06 December 2016
7-Eleven has taken another significant step forward in its remediation and reform program by signing an industry-leading comprehensive Proactive Compliance Deed with the Fair Work Ombudsman (FWO).
7-Eleven entered into the Deed voluntarily, as part of its ongoing cooperation with the regulator and commitment to transparency through the reform process.
The Deed acknowledges the substantial steps 7-Eleven has already taken in addressing issues in its franchised network, including:
a multi-million dollar investment in innovative store level technology to centrally record and capture time and attendance records for all employees through biometric (thumbprint) sign-on and sign-off;
centralising payroll and implementing oversight and other monitoring measures to ensure payroll non-compliance is more easily able to be identified;
investing in a significant increase in field-level investigation and compliance activity;
aggressively investigating and, where required, acting upon any allegations of unlawful Franchisee activity, including termination of the Franchise Agreement; and
increasing Franchisees’ profit share and minimum profit guarantees under our franchise agreement, positioning 7-Eleven’s model as among the most competitive and attractive in the franchise industry.
In signing the Deed, 7-Eleven commits to implementing further reforms, including:
enhancing in-store identification of staff and their hours worked through photographic identification and centralised CCTV systems;
establishing a staff consultative forum with Employees from across the Franchise network, operated directly by 7-Eleven and excluding Franchisees;
review, develop and deliver workplace relations training for all Employees, including in the Franchise network;
regular communication to all Employees regarding their workplace rights, where to find further information, and how to make inquiries or lodge a complaint;
external audits assessing compliance with Commonwealth Workplace Laws and applicable Fair Work Instruments, including statistically relevant samples of time and wage records; and
regular reporting to the FWO on progress in relation to commitments outlined in the Deed.
The Deed also acknowledges the steps 7-Eleven has taken, and will continue to take, in ensuring underpaid Franchisee Employees receive their full entitlements as quickly and fairly as possible.
7-Eleven’s voluntary wage repayment initiatives have to date approved almost $57 million to more than 1,400 claimants. These initiatives have now been operating for a total of 15 months. In that time, more than 15,000 former and current 7-Eleven Franchisee Employees have been contacted a minimum of 13 times each via email and SMS, and several public calls have been placed in local and international media encouraging claimants to come forward. The overall rate of new claims has declined.
The Deed agreed with the FWO outlines transition arrangements to ensure these existing claims continue to be processed swiftly and fairly, to encourage any further historical claimants to quickly come forward, and to ensure that any future claims are made promptly and are able to support any appropriate action.
Wage Repayment Panel (WRP)
The 7-Eleven WRP will remain open to new claims until 31 January 2017. 7-Eleven encourages any former or current Franchisee Employees who believe they have not been paid their full entitlements to come forward by 31 January 2017 and submit their claim to the Secretariat on 1800 619 802 or wagerepaymentprogram.com.au.
In order for any claim to be assessed, claimants need to provide the Secretariat a simple completed template outlining the hours that they are claiming together with certified ID and proof of address. The template is available via the WRP website. The Secretariat will continue to follow up a number of claimants that are yet to provide the minimum required information, despite repeated communication attempts.
The WRP will continue to process all claims meeting the minimum criteria lodged by 31 January 2017 in line with existing protocols and methodology, including protecting the confidentiality of the claimant.
Internal Investigations Unit
From 1 February 2017, all new claims will be directed to 7-Eleven’s Internal Investigation Unit (IIU), where they will be processed following similar principles and methodology as the WRP, with two main differences.
1. Whilst the IIU will at all times adhere to the 7-Eleven Principles contained in the Deed, in order to investigate allegations of underpayment or serious non-compliance, the IIU may – with the consent of the claimant - disclose information, including the identity of the claimant, to third parties including the Franchisee or FWO. Where the withholding of consent impacts the ability of 7-Eleven to investigate or substantiate the allegation, the claimant will be informed of this.
2. Where underpayment has been reasonably substantiated, the Franchisee will be required to rectify the underpayment within 30 days. Where the Franchisee fails to rectify the underpayment, 7-Eleven will make an ex-gratia payment to the claimant to rectify the underpayment. However, if the underpayment arose from conduct akin to ‘cash-back’, the Employee was required to perform work at places other than 7-Eleven, or misuse of 7-Eleven’s systems such as failing to record hours, 7-Eleven will not be required to make an ex-gratia payment unless the claim was lodged within 90 days of the claimant becoming aware of or participating in the alleged behavior.
These conditions, agreed with the FWO, seek to encourage Franchisee Employees to come forward quickly, and assist 7-Eleven’s investigation and potential action, and ensure that Franchisees bear full responsibility for any substantiated wage fraud.
In signing the Deed, 7-Eleven again acknowledges its moral and ethical responsibility to require and ensure standards of conduct from all Franchisees and individuals involved in the conduct of its enterprise, that comply with the law in relation to all Employees, and meets Australian community and social expectations, to provide equal, fair and safe work opportunities for all Employees.
7-Eleven will continue to take steps to improve the employment practices of its Franchisees by implementing fundamental, permanent and sustainable changes to its Franchise model designed to ensure that Commonwealth Workplace Laws are fully complied with for all Employees in each of its Franchises.
The full text of the Proactive Compliance Deed is available here.
Quotes attributable to Angus McKay, Chief Executive Officer:
“We have zero tolerance for wage fraud and are doing all we can to stamp it out from our network of franchised stores. This week we have taken the next major step in our reform journey through voluntarily signing a robust Proactive Deed of Compliance with the Fair Work Ombudsman that sets the standard for our industry.”
“Our resolve is unquestionable. 7-Eleven immediately fronted up and owned the issue of wage underpayment in our network of franchised stores. We have invested in industry-leading initiatives internally to ensure correct wages are paid, voluntarily paying almost $57 million to more than 1,400 claimants to date, and proposed a range of policy reforms to raise the standard across the franchising industry.”
“I have consistently said we want to be judged on our actions. We’ll continue to report transparently on our progress as we seek to be the exemplar of a solution to a problem that is regrettably broader than our network.”
“We will continue these efforts, and our ongoing collaboration with the Fair Work Ombudsman and others, to ensure our franchised store network operates at the highest standard we and the community expect.”