Unethical Business Practice of 7-Eleven in Australia

This study discusses the unethical business practices of 7-Eleven in Australia, its impact on stakeholders, main issues, effect on organizational reputation, legislation prohibiting such practices, and recommendations for moving forward.

Running head: ETHICS AND SUSTAINABILITY
Ethics and Sustainability
Name of the Student:
Name of the University:
Author’s Note:

1ETHICS AND SUSTAINABILITY
Table of Contents
1.0 Introduction................................................................................................................................2
2.0 Impact of Business Practice on Stakeholders............................................................................2
3.0 Main Issues in Business Practice...............................................................................................3
4.0 Effect of Business Practice on Organizational Reputation........................................................4
5.0 Legislation Prohibiting Business Practice.................................................................................4
6.0 Recommend for Moving Forward.............................................................................................5
6.1 Compliance with Fair Work Ombudsman.............................................................................5
6.2 Proper Governance Arrangement..........................................................................................6
6.3 Staff Consultative Forum.......................................................................................................6
7.0 Conclusion.................................................................................................................................6
Reference List..................................................................................................................................7

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1.0 Introduction
Business ethics ensure adherence of an organization with ethical principles towards
marinating its long term sustainability. Fair workplace practice is also an important part of
business ethics for ensuring sustainable business (Michaelson et al. 2014). Unethical business
practices are engaged in unethical conducts, unfair treatment to employees, customers or public.
This study will discuss the unethical business practices in terms of employee exploitation.
Employee exploitation is the act of treating employees unfairly for the benefits of organization
(Arnold, Goodpaster and Weaver 2015). This study will discuss the employee exploitation
business practice of 7-Eleven in Australia. The impact of such business practice on the
stakeholders will be concern for this study. The study will also highlight the main issues of
business practice along with its effect on reputation of the organization. Furthermore, some
legislation will also be highlighted in this study, which can prohibit such unethical business
practice. Apart from that, the study will also demonstrate appropriate recommendation to be
adopted by organization in their forward moving.
2.0 Impact of Business Practice on Stakeholders
The business practice of 7-Eleven has mostly affected the migrant employees and
students. Such employment practice is actually hampering the mental condition of the migrant
students, who used to work in this organization for earning some money beyond their studies
(Terry-Armstrong 2016). As per my opinion, the threat of Visa cancelation and forcing them to
work beyond the working hours is affecting both the mental as well as physical condition of
those students. Apart from that, the unethical business practice of the organization is also leading
financial crisis for the employees (Sivaraman and Turner 2016). Moreover, the organization is

3ETHICS AND SUSTAINABILITY
exploiting the employees by underpaying them as per their working hours. Furthermore, I think
that the cash back system of 7-Eleven is also leading to financial emergency for the employees.
In such strategy, the employees are forced to giving back some amount of their salaries back to
the employers.
Such business practice has also affected the managers, where they are being alleged
legally and being answerable to the court and media. Apart from that, I think that shareholders
are also affected by this business practice. Moreover, such strategy has destroyed the
organizational reputation in the market, which has reduced the profit level of the organization.
Therefore, the shareholders are not getting their adequate return on investment from this
organization.
3.0 Main Issues in Business Practice
The main issue relies in the business practice of 7-Eleven Australian Franchises is
employee exploitation. Moreover, the organization has been claimed with underpaying the
employees, where it is also forcing the employees to work beyond their normal working hours.
Moreover, the organization has also falsified the payrolls of the employees, where the managers
has recorded just half the working hours in comparison to actual working hours of the employees
(Ferguson and Danckert 2016). As per my viewpoint, the intension of the managers towards
gaining instant profit has led them towards exploiting the employees unethically.
The organization also has cash back system, where it initially provides bonuses the
employees, but later on, it forces the employees towards paying back some amount of salaries
back to the management (Ferguson 2016). Such unethical employment practice is even leading to
legal complication for the organization. 7-Eleven is also facing ethical issue for their practice of

4ETHICS AND SUSTAINABILITY
threatening the migrant students with the fear of Visa cancelation for breaching the contract of
student Visa (Karp 2016). In this way, the organization is forcing those employees to work
beyond their normal working hours. As per my opinion, the main issue of 7-Eleven is breaching
the workplace ethics and laws.
4.0 Effect of Business Practice on Organizational Reputation
The wage scandal of 7-Eleven has destroyed its market reputation. Moreover, the
unethical business practice of the organization has quickly spread among various media
channels. Fair Work Ombudsman has majorly investigated the unethical practice of the
organization. From my viewpoint, the disclosure of such unethical business practice has created
a highly negative impact on the organizational stakeholders. It has ultimately diminished the
corporate image of the organization in the market. The court has also imposed penalties of 1
million on 7-Eleven operators for concealing the underpayment and falsifying the record. I think
that the legal allegation against 7-Eleven has added to its diminishing corporate image. The
shareholders are being unwilling to invest in such fraudulent organization, which is also
diminishing the corporate image of the organization (Fraser 2016). Apart from that, the unethical
business practice of 7-Eleven has also become viral on social media. It is spreading the unethical
business practice of the organization across Australia, which is also destroying its global market
share.
5.0 Legislation Prohibiting Business Practice
The Minimum Wage Act of Australia prohibits the unethical business practice of 7-
Eleven. As per this act, the managers cannot undercut the minimum wage rate of the employees
(Kemp 2014). However, 7-Eleven is paying on $10 an hour to the migrant employees. Such

