Professor Fels told Fairfax Media there were 2000 claims from current and former workers at 7-Eleven that were being processed, with new claims still coming in. Underpayment of staff at 7-Eleven franchises is under Senate scrutiny. Credit:Darrian Traynor So far the panel has paid 300 workers a total of $10 million in back pay, which he says is equivalent to an average payout of $38,000. He wouldn't be drawn on how much the final payout would be. But based on the current payout rate, it could be anywhere between $60 million and $100 million. If the tally tops $100 million it would place 7-Eleven's back pay claim as the highest in Australia's history, eclipsing the payout of Ansett workers following the airline's collapse.

'Unfounded guesswork' A spokesman for 7-Eleven said: "Speculating on the quantum of claims is unhelpful, is nothing more than unfounded guess work and adds nothing to the process of remediation. 7-Eleven stands by its commitment that approved claims will be paid." Professor Fels' comments come as a report into 7-Eleven by the Fair Work Ombudsman shows the regulator does not have enough powers to properly crack down on wage abuse in Australia. "We do not have power to compel any employer or other witness to participate in an interview," the report, obtained exclusively by BusinessDay, says.

Unlike other regulators that operate in civil jurisdictions like the Australian Securities and Investments Commission, FWO does not have the power to compel employers or witnesses to provide evidence. The report recommended 7-Eleven enter into a compliance partnership with Fair Work to ensure wage fraud is stamped out. The report also recommended 7-Eleven set up a guarantee fund to repay exploited workers, introduce biometric systems to track worker hours and engage an external party to conduct annual audits. 7-Eleven must also publicly accept its moral and ethical responsibility to staff, the report says. Ombudsman's warning Fair Work Ombudsman Natalie James has also flagged taking on the head offices of more large companies in an opinion piece published in BusinessDay.

"The law can extend legal liability to individuals involved in the procurement and to companies further up the supply chain," Ms James warns. Professor Fels said while tougher laws and penalties would be useful, the problem of underpayment of wages is widespread in Australia and something much deeper needed to be done. He said there was something to be learned from the 7-Eleven compensation model, which should be considered to be put in law with far less rigorous standards of proof than is required for the courts. "I think one of the elements of a solution would be to impose a degree of liability on the franchisor with payments, without totally discharging the franchisee's obligations," Prof Fels said. "Asking franchisors to make up payment provides a more powerful incentive than fines or even modest court-arranged payments," he said.

"The difference with the Fair Work and the panel is to get repayments you need to go to court which requires high standards of evidence, the 7-Eleven model is one where reasonably justified claims are paid, and the size of outcomes that would dwarf what would be possible in court of law." 7-Eleven has previously said it would cover the first $25 million in back pay claims and then expect franchisees to chip in 50¢ in the dollar for every claim over that amount. Loading Yet both the government and Labor appear to have little appetite for increasing the powers of the Fair Work Ombudsman. The Minister for Employment, Michaelia Cash, did not answer questions regarding increasing the powers of Fair Work while shadow employment minister Brendan O'Connor said Labor would consider it but only after consultation with employers.