Adele Ferguson & Sarah Danckert, 22 October 2015

7-Eleven could face a $300 million compensation wages bill after the Allan Fels-chaired panel released the first tranche of payments to exploited workers.

It can be revealed the panel led by the former competition tsar has 50 claimants owed $1.1 million in underpaid wages, equivalent to $22,300 a claimant.

After years of being exploited by their bosses, workers at 7-Eleven will soon be receiving back-pay from the company in the quantum that will be life-changing for many.

The Fels Wage Fairness Panel was set up by the convenience store giant in early September after Fairfax Media and Four Corners revealed systemic wage exploitation  among 620 stores across Australia.

The panel will write to 15,000 current and former employees at 7-Eleven stores between 2007 and 2015   to encourage them to lodge back-pay claims.

Extrapolating the average payout over a potential 15,000 future claims could set head office back $300 million.

The panel is working through the next tranche of 350 claims that it has received.

“Of the claims we have received there is widespread underpayment of staff across franchisees and across states,” Professor Fels said.

Chillingly, the Fels panel has also confirmed reports in Fairfax Media of the “cash-back” scam where franchisees pay full wages to workers and then demand the worker hands over half the salary back to the franchisee.

Fairfax Media understands the Fels Wage Fairness Panel is planning to extend the review period back to 2003, which could result in thousands of other former workers receiving back-pay.

“We hope that the first set of compensation payments will encourage others to come forward and make a claim,” Prof Fels said.

Prof Fels has previously called for a visa amnesty for 7-Eleven workers who have, through the half-pay scam, been made to breach the conditions of their student visas and work over 20 hours a week for no financial gain.

Yet confusion within the Turnbull government over an amnesty could make it difficult for workers to come forward.

This week Immigration Department deputy secretary Michael Manthorpe told a Senate estimates hearing that affected students would have “no action taken against them”.

Yet a spokesman for the Minister for Immigration Peter Dutton said there would be no general amnesty offered to 7-Eleven workers.

Along with Prof Fels, 7-Eleven chairman Michael Smith, the ALP and the Greens all support an amnesty, leaving Minister Dutton’s office as the only hold-out on the matter.

Prof Fels said some of the claimants’ stories were heartbreaking.

One worker, who the panel has not named, will receive back-pay of $75,000 plus $10,000 for the four-year period of underpayment to August 2015. According to the panel, the worker was underpaid by 50 per cent.

“After the wage scandal came on news, I am being paid $14 per hour but my working hours were significantly reduced (average 30 down to 10 hours),” the worker said.

Another worker who wished to remain anonymous was also underpaid by 50 per cent over a two-year period. That worker is set to receive back-pay of $62,000 and $14,000 in interest, taking  the total payout to $76,000.

“[The franchisee] would pay me double in dollars but use to reduce my hours in half. So it was OK in papers that I’m getting paid normal but I was not,” the worker said.

He said he used pay slips and group certificates to help prove his claim that he was not paid penalty rates and loadings for night shifts and weekend shifts.

“As you can see in my salary slips it’s all on flat rate.”

According to the panel, one claimant who worked for 8 months under the “half pay” scheme said once the story broke about 7-Eleven’s underpayment of staff in late August 2015, the franchisee started paying staff the appropriate amount but requested that they transfer half of it back to the franchisee’s private account. When the claimant refused he was fired.

Consumer advocate Michael Fraser, who brought the wage fraud to light, said it was “fantastic to hear the Fels panel had already paid 50 people.

“Hopefully the process is water tight and they treat employee information as highly confidential. I encourage more employees to come forward and claim their back-pay,” Mr Fraser said.

“It gives me the greatest of joy to see employees finally getting paid for their blood, sweat, and tears,” he added.

Extracted in full from the Sydney Morning Herald.