourage anyone with information on alleged ‘cash-back’ schemes to come forward and assist us in our investigations.”

“While the Fair Work Ombudsman’s investigation is welcomed, the industry should be given the power to uphold the integrity of their own franchise networks in accordance with the increased responsibilities imposed by the Government’s Fair Work Amendment (Protecting Vulnerable Workers) Bill,” said 7-Eleven in a company statement.

7-Eleven stated the burden of proof is unreasonably difficult to meet thus they have been calling for 18 months now for the two relevant industry codes – the Franchising Code of Conduct and the Oil Code – to be amended to give franchisors the right to terminate a franchise agreement in the case of serious non-compliance with Commonwealth Workplace Laws or Fair Work Instruments.

The matter is listed for a directions hearing on 30 October 2017. In December, the Fair Work Ombudsman and 7-Eleven signed a Proactive Compliance Deed which requires the convenience store to overhaul its systems and implement fully biometric time recording to prevent the falsification of records.

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