Business

Australia's 7-Eleven heads resign amid workers scandal

Russ Withers, chairman and major shareholder of 7-Eleven (file image) Image copyright EPA
Image caption Russ Withers said he was determined to leave the company in good hands

Australia's 7-Eleven Stores' chief executive and chairman have resigned amid a worker exploitation scandal.

Last month, Australian media found some of the firm's franchisees had been paying workers around the country about half the minimum wage.

Chairman Russ Withers and chief executive Warren Wilmot will leave their posts immediately, the firm said.

7-Eleven is Australia's biggest petrol and convenience retailer with some 620 stores, including 450 franchises.

In their joint investigation, the Australian Broadcasting Corporation's Four Corners programme and Fairfax Media said they had "uncovered evidence of collusion between some of the owners at hundreds of (7-Eleven Stores) across multiple states".

Some 7-Eleven workers told how they had been made to work at half the minimum wage and for longer-than expected hours.

Mr Wilmot said in a statement that he had offered his resignation "following the recent realisation of the extent to which 7-Eleven franchisees had underpaid workers".

He said it would be difficult for him to lead the company amid the scandal and that a new independent chief executive was appropriate given the circumstances.

'Major decision'

Chairman and founder of the Australian business, Mr Withers, said he was bringing forward by 18 months an existing succession plan to pass the reins to Michael Smith - a non-executive director and deputy chair of the retail giant.

Image copyright EPA
Image caption 7-Eleven has more than 600 stores across Australia

But Mr Withers said he would stay on as head of the group holding company which has investments in real estate and Starbucks stores among other areas.

"Naturally this is a major decision for me to stand aside as chairman," he said, "however I will continue to be a shareholder and I am determined to make sure the company is in the right hands to move forward".

The company said it was investigating all allegations of franchisees underpaying workers with the help of Australia's workplace rights ombudsman as well as accounting firm Ernst & Young.

7-Eleven is a private company with a license to operate in Australia from the US-based 7-Eleven Inc and has been in operation in the country for 38 years.

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