More gloom and doom for 7-Eleven amid claims worker beaten

By Sarah Stowe | 08 Feb 2016 View comments

Exploited 7-Eleven workers are allegedly still being forced to give pay back to their bosses and at least one is said to have been beaten for speaking out.

This has led former Australian Competition & Consumer Commission chairman Alan Fels to tell a Senate inquiry he has lost confidence in the chain’s ability to handle the debacle.

Deloitte partner Siobhan Hennessy, a member of the Fels Wage Fairness Panel created by the company to investigate the scandal, told senators in Canberra that a worker had been beaten for speaking to the panel, as reported by Fairfax Media.

"The intimidation has gone to levels that are very worrying," said Hennessy.

The hearing also included a testimony from former 7-Eleven chairman Russ Withers, current chairman Mike Smith, and interim chief executive Bob Baily that up to 500 employees were still being short changed.

Claims of cash-backs related to the fiasco were on track to peak at $50 m in what Senator Sue Lines described as the biggest back-pay claim in Australian history.

Read more about the Special investigator appointed by 7-Eleven

7-Eleven has already budgeted a sum of $25 m for back-pay claims.

Damaging revelations about the extent of the "cash-back" scheme – where an employee is appropriately paid but is then forced to give back half their pay to their bosses –and head office exposing information to franchisees, was made by panel co-chairman Professor Allan Fels at the hearing.

The panel was set up by 7-Eleven last year after a joint investigation into stores by Four Corners and Fairfax Media found ingrained underpayment of wages and the doctoring of payroll records within the country's biggest convenience store chain.

"We're received a number of consistent reports from claimants that since the revelation of the scandal … franchisees who were operating under the half-pay scheme are now operating under the cash-back scheme," said Fels.

"Right now this cash-back scheme is happening on a large scale," he said.

Fels also stated in some instances he had lost faith in the company's ability to manage poor franchisee behaviour.

"We've had a loss of confidence in 7-Eleven, in the information we have given to them and they've given to regional managers," said Fels.

He said the company had to manage the issue "more quickly, more boldly", adding that "They need to move on some of their regional managers".

Professor Fels' panel has written to 20,000 7-Eleven workers but responses, now obtained from more than 2000 workers, were being hindered by intimidation of employees by store owners.

Baily informed the hearing 1350 current and former 7-Eleven workers had made 1492 claims to the panel, including 500 claims from current workers at 7-Eleven stores. Senators at the hearing labelled these accounts as deeply concerning.

"Of those who have been processed, there's 188 for a total of $4 million," said Baily. However, he added that so far only 97 workers had been remunerated, in claims totalling just above $2.8m.

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