Unscrupulous behaviour damages independent service stations

Melbourne, 1 September – Unscrupulous treatment of staff among Australian 7-Eleven franchises is allowing the business to compete unfairly against small independent fuel and convenience store retailers. 

The Australian arm of 7-Eleven is setting up an independent panel to review franchise agreement terms and pay practices, following allegations by Fairfax Media and the ABC’s Four Corners of underpayment of staff. 

The program alleged a number of franchisees hired foreign students who were restricted to working 20 hours per week by their visas and paid them around half the award rate while they worked up to twice as long. 

Victorian Automobile Chamber of Commerce (VACC) Executive Director, Geoff Gwilym, said this had allowed 7-Eleven stores to compete unfairly with struggling independent retailers and service stations. 

“The service station industry operates on incredibly low margins, of around two per cent, and we’re seeing many 7-Eleven franchise operators flouting wage rates while those who follow the rules are punished for it. 

“In the past five years, 195 service stations have been lost across Australia as they are squeezed out by competitors, some of whom have behaved unfairly. It’s appalling to think that mistreatment of staff may have been to blame,” Mr Gwilym said. 

Mr Gwilym said the impacts of these allegations were wide-ranging, and called for better enforcement by regulatory authorities. 

“If they have underpaid their staff, these franchisees have flouted payroll and personal tax obligations, ultimately harming the rest of the community,” he said. 

“This issue spreads across immigration, education, tax and fair working conditions. The relevant government departments need to hold all businesses in Australia to account and keep the playing field level.” 

Citing the Harper Review into Competition Policy, which recommends an ‘effects test’ into the capacity of big business to impact on smaller employers including franchisees, Mr Gwilym said the 7-Eleven case was a clear example of the harm big business and unfair trading can cause. 

“7-Eleven has huge market power. We want to see section 46 of the Competition and Consumer Act broadened so that the effects, rather than the purpose, of this behaviour could be shown in law to damage competition,” Mr Gwilym said.

VACC is Victoria’s peak automotive industry body representing more than 5,000 small business members

For interviews and comments

Head of Marketing, Media, Communications & Publications
David Dowsey
P: 03 9829 1247
M: 0419 361 122
E: ddowsey@vacc.com.au

VACC Executive Director, Geoff Gwilym
VACC Executive Director, Geoff Gwilym, says alleged underpayment of staff by 7-Eleven franchises is not only unethical, but squeezes out independent competition