Impact of Underpayment on Convenience Stores

This assignment explores the ramifications of wage underpayment within the convenience store industry, specifically focusing on the highly publicized 7-Eleven scandal in Australia. It delves into legal frameworks surrounding worker rights and analyzes how the scandal exposed systemic issues within the sector. The assignment emphasizes the urgent need for law reform to prevent further exploitation and ensure fair wages for convenience store employees.

Running head: INDUSTRIAL RELATION
7 Eleven Inquiry
Name of the student:
Name of the university:
Author note

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Table of Contents
Introduction:...............................................................................................................................2
Discussion:.................................................................................................................................2
The Inquiry:............................................................................................................................2
Gaps in the Australian Employment Relation System:..........................................................4
Implication of the Inquiry:.....................................................................................................5
Conclusion:................................................................................................................................7
Reference:..................................................................................................................................8

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Introduction:
In Australia, 7 Eleven is one of the most popular names in the petrol and convenience
sector. The origin of the company is 7 Eleven Inc. that is situated in the continent of United
States. The company had opened the store in Australia in the year 1977. By 2015, the
company had opened more than 626 stores in Australia (Sivaraman & Turner, 2016). The
number of franchise owner in the various parts of Australia has reached 442 and the quantity
of transaction done by the company annually is approximately 185 million. In the year 2008,
an allegation was made against the company is that the company conducted certain double
hour scam, where the employees are not properly getting their wages and falsify the
employment records by misappropriating their posts in the market of Australia (Settle,
Cameron & Thornton, 2014). An inquiry has been made by the Fair Work Ombudsman in the
year 2014 to point out the truthfulness of the allegation and made certain observations
regarding the same. It was observed from the inquiry that the company had involved into
waging scam. The FWO had inquired several stores of the company. The impacts of the
inquiry were long lasting and important in nature. In the words of Lorelle Frazer, every
franchisee company owes certain statutory duties that should not be violated at any cost. The
inquiry has also created effects on the Australian society in certain circumstances.
Discussion:
The Inquiry:
In the year 2008, several allegations were made against the leading convenience
company regarding the disputed waging system and employment records in various stores of
the company and the company regarding the migrated employees made allegations regarding
discrimination. In 2014, an inquiry was made by the Fair Works Ombudsman to identify the
problems occurred in the branches of the company and near about 20 stores were being
examined by the FWO during the process. It was come into the light that the company had
violated the rules of Fair Work Act and breached certain duties while performing their duty.
The Ombudsman had published certain reports on the same. There are certain reasons behind
holding the inquiry.

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The Ombudsman as to identify the company’s non-compliance regarding the
workplace has made an attempt. An initiative has been made regarding the company’s payroll
and auditing section. It was found that the company has failed to comply with the regime of
the Fair Works Act and failed to detect the non-compliances. Therefore, a complex situation
arose and the company had started to underpay the employees. There are sections mentioned
under the Fair Work Act and Fair Work Regulation against underpayment. Therefore, the
company had violated the rules regarding the same.
In 2008, an audit had been published by the workplace Ombudsman regarding the
allegations from an unregistered organisation working for the interest of the employees. It
was alleged that the company is paying its employees certain amount that are half in nature
and therefore, the employees are facing the under waging problem. In the year 2009, it was
revealed from the report made by the Fair Work Ombudsman that the company had reduced
the rates for the night shift works.
In the year 2010, an education campaign was conducted and it was revealed that the
young employees are facing much trouble in the company. More than 70% of the audits are
disputed in nature and contradictory to the provisions of the Fair Work Act 2009. The
Ombudsman examined two operators of the company and the truthfulness regarding the
allegation was proved. It was found that the company had failed to pay the casual rate to
many of its employees. There were no continuity regarding the record keeping system and the
company had failed to maintain all the employment records. The company had not engaged
any inspector who can inspect the situation regarding the employment relation.
The inquiry had also revealed that 60% of the franchisee owners of the company are
novice and they had no particular knowledge on the matter. They also had little knowledge
about the Industry Relation System of Australia. Finding report regarding the company’s
work force was also shocking in nature. Most of the employees had non-English background
and the migrated employees had to do overtime in the company but there were no pay hike
regarding the same.
A request had been made before the Ombudsman to secure the life and interest of
every employee who are facing the waging problems. There was an inconsistency found in
the penalty rates and pay rates. The records maintained by the company were insufficient and
that are not being matched with the CCTV footage of the stores. It was revealed by the
inspector that the pattern of work maintained by the company was not according to the rules

