7-Eleven back pays $173m in wages and invests $10m into upgrading payroll systems

Operators of 7-Eleven have back paid staff more than $173 million in wages and invested more than $10 million into improving payroll and time recording systems.

In December 2016, 7-Eleven voluntarily entered into a Compliance Deed to improve systems across its network. This was after the Fair Work Ombudsman (FWO) found several franchisees had been deliberately falsifying records to cover up underpayment of wages.

The FWO 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.

As part of the Compliance Deed, 7-Eleven put in place a biometric time recording system across all its Australian stores, requiring employees to clock in and out with a thumbprint, which is cross-checked against employee facial recognition images and store rosters to enable more accurate recording of working hours.

Other 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.

The compliance partnership also required 7-Eleven to engage an independent expert to complete three annual audits of its compliance with workplace laws, leading to back-payments of $102,167 as a result of the first audit in 2017. No further underpayments were identified in the second and third annual audits.

Maurice Blackburn Lawyers and the Shop, Distributive and Allied Employees’ Association (SDA) have been working together for four years to recover the underpaid wages of more then 4,000 workers. They say that this is an example of why unions are critical for these workers.

SDA National Secretary Gerard O’Dwyer said: “The SDA is pleased that its efforts have finally retrieved large amounts of their wages that should never have been stolen from them in the first place.

“Let this be a warning to those sectors with large numbers of migrant workers that there is no hiding place.

“The SDA will remain relentless in its efforts to ensure that fast food workers are paid all they are entitled.”

Maurice Blackburn Principal Giri Sivaraman, said: “This is a great example of why unions are critical to ensuring workers aren’t ripped off by unethical employers. While it is good to hear 7-Eleven has improved its compliance, underpayment remains rife in the retail and hospitality industries.”

Between September 2015 and February 2020, 7-Eleven Stores have back-paid $173,610,752 in wages, interest and superannuation to 4,043 current and former franchisee employees.

Fair Work Ombudsman, Sandra Parker, said: “We will continue to monitor compliance in 7-Eleven outlets and encourage head office to consider entering into a second compliance partnership to ensure ongoing accountability.”

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