Russ Withers resigns as 7-Eleven chairman

7-Eleven chairman, billionaire Russ Withers, has resigned from the board of the organisation, as claims of worker exploitation continue to dog the company.

But Mr Withers will stay chairman of the group holding company that owns 7-Eleven and Starbucks stores.

The company said Mr Wilmot had “offered his resignation following the recent realisation of the extent to which 7-Eleven franchisees had underpaid workers”.

Mr Withers said his original 7-Eleven board succession plan had been to hand the chair over to Mr Smith in 18 months.

“Mr Wilmot acknowledged it would be hard for him to play a central role in navigating the company through the current challenges it faces given his long standing executive role”, the statement said.

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

Michael Smith was appointed to the role on Wednesday following the resignation of predecessor Russell Withers, who stepped down alongside CEO Warren Wilmot and general manager of operations Natalie Dalbo.

Chief executive Warren Wilmot also resigned on Wednesday, with Bob Baily to take over the position.

Two weeks ago, he stood aside as chairman of the Australian Institute of Company Directors to await the outcome of the 7-Eleven independent review.

Mr Smith denied the company’s unique business model forced franchisees to look at ways to cut costs, including systematically underpaying staff, but said a board meeting on Thursday would discuss ways the model can be changed. Mr Baily is a current non-executive director at The Muir Electrical Company and City Pharmacy and is the former chairman of the Australian Association of Convenience Stores.

Smith said that the company had already implemented a number of initiatives in a quest to identify the extent of the underpayments, as well as an appropriate remedy to the problems they had caused.

7-Eleven has appointed former ACCC commissioner Professor Allan Fels to lead an inquiry into the underpaying scandal.