A student from India with three degrees, Pendem came to Australia in 2011 and worked at three different stores under four franchisees in the Gold Coast region. Recurring nightmare Pendem still has nightmares from his time working at 7-Eleven, where he worked long shifts of up to 16 hours without a proper break. He was robbed twice in the space of 18 hours by a man in a balaclava brandishing a long serrated knife. Both times his boss scolded him for not fighting back to stop the robber taking $180. "Ah should fight or do throw the till on him, something, punch him. Why did you give the money like?" he recalls his boss saying.

Pendem was paid $10 an hour at one store and $14 an hour at another store, which is well below the award rate of more than $24 an hour – not including penalty rates for working nights, weekends or public holidays. 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. Widespread underpayment

The chain is owned by billionaire businessman Russell Withers and his sister Beverley Barlow and their spouses. The siblings brought the franchise to Australia in the 1970s. Mr Withers also serves as the company's chairman. Explosive internal documents reveal that between July and August this year 7-Eleven head office reviewed the payroll compliance at 225 stores and found that 69 stores had ongoing payroll issues. This is equivalent to one in four stores based on one month's review. The range of apparently illegal activity by franchisees extends beyond wage fraud and includes blackmail and withholding passports and drivers licences of staff. The documents, seen by the joint investigation, show franchisees are continuing to flout the law and are continuing to underpay staff even when caught out by the Fair Work Ombudsman.Fair Work has recently launched a full scale investigation into wage fraud across 7-Eleven's network of stores.

It was the third time in six years the wage regulator had conducted raids on 7-Eleven with each raid showing little improvement. Stores raided In September last year, the wage regulator raided 20 stores in Melbourne, Sydney and Brisbane, seizing rosters, timesheets and CCTV footage from franchisees it suspected of committing wage fraud. The regulator found that 60 per cent of stores raided were underpaying staff. Fair Work's raids have already produced findings of underpayment of staff and led to an enforceable undertaking with a franchisee in the Melbourne CBD. Separate to the raids, it has launched legal action against a franchisee in Blacktown in Sydney's west for underpaying workers.

The Blacktown franchisee, Harmandeep Singh Sarkaria, said he would be defending the claim and was disappointed Fair Work had decided to litigate against him as he had been under the impression he had been cooperating with the ombudsman. A third store in Parkville in Melbourne that was raided resulted in the franchisee agreeing to pay staff the money owed. That franchisee has since sold the Parkville store but documents show that he maintained another store in the Melbourne CBD. It is understood this store is underpaying wages. Fair Work declined to answer questions about whether it had reviewed the second Melbourne CBD store owned by the franchisee that it had busted in September. The ombudsman's office is still working through its findings for the other stores.

It is expected to release a report into 7-Eleven late this year or early next year, outlining recommendations on how to deal with the systemic wage fraud. A spokeswoman for 7-Eleven said head office expected franchisees to meet their legal obligations and that if even one store was underpaying workers, it was one store "too many". "In the one instance we were made aware of a store employee's passport being held by a franchisee, we intervened to facilitate the return of the passport." "7-Eleven strongly supports the Fair Work Ombudsman's investigation into employees' pay and conditions currently underway at a select number of franchisees' stores."

7-Eleven workers were not paid penalty rates for night shifts. Photo: Photo: Arsineh Houspian Half-pay scam Yet a company insider said head office had been covering up the wage fraud by scores of its franchisees for years. "They can't run 7-Eleven as profitably and successfully as they have without letting this happen. The reality is it's built on something not much different from slavery," the 7-Eleven insider said. A common payroll fraud employed by 7-Eleven franchisees is known as the "half-pay scam", where staff members are paid for only half the hours they work.

Under the half-pay scam, a worker is forced to work for 40 hours a week for an average of $12 per hour against an award rate of $24.69 per hour. As part of the scam the franchisee will doctor the roster and fudge time sheets to make it appear that the staff member has only worked half the hours in the store that they have actually worked. The staff member is then remunerated based on the hours they are listed as having worked in the payroll details that are sent to 7-Eleven head office. Names of so-called "ghost workers", often family members of the franchisee, who don't actually work at the store are used to fill the gaps on the roster and give the impression that all staff are being paid correctly. Penalty rate rorts

The Four Corners and Fairfax Media joint investigation has seen evidence that franchisees are flouting penalty rates as well as not paying the minimum wage. Overtime rates for shifts exceeding 10 hours are also not being paid, according to the internal documents. It can also be revealed scores of stores are not paying penalty rates for Saturday, Sunday, public holidays or night shifts.



7-Eleven head office has claimed that many of the often student workers are "colluding" with the franchisees.



Several workers who have spoken to the joint media investigation say they would rather work 20 hours at the correct rate than work 40 hours for half the pay. 'Nobody told me' Pendem says he tried to quit many times but it was difficult finding another job and he had university fees, rent and other living expenses. "Eventually I couldn't take it anymore and I went back to India for three months," he says.

Pendem is now an Australian resident working in a restaurant, earning the correct wages. He said when he came to Australia he had no knowledge of what the rate of pay was for a till operator in a convenience store. Affable and intellectual, he is embarrassed he didn't know. Loading "But nobody told me." Do you know more? Email Adele Ferguson at aferguson@fairfaxmedia.com.au or Sarah Danckert at sarah.danckert@fairfaxmedia.com.au .