Adele Ferguson & Sarah Danckert, 17 December 2015
At least 50 stores at the scandal ridden 7-Eleven convenience store chain were raided at on Thursday morning as part of an expert panel’s review of underpayment of employees.
The raids were coordinated across the country with 150 staff from the Fels Wage Fairness Panel.and Deloitte visiting stores unannounced to seize documents including rosters that aren’t available from head office.
The 50 stores that have been targeted include some of the most egregious alleged underpayers of wages and falsifiers of payroll records.
The raids come as most franchisees have entered a new business agreement with 7-Eleven in terms of profit split with head office to try and stamp out wage fraud. Others are considering a class action.
“As this action today demonstrates, the panel is committed to identifying and quantifying all cases of underpayment and to getting redress for all underpaid 7-Eleven employees, past and present,” panel chairman Allan Fels said.
The panel was set up by 7-Eleven head office in September after Fairfax Media and Four Corners revealed systemic wage abuse across the company’s network of 620 stores.
7-Eleven, which is jointly owned by billionaire Russ Withers and his sister Bev Barlow, agreed to fund up to $25 million of wage fraud claims. If the claims exceed $25 million, franchisees will pay the next $5 million. Anything outstanding after that will be split 50:50 between franchisees and head office.
“No doubt the visits will also send a strong message to franchisees that underpayment practices will be identified and action taken to pay what is owing,” Professor Fels said.
An estimated 1200 claims have now been lodged with the panel, which has written to 15,000 past and present staff. The panel hopes to wrap up its work within six months.
“7-Eleven has made an unequivocal commitment to pay any employee, past or present, that we find has been underpaid and to pay, without question, the amount we determine they should be paid,” Professor Fels said.
At a Senate hearing in October, the convenience store giant admitted it was not only aware of a new wage fraud scam operating, known as the “cash scam” but that it was investigating two stores.
Until the Fairfax Media investigation franchisees, were using the “half pay scam”, where workers worked for double the hours and received half the pay.
When the lid was blown on the scandal in late August, franchisees switched to the “cash scam” where they pay employees the correct award rate in their nominated bank accounts for the hours they have worked, then ask for half of it back in cash, away from the surveillance cameras that operate in most of the 620 stores.
If workers refuse to play ball, they lose their job and are threatened with deportation.
“Now that the submission and payment process is in place, along with our planned engagement strategies, we expect to reach more 7-Eleven employees and build their trust in the panel as a reliable source to receive their underpaid wages,” Professor Fels said.
Extracted in full from the Sydney Morning Herald.