A 7-Eleven franchisee in Melbourne’s Parkville has been fined $150,000 by the Federal Circuit Court of Australia who systematically underpaid staff while simultaneously building up a near $3 million property portfolio.
The former operators of the 7-Eleven store on Royal Parade in Parkville, husband and wife Haiyao Xu and Yiran Gu, were each hit with a $20,000 personal fine while their company Hiyi Pty Ltd was fined a further $110,000 for the underpayment.
Fair Work Ombudsman found the couple paid the their staff as little as $12 an hour.
Judge Suzanne Jones accepted the former owners’ argument that the 7-Eleven franchise agreement had restricted their ability to generate income from the store.
However, the court found the couple did have access to money and were dealing in the upper end of the housing market.
According to their own admissions, Mr Xu and Ms Gu, with the assistance of their parents, purchased a $1.35 million home in Melbourne's North Balwyn in 2014 and another investment property for $959,000 in 2015.
The couple also sold a third property in 2016 for $540,000.
Land title records indicate another property was purchased by Ms Gu for a little more than $400,000 this year.
Judge Jones said the conduct of Mr Xu and Ms Gu called for "full condemnation and approbation".
The court found the owners had reverse engineered the wages and hours worked by employees when filing their payroll paperwork.
Reverse engineering is essentially known as the "half-pay scam" – where the hours worked are halved to show that they are being paid properly.
Fair Work Ombudsman Natalie James said the agency was still in discussions with 7-Eleven head office to formalise a "robust and transparent" arrangement to ensure workers in the convenience store chain's network are correctly paid in the future.
