May 20, 2016

    Australia plans higher fines for bosses who underpay staff


    AUSTRALIA unveiled plans yesterday for a 10-fold hike in fines for employers who underpay staff after 7-Eleven convenience store franchisees were accused of ripping off migrant workers.

    The government also said it would boost funding for the Fair Work Ombudsman by A$20 million (S$19.8 million), bolster the regulator's evidence-gathering powers and set up a taskforce to help migrant workers.

    The hike in proposed penalties is a measure of the outrage sparked by an Australian Broadcasting Corp report last year. It accused Australia's 7-Eleven Stores of letting franchisees threaten workers with deportation if they complained of being paid as little as half the minimum wage.

    The new moves also suggest a bid by the conservative government of Prime Minister Malcolm Turnbull to appeal to voters concerned by his Liberal Party's tough stance on asylum seekers ahead of July 2 elections.

    Fines for underpaying workers are currently A$10,800 for an individual and A$54,000 for a company, amounts "seen as an acceptable cost of doing business", a policy document released by the government said.

    Allan Fels, the former competition regulator, was the preferred choice to lead the new migrant worker taskforce, the policy document said.

    He was hired by 7-Eleven to run an inquiry into underpayment but earlier this month said he had been fired after resisting what he called a threat to his independence.

    Mr Fels said most of the 20,000 7-Eleven franchise employees over the past decade were underpaid by about 50 per cent. He added that before being fired, he recovered an average of A$40,000 per person for 400 employees, from 2,000 who lodged complaints.

    He estimated that the number of cases where workers of other Australian franchises have been underpaid in similar circumstances was "at least in the tens of thousands".

    The Australian 7-Eleven franchisor is owned by Japan's Seven & i Holdings and licensed by United States-based 7-Eleven.