September 4, 2015 / 5:16 AM / 2 years ago

Australia 7-Eleven says probing workers' pay amid abuse allegations

* Firm hires former anti-trust regulator to lead probe

* Senate inquiry, TV report say firm underpays workers

* U.S. license holder also facing accusations of unfair treatment

By Byron Kaye

SYDNEY, Sept 4 (Reuters) - The operator of 7-Eleven convenience stores in Australia said it was launching its own probe into how its franchisees treat employees after a TV report and a Senate inquiry said the company was denying its workers proper pay.

In a statement, Australia's 7-Eleven Stores Pty Ltd, which is licensed by U.S.-based 7-Eleven Inc, said it had hired former Australian Competition and Consumer Commission chairman Allan Fels to lead an inquiry into whether it underpaid staff or forced them to work longer hours without compensation.

It also said it would reimburse the wages it owed underpaid workers.

"What has happened with franchisees not meeting their employer obligations has happened on our watch, and we are going to make this right," Chairman Russ Withers said in the statement, which was issued late on Thursday.

The probe by the Australian firm comes as the convenience store chain, which is ultimately owned by Japan's Seven & i Holdings Co, is facing accusations of unfair treatment of its franchisees in North America.

In Australia, the probe could force 7-Eleven Stores, which licenses more than 600 shops throughout the country, to cut the amount of profit it takes from store owners in a bid to stop them from underpaying staff to break even.

A Tokyo-based spokeswoman for Seven & i said the company was not aware of any allegations. The company does not disclose how much of its earnings it gets from Australia.

Former anti-trust regulator Fels told Reuters 7-Eleven Australia takes 57 percent of store profits, higher than in the United States. Asked about the employee mistreatment accusations, he said he believed they were very extensive, and not limited as the company suggested.

The working conditions at Australia's 7-Eleven Stores outlets have been the subject of a Senate investigation but the issue drew widespread attention when an Aug. 31 Australian Broadcasting Corp. report accused the company of letting franchisees threaten workers with deportation if they complained of being paid as little as half the minimum wage.

Australian Labor Senator Deborah O'Neill, part of the Senate Committee running an inquiry into mistreatment of temporary work visas, told Reuters the 7-Eleven franchisee practices amounted to "wage slavery". (Reporting by Byron Kaye in SYDNEY and Makiko Yamazaki in TOKYO)

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