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of the Fair Works Act 2009. The persons who are working at night, not being tracked by the
CCTV of the company and the respective stores. There has been a manipulation observed
regarding the payroll system in the company.
Another major finding of the inquiry is to disclose the facts that the company had not
maintained the proper data system. There is a mismatch regarding the penalty hours and the
penalty records observed during the inquiry. There are certain penalties present in the
company and the penalty hours are also different. However, the company was not
maintaining the records regarding the same in a proper way.
Gaps in the Australian Employment Relation System:
The Employment Relation denotes the relationship between the employee and
employer. In this relationship, certain reciprocal rights are generated in between the employer
and employees. The employees are getting the benefits and social security by the acts of the
employer. Under the employment relationship system, rights and obligations of the
employers are being mentioned. The workers or the employees can be of any types, whether
migrant workers or the private employees. The scope of the employment relationship has
been confirmed in the year 2003. Under the Employment Relation, every employee is doing
their works for remuneration and for certain fees. The primary object of the employment
relation is to protect the interest of the workers. It is a fact that if there is any laxity regarding
the labour protection has arose, the outcome can be adverse to the families of the employees.
There are certain gaps observed in the process of the employment relations in these
years. A number of allegations are made against the employers and rules of the International
Labour Organisation and the Fair Work Act has not been maintained properly in this regard.
The provision regarding the labour law has been frequent in nature and that leads towards an
ambiguity in the employment relations. In Australia, certain problems regarding the
employment relations have been cropped up and the effects of the same is detrimental in
nature. The rule under the employment law is that a person can be recruited without any fixed
period, but there are certain conditions have to be followed. Those employees are entitled to
get certain pecuniary benefits as against the same. It is the duty of an employer not to
discriminate the workers over their remuneration and fees. If they are eligible to get certain
benefits or over time fees, they should be get the same from the employers.

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The primary objective of the employment relationship is to secure the interest of the
employees. Therefore, any intention to manipulate the workers are to be taken, that will affect
the rights and interest of the workers a lot. Certain employment gaps are found in the
industrial society of Australia during the inquiry made at the several stores of the 7 eleven
and identify the positions of the industrial organisation regarding the employment relation. It
has been observed by the inquiry that the company has violated various principles of the Fair
Work Act and had not maintained the provisions of the Employment Relationship properly.
There were many allegations made against the company regarding the non-payment of wages
to the workers. In the company, many migrated workers were working and they often had to
work at night. After the inquiry some information were came into light regarding the
company and therefore, a gap has been noticed regarding the employment relations.
The primary objective of the ER system has been violated by the acts of the company.
There was laxity observed regarding the interest of the workers. The provisions of the
remuneration were also not according to the law or the rule. The company did not maintain
the payroll records and there was a mismatch happened regarding the CCTV footage and the
payroll records. Many workers were alleged that they were not getting proper fees for the
night shifts or over time. Even there was no footage regarding the night shift duties.
Therefore, it can be seen that the company was engaged into the serious mischief regarding
the employment relation by non-compliance of the rules.
Implication of the Inquiry:
Certain things have been come into the light through the inquiry and a huge gap has
been observed regarding the Employment Relation System. There was a lack regarding the
compulsory power observed in the company and it resulted into the non-compliance of the
rules of the Fair Work Act 2009. The implication of the inquiry has created serious effect not
only on the respected company but on the Australian Industry as well. Many articles were
published to expose the conditions of the company and the outcome of the inquiry. ”The
Guardian” regarding the company had published certain material facts (Briton, 2015). It was
reported that the workers who were suffered by the under payment waging system of the
company and alleged to made complaint against the company had been brutally beaten up by
the company. As per the panel, conducting the investigation, observed that the company is
engaged with the underpayment malpractice and the company is bound to pay $4.36m to the
workers.

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The under payment scandal was reported to the Senate employment committee and
over 2500 complaint were made to the committee regarding the scam. It was revealed by the
committee and a migrated worker was beaten by the company when he tried to make
complaint against the company regarding the under waging system.
It was reported by the “Sydney Morning Herald” that two of the employees were paid
$270,000 from the company after the investigation was made. These workers were taken key
role regarding the exposure. One Mohamed Rashid Thodi had been suffering since 2007 and
made a claim regarding the matter.
7 Eleven was the most popular convenience store in Australia and when the scam was
came into the light, all the franchisee networks were encouraged by the act. The investigating
panel claims certain recommendations regarding the repayment to the affected workers.
The main objectives of the inquiry were to promote the sustainable culture among the
franchisee of the Australia. The franchisee structure was very much affected by the inquiry of
7 eleven. The franchisee used the employment law as their weapon to cheat the people or the
workers at large. They are not following the rules of the Fair Work Act 2009. 7 eleven is a
less typical arrangement. The employee relation surfaces are vehemently affected by the acts
of the franchisee in Australia. The investigators were suddenly raid on the stores of the 7
eleven and exposes certain shocking facts that shows the real face behind the mask. The
payroll services are not maintained properly and the company was using the same to gain
certain illegal process to cheat the migrated workers at large. The audit system of the
company has also certain loopholes and there was no such record present that can be regarded
as proper as there were lots of gap between the record and the practical life. The loopholes
are basically founded as the form of an under payment. Certain training was necessitated
regarding the same of wages and the violation of the employees. It can be stated that the
inquiry made by the fair work inspector are creating certain implications not only on the
company but on the Australian franchisee system. It can be observed by the statements of the
various workers that who are working in the same company. According to Mr. Mohamed
Shahid, the company had not made his payment since the year 2007. After the inquiry,
Mohamed get all the money that were engaged in the company. Therefore, it can be said that
the company report had certain implication on the Australia based convenience store 7
Eleven.

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Conclusion:
Therefore, from the above discussion, it can be stated that the inquiry made by the
Fair Work authority in Australia has been regarded as one of the major step to curb the
problem regarding the Australian franchisee system. The inquiry had made certain specific
rule regarding the under payment of wages.

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