7-Eleven Wage Fraud and Exploitation

This assignment delves into the 7-Eleven wage fraud scandal that rocked Australia in 2016. It examines how franchises exploited workers through underpayment, unfair labor practices, and intimidation. The assignment analyzes relevant legal frameworks, investigates media coverage of the scandal, and considers the broader implications for worker rights and corporate responsibility.

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

1ADVANCED STUDIES IN INDUSTRIAL RELATIONS
Table of Contents
1.0 Introduction................................................................................................................................2
2.0 Summary of 7-Eleven Inquiry...................................................................................................2
2.1 Reason for Inquiry.................................................................................................................2
2.2 Major Findings in Inquiry......................................................................................................2
3.0 Gaps in Australian ER system...................................................................................................4
3.1 Gaps in Minimum Wage........................................................................................................4
3.2 Gaps in Working Arrangement..............................................................................................4
3.3 Gaps in Working Rules for International Students................................................................5
3.4 Gaps in Human Right Act......................................................................................................5
4.0 Implications of Inquiry..............................................................................................................6
4.1 Compliance with Fair Work Ombudsman.............................................................................6
4.2 Effective Governance Arrangement......................................................................................6
4.3 Reviewing Operating Model..................................................................................................7
4.4 Setting Up Staff Consultative Forum....................................................................................7
5.0 Conclusion.................................................................................................................................7
References........................................................................................................................................9

2ADVANCED STUDIES IN INDUSTRIAL RELATIONS
1.0 Introduction
Industrial relation defines the relationship between the employers and employees of an
industry, which is defined by industrial laws. This study will provide a summary of 7-Eleven
inquiry, which has been done by Fair Work Ombudsman. Moreover, the study will discuss the
major findings in the inquiry. The study will also critical analyze the gaps in the Australian ER
system, which the inquiry of the Fair Work Ombudsman has revealed in terms of the role of
unions and states. Furthermore, the study will also discuss the implications of this inquiry
towards regulating ER in Australia, which is not only for 7-Eleven, but also all kinds of
organizations.
2.0 Summary of 7-Eleven Inquiry
2.1 Reason for Inquiry
Fair Work Ombudsman has conducted an inquiry towards looking into the employment
practices of 7-Eleven, where the organization seems to make non-compliance with the
employment relation (ER) laws of Australia. This inquiry was conducted with the allegations of
systematic non-compliance of federal workplace laws. Fair Work Ombudsman had demonstrated
significant engagement in this inquiry from 2009-2014 and expected to observe significant
improvement over the compliance (Fair Work Ombudsman, 2016). Based on the continuing
concern and intelligence, Fair Work Ombudsman began strategic inquiry into the sample of 7-
Eleven stores across NSW, Victoria and Queensland. This inquiry had been performed over 20
stores of 7-Eleven across Australia. The intension behind such inquiry was to further the
opportunities towards indentifying the root causes of non-compliance so that the statutory agency
can approach 7-Elven for addressing the issues. The statutory agency also conducted this inquiry
for providing support to the franchisors through advising them in ensuring high level of
compliance with employee relation. Moreover, the purpose of this inquiry is to identify the
ethical and legal issues associated with the 7-Eeven employment practices (Fair Work
Ombudsman, 2016). Such inquiry also forces 7-Eleven towards complying with the employment
relation practices.

3ADVANCED STUDIES IN INDUSTRIAL RELATIONS
2.2 Major Findings in Inquiry
Fair Work Ombudsman has initiated legal proceedings against 7-Eleven retail store of
Australia, which allegedly underpaid 2 foreign employees approximately $50000. For more than
7 years, the organization has been consistently alleged with the underpayment to the migrant
employees. According to Ferguson and Danckert, (2016), 7-Eleven has been alleged with the
underpayment to the migrant employees having visa holders, where the workers are often paid
with a rate of $10 an hour. However, the employees were actually entitled to get paid normal
hourly rates of more $22 an hour and up to $29.27 an hour for some public holidays, weekend
and overtime shifts. On the other hand, Fair Work Ombudsman, (2016) opined that 7-Eleven has
also been alleged with falsifying the payroll of the employees. The employees have complained
that the wage structure demonstrated in the payroll is quite higher than the amount actually paid
to them. Moreover, half the working hours has been recorded in the payroll. Furthermore, Karp,
(2016) opined that 7-Eleven is also forcing the employees work for longer hours, which is quite
longer than the normal working hours. The organization is mostly mistreating the migrant
workers among them some are the students from the foreign countries.
According to Tham, (2016), most of the employees in 7-Eleven stores are typically male
international students having their visas with them. Such international visa holder students are
mostly affected by the unethical employment practices of 7-Eleven. Moreover, the organization
is deliberately exploiting such migrant workers, which is severely hampering the health
condition of s457 visa holders and education life of foreign students visa holders. On the other
hand, ABC News, (2015) opined that most of the migrant employees are from non-English
speaking backgrounds specifically from Pakistan, China and India. Generally, such employees
have very or no knowledge regarding the employment relation of Australia. Therefore, the
organization can make them stupid and force them to work more than the normal working hours.
International students are normally allowed to work up to 40 hours a fortnight, while they
are studying. However, the organization is forcing many of the migrant students to work up to
50 hours a week. It is actually hampering their physical condition due to longer working hours.
Furthermore, the students are not also allowed to complain such unethical organizational
behavior with any statutory and legal authorities. Moreover, 7-Elevn is threatening the student
visa holder with the fear of cancelation of their visas, if they complain the unethical behavior

