7-Eleven pays out $150 million to staff

7-Eleven-11 copyAbout 3600 7-Eleven workers have been paid out $150 million since revelations of under-payments and poor record-keeping.

A Senate committee heard on Wednesday the “compliance partnership” between the Fair Work Ombudsman and 7-Eleven was yielding results.

Ombudsman Natalie James said 10 matters were before the courts.

An agreement struck in 2016 also included installing and overseeing biometric shift-scanning systems and the introduction of 7-Eleven-owned CCTV at all outlets to allow head office to monitor employee hours and make sure workers were paid correctly.

The Ombudsman has also written to pizza chain Domino’s about underpayments.

“We have some outstanding issues around information we have requested,” James said.

Last week, 7-Eleven said it supported the Ombudsman’s investigation into a Brisbane franchisee.

The franchisee allegedly sought repayment of accrued annual leave that had been paid to the employee, then dismissed the employee when these requests were refused. 

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.

“Unbelievably, underpayment no matter what the amount does not entitle a franchisor to terminate a franchise agreement under the existing industry codes,” the company said in a statement.

“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 said its experience demonstrated that the “burden of proof is unreasonably difficult to meet.”

“That’s why 7-Eleven has been calling for 18 months now 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.”

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1 comment

  1. Don Gilbert posted on October 26, 2017

    Growing business brand organically, without proper checks n balances, particularly lower margin lower GP business model, even within a given geographical area, PLUS tons of competition in this space, without proper structured leases and or thoroughly researched occupancy costs, means the $$$s have to come from somewhere to keep the business afloat. Many of these businesses operate under Business Migration Visas; often subsidised via external funds. Unless each business perhaps is earning $1.10 per dollar taken at the till, or even $1.20 to subsidise rent and wage bill; well the business will go under. Obviously those on student visas are "soft targets" and this has probably been the case. A good starting point is to get rents to correct benchmark level for this business model aka 0.04 to perhaps 0.06c per dollar as a guide. Also franchise and advertising fees and accountability are a must and should be properly linked to metrics of business model; and reward should go to the person putting up the capital. Otherwise it is NOT a business; one has bought a JOB.

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