More than 90 per cent of 7-Eleven Australia’s 620 stores are now trading under a new enterprise agreement, which includes a revised profit-sharing model between franchisees and head office.
Franchisees were given until 5:00pm on Monday, December 7 to sign the agreement, which includes increased compliance, governance and oversight initiatives. More changes to the 7-Eleven model are set to roll out in the coming weeks, with a new payroll system to be introduced early next year.
7-Eleven interim CEO, Bob Baily, said, “an important aspect of the new agreement is a commitment to increased compliance, governance and oversight arrangements relating to store operations and workplace obligations”.
A 7-Eleven spokesperson told C&I Week the response to the new business model is a “significant and positive step forward” for both the company and store owners, noting some franchisees yet to formally agree to the new deal have indicated their to intent to sign. Those yet to sign the new agreement have until February 1 2016 if they wish to do so.
“We have been working with franchisees and their representatives for several weeks to achieve an outcome that would deliver mutual benefits. Given that more than 90 per cent of stores have signed up, we think this has been accomplished,” the spokesperson said.
“For those that have signed, the benefits of the new agreement apply immediately and are back dated to September 1. With that, there is increased compliance, governance and oversight measures that are in place that relate to payroll reporting, time keeping, and rostering. There are some new measures and new interim measures going into place over the course of the next week or two, which is the first step towards the implementation of a new payroll system in 2016.
“There’s an enormous amount of other work going on across the organisation but it’s a good outcome and it shows what can be achieved when the franchisees and 7-Eleven work together. It’s a significant and positive step forward.”
Last month, 7-Eleven workers from 400 stores across Australia, around two-thirds of the franchise’s network, submitted claims of underpayment to the Independent Franchisee Review and Staff Claims Panel. At the time, the panel had received around 600 claims, with thousands more expected, after 15,000 former and current 7-Eleven employees were invited to apply for compensation.
7-Eleven’s wage scandal was first revealed by a joint investigation by Fairfax Media and ABC Four Corners. Following the investigation, 7-Eleven set up an independent panel, chaired by Professor Allan Fels AO, to receive and examine claims including underpayment of staff by franchisees, and franchise agreement terms. The investigation has also led to the resignations of 7-Eleven chairman, Russ Withers; CEO, Warren Wilmot; and General Manager – Operations, Natalie Dalbo.
Class action talks loom
Despite the uptake of the new agreement, the convenience store chain is reportedly facing a class action from around 100 franchisees.
Earlier this week, Fairfax Media reported “hundreds” of franchisees had met with the lawyer preparing the class action, Stewart Levitt from Levitt Robinson Solicitors, in the past few weeks to discuss their options. Levitt told Fairfax 40 store owners had formally signed up to the class action and another 60 had registered their interest.
“In respect to a class action, we would hope that it doesn’t come to that but if it does then we will be defending that vigorously,” the spokesperson said.