7-Eleven Australia offers $25 million in back-pay as class action looms
posted on 7th December 2015
7 December 2015 - At least 40 7-Eleven franchisees in Australia have signed up for a class action suit against the franchisor, claiming that if they had received proper disclosure at the outset they would not have entered into a franchise agreement. The lawyer preparing the class action, Stewart Levitt, has claimed: 'The wage rorts and the oppression of many working class investors under the 7-Eleven and other similar franchise models is widespread.' Meanwhile, the company has offered a new profit-sharing agreement, which includes an agreement to pay the first A$25 million of back-pay claims brought by current and former workers. This could be seen as blurring the distinction between employment responsibilities which the franchise sector has been keen to maintain (see World Franchise Council Declaration).
Franchisee sources told Fairfax Media a key concern with the new agreement was that it didn't provide all stores with enough of an income boost to offset a new clause in the contract that places all future liability for the underpayment of workers on the franchisee. Some franchisees were also concerned that the new deal doesn't address what will happen to the low-income-generating franchisees when their contracts expire.
The 7-Eleven spokesman said this was not an admission by the company that its model had contributed to the underpayment of staff.
Mr Levitt said the $25 million offer would not be enough to cover the full amount of claims brought against a store owner or any fines issued by the Fair Work Ombudsman.
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