Troubled franchisor 7-Eleven has taken further steps to rebuild its reputation with the release of a new document, in co-operation with the Fair Work Ombudsman, which outlines best practice for its franchisees.
Among the measures outlined in the Proactive Compliance Deed are the rollout of biometric shift-scanning systems and 7-Eleven owned CCTV systems in every outlet, representing a huge shift in the ability of 7-Eleven head office to monitor day-to-day activities of employees and franchisees.
Biometric recognition systems were rolled out across the 7-Eleven network and have been in operation for three months, however the P&C giant said today it was “currently investigating a range of facial recognition and CCTV solutions to further enhance our in-store identification of staff and their hours worked”.
Fair Work Ombudsman Natalie James said the commitments outlined in the deed would help prevent systemic and unlawful practices such as underpayment of workers, increase accountability and introduce a culture of compliance across the entire 7-Eleven business from head office down.
“The measures in this deed are the most robust and comprehensive that any franchise brand has in place in Australia,” Ms James said.
“The goal is to make sure franchisees pay workers correctly in the first place.
“As we noted in our [April 2016] Inquiry report, non-compliance in this network has been long term, extensive and systemic.
Ms James said that some franchisees had demonstrated a willingness to go to “extreme lengths to circumvent record keeping systems”.
“The deed establishes a framework for 7-Eleven to detect, investigate and rectify underpayments within its network now and into the future,” she said.
“It also maintains commitments to backpay workers underpaid in the past.”
7-Eleven general manager, corporate affairs Clayton Ford said today’s announcement marked a significant step forward in the company’s reform program.
“We have entered into the Deed voluntarily, as part of our ongoing cooperation with the regulator and commitment to transparency through the reform process,” he said.
“The Deed also recognises the steps 7-Eleven has taken in ensuring underpaid staff receive their full entitlements as quickly and fairly as possible.
“Our voluntary Wage Repayment Program (WRP) has so far paid out more than $55 million to almost 1,400 claimants.”
The deed also includes policy changes to ensure all new wage claims from 1 February next year will be processed through 7-Eleven’s Internal Investigations Unit, with two key changes from the Wage Repayment Panel being that 7-Eleven may, with consent from the claimant, disclose information (such as the claimant’s identity) to third parties including the franchisee; and that substantiated underpayments must be rectified within 30 days.
“We have zero tolerance for wage fraud and are doing all we can to stamp it out from our network of franchised stores. This week we have taken the next major step in our reform journey through voluntarily signing a robust Proactive Deed of Compliance with the Fair Work Ombudsman that sets the standard for our industry.”
7-Eleven CEO Angus McKay said the organisation’s resolve was “unquestionable” and defended their ownership of the wage underpayment issue and willingness to be up-front about it.
“We have invested in industry-leading initiatives internally to ensure correct wages are paid, voluntarily paying almost $57 million to more than 1,400 claimants to date, and proposed a range of policy reforms to raise the standard across the franchising industry,” he said.
“I have consistently said we want to be judged on our actions. We’ll continue to report transparently on our progress as we seek to be the exemplar of a solution to a problem that is regrettably broader than our network.”
“We will continue these efforts, and our ongoing collaboration with the Fair Work Ombudsman and others, to ensure our franchised store network operates at the highest standard we and the community expect.”