Ethical Issues in Employment Relationships

This assignment examines the 7-Eleven wage scandal, focusing on the company's unethical practices. It highlights how the organization prioritized profit maximization over employee well-being, violating labor laws and exploiting international students. The analysis also discusses the role of unions and individual contracts in addressing these issues.

Running head: ADVANCED STUDIES IN INDUSTRIAL RELATIONS
Advanced Studies in Industrial Relations
Name of the Student
Name of the University
Author Note

1ADVANCED STUDIES IN INDUSTRIAL RELATIONS
Implications of the 7 eleven inquiry report for non-union forms of employee representation
and bargaining structures in the Australian ER system.
The employment relation refers to the relationship between the employer and the
employee in any organization. In regards to the employment relations, the employees are
considered as an asset of an organization as the productivity and growth of any organization
relies on the employees and the workers of an organization (Fraser, 2016). The employers of any
organization are obligated to ensure that the employees are provided with a healthy workplace
environment where the employees can freely communicate their issues to the employers and
expect them to address such issues. In Australia, the employment system is a combination of
common law, legislation, agreements and awards that are legally binding upon both the
employers and the employees of any Australian organization. A syndicate of state and federal
laws addresses various issues such as working conditions, working hours, annual leave,
occupational health, safety, and industrial action.
The significance of a worker’s union is a well-known fact and the role played by the
union in voicing the issues faced by the employees and assisting the employers to reduce the
turnover ratio by reducing the hiring and training expenses that are associated with the new
employees (Briton, 2015). The union leader is a person who is chosen among the workers who
raises the issues being faced by the employees on their behalf before the employer. However, the
employees who are not a member of the union have a restricted role to play as compared to those
who are members of the union. The representatives usually provide consultation with respect to
legal matters and enable them to improve their performance. The different forms of non-union
representatives include Representative of health safety, work force agreement representative,
Representative of information and consultation, etc. Representatives are responsible for assisting

2ADVANCED STUDIES IN INDUSTRIAL RELATIONS
the employees to work properly and are on good terms with the management of the organization
as well.
In regards to the bargaining structure of the organization, the implementation of the
Workplace Relations Act 1996, several reforms were introduced in the Australian Labor Market.
The Australian Fair Pay Commission set and reviews the federal minimum age that were paid to
the employees. Amongst the other things, the Australian reforms aimed at increasing the working
time flexibility, individualization and decentralization in respect of wage bargaining to increase
the wage flexibility and boost the employment participation by bringing change in the welfare
system. The Australian government system introduced a neo-liberal industrial relations agenda
for the purpose of breaking the age-old system of collective bargaining with the trade unions, in
particular. The introduction of Australian Workplace Agreements (AWA) could exclude the
unions and determined the conditions, rights and wages of the employees (Kaufman & Taras,
2016).
The Employment system of Australia aims at safeguarding certain terms and conditions
related to employment and it also safeguards several rights obligations that are associated with
the workplace (Briton, 2015). There is Federal and state statutes in the country have their
respective workplace statutes aiming at safeguarding the rights and obligations of the employees
from discrimination or any other workplace related issues.
The inquiry report of the 7-Eleven stated that the organization has been engaged in
conducts that are contrary to the employment relation system operated in Australia (Sivaraman &
Turner, 2016). The organization has been acting in non-compliance with the Fair Work Act by
compelling its employees who to work for additional hours for lower wage rates. Most of the

3ADVANCED STUDIES IN INDUSTRIAL RELATIONS
employees included international students who were not permitted to work for more than 20
hours a week as stipulated in their visa. Further, the company was alleged to have manipulated
their employment payment record and failed to keep record in a condition that would allow the
workforce inspector to determine the entitlements of the employee. The directors of the company
were also involved in the infringement committed by the organization.
The employees who were not a part of the unionized setting within the country that is, the
non-union form of representation have restricted control upon the decision-making process as
compared to those employees who are a part of the union (Berg et al., 2013). This is because
they have the union representative who would raise his voice on behalf of the employees
regarding the issue relating to additional working hours at low wage rate. As discussed above,
the non-union representatives shall assist the employees who are not a part of the company union
with respect to any matter that might hinder the performance of their work.
However, with the introduction of the AWA, the employees may bring legal actions
against the employer as it includes all the details with respect to the employment including
wages, terms of conditions, wage hours, and flexibility in the wage hours within the
organization. The introduction of individual contracting has lessened the scope of bargaining
because of the unequal power existing between the parties (Grimshaw, Bosch & Rubery, 2014).
In Australia, with respect to the 7-Eleven case, the organization should have adopted the
Individual contracting bargaining structure to avert the issues faced by the organization.
Individual contracting is a process the employment terms and conditions are determined between
the employers and individual employees (Townsend, Wilkinson & Burgess, 2014). This form of
bargaining structure reflects individualization of employment relationship. Individual contracting

4ADVANCED STUDIES IN INDUSTRIAL RELATIONS
is often considered as one of the aspects of individualization of the employment relationship. An
individual contracting may be described as either a substantive and procedural individualization
(Poole, 2013). A substantive individualization entails the different terms and conditions that are
stipulated in an individual employment contracts such as wages, working conditions, salary, and
starting/finishing times. The procedural individualization includes instruments and mechanisms
that are usually used to assess the employment conditions such as negotiations and arbitrations.
The Australian Workplace Agreements (AWA) is an advantageous document for the
employees as it permits individual efforts to value and makes them entitle to rewards. This kind
of bargaining structure is beneficial for the employers of an organization as well. It enables the
management to exercise discretion in the management of the employment relationship. It further
assists in developing closer relations between the employer and their employees. In the case of 7-
Eleven, the inquiry report found that the employees were underpaid and were threatened that if
they complaint about the conduct of the organization to the Fair Work Ombudsman, the
organization shall complaint about their working for additional hours in non-compliance with the
stipulated visa permits. The franchisees underpaid the employees with a view to enable the
franchisors to obtain financial gains (Townsend, Wilkinson & Burgess, 2014).
It is a known fact that bargaining structure should be such that enables the employer and
the employee to determine the terms and conditions of the employment relationship. The
employers should have negotiated with the employees regarding working for additional hours.
the organization mainly focused on the profit maximization and as least concerned with the
impact it would have on the employees and the community (Townsend, Wilkinson & Burgess,
2014). The company was aware of the fact that the employees included some international
students as well who are not permitted to work more than 20 hours a week and the details of the

5ADVANCED STUDIES IN INDUSTRIAL RELATIONS
same is entailed in the employment contract. The employees who were part of the organization
union had their representatives to bargain regarding the wage conditions and the underpayment
issues being faced by the employees within the organization. However, the individual employees
who were not a part of the union is entitled to claim their payment based on the individual
contract as it contains details of the wage rate and the working conditions (Wilkinson et al.,
2014).
The organization, instead of negotiating with the employees regarding the additional
working hours merely intimidated the employees that they shall be reported against for working
for additional hours in contrary to the time stipulated in their visa, which would result in
deportation of the workers from the country. The organization had been engaged in other
conducts such manipulation with the payment records and failure to maintain a workplace where
the inspector could under inspection anytime in contrary to the Fair Work Act of the country.
The conduct of the organization is in contravention of its legal as well as ethical obligations.

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Reference List
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Grimshaw, D., Bosch, G., & Rubery, J. (2014). Minimum wages and collective bargaining: What
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7ADVANCED STUDIES IN INDUSTRIAL RELATIONS
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