More details have emerged of 7-Eleven’s alleged ‘half-pay scam’

THE explosive wage theft allegations against Australia’s biggest convenience store chain 7-Eleven go all the way to the top, with claims head office must have been aware of the “half-pay scam”.

7 eleven logoco

MORE explosive allegations have been levelled against Australia’s biggest convenience store chain, with claims of a management cover-up of widespread exploitation.

7-Eleven is being investigated over allegations of wage theft that have seen its network of convenience stores described as operating “a sweatshop on every corner”, and fresh claims have emerged that the alleged scam went all the way to senior management.

Fairfax Media this morning revealed it was in possession of thousands of leaked documents that allegedly implicate 7-Eleven’s head office in the scandal.

The documents contain extracts of interviews conducted by 7-Eleven’s field inspectors, in a payroll compliance review of 225 franchises across the country, which allegedly found that the vast majority were underpaying staff. The alleged breaches of workplace laws were handled internally.

The company stands accused of paying workers as little as $10 an hour, with a Fairfax Media analysis revealing that up to two-thirds of stores are blatantly ripping off staff. That’s less than half the award rate of more than $24 an hour, and you can forget about overtime or penalty rates.

In what is being dubbed the “half-pay scam”, staff are allegedly paid for only half the hours they work, with time sheets fudged and “ghost workers” added to rosters before franchisees send the paperwork to head office.

The former head of Australia’s competition watchdog Allan Fels this morning said he found it hard to believe that 7-Eleven’s head office did not know what its franchisees were up to.

“It’s just impossible to believe that they’re unaware of it,” Prof Fels said on ABC radio.

The company responded to the wage theft allegations over the weekend, posting a statement on its website which said it was “extremely disappointed that a number of franchisees have chosen not to meet their obligations as employers” and encouraged workers to seek help from the Fair Work Ombudsman.

The Ombudsman announced this morning that it had launched fresh legal proceedings against a 7-Eleven retail store in Sydney which allegedly underpaid two migrant employees almost $50,000 and falsified their paperwork.

Fair Work Ombudsman Natalie James said the decision was made to prosecute because of the seriousness of the alleged breaches and the involvement of vulnerable migrant employees.

In response to tweets from outraged customers, the United States 7-Eleven account tweeted overnight:

@BeachMilk We are confident 7-Eleven Australia will take the appropriate steps to address this situation. http://t.co/kN2H7HVQVI

— 7-Eleven (@7eleven) August 30, 2015

One worker told Fairfax of his harrowing time working at a 7-Eleven in the Gold Coast area, recounting a nightmarish routine of working 16-hour shifts.

One Indian student told the publication there was no sympathy from his bosses, even after he was violently robbed twice in the space of 18 hours.

The store manager allegedly chastised the student for not fighting back against the balaclava-clad man who, armed with a long, serrated knife, robbed him of $180.

“Ah should fight or do throw the till on him, something, punch him. Why did you give the money like?” the manager is claimed to have said.

The student said he was made to foot the bill if drive-off petrol thieves struck on his shift, and perform the jobs of two people in running the store on his own.

International students can find themselves in a difficult situation if franchisees underpay them, because employers can wield the threat of dobbing them into immigration authorities for breaches of their visas — even if the breach, such as working extra hours, has been imposed by the employer.

There are also allegations that franchisees have withheld passports and drivers licences of staff.

Earlier this month, a 7-Eleven franchisee was fined $21,000 for underpaying an overseas worker and refusing to co-operate with the Fair Work Ombudsman.

The franchisee ripped off a Nepalese student $21,298 over the 13 months to last February while operating a Queensland outlet, which has since been closed.

Initially fined $6970 by the Federal Circuit Court, defied orders to produce documents and pay the student the wages he was owed, prompting the heftier fine.

More court cases can be expected as the scandal unfolds, with Fair Work analysing evidence seized in raids across Australia.

7-Eleven is owned by billionaire businessman Russell Withers and his family, who brought the American franchise to our shores in the 1970s.

A spokeswoman for the company said in a statement to Fairfax: “7-Eleven strongly supports the Fair Work Ombudsman’s investigation into employees’ pay and conditions currently underway at a select number of franchisees’ stores ... In the one instance we were made aware of a store employee’s passport being held by a franchisee, we intervened to facilitate the return of the passport.”

The spokeswoman said 7-Eleven expected franchisees to meet their legal obligations and that if even one store was underpaying workers, it was one store “too many”.

A statement posted on 7-Eleven’s website said: “We take our responsibility as a franchisor seriously. We ensure we provide education and support to assist our franchisees to meet all their legal obligations, including their obligations as the employers of store staff.

“We are deeply concerned about the personal impact on affected employees or former employees, and the damage such actions cause to franchisees who are trusted, reliable and responsible small business owners, meeting their obligations as employers. Our business does not condone the action of any franchisee who does not meet their employer obligations, and we do not and will not hesitate to take any appropriate action, under law and within the franchise agreement, where a franchisee is found to be in contravention of the law.

“If you have any questions or concerns about your pay or conditions, we would encourage you to contact the Fair Work Ombudsman for advice and support.”

Read more at Fairfax, or tune into ABC’s Four Corners on Monday night.