Wage Fraud at 7-Eleven Australia

This assignment delves into the 7-Eleven wage fraud scandal that occurred in Australia. It examines how franchisees exploited immigrant workers by paying them significantly less than the stipulated minimum wage. The paper discusses the Human Rights Commission's involvement, legal actions taken against 7-Eleven operators, and the impact of this scandal on workers' faith in the Australian government's ability to protect their rights.

Running head: EDITORIAL WRITING
Editorial Writing
Name of the Student:
Name of the University:
Author Note:

1EDITORIAL WRITING
The Financial Review
Jan 28 2018
7-Eleven Revelation of Worker Exploitation, Victimization and Gross Underpayment
Australia’s one of the renowned convenient stores 7-eleven owned by Russell Withers
and Beverley Barlow, has been busted for intentionally underpaying workers combining to
$19,937 (Sivaraman and Turner 2016). The Federal Circuit Court has imposed on Jim Chien-
Ching, the former Franchisee of the store, penalty of $28,000alongwith his company JS Top Pty
Ltd to pay $140,000 for deliberately disregarding law. As far as evidence suggest, Mr Chang had
willingly concealed the actual amount that was being paid to an employee and inaccurately
elaborated an amount of $25 or $30 per hour in order to hoodwink the officials. The penalties
that are now hanging like an apparition are only evidences of how employment exploitation and
unlawful labor utilization will not be permitted in the country.
According to sources, the Fels wage fairness panel is currently looking into employee
manipulation, tampering with data and inadequate pay(Vice, 2018). On an average, the workers
were paid $23, 000 less, each. Jude Jarrett further added that the act was committed in order to
inflate company’s profit and dismissed a case of inadequate cash flow. The claims dates back to
2013-2014 and since then the company had been reportedly amassing 57% of the gross profit.
Over the few months, The Fels Wage Fairness panel has recorded 2,169 issues regarding
underpayment regarding approximately 60% stores. 7-eleven allegedly made use of force and
cohesion by threatening to report the workers to the immigration department if they commit any
act of grievances. Apart from 7-eleven, 50 different stores spanning across the country were

2EDITORIAL WRITING
raided by Fels Wage Fairness Panel and seized documents and rosters detect possibilities of
employee deception.
According to sources, the workers were paid for 20 hours even after they provided labor for 40
hours, thereby exploiting and unlawfully retaining their money. Several media spokesperson
although have criticized 7-elevenwage fraud, citing that it would be practically disastrous for any
company to rip benefits without swindling the employees. An insider, who wishes to remain
anonymous, has commented that for years the company has produced surplus profit based on a
system of slavery and deceit. Siobhan Hennessy, from Deloitte has commented that the workers
faced systematic intimidation, fraud and cunning in their workplace. An immigrant was also
physically violated while protesting against underpayment claim.
In regard to this, the financial discrepancy of hundreds of 7-Eleven stores has come to the
forefront. Consequently, 7-Eleven has agreed to pay up to $25 million of wage fraud which
could further sum up to $30 million if the claims exceed the former amount. However, on
exceeding $30 million the amount will be divided in between the franchises and head office.Four
Corners and Fairfax Media as accumulated documents which clearly indicates that the head-
office only reviewed the payroll compliance after media started taking action against the
business model and wage fraud of 7-Eleven.
The Fair Work Ombudsman Natalie James added about the possibilities of taking further
legal actions against the culprits of 7-Eleven. The government has vowed to formulate effective
provisions for the head offices to regulate unlawful employee exploitation by their franchises.
Famous personalities like Michaelia Cash, has commented about the lapse administration that
permits systemic underpayment of the employees and rampant practice of extracting money from

3EDITORIAL WRITING
employees using manipulation or intimidation. The 7-Eleven wage scam has only pointed
towards the dire need of an active collaboration on the part of the parliament to incorporate the
Coalition’s steps to execute penalties for employers exploiting their workforce.The degraded
ethical standard which has zero respect for the culture of compliance has only proliferated
corporate scandals and psychological torture of the workforce. The 7-Eleven story is a story of
leadership failure where the management fails to maintain a system that hardly yields profits
under the compliance of law and order.

