New FWO ruling puts franchisees on notice


A second FWO ruling in as many days reinforces the severe implications of failing to comply with minimum wage regulations

For the second time this week the Fair Work Ombudsman has moved against an organisation for failing to heed its minimum wage requirements.

Businesses of all sizes should take heed and ensure they comply with the FWO’s regulations, and those running franchise operations need to check their franchisees are doing the right thing as this case proves not being in direct control of every aspect of business operations is not seen as an excuse if the law is not adhered to.

In this new case two NSW 7-Eleven stores have had their franchise agreements terminated for underpaying workers.

The convenience chain is auditing stores after revelations international students were threatened with deportation if they reported exploitation at work.

‘Effective today, 7-Eleven has taken operational control of the stores concerned and existing staff will be offered ongoing employment,’ interim CEO Bob Baily said on Tuesday.

‘There are no winners in circumstances where people are underpaid,’ he added.

Company chairman Russ Withers and chief executive Warren Wilmot quit in September after the revelations were made public.

In October 7-Eleven announced more profits would go to franchisees in a bid to ‘incentivise’ ethical conduct.

‘7-Eleven does not condone the underpayment of franchisee employees and is doing everything it can, including working with franchisees, to stamp out the practice,’ Mr Baily said.

Retail specialists are still doing payroll audits of stores to make sure franchisees are doing the right thing.

The company set up an independent panel to hear confidential claims of underpayment, with the aim of repaying all affected workers before Christmas 2015.