The 7-Eleven chain is bringing in-house the claims process for past under-payment of wages by franchisees. An independent unit within the group will take over from the Fels Wage Panel which was brought in to assess wage claims.
Professor Allan Fels was selected to run an independent process reimbursing workers, but according to an Inside Retail report, he now claims that 7-Eleven’s management has “welshed” on public promises to pay staff back after he was removed as an independent judge of workers’ claims.
“One of the red lights for 7-Eleven was the fact that some individual claims have been up in the hundreds of thousands,” said Fels on Wednesday night.
“There have been some claims of the level $350,000 (to) $400,000.”
Fels said 7-Eleven applied “great pressure” on the panel to conceal those amounts from the public, and to maintain the relationship, the panel agreed.
But Prof Fels said the decision showed 7-Eleven was trying to minimise the payouts.
From Friday all existing claims will be processed by the unit, against what 7-Eleven describes in a media statement as “enhanced investigative protocols and evidentiary standards”.
In a media statement, Michael Smith, chairman of 7-Eleven, said “It is important to state unequivocally that the process for claims will continue and 7-Eleven will pay all legitimate claims by franchisee employees for the past underpayment of wages.
“The Panel has provided 7-Eleven with an opportunity to gather in-house capabilities and implement new systems and processes that position us to take responsibility and accountability for this aspect of our business,” he said.
“It is incumbent upon 7-Eleven to take responsibility for this process. Ethical corporate standards cannot and should not be outsourced. We are happy to be held to the standards we have set for and expect of ourselves.”
7-Eleven is prepared to fund additional resources for the FWO should that be required for the Ombudsman to take an active oversight role..
Smith has indicated that independence from the engine room of the business will be a priority for the new unit which "will ensure claimant confidentiality and the independence of the proposed internal unit that will be responsible to the chief executive officer.”
It will be backed by the Secretariat that will:
- be staffed by qualified forensics accountants
- meet the highest levels of claimant confidentiality
- adopt evidentiary standards that protect against the prospect of corrupt activity, and
- liaise with the Fair Work Ombudsman.
When assessing claims it will also provide 7-Eleven with a recommendation, the basis of validation and the quantum of each claim to be paid.
The convenience chain will regularly publish the outcomes of the claims process on its website and provide the Fair Work Ombudsman with complete access to the process, investigative and determination data as well as the whistle-blower service already established to protect claimants from intimidation.
7-Eleven has said it is prepared to fund additional resources for the FWO should that be required for the Ombudsman to take an active oversight role.
The convenience chain's chief executive officer, Angus McKay said,
“The new unit we are establishing will be dedicated to the claims process full-time and it is my expectation that as a result more claimants will be paid more quickly.
“7-Eleven’s first priority remains to make sure those who have been disadvantaged as a result of wage underpayment practices by franchisees are paid what they are legitimately entitled to and as quickly as possible.”