5ETHICS AND SUSTAINABILITY
practice is actually breaching the Minimum Wage Act of Australia. However, proper
implementation of this legislation can be effective for the preventing the unethical business
practice of 7-Eleven. As per my opinion, Fair Work Act also prohibits the unethical business
practice of 7-Eleven. Fair Work Act sets the standard working hours for the employees. As per
this act, no employee should work more than 40 hours a week (Matthews et al. 2014). However,
the organization is pressurizing the employees for working beyond 40 hours per week. In this
scenario, 7-Eleven is violating the Fair Work Act.
On the other hand, I also think that Student Visa Legislations of Australia also prohibits
the unethical business practices of 7-Eleven. As per this legislation, no foreign students are
permitted to work beyond 20 hours a week during their school session (Kemp 2014). However,
7-Eleven is pressurizing the foreign students to work more than 40 hours. Therefore, such
business practice is actually breaching the legislation of Student Visa Rules. However, in my
opinion, regular vigilance of the statutory bodies can be effective for preventing such unethical
exploitation of migrant students.
6.0 Recommend for Moving Forward
6.1 Compliance with Fair Work Ombudsman
I recommend that 7-Elevn should make a compliance partnership with Fair Work
Ombudsman for ensuring effective business practices within workplace. Moreover, compliance
and corporation with this legal and regulatory agency will ensure secure and fair working
environment for the employees of the organization. It would help the organization in better
complying with employment relation legislation in future.

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6.2 Proper Governance Arrangement
As per my opinion, 7-Eleven should initiate effective governance arrangement in future.
Such governance arrangement will facilitate the organization in complying with all federal
workplace laws. Therefore, the organization will be able to ensure that the employees are getting
their right benefits. In this way, the organization can move forward for ensuring fair and ethical
workplace for the employees.
6.3 Staff Consultative Forum
I recommend that 7-Elven should have proper staff consultative forum to minimize the
gaps between the employees and employers. Such consultative forum will raise the issues of the
employees to the employers for mitigating them in an urgent basis. In this way, the organization
can ensure a better business practice for its sustainable business.
7.0 Conclusion
While concluding the study, it can be said that 7-Eleven is practicing an unethical
business practice. Moreover, the issue of the business practice is that the organization is
exploiting the employees by underpaying them. As per my opinion, the organization is practicing
such unethical and fraudulent business practice of earning instant profit. At the starting of the
course, I used to believe that all reputed business organizations maintain business ethics for
ensuring ethical business practice. However, my opinion has been changed from the beginning of
the course with the unethical business practice evidence of 7-Eleven. Such business practice is
actually hampering the mental and physical condition of the migrant employees. Moreover, I like
to recommend the organization to ensure proper workplace arrangement for fair and ethical
organizational practice.

7ETHICS AND SUSTAINABILITY
Reference List
Arnold, D.G., Goodpaster, K.E. and Weaver, G.R., 2015. Past trends and future directions in
business ethics and corporate responsibility scholarship. Business Ethics Quarterly, 25(4), pp.v-
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Ferguson, A. 2016. Revealed: How 7 Eleven is ripping off its workers. [online] Smh.com.au.
Available at: http://www.smh.com.au/interactive/2015/7-eleven-revealed/
Ferguson, A. and Danckert, S. 2016. 7-Eleven's wage fraud sparks $170 billion blow back.
[online] The Sydney Morning Herald. Available at:
http://www.smh.com.au/business/retail/7elevens-wage-fraud-sparks-170-billion-blow-back-
20160826-gr264h.html
Fraser, M., 2016. Investigating 7-Eleven: Who are the real bad guys?. Griffith Journal of Law &
Human Dignity, 4(2).
Karp, P. 2016. 7-Eleven workers beaten and forced to pay back wages, Senate inquiry hears.
[online] the Guardian. Available at: https://www.theguardian.com/australia-news/2016/feb/05/7-
eleven-workers-beaten-and-forced-to-pay-back-wages-senate-inquiry-hears
Kemp, V., 2014. Antecedents, consequences and interventions for workplace bullying. Current
opinion in psychiatry, 27(5), pp.364-368.
Matthews, L.R., Fitzpatrick, S.J., Bohle, P. and Quinlan, M., 2014. Investigation and prosecution
following workplace fatalities: Responding to the needs of families. The Economic and Labour
Relations Review, 25(2), pp.253-270.

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Michaelson, C., Pratt, M.G., Grant, A.M. and Dunn, C.P., 2014. Meaningful work: Connecting
business ethics and organization studies. Journal of Business Ethics, 121(1), pp.77-90.
Sivaraman, G. and Turner, P., 2016. The 7-Eleven wages scandal: The need for law
reform. Precedent (Sydney, NSW), (135), p.53.
Terry-Armstrong, N., 2016. 7-Eleven: A case study of a flawed franchise model. Busidate, 24(2),
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