4ADVANCED STUDIES IN INDUSTRIAL RELATIONS
with any statutory bodies (Ferguson & Danckert, 2016). The organization is threatening the
student visa holders to the fear that they would contact the Department of Immigration and
Border Protection (DIBP) regarding the employees breaching the Visa conditions. Such
threatening is actually creating huge mental pressure on the students, which is actually
hampering their educational life.
Terry-Armstrong, (2016) pointed out that 7-Eleven has also been alleged with cash-back
scam, where the migrant employees are initially paid with adequate reward, but later on, they are
forced to pay back some amount of their compensation to the organization. It is leading to
financial crisis for the migrant employees. However, Abc.net.au, (2015) opined that the head
office of 7-Eleven is completely indifferent of such activities in Australian franchisees and they
are even unwilling to address the employment issues of such 7-Eleven retail stores.
3.0 Gaps in Australian ER system
3.1 Gaps in Minimum Wage
The minimum wage act of Australia fixes minimum rates of wages for certain
employments. According to Fair Work Ombudsman, (2017), the minimum wage of Victoria,
NSW and Queensland have been lifted by 3.3%, which is up by $18.29 an hour. The employers
are cannot undercut the minimum wages of the employees, even the employees are willing to
accept the lower rate of wages. However, in case of 7-Eleven, the employers of Australian
franchisees are undercutting the minimum wage rate of the employees. Moreover, the employers
are paying $10 an hour to the migrant employees of the organization. In this way, the
organization is actually breaching the employment laws of the states. Moreover, the
Australian Industrial Relations Commission (AIRC) is incapable of bridging the gaps in the
employment laws. Furthermore, Hotline and Hotline, (2016) opined that employment relation
legislation also suggests proper record of working time and ware rate of the employees.
However, 7-Eleven is falsifying their payroll record for the employee, which is also breaching
the minimum wage laws of the country.
3.2 Gaps in Working Arrangement
Fair work act of Australia has set standard working hours for the employees. According
to Awu.net.au, (2017), employment relation act of NSW, Victoria and Queensland has set

5ADVANCED STUDIES IN INDUSTRIAL RELATIONS
standard working hours for the employees, where the period an employee is required to work
should not exceed 40 hours in a week. However, 7-Eleven is forcing the migrant employees
towards working more than 40 hours in a week. Moreover, the organization is forcing the
migrant employees to work more than 50 hours in a week. In this way, the organization is
creating gaps with the standard employment relation regulations of Australia. On the other hand,
Australia.gov.au, (2017) opined that work health and safety act of Australian employment
relation encourage the unions and employers towards promoting improvement in the working
arrangement. However, 7-Eleven is incapable of providing positive working arrangement to the
migrant employees. The organization is forcing the employees to work for longer hours without
paying them adequately. The labor union is incapable of resolving such employment issues.
Therefore, such employment practices are actually breaching with the Australian employment
relation.
3.3 Gaps in Working Rules for International Students
As per the Visa rules of international students in Australia, there are certain working rule
and regulation for the students during their school session. According to (Border.gov.au, 2017),
International students in Australia are only allowed to work for up to 20 hour a week on their
valid student visa, while they are in school session. However, 7-Eleven is forcing the migrant
employees towards working more than 50 hours per week. In this way, the organization is
actually breaching the employment laws for the student visa holders. On the other hand,
NewsComAu, (2013) opined that the student visa holders do not have any limit on their working
hours during their school vacations. However, the employers in this case are liable to pay extra
money to the migrant students for their overtime work. However, in this case, the employers of
7-Eleven are not providing additional compensation to the migrant employees. Moreover, the
organization also has wage scam policy, where the employees are initially paid for their extra
contribution, but later on, they are to pay back some amount of their compensation the
organization. It is also against the employment laws of various Australian states like Victoria,
NSW and Queensland.
3.4 Gaps in Human Right Act
As per Humanrights.gov.au, (2017), Human Right Act of Australian states define the
ability of the people towards expressing their issues. Such rights can also be applied in the

