HOW 7 ELEVEN IS RIPPING OFF ITS WORKERS The lot of the average 7-Eleven worker in Australia is as simple as it is bleak: you get paid half the $24.50 an hour award rate - or less - and if you complain your boss threatens you with deportation. It’s highly illegal and goes against the Australian tenet of giving people living in this country a “fair go”. A joint investigation into 7-Eleven stores by Four Corners and Fairfax Media has found systemic underpayment of wages and the doctoring of payroll records within the country’s biggest convenience store chain. Politicians, lawyers and regulators all say something should be done to help these exploited and intimidated workers who are often are international students. Doctored time sheets and rosters, store financials with possibly understated wage bills, store reviews and explosive documents relating to payroll compliance from head office are further evidence that something is deeply rotten within the 7-Eleven Australia empire. Within days of the scandal breaking, the company is in crisis and has announced a “independent review” of wages and offered to buy out franchisees.

It has sought to pin blame for wrongdoing on those franchisees but the testimony of a whistleblower from head office, former workers from stores around the country, a consumer advocate who has lobbied head office for over two years, and the damning opinion of the Fair Work Ombudsman paints a bleak picture of what it is like to work in one of the 620 franchise stores. The picture is painted in the words of these experts along with evidence here.

THE WHISTLEBLOWER A whistleblower chose to speak out because he says he had had enough of 7-Eleven head office deliberately ignoring systemic wage fraud throughout the franchise system. “Head office is not just turning a blind eye, it’s a fundamental part of their business. They can’t run 7-Eleven as profitably as successfully as they have without letting this happen, so the business is very proud of itself and the achievements and the money it’s made and the success it’s had, but the reality is it’s built on something not much different from slavery,” he says. The insider said it was time someone told the truth “or else they’ll just keep on doing it.” “Head office is not just turning a blind eye, it’s a fundamental part of their business.” Documents seen by a joint investigation by Four Corners and Fairfax Media reveal that head office started scrutinising payroll compliance of its franchisees shortly after the media investigations team informed 7-Eleven it was looking into its business model, wage fraud and the relationship with franchisees. “About a month ago panic set in,” the whistleblower says. “We are now checking the paperwork against the CCTV and guess what? It doesn’t match in nearly every store.” He said when Fair Work raided 20 stores last September, head office put in place processes to make it look like it was serious about addressing the problem. But he says few cross-checks were done, which made the process more like smoke and mirrors. The whistleblower says the wage scam is shared among franchisees. In some cases, the most experienced franchisees who are handpicked to become mentors train new franchisees in how to falsify the payroll and manipulate records. He estimates that more than 140 of the 620 stores would drown in red ink if they had to pay the legal wages. Other documents show that 7-Eleven factors into its total earnings before interest and tax projections, store changeovers. In 2014, the company made almost $9 million from “changeovers” on more than 60 stores. Head office had projected more than 70 stores changing hands during the period. Store changeovers are money spinners for the group as every time a store sells it reaps a franchise fee.

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THE VICTIMS Pranay Alawala has worked in four 7-Eleven stores around Brisbane and at each store he’s been underpaid. At one store he was asked to train for a week without pay on the promise he would be hired. He wasn’t hired and was never paid for the 40-plus hours he worked at that store. One store owes him more than $30,000 in unpaid wages. He quit after getting a back injury at work. He later confronted his boss for the money he was owed but the franchisee’s lawyer sent him a letter threatening to report him to immigration for working more than 20 hours a week, which is in breach of his visa conditions as a student. Pranay says he’s disappointed with how he’s been treated and wants to stand up for all the international students who are being ripped off. The popular young man (his phone rings often the day Fairfax meets him), who came to Australia to complete his Masters in IT in August 2013, can point to 70 different 7-Eleven stores in Brisbane who are committing wage fraud. “It’s a big fraud. They are making money on us, not the business.” NOT AN ADVERTISMENT Newlywed Sam Pendem has three degrees, including an Advanced Masters in IT, and oodles of ambition to build a life as a professional in Australia. A former 7-Eleven store manager, Sam worked at three different stores under four franchisees in the Gold Coast region and was underpaid at each. He was part of the “half pay scam”, where franchisees pay half the award rate. Sam was required to work longer hours, shifts of up to 18 hours straight, without breaks. He was doing the job of two people, having to watch petrol pumps (if someone drove off without paying for petrol, he footed the bill), serve customers, clean the store and stock shelves in a busy store all on his own. The long hours put him in breach of his visa conditions. It gave the franchisees leverage to threaten to go to the authorities to have his visa cancelled if he complained about his salary or working conditions. He has four separate Fair Work claims on foot seeking unpaid wages in total of $140,000. Sam still has nightmares about 7-Eleven when he was robbed twice in the space of 18 hours: a long serrated knife, a black balaclava and drug fuelled eyes. After each robbery his boss yelled at him and said he should have fought the robber instead of letting him steal money from the till. Despite his poor treatment at the hands of 7-Eleven, Sam says he loves Australia and has applied to become a citizen. “I’m very outgoing. The lifestyle here suits my personality,” he says.

