Exploitation of workers is a key part of the 7-Eleven franchise network’s business plan, a company insider claims.

Speaking to the ABC’s Four Corners and Fairfax Media on the condition of anonymity, the insider said if franchisees paid staff the correct wages, many would face financial ruin.

He said everyone at 7-Eleven’s head office was aware of the systemic wage-rorting of employees, who are largely foreign students on visas.  

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“They [head office] can’t run 7-Eleven as profitably, as successfully, as they have without letting this happen,” the source said.

“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.”

The insider said head office had known franchisees were underpaying wages for years, but did little — if anything — to stop it.

“At lower levels it’s discussed all the time … everyone knows about it. No-one likes it, but people want to keep their jobs so they stay quiet,” he said.

He added that the knowledge was so widespread it had become the butt of jokes.

“I’ve heard it [underpayment of wages] being joked about at senior levels at meetings.”

Payroll compliance issues in more than two thirds of stores

Since Four Corners and Fairfax Media first notified the company of its investigation, the insider said 7-Eleven head office had gone into “panic mode”.

Explosive internal documents reveal store reviews by head office were ramped up, with damning findings.

Between July and August, a review of 225 stores revealed more than two thirds had payroll compliance issues.

“I ask [franchisees] why there [sic] not paying correct rates for this trading period. The reply was to save money,” one review of a store in outer-east Melbourne read.

“[Franchisee] has admitted not paying the correct wages,” read another review of a store in western Sydney.

In a media statement released on Monday afternoon, 7-Eleven said it would establish an independent panel to “receive, review and process” claims of underpayment.

“The company has committed that any existing franchisee, who no longer wants to participate in the system, 7-Eleven Stores Pty Ltd will refund the franchise fee paid, and help to sell any store where a goodwill payment has been made,” CEO Warren Wilmot said.

“What has happened, has happened on our watch, and we are a company with a proud heritage and a strong reputation, we cannot allow the few to taint the achievements of the many.”

-ABC