Mass underpayment of employees within 7-Eleven franchises has been exposed earlier by Fairfax Media and the ABC.
Now, a Sydney lawyer - Stewart Levitt - has alleged that 7-Eleven employed a de facto policy of “ethnically screening” its franchisees.
He further claims that ANZ lured them with "easy" loans that they could not repay later.
In an unpublished submission to a Senate Inquiry, Mr Levitt alleges that 7-Eleven’s “ethnic selection of franchisees was “in order to select store owners less likely to blow the whistle on employment practices,” reports the Sydney Morning Herald.
Mr Levitt represents about thirty 7-Eleven franchisees.
He also announced an intended class action against the company and ANZ bank.
His submission says the company's franchisees and employees are "overwhelmingly" migrants mainly from the Indian sub-continent.
"Unsuitable loans were made to franchisees, of whom the vast majority had no relevant experience," alleges Mr Levitt in his submission.
Potential franchisees pay $5000 application fee. They are later "screened, interviewed and approved" by the company's head office.
According to the Sydney Morning Herald, the submission notes a number of “cases of women with no work experiences co-securing loans - "Franchisees and their families are each now 'on the hook' for hundreds of thousands of dollars having had no demonstrable capacity to repay."
Franchisees were thus left struggling to service the debts.
The inquiry's full, 350-page report, titled "A National Disgrace", was tabled to parliament this month.
Labor Senator Deborah O'Neill, who is on the Senate Education and Employment References Committee, said - "They're coming from a culture where payment of wages is a different to what is expected in Australia."
Ms O'Neill also said that the back-pay claims from employees are expected to reach as much as $50 million.
Ms O'Neill said she also believed some 7-Eleven franchisees had acted as brokers to encourage members of their ethnic communities into buying stores.
A spokesman for 7-Eleven declined to comment on the allegations because the company had not seen the submission.