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WATCH CCTV FOOTAGE OF THE ROBBERY

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Mohammed Rashid Ullat Thodi came to Australia on a student visa to study architecture. He was one of the top students in India but long hours working at 7-Eleven drove him to the brink. He was living and studying in Geelong and his boss at 7-Eleven took a second store in South Yarra and asked him to work there. He was getting paid $10 an hour but after travel expenses and tax his wages were $5 an hour, which is slave labour. On top of slaving long hours for low, below award wages, his complaints and attempts to resign were met with threats from his bosses that he would be deported. Student visas only allow students to work only 20 hours a week. A meticulous diary keeper, Mohamed kept a record of every single shift he ever worked at the stores. This diary was used by Fair Work to uphold his claim against the franchisees for unpaid wages and led to the couple who ran the store being fined $150,000 in the Melbourne Magistrates Court. It was a hollow victory for Mohammed, however, with the couple who owned the company placing their business into administration before any payment was made to Mohammed. “You have to survive, you have to pay your rent, you have to pay your fees… you have to pay for your food.” Tejinder Jit Singh or “Jeet” worked at two stores in the Melbourne CBD that paid him below the award rate, sometimes cash in hand. The owner would then log in on her own name and pretend to be working, when really it was Jeet. In all stores he was forced to do at least one week’s training for free. One store, Parkville, paid him $11 and the other store paid him $16.50 an hour. Fair Work raided one of the stores last September and found wrongdoing. The regulator told the owners to pay back what was owed to staff. Fair Work never spoke to Jeet but based the amount he was owed on the rosters and what they saw on CCTV footage. The amount he was owed was estimated at $2500 but Jeet believes it is far more. The franchisees told staff they would pay them the money but afterwards that they would have to pay it back or lose their job. Jeet didn’t pay it back and lost his job. One of his worst memories was when two robbers started stealing food. He tried to stop them but one of them pulled out a knife and slashed his face, just under his eye. Jeet knows a lot of people working at 7-Elevens in Melbourne. He says none of them are getting paid the proper wages. Many are scared to speak up for fear they have breached their visa conditions and will be deported.

THE BILLIONAIRE Until now, Russ Withers, 68, has managed to escape the public glare. In rare interviews he is portrayed as the son of a grocery store owner and wholesaler, who built a fortune when he went to the United States in 1977 and struck a deal to bring the 7-Eleven licence to Australia. The 7-Eleven network, headquartered in a no-frills office in Mount Waverley, includes 620 stores across Australia generating $3.6 billion in sales a year and profits of $1.44 million. Withers shares the spoils with his sister Bev Barlow. Their fortune is worth an estimated $1.5 billion. Besides 7-Eleven Australia, they control the Starbucks chain in Australia and 300 Mobil stores. They also own $450 million worth of property including 7-Eleven properties, which they rent to franchisees. Earlier this year Bev Barlow smashed the record for a residential home sale in Brighton, snapping up a sprawling seaside mansion in Brighton for $20 million. Withers’ principal place of residence in Australia is in the picturesque Victorian wine district the Yarra Valley, where he owns a property covering more than 250,000 square metres. Withers is passionate about equestrian sports. He sits on the board of the Australian Olympic Committee and has held various sporting board seats over the years of sat on the board including Equestrian Australia between 2001 and 2006 and Team Equestrian Australia - the organisation helps to choose which athletes are picked in the Australian Olympic team. He did not respond to questions as part of this investigation.

WHO IS RUSS WITHERS?