7-Eleven links with FWO to set franchising standard in Australia

7-Eleven signs landmark deal to ensure accountability among franchisees.

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,” 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,” James said.

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:

  1. Improving systems and record keeping
  • identifying Employees and Maintaining Employee Records using a biometric time recording system
  • using a central payroll system which will specify lawful minimum rates of pay for all employees.
  1. Managing claims of underpayment
  • establishing an Internal Investigations Unit (IIU) to ensure compliance in individual franchises by monitoring and reporting on all activity to 7-Eleven and the FWO on a quarterly basis
  • rectification of underpayments of any underpayment to that employee within 30 days of service
  • uncapped Payments for all claims lodged with both the WRP and the IIU
  1. Acknowledgement and Accountability
  • compliance with Commonwealth Workplace Laws
  • auditing and Reporting to the FWO via 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
  • internal auditing and risk analysis with the appointment of a Senior Manager with responsibility for auditing time and payroll data
  • establishing a hotline for reporting of non-compliance with commonwealth workplace laws
  • access to stores for Fair Work Inspectors to verify compliance with Commonwealth Workplace Laws.
  1. Clear expectations for franchises
  • wage costs outlining the applicable minimum wages, loadings, penalty rates and overtime rates of pay for full-time, part-time and casual employees
  • franchisee obligations to comply with workplace laws.

“The law requires direct employers pay all workers, including visa holders, their minimum rates of pay. We are pleased that 7-Eleven has acknowledged this by agreeing to this Compliance Deed, entering into a partnership arrangement with the FWO which sets a new Australian standard,” James said.

Inside Small Business

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