Targeting and exploitation of marginalised workers in Australia is so widespread it appears to have become a business model. Credit:Paul Jeffers The workers were paid as little as $13 an hour and the store owner, Sheng-Chieh Lo, had tried to conceal the underpayments through false payroll records. Federal Circuit Court judge Michael Jarrett described the false records as "a sophisticated system of data manipulation". Judge Jarrett said the 7-Eleven franchisee had shown "contemptuous disregard" for Australian workplace laws and that it had tried to deceive the fair work regulator. The $408,348 he issued in penalties is $65,000 more than the previous record of $343,860 awarded against a Perth store in 2013. Brisbane businessman Mr Lo, who owns and operates the 7-outlet on Boundary Road, West End, was penalised $68,058 and his company, Mai Pty Ltd, $340,290. Mai Pty Ltd has was ordered to correct the underpayment. Mr Lo was found to have underpaid 12 employees, including international students, $82,661 over 12 months to September 2014. More than $35,000 of the underpayment is still outstanding.

A spokesman for 7-Eleven confirmed the company 'has had some discussions with the relevant state revenue offices'. The court heard that Mr Lo initially provided inspectors with false records to cover up the underpayments, and showed inspectors selective bank records as evidence that his employees had received back-pay. He later admitted he had made arrangements for the employees to pay back thousands of dollars to him and his wife. "Mr Lo's contempt is demonstrated by his persistent attempts to deceive the Fair Work inspectors investigating the relevant complaints and his insistence, undertaken in a secretive way, that any amounts he paid to the relevant employees to make good [Mai Pty Ltd's] defaults should be immediately paid back to him," he said. Judge Jarrett said the underpayments were "substantial amounts for low-income earners who were reliant on the minimum award wage". Most of the employees received just over half what they were entitled to, with individual underpayments ranging from $1673 to $21,966.

Mr Lo was said to have expressed no regret, instead trying to justify his actions "without accepting responsibility for them". "Employers should be in no doubt that they have a positive duty to ensure that they comply with the obligations which they owe to their employees under the law," Judge Jarrett said. The court penalty is the latest in a number of actions targeting systemic exploitation of workers within the 7-Eleven network, which has been the subject of a national inquiry. Fair Work Ombudsman Natalie James said her office was in talks with 7-Eleven to ensure it was taking steps to ensure workers were correctly paid in future. The Brisbane outlet was one of 20 targeted by Fair Work inspectors during surprise night-time visits last year.

7-Eleven announced on Tuesday the approval of the first round of payments under its in-house wage repayment program and said it was happy to be judged on its actions. It released a statement saying 21 claims, totalling $686,000, have been approved. It has received 4,008 repayment claims. 7-Eleven chief executive officer Angus McKay said it had taken the wage repayment program process in-house "to deliver a robust and efficient process that puts money in the hands of claimants as quickly as possible". "We have spent the past few weeks building a claims assessment process that places legitimate claimant interests at its centre and responds to feedback from all key stakeholders," he said. Loading

"We are confident that our Wage Repayment process delivers against these objectives, and are now absolutely focused on ensuring it meets our commitment to pay legitimate claims as quickly as possible. "7-Eleven is happy to be judged on our actions, and will continue to publicly report our progress as we move forward."