University Essay: The Seven Eleven Wage Fraud Editorial Analysis

This essay presents an editorial analysis of the 7-Eleven wage fraud scandal in Australia. It examines the ethical failures of the company, highlighting issues such as underpayment of workers, particularly immigrant employees, and the exploitation of labor laws. The essay discusses the role of corporate governance, the impact of the business model, and the government's response to the scandal. It explores the perspective of two editorials, one focusing on governance failures and the other on the issue of modern-day slavery. The essay references media reports and internal documents to support its arguments, concluding with a discussion of the social and ethical implications of the 7-Eleven wage fraud.

Running head: EDITORIAL
THE SEVEN ELEVEN WAGE FRAUD EDITORIAL
Name of the Student
Name of the University
Author’s Note

1THE SEVEN ELEVEN WAGE FRAUD EDITORIAL
Introduction
Newspapers are an integral part of the constitution they are involved in shaping the public
opinion as well disseminate important information. Editorials are often a way that the editor of
the newspaper is able to communicate their view to the audience and engages in dialogue with
the audience. Editorials however can only put forward a point of view that is without bias. The
following article presents two editorials perspective discussing the seven eleven fraud.
Business profit or people welfare a story of 7 eleven.
ABC’s four corners and the Fairfax Media has exposed on what seems one of the biggest
corporate fraud that Australia has ever witnessed in recent times. The recent media attention has
brought to light some of the rather unsavoury truths about the convenience chain. The story that
follows questions the ethical standards and the governance policy. The increasing number of
wage frauds in companies such as Pizza Hut, Coles, Myers and so many others in Australia
points to the ethical standards of the businesses and even more to the fault in the governance
policy. These businesses have repeatedly shown a pattern of choosing business profit over the
welfare of people.
When 83 seven eleven stores were reviewed 47 stores showed they had not adhered to the
minimal wage policy moreover they showed discrepancies in their payroll sheets. This means the
company has systematically evaded taxes adding to their profit albeit illegally and additionally
cheated their workers of a basic minimum wage. What is more amazing is that when The Fair
work Ombudsman pointed out that the majority of the seven eleven stores showed 60 percent of
payroll compliance issue, the Australian government did not take any action against the
company. This certainly questions the effectiveness of the governance policy. It is to be noted

2THE SEVEN ELEVEN WAGE FRAUD EDITORIAL
that the majority of workers employed by these organisation are immigrants who are often
unaware of the various working policies and are thus more vulnerable. Senator Deborah O’Neil
stated concern about revising the visa related issues pertaining to the immigrant workers and
acknowledged the concerns regarding the wage frauds. The following discussion also reveals
that the powers of the Fair Works policies can further increase which may help in solving these
kind of discrepancies.
The company has since the scandal expressed a public statement expressing their concern
for the current issues. The company has denied however a majority involvement in the issue.
They have gone on record to state that “We still believe the underpayment of the staff is
relatively small, and the vast majority of the franchisees are doing the right thing.” The facts
reveal a different story former chairperson of ACCC Alan Fels has pointed that the 7 eleven
issue has happened owing to a faulty business model. According to the business model the
company takes about 57 percent of the gross profit while the franchises make only 43 percent.
The franchises are using the faulty business model as an excuse for underpaying their workers.
The government has since fined the company to pay $335,000 for failing to conduct the business
within the parameters of law.
Seven eleven has since paid more than $150 million in compensation one of the highest
compensation scheme. However, this does not eliminate the fact the company chose to promote
the business profit over the people welfare every time. The only thing that changed was that 7-
eleven was caught in the scandal that they could not ignore. This certainly questions the
governance policy and ethical conduct of the company.

3THE SEVEN ELEVEN WAGE FRAUD EDITORIAL
7-eleven a modern age slavery
The recent scandal of 7-eleven is somewhat of an anachronism of modern day slavery.
The systematic exploitation of immigrant workers reveals insidious practice within the company.
Immigrant workers are the major workers at 7-eleven and were subjected to exploitation that
went unnoticed for a long time.
The immigrants are an important part of the Australian workforce and majority of them
are students. They are also major contributors to the Australian economy and yet are one of the
marginalised section of the society. The “half-pay” system that was widely being practiced in
these seven eleven stores are disturbing. Some store owners have been found guilty of paying
their workers as less as $10 dollars an hour for working a double of their shift timing.
The Fairfax publications and the ABC's Four Corners have revealed an internal document
that showed that 69 percent of the 225 stores that were reviewed had underpaid their workers. A
previous employee has stated that they were even blackmailed into working for longer hours for
less pay stating that complaining against them would revoke their visas. The international
students who make most of the workforce at 7-eleven would get reported to the immigration
department is a psychological harassment and abuse of power.This is simply not just a payroll
compliance issue and a tax fraud it also shed light on the stakeholder treatment the lack of ethical
value within the business model. The fact that immigrants are a prey of such institutes shows that
there is some fundamental issue that is unable to protect the rights of the people who need it.
The systematic abuse of power is something that correlates to a modern day slavery. The
big corporations exploit the lack of information of labour law among the workers and intimidate
them into working for longer hours but end up paying only half of their labour. They amassed

4THE SEVEN ELEVEN WAGE FRAUD EDITORIAL
profits unapologetically while the poor suffered. The compensation scheme issued by the
government can be somewhat regarded as a social justice in the light of the events. This issue
helps to understand the fault within the society that promotes such practices boldly.
Conclusion
The first editorial points at the governance failure and unethical business model which is relevant
to the Financial Review audience. While the second editorial discusses the abuse of the labour
laws and how it relates to modern day slavery which connect with The Australian from a more
sociological perspective. The editorials have been written keeping in mind the different target
audience.

5THE SEVEN ELEVEN WAGE FRAUD EDITORIAL
Bibliography
Baxendale, R. (2015). | The Australian. Retrieved 16 January 2020, from
https://www.theaustralian.com.au/search-results?q=the+buck+stops+with+us+%3A7-
eleven+
Branley, A. (2020). 7-Eleven staff work twice as long at half pay rate. Retrieved 16 January
2020, from https://www.abc.net.au/news/2015-08-29/7-eleven-half-pay-scam-exposed/
6734174
Ferguson, A. (2015). AFR Search. Retrieved 16 January 2020, from
https://www.afr.com/search.html?text=7-
eleven+head+office+involved+in+wage+fraud+cover+up+adele+ferguson&ss=afr.com.a
u
Geldart, S., Langlois, L., Shannon, H. S., Cortina, L. M., Griffith, L., & Haines, T. (2018).
Workplace incivility, psychological distress, and the protective effect of co-worker
support. International Journal of Workplace Health Management, 11(2), 96-110.
Regan, L. (2016). Time for change at 7-Eleven. Proctor, The, 36(5), 36.
Syfret, W. (2020). Everything We Know So Far About 7-Eleven Australia’s Wage Fraud
Scandal. Retrieved 16 January 2020, from
https://www.vice.com/en_us/article/4wbnqg/everything-we-know-so-far-about-7-eleven-
australias-wage-fraud-scandal