The Fair Work Ombudsman (FWO) is investigating allegations by the retail union that young foreign employees are being exploited by 7-Eleven franchisees and that some franchisees are not paying the correct penalty rates to their weekend and night shift workers. In many cases, the allegations include the failure by the 7-Eleven franchisees to maintain accurate and up-to-date employment records.

To date, the FWO investigation has recouped more than A$162,000 for approximately 168 underpaid 7-Eleven workers. Five franchisees in Melbourne's CBD will be required to reimburse 88 workers A$112,000 in wage underpayments and a sixth store has been formally requested to reimburse 12 staff with almost 1000 hours of annual leave.

In response to the ongoing 7-Eleven investigation, the FWO has commenced a joint campaign with 7-Eleven to perform a compliance audit to ensure that all 7-Eleven stores in Victoria are operating in strict compliance with all federal workplace laws. The FWO has broad powers to investigate and prosecute employers who breach the federal workplace laws including those laws dealing with awards and agreements.

The audit will scrutinise the records of 63 7-Eleven franchisees. However, the FWO has indicated that the audit may be widened to include every 7-Eleven store in Victoria if further issues of concern are identified and franchisees do not show compliance with workplace laws. The audit is targeted to ensure, among other things, that:

  • employees are being paid for all hours worked
  • employees are receiving full payment of weekend and evening penalty rates
  • franchisees are complying with their record-keeping and payslip obligations.

To assist in this investigation, the FWO has been granted broad investigatory powers such as the right to access to workplaces, interview staff and obtain employment records and other relevant documents.

If the FWO receives a complaint that an employer has failed to comply with federal workplace laws, it may first seek to resolve the compliance failure privately with the assistance of the parties involved. However, the FWO has the authority to launch a formal investigation into the matter where the problem cannot be resolved privately. Where the contravention is not corrected privately between the parties, the FWO may seek court orders for the imposition of penalties and/or compensation payments to the applicable employees in relation to contravention of workplace laws. The FWO may seek a maximum penalty of A$6,600 for an individual and A$33,000 for a corporation.

This compliance audit is part of a wider campaign by the FWO targeting the retail industry generally to promote compliance with workplace laws. Franchisees will be required to cooperate with the FWO inspectors and to act upon the results of the audit. The 7-Eleven franchisor has made it clear that it takes this audit very seriously and that there will be consequences for franchisees if they do not comply with workplace laws.

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