7-Eleven’s workplace compliance gets thumbs up after audits and $173m back pay

7-Eleven’s workplace compliance has improved significantly over the past three years, according to the Fair Work Ombudsman.

The franchisor voluntarily entered into a Compliance Deed in December 2016 to improve compliance across its franchise network after widespread breaches across the network were revealed by a Fair Work Ombudsman inquiry.

As part of the agreement 7-Eleven engaged an independent expert to complete three annual audits of its compliance with workplace laws, leading to back-payments of $102,167 as a result of the first audit in 2017.

No further underpayments were identified in the second and third annual audits.

The convenience and fuel outlets franchisor, between September 2015 and February 2020, back paid $173,610,752 in wages, interest and superannuation to 4,043 current and former franchisee employees and has introduced a number of governance measures.

A biometric time recording system operates across all its 700+ Australian stores, requiring employees to clock in and out with a thumbprint, which is cross-checked against employee facial recognition images and store rosters for accurate working hour records.

Costs for the improved technology, systems and processes was more than $10 million.

Staff are now paid electronically only, there is compulsory online training on employment conditions for new employees, an Internal Investigations Unit has been established and a new employment conditions chapter added to the Franchisee Systems Manual.

Fair Work Ombudsman Sandra Parker said the compliance partnership had led to network-wide improvement to protect the workplace rights of current and future employees.

“After widespread non-compliance in its franchise network was identified, 7-Eleven has implemented extensive high-tech systems, training and employee assistance programs across its business. Through our Compliance Partnership, the franchisor has delivered on its commitment to address past breaches by its franchisees and lead a network that meets its lawful obligations to workers,” Parker said.

“Franchise networks are a priority sector for the Fair Work Ombudsman. We urge all head offices to prioritise compliance with workplace laws or risk systemic breaches that impact their brand and workforce. Franchisors can now be held responsible for their franchisees’ conduct and may be subject to enforcement action, court proceedings and penalties if their franchisees have breached the law.”

Parker said the FWO will continue to monitor compliance and encourage the franchisor to sign up to a further compliance partnership “to ensure ongoing accountability”.