Lawyers and union seek clarification on 7-Eleven wage panel

Maurice Blackburn, a law firm representing more than 100 7-Eleven workers, and the SDA – the union for retail, fast food and warehouse workers – are calling for 7-Eleven to publically release the terms of reference for its new wage panel, warning the convenience chain will face legal if it does not comply.

The warning by the law firm comes in response to letters sent on Monday by forensic accountants, Deloitte, and 7-Eleven head office, which Maurice Blackburn says fail to clarify what the process will be for 7-Eleven employees trying to make claims following the closure of the Fels wage panel last week.

In a statement released on Tuesday, Maurice Blackburn said it, along with the SDA had concerns after reading the responses by the convenience chain.

Maurice Blackburn expressed concerns that the new claims process has still not yet been publically disclosed and that it is not yet clear if employees will be required to consent to revealing their identities before receiving repayment. The company also said it was troubled about the number of 7-Eleven staff dealing with claims as part of the new internal unit, which will reportedly increase from two to five.

Following the announcement by 7-Eleven that it would close the Fels panel, newly appointed 7-Eleven CEO, Angus McKay, said 7-Eleven’s first priority remains to make sure those who have been disadvantaged as a result of wage underpayment practices by franchisees are paid their legitimate entitlements.

Last week an open letter to claimants from Mr McKay was published on 7-Eleven’s website, stating he is “personally committed to ensuring those who have been subjected to past underpayment of wages receive their due entitlements.”

Mr McKay said all claims “will be dealt with through the existing process which remains open” and the “confidentiality of the claim will continue to be protected as a matter of priority”. Mr McKay also said it was his intention to accelerate the payout of legitimate claims.

In the wake of public criticism, the company posted an additional statement on its website which stated that it takes the matter of claimant confidentiality very seriously.

“7-Eleven has not and will not breach claimant confidentiality. In particular, claimant details will not be disclosed to a franchisee employer without the claimant’s consent, nor will 7-Eleven ask the ecretariat operated by Deloitte to do so,” the company said.

“The claims process remains open and will continue. All existing claims will be processed and legitimate claims paid. 7-Eleven encourages anyone who believes they have a claim to contact the Secretariat on 1800 619 802.”

Angus McKay Pylon 5
7-Eleven Australia CEO Angus McKay

7-Eleven CEO: 7-Eleven will repay valid claims
Mr McKay told 3AW 7-Eleven is committed to making payments where there is a valid claim and the company will continue to encourage claimants to come forward.

“We are going to continue to accept and encourage any new claims that employees, past or present, wish to put into the system. We’ll review those that are in the system. There’s some 1900 that are ready to be investigated and where those are valid claims we are going to pay them,” he said.

“The premise that we’re not going to look after [employees] is just false,” Mr McKay said.

Mr McKay said there had been evidence of fraudulent activity beginning to emerge, however, claims of intimidation practices by franchisees were “limited” and had been stamped out by the convenience chain.

“Nine months ago we were accused of not listening and [not] hearing enough in the marketplace around what was going on. We’re not going to not listen to what we’re hearing out there. Whether it’s factual or not we’ll get the secretariat to go through and analyse, but I am absolutely going to listen to any intelligence I get out there that says people are trying to game the system,” he said.

“There is no legal responsibility for us to do this. We are doing this because it’s the right thing to do. We’re also doing this because it happened on our watch. But right now the first place for us to redress is for us to step up and continue to make payments to those people that have been aggrieved.

“We’re not saying anybody hasn’t done a good job it’s about what job we believe needs to be done in the future.”

Fraud claims based on hearsay, says Fels panel deputy chair
The co-chair of the now axed Fels panel, says 7-Eleven’s claims of fraudulent behaviour were based on hearsay.

In a statement issued last week, Dr David Cousins said as “dollar amounts rose, greater efforts were made by the company to get control of the situation”, believing the embattled convenience chain became “spooked by suggestions it might have to pay out in excess of $100 million”.

“It started to push back of very large determinations and sought to have direct influence on the claims determination process, including wanting to obtain the names of claimants,” he said.

Professor Cousins said 7-Eleven recently began to focus on allegations that there was evidence of fraudulent claims.

“The panel sought evidence of this. When it was provided in the last few weeks the panel pointed out the alleged cases were in fact hearsay and that no determinations had been made in relation to them.

“The panel was from the outset aware of the possibility of fraudulent claims emerging, particularly, the longer the process went on. Our methodology was designed to identify likely fraudulent claims and in fact had done so.

“The panel recognised the concerns 7-Eleven had expressed about possible fraudulent claims and itself proposed amendments to the terms of reference to deal with them in a way which still maintained the fundamental commitments given at the outset as to the operation of the panel. 7-Eleven was not interested. These proposals were not even discussed with the panel.”

According to Dr Cousins, the panel has received 3700 expressions of interest from employees wanting to make a claim.

“There are many more potential claimants and the number of new cases has been increasing by around 100 in recent weeks. As the investigations have been completed the panel has made its determinations in 421 cases amounting to the $16.7 million, an average determination of close to $40,000.

“My concern is that the number of claims will now rapidly dry up and that the average determination will sharply decline as 7-Eleven moves to reign in the costs associated with providing redress for the past illegal behaviour, which it turned a blind eye to and indirectly benefited from.”

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