It is 12 months since the franchised convenience chain 7-Eleven was hauled into a media scrum because of systemic wage rorts and now the Fair Work Ombudsman is making fresh claims that franchisees are still exploiting employees.

The national chain has made significant changes to its executive team, launched an investigation into the underpayment of workers, and paid out $26m in back pay to nearly 700 workers.

However underpayment claims are still being processed, and the Fair Work Ombudsman has just launched a new investigation into so-called ‘cash back’ schemes, where franchisees formally pay employees the correct wage and then ask for part of that money back in cash.

According to Fairfax Media, FWO is investigating “serious allegations of breaches of workplace laws” at the chain and may well take further legal action.

At the same time, 7-Eleven is proposing industry reform to reduce the risk of workplace law compliance failures.

7-Eleven Chairman Michael Smith said “The proposals provide clarity of responsibilities, remedies and sanctions for everyone involved in the industry, and seek to significantly diminish the potential for companies and/or individuals to exploit workers.

“Our advocacy is based on the workplace challenges 7-Eleven has confronted and the actions we have taken to improve compliance, governance and transparency across our store network.

“We are urging Government and stakeholders in the franchise sector to support these reforms and I look forward to a positive and balanced debate that will lead to real and lasting solutions,” Smith said.

What you need to know

Anyone buying into a business needs to understand where responsibilities and obligations lie in a franchise relationship.

It’s crucial to know how employment law will have an impact on your business, and what policies you need to adopt.