Over the past  week 7-Eleven franchises have held meetings in Sydney, Melbourne and Brisbane to consider their position following the formation of the Alan Fels 7-Eleven wage inquiry panel. The situation for them has not been helped by the recent decision by the Fair Work Ombudsman to conduct a systematic examination of wage payments at all 7-Eleven stores, possibly with the intention of opening up a legal route to 7-Eleven head office.

Last week 7-Eleven announced an increase of income support to $310,000 per annum, which is almost triple the previous figure. This follows offers to assist franchisees who wish to exit the network. Currently around eighty  7-Eleven stores are on the market and one franchisee at a meeting held in Sydney last night said that he would like to get out, but there were no takers.

Stewart Levitt 2
Stewart Levitt, principal of Levitt Robinson Solicitors (Image courtesy of Four Corners)

Stewart Levitt, principal of Levitt Robinson Solicitors, is representing franchisees and is seeking enough momentum among 7-Eleven store owners to launch a class action against 7-Eleven in Australia and against the parent company in Atlanta.

“There are issues about whether the real situation with wage payments was honestly explained to the franchisee in the franchise disclosure documents, which are required to be submitted before the franchisee commits to the business,” he told C&I at the Sydney meeting last night. “If franchisees have been mislead, only to find that they have to break the law in order for the business to survive, we have an action against the7-Eleven Australia.

“But the nature of the relationship between 7-Eleven in Australia and 7-Eleven Altanta is such that Atlanta has ultimate control over the operation in Australia. We believe that if 7-Eleven Australia knew about the systematic underpayment of wages, then so did 7-Eleven Atlanta.”

“Under Australian law,” he said, “the payment of damages is limited to restoring the plaintiff to the same situation that it was in before the damage was sustained. However under American anti-trust laws, it is possible to seek punitive damages which can be up to eleven times higher.”

Meanwhile 7-Eleven franchisees in Australia are awaiting any announcement from 7-Eleven as to what support they might expect if prosecuted and fined by the Fair Work Ombudsman.

 

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