7-Eleven signs on with Fair Work Ombudsman to set the standard for franchising in Australia
Australia’s largest petrol and convenience retailer, 7-Eleven, has signed a Proactive Compliance Deed with the Fair Work Ombudsman which will set a new standard for franchising in Australia.
The landmark agreement commits 7-Eleven to a range of measures designed to ensure all its workers receive their lawful entitlements through strong accountability for all operators across its franchise network and supervision by the Fair Work Ombudsman.
The measures include installing and overseeing biometric shift scanning systems and the roll out of 7-Eleven owned CCTV systems at all outlets in order to allow the head office to monitor employee hours and make sure workers are paid correctly.
The deed also implements measures aimed at overcoming the challenging and unlawful practice of ‘cash backs’ by workers to franchisees which were revealed by the Fair Work Ombudsman’s Inquiry Report into workplace non-compliance in the 7-Eleven network.
Fair Work Ombudsman Natalie James said the commitments in the deed would help prevent the unlawful practices identified in the regulator’s April 2016 Inquiry Report, increase accountability across the entire franchise network and introduce a culture of compliance from head office down.
“The measures in this deed are the most robust and comprehensive that any franchise brand has in place in Australia,” Ms James said.
“The goal is to make sure franchisees pay workers correctly in the first place. As we noted in our Inquiry report, non-compliance in this network has been long term, extensive and systemic. Some franchisees have demonstrated they will go to extreme lengths to circumvent record keeping systems. The deed establishes a framework for 7-Eleven to detect, investigate and rectify underpayments within its network now and into the future. It also maintains commitments to backpay workers underpaid in the past.”
The actions required by the deed will ensure employees and franchisees understand their rights and obligations, including ensuring franchisees understand the wages costs associated with their store. It will make franchisees and Head Office accountable through new systems and oversight by the Fair Work Ombudsman. The measures include:
Managing claims of underpayment:
The current 7-Eleven Wage Repayment Program – will continue to receive and process all employee Claims submitted prior to 31 January 2017, as well as all Claims previously made to and received by the Panel. 7-Eleven will pay the aggregate Claim amounts approved through the 7-Eleven WRP on an uncapped basis and will report to the FWO at least quarterly regarding the outcome of Claims to the 7-Eleven WRP. Claimants who disagree with the outcome of a claim can seek review by the WRP and further review by the Fair Work Ombudsman if they choose. Note – to date, 7-Eleven has paid more than $55 million in wages to employees who were underpaid by 7-Eleven franchisees.
Rectification of Underpayments - Where an underpayment claim is substantiated by the IIU, 7-Eleven will require the relevant franchisee to rectify any underpayment to that Employee within 30 days of service.
If the Franchisee fails to rectify the underpayment within 30 days of 7-Eleven having notified the Franchisee of the substantiated Underpayment claim, 7-Eleven will rectify the underpayment within a further 15 days.
Compliance with Commonwealth Workplace Laws – 7-Eleven acknowledges its moral and ethical responsibility to ensure compliance with the law in relation to all employees and meet Australian community and social expectations.
Auditing and Reporting to the FWO – 7-Eleven will engage an independent auditor to conduct three annual audits throughout the duration of the Deed assessing compliance with Commonwealth Workplace Laws and applicable Fair Work Instruments. Within two months of the audit, 7-Eleven must provide the Fair Work Ombudsman with a summary report prepared by the auditor outlining findings and steps taken to rectify contraventions.
Reporting of Non-Compliance with Commonwealth Workplace Laws - 7-Eleven will, at its own expense, establish and maintain a dedicated telephone hotline and email account service with interpreter accessibility to ensure that any person, including Employees and members of the public, may make enquiries, lodge complaints or report potential non-compliance with workplace laws, including underpayment of wages, at 7-Eleven Franchises. The hotline must have the capacity to receive, respond to and manage complaints made anonymously.
The Fair Work Ombudsman and 7-Eleven signed the compliance deed on Tuesday 6 December 2016.