6ADVANCED STUDIES IN INDUSTRIAL RELATIONS
employment practices in the organization. Moreover, the employees should be allowed to
express their issues with an expectation to resolve those issues. However, in case of 7-Eleven,
the employers are threatening the student visa holders with the fear of cancelation of their Visas,
if they complain about the unethical employment practices of the organization to any statutory
body. Moreover, the employers are forcing the migrant students to work more than their normal
working hours. On the other hand, they are also threatening the students with their Visa
cancelation on breaching their visa condition so that they cannot complain about their long
working hours. In this way, 7-Eleven is actually breaching with the employment relation laws of
Australia.
4.0 Implications of Inquiry
4.1 Compliance with Fair Work Ombudsman
The inquiry suggests that 7-Eleven should enter into the compliance partnership with Fair
Work Ombudsman. Such partnership is not just applicable on 7-Eleven; rather such compliance
is applicable on all kinds of organizations. Moreover, the compliance partnership with Fair Work
Ombudsman ensures that organizations maintain all their moral and ethical responsibilities.
Furthermore, the compliance partnership with this statutory agency ensures safe, fair and equal
opportunities for all the employees (Fair Work Ombudsman, 2016). Therefore, organizations can
better comply with employment relation legislation through the compliance partnership with Fair
Work Ombudsman.
4.2 Effective Governance Arrangement
The inquiry of Fair Work Ombudsman also suggests implementation of effective
governance arrangement within the workplace. 7-Eleven can better ensure effective employment
relation within the workplace through effective governance arrangement. Such arrangement
ensures effective employment relation only for 7-Eleven, but also for all kinds of organizations.
Moreover, effective governance arrangement ensures compliance with all federal workplace laws
for all types or organization. This workplace arrangement would ensure that the employees have
got their equal right and fair benefits from their organizations (Townsend et al., 2014).
Furthermore, such governance arrangement would also ensure fair working time and fair

7ADVANCED STUDIES IN INDUSTRIAL RELATIONS
payment to the employees. In this way, organization will be able to maintain the employee
relation properly.
4.3 Reviewing Operating Model
The inquiry conducted by the Fair Work Ombudsman, every organization should
regularly review the operating model of the organization. Such reviewing of operating model
would ensure financial viability and legal exposure of franchisee arrangements. Furthermore, it
would engage external and independent parties for self-auditing the compliance of the
organizations with the federal workplace legislation. Therefore, reviewing of operating model
would ensure proper employment relation of the organization. In this way, the organizations can
minimize the gaps between the employment practices and federal employment legislations
(McBride et al., 2015). Moreover, reviewing operating model would better ensure proper
employment relation in all kinds of organizations.
4.4 Setting Up Staff Consultative Forum
Effective employment relation depends on the agreed terms and conditions between the
employers and employees. However, there should be an intermediate for minimizing the gaps
between the employers and employees. Moreover, the employees should have a representative
body for raising their concern to the employers and getting solution to their issues immediately.
The inquiry of Fair Work Ombudsman suggests that every organization should set up a staff
consultative forum having employee representatives from across the networks, which are
separate from franchisees (Fair Work Ombudsman, 2017). Such representatives will be
responsible for raising the concern of the employees to the employers of organizations for
performing effective collective bargaining. In this way, the employees will be able to get their
right values and benefits and the organizations will be better able to comply with the federal
workplace legislation.
5.0 Conclusion
While concluding the study, it can be said that Fair Work Ombudsman has conducted an
inquiry on 7-Eleven, as it has demonstrated non-compliance with the federal workplace
legislation. It has been found that 7-Eleven is constantly exploiting its migrant employees.
Moreover, the organization has been alleged with underpayment to the migrant employees.

8ADVANCED STUDIES IN INDUSTRIAL RELATIONS
Furthermore, 7-Eleven is also falsifying the payroll of the employees. Apart from that, the
employers of the organization are also forcing the employees to work more than the normal
working hours. In this way, the organization is creating gaps with the employment relation act of
Australia. Moreover, the employment relation act of Australia has set normal hour for the
employees, which is 40 hours per week. However, 7-Eleven is forcing the migrant student visa
holders and s457 visa holders to work more than 50 hours per week. In this way, the organization
is creating gaps with the working rules for the international students.
The international students are allowed to work for only 20 hours per week. However, the
organization is forcing them to work more than the legal working hours. Furthermore, the
organization is also creating gaps with the Human Right Act, where it is threatening the migrant
students with the fear of visa cancelation, if they complain about the unethical organizational
practice. The inquiry of Fair Work Ombudsman implies that every organization should make
Compliance with Fair Work Ombudsman for effective employment relation.

9ADVANCED STUDIES IN INDUSTRIAL RELATIONS
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10ADVANCED STUDIES IN INDUSTRIAL RELATIONS
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