Employment and Migration Blog

7-Eleven and award and immigration compliance

Posted by Lisa Qiu on 3 Sep 2015

We’re all familiar with the 7-Eleven convenience stores and more often than not, have relied upon them being open to get a late night snack or an emergency supply. But have you ever considered what it’s like to work for a 7-Eleven store? You could be buying your snack from someone who’s being exploited, but is between a rock and a hard place if they try to do anything about it.

A raid instigated by the Fair Work Ombudsman last year, showed that of the 20 stores audited, 60% were underpaying their staff. Many of the 4,000 staff members working across 620 outlets nation-wide are international students on student visas, which means that they can only work up to a maximum of 20 hours a week. If they work more, they’re in breach of their visa conditions, and not likely to complain about underpayment because of the risk to their visas.

A recent investigation by Four Corners and Fairfax has revealed that aside from systemic underpayments, 7-Eleven franchisees have also been fabricating employee records, to conceal the true hours worked by their staff, and now the Fair Work Ombudsman and the immigration authorities are all over it.

The focus on award compliance arising from the 7-Eleven scandal raises another important issue from an employer’s point of view:

  • If you aim to pay minimum award rates, you and the employees are likely to be conscious of the award rules, and see the relationship as being governed by the award.
  • What if you pay above the award and your staff are happy? Does it matter if you’re not complying with all the provisions of the award? 

Many employers assume that so long as they pay above the minimum wage, the award is irrelevant – “No, he’s not an award employee” - and they don’t need to concern themselves with the finer details. That’s incorrect - the award applies to employees within its scope, even if paid above award.

Although you may be meeting the minimum pay obligations under the relevant award, you still need to comply with the other clauses which may affect how you operate your business. For example, there are provisions in awards which deal with how much notice you need to give to someone if you want to change their roster, when you can direct staff to take leave, how many breaks they’re entitled to, what rates you have to pay them on weekends or outside certain hours, and whether you need to pay annual leave loading or other penalties.

If you’re paying well above the award wage, it’s likely that overtime, penalties and allowances are included in the hourly rate, but have you made this clear to your employee? In the absence of an “offset clause” in your employment contract, or something similar, there is a risk that the employee can claim $X ÷ 38 = $Y per hour, and that overtime etc are to be added to that.

Small underpayments can escalate into large claims, as an employee can claim back over six years. If you’re mistakenly underpaying one employee, it’s likely that you’re mistakenly underpaying others, and one successful claim can easily result in claims from others.

If you need assistance with clarifying your rights or obligations in relation to Awards or visa holders please contact our Employment Law and Immigration Team: