More than 4,000 current and former franchisee employees at 7-Eleven franchises have been paid back $173-million in underpaid wages, interest and superannuation between September 2015 and February 2020.
Human Resources Director magazine (HRD) says the Fair Work Ombudsman brought 11 litigations against 7-Eleven franchisees, resulting in courts awarding more than $1.8-million in penalties against them, including for operating unlawful cash-back schemes, paying unlawful flat rates to workers and falsifying records.
Voluntarily agreed to improve compliance
According to the Ombudsman, 7-Eleven Stores Pty Ltd has made significant improvements to its payroll and time-recording systems as part of a three-year compliance partnership with the Fair Work Ombudsman.
The company voluntarily entered into a Compliance Deed in December 2016 to improve compliance across its franchise network. The Compliance Deed was a recommendation from the Ombudsman’s Inquiry Report, which found significant underpayments in 7-Eleven’s franchise network.
Human Resources Director says the inquiry found that several 7-Eleven franchisees had been deliberately falsifying records to disguise the underpayment of wages.
Didn’t address deliberate non-compliance
It further found that 7-Eleven’s approach to workplace matters, while seemingly promoting compliance, didn’t adequately detect or address deliberate non-compliance.
“7-Eleven welcomes the release of the Fair Work Ombudsman compliance partnership report and we would like to thank the [Ombudsman] for working collaboratively with us over the past five years,” said 7-Eleven CEO Angus McKay in a media statement.
“Since 2015, we have continued to undertake independent reviews and audits, make improvements to our systems and processes, update workplace relations training programs and share our learnings with both the FWO and our industry.”
Now has industry-leading compliance
McKay said this has led to the position of having “industry leading compliance processes and procedures”.
“With ongoing support from staff across our network, we are incredibly pleased with the progress we have continued to make,” added McKay.
“I said we would be accountable for our actions and take ownership of our remediation journey. I truly believe we have done just that and will continue to do so.
A biometric time recording system
“We remain absolutely committed to ensuring continued compliance with all workplace laws and regulations across our Australian network.”
As part of the Compliance Deed, 7-Eleven put in place a biometric time recording system across all its Australian stores.
Further governance measures implemented include 7-Eleven requiring all staff to be paid electronically only, new compulsory online training on employment conditions for new employees, an Internal Investigations Unit and a new employment conditions chapter in the Franchisee Systems Manual.