Another 7-Eleven franchisee to face court over cash-back scheme

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A Brisbane-based 7-Eleven franchisee is alleged to have dismissed a worker by removing him from the roster after he refused his employer’s request to repay an amount he had been paid.

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 people and were later provided to Fair Work Inspectors during their investigation.

It is alleged that the worker, an Indian national, was first employed in February 2015 as a casual and then engaged as a part-time employee between December 2015 and July 2016. During this time, he accrued annual-leave entitlements equivalent to $731.06.

In July 2016, it is alleged, the worker was transferred to a casual-employment relationship and was paid $731.06 in accrued annual leave and leave loading from the preceding period, in which he was engaged on a part-time basis.

The Fair Work Ombudsman (FWO) alleges that Mr Ponnada, on behalf of the company, then made multiple requests for the worker to return the $731.06 that had been paid.

It is further alleged that on the day after the worker refused to repay this money, Mr 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 matter is listed for a directions hearing later this month and is the 10th matter filed by the FWO involving a 7-Eleven franchisee, with more than $1 million in penalties ordered in cases to date.

FWO Natalie James says requiring workers to repay portions of their wages is an insidious practice.

“We’re concerned that so-called cash-back schemes are being utilised to disguise the underpayment of some of the most vulnerable workers in our community,” she said.

“This is the type of behaviour that warrants serious enforcement action, such as litigation through the courts.”

In a statement released by 7-Eleven, the franchisor said it supported the FWO’s investigation into the Brisbane franchisee and endorsed the FWO’s action.

“7-Eleven conducted its own investigation into the allegations, which was unable to find a level of evidence required for the company to take its own action under the industry codes,” the statement said.

“Unbelievably, underpayment (no matter what the amount) does not entitle a franchisor to terminate a franchise agreement under the existing industry codes. Termination for 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.

“7-Eleven’s experience demonstrates that the burden of proof is unreasonably difficult to meet.”

For the past 18 months, 7-Eleven has been calling 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.

“While the FWO’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,” 7-Eleven said.