4EDITORIAL WRITING
The Australian
Jan 28 2018
The Uncertainties of an Immigrant Career under the Clutches of 7-Eleven
The 7-Eleven which is jointly owned by Russell Withers and his sister Beverley Barlow
as well as their spouses. The underpayment scandal has brought to the surface the issue of
immigrant workers whose international student visas are now under scrutiny as commented by
Immigration Minister Peter Dutton (Thornthwaite, 2017). The burning issue has made
intellectuals to consider how the workers hailing from third-world countries are exploited with
little possibilities of staging protest. It is mainly because they are in perpetual fear of loss of
employment and immigrant status franchises like 7-Eleven verbally intimidate the workers who
in some case were even threatened with immediate deportation and financial penalties.
At this juncture Mr. Dutton has assured that the students will be spared from further
harassment or pester if they make a fair deal of cooperating with the Fair Work Ombudsman,
responsible for peeling the mask of Mr. Chang for amassing workers’ money. They were also
asked to comply with the rule of not providing labor beyond the stipulated 20 hours a week
(Karp, 2018). The scandal according to Australian Human Rights Commission has provided a
platform to address the grievances of these immigrant workers who are made vulnerable and has
also commented on the lack of response by the government.
7-Eleven has propelled around 4000 workers to voice their claims of injustice that they
have faced in their workplace. Insiders have come up to provide the media with their version of

5EDITORIAL WRITING
the story and it is their stern belief that the head office is not being strategically blind to the
entire affair but they are hardly committing to anything that would put a halt to the systemic
exploitation of their workforce (Mantouvalou, 2015). This is primarily because of the profit that
they are incurring each year on a system based on slavery and forced labor. At the crux of the
matter is the fact that many third world country students are crouching in front of their masters in
order to afford maybe a luxury cup of coffee which in turn have allowed 7-Eleven to function
upon a flawed business model which only allowed for the scope of company’s profit at the
expense of the rights and welfare of workers (Perrin, 2015).According to the lawyers of Maurice
Blackburn, one of the employees worked for 685 hours in order to earn a mere stipend of $325
stretching over a two-month period.
According to SBS reports, around 110 immigrated students are now being paid a
compensation of estimated $2.8 million, however, there were 20,000 people in total deserving
the compensation. Furthermore a percentage of workers who have been working with 7-Eleven
are now scared of being personally identified while making their claim. This emphasizes on the
vulnerability that they are exposed to due to their immigration status (Vettori, 2016).
Critics have identified that 7-Eleven has shaken the very foundation of compliance
culture which revolves round codes of conduct and ethical policies. When 7-Eleven took
initiatives to deal with employee grievances it was too late and the issue had already come
undermedia speculation and public bruising ("Everything We Know So Far About 7-Eleven
Australia’s Wage Fraud Scandal", 2018). The Human Rights Commission had sympathized with
the immigrants who are documented of having paid only $10 an hour which is insignificant when
compared to the stipulated pay of $14 which 7-Eleven has flouted rampantly.

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The whole scandal has called for an active collaboration of 7-Eleven with Fair Work
Ombudsman in order to repay the workers and improve its old and tattered practices. The
immigrant workers’ faith in the law and operation of Australian government has been re-
established after legal measures were taken against mine of the 7-Eleven operators since 2009
reassuring the workers the validity of their basic rights in a land far away from their home
country. The capitalistic exploitation shows one of the many instances of how the franchises
function and commit to acts of deception way beyond wage fraudulence and blackmailing.

7EDITORIAL WRITING
Reference List:
Fraser, M., 2016. Investigating 7-Eleven: Who are the real bad guys?.Griffith Journal of Law &
Human Dignity, 4(2). Retrieved from:
https://griffithlawjournal.org/index.php/gjlhd/article/view/836
Freedland, M., Bogg, A., Cabrelli, D., Collins, H., Countouris, N., Davies, A.C.L., Deakin, S.
and Prassl, J. eds., 2016. The contract of employment. Oxford University Press.
Karp, P. (2018). 7-Eleven workers beaten and forced to pay back wages, Senate inquiry hears.
the Guardian. Retrieved 29 January 2018, from https://www.theguardian.com/australia-
news/2016/feb/05/7-eleven-workers-beaten-and-forced-to-pay-back-wages-senate-
inquiry-hears
Schwenken, H., 2017. “Domestic Slavery” versus “Workers Rights”: Political Mobilizations
ofMigrant Domestic Workers in the European Union. Retrieved from
https://cloudfront.escholarship.org/dist/prd/content/qt5759t7fw/qt5759t7fw.pdf
Sivaraman, G. and Turner, P., 2016. The 7-Eleven wages scandal: The need for law reform.
Precedent (Sydney, NSW), (135), p.53. Retrieved from
https://search.informit.com.au/documentSummary;dn=334423012367770;res=IELAPA
Thornthwaite, L., 2017. Australia's wage theft crisis. Advocate: Newsletter of the National
Tertiary Education Union, 24(1), p.28. Retrieved from
https://search.informit.com.au/documentSummary;dn=716566619436533;res=IELBUS
Vettori, S., 2016. The employment contract and the changed world of work. CRC Press. ISBN:
978-0-754-64754-6

8EDITORIAL WRITING
Everything We Know So Far About 7-Eleven Australia’s Wage Fraud Scandal. (2018). Vice.
Retrieved 29 January 2018, from
https://www.vice.com/en_us/article/4wbnqg/everything-we-know-so-far-about-7-eleven-
australias-wage-fraud-scandal