The Scandal of 7 Eleven Relating to the Wages of Its International Employees

[7 ELEVEN WAGE SCANDAL]
The in depth analysis of the scandal of 7 eleven relating to the wages of its international
employees
2020
University
Student Credentials

Corporate Law 1
Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................2
Situation of the Stakeholders.....................................................................................................3
Ethical and legal issues raised....................................................................................................4
Role of Culture in Ethics............................................................................................................5
How everything was justified.....................................................................................................5
Persons responsible....................................................................................................................6
Impact on the company and the society.....................................................................................6
Conclusion..................................................................................................................................7
Bibliography...............................................................................................................................9

Corporate Law 2
Executive Summary
This analysis relates to the 2015 scandal of 7 Eleven, which blew out when a whistle blower
provided certain archived documents that clearly stated the wage fraud being committed. Fair
Work Ombudsman got involved and proper investigations were held. Raids were held at
various stores owned by the franchise in order to obtain more evidence. It was found that
workers mostly young and foreign were underpaid and paid approximately half the amount
that was being awarded in Australia at that time. Even after a compensation scheme was set
in order to provide the underpaid workers what company owed them, after 7 –Eleven took
over that, many of the employees or the ex –employees were still left unpaid. This led to a
great deal of frustration and distrust amongst people as far as 7 –Eleven was concerned.
Introduction
This research at large discusses and analyses factors based upon which the wage scandal of 7
–eleven occurred. One of these aspects includes the stakeholders that were involved with the
company and how this scandal affected them and the outcomes of this scandal as such on
them. Also a few other aspects that shall be discussed further are the ethical issues aligned
with it and the social aspects revolving around this scandal. The way this scandal has affected
people at large and the distrust that has been caused in the public and the reasons behind it are
in detail analysed below. The company culture played a significant role in this whole
scenario. As the company culture and the ethics followed in the company affect the society
and the employees at large and since this company way quite big as it had a lot many
franchisees all over Australia and had a lot of people hired under it. There was involvement
of many authorities in the breach of ethical laws related with the wages of individuals or the
labour market. People could also be seen shunning the franchisee for its actions in public and

Corporate Law 3
even after spending money upon marketing and recruitment, the public especially the young
and foreign individuals were not interested in job prospects issued by seven eleven.
Situation of the Stakeholders
Stake holders in a company are those which provide an input to the company. These can be
the media, government, employees, shareholders, directors, suppliers as well as the unions. In
case of the company 7 –eleven, the stake holders such as the employees were largely affected
by this. The relations with all the stake holders were disrupted (Ferguson, 2015). In
governmental terms, many labour laws were breached as well. People on high levels such as
the chief executive, Warren Wilmot and also the CEO of the 7 eleven holdings, Russell
Withers stepped down from their positions as a result of the whole scandal. It initiated at first
on a low scale when the employers started paying less to the employees and since most of
them were foreign or from other countries and needed a stagnant job tried to keep up with it
in order to survive. Even when some people complained or reported to the higher staff,
nothing was done and in fact they were threatened to which these people responded by
staying quite (ZUCHETTI, 2018).
These kind of activities make the whole system to be questioned for the policies and working
of the company. This talks about the internal workings of the people who are working in the
company that directly or indirectly affects the governance as well. These kinds of instances
make the board and the superior authorities be questioned as to what resulted in such
malpractice. The community as of now is quite intolerant towards the non- compliance of the
laws that are made, specifically in Australia. This scenario did not just affect the directors and
the employees but also the shareholders who invested in shares of 7 eleven (Ferguson,
2017). It is not just about these but creditors or the people who used to deal with the
franchisees as well. Most of the franchisees are currently under debt and struggling to