Employee Entitlements Compromised: 7-Eleven Underpayment Case Study

This case study examines the underpayment scandal within 7-Eleven franchises in Australia, focusing on the exploitation of employees and the violation of their entitlements under Australian employment law, specifically in Victoria. It addresses the systemic issues that allowed these practices to occur, including the vulnerabilities of migrant workers and the bypassing of regulatory standards like the Fair Work Act 2009. The analysis explores potential approaches that employees could have taken to address the underpayment, such as reporting to labour bureaus, seeking assistance from the International Organisation for Migration, and engaging in collective bargaining. It also discusses the importance of involving management, unions, and colleagues in resolving the situation through collaborative efforts and potential legal actions via the Fair Work Ombudsman. The study concludes by advocating for a collective bargaining approach, emphasizing the need for open communication and mutual agreement, with legal recourse as a final option to ensure fair treatment and compensation for affected employees.

EMPLOYEE AND LABOUR
RELATIONS

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Contents
Introduction................................................................................................................................1
Approach that can be taken........................................................................................................1
Approach for involving management, unions and colleagues...................................................2
Conclusion..................................................................................................................................3
References..................................................................................................................................3

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Introduction
The case of 7-Eleven suggests that there are people from different parts of the world who
were influenced by the scam done in the company. Underpayment is a serious issue in any
part of the world in any condition. In the Australian working environment, this is the biggest
challenge that companies had to face (Smh, 2015). Company took the advantage of the
situations in which different employees were working. Most of them faced immigration
issues and hence companies official also threatened them that if they do not hear them then
they will be sent back home. By threatening the employees, they were kept away from the
entitlements and they have bypassed normal regulatory standards such as Fair Work Act
2009. This was done in the planned manner as when the raids were conducted it was seen that
there were many malicious papers, store reviews were incorrect, there were some explosive
documents related to payroll compliances from the head office, doctored time sheets and
roasters were also present (Toscano, 2019). It was also seen that the store financials did not
have appropriate wage bills. Many of the people were not given payments even when they
worked for hours within the firm and when they asked for it they were threatened to send
them back to their home (Feguson, 2017). This was the major reason why no one was playing
the role of whistle blower. But when the fraud came out a serious charges were noted against
the firm and the compensations were announced for them. The nature of issue is that the
rights of the employee have been compromised.
Approach that can be taken
In spite of the fact that Australian laws for employment is strong and protects people from
any kinds of frauds, it was the lack of the system that did allow the people to speak for them.
As an employee the approach that could be taken here is to report it in front of the labour
bureau for registering their complaint against the organisations. Since most of the people that
faced such issues at 7-Eleven were from the Asian region hence the first complaint should
have been registered at the International Organisation for Migration (Bray and Stewart,
2013). This is because the Visa that they have been provided in Australia would have lapsed
if the employees did not follow the working timing regulations like in the case of Newlywed
Sam who did overtime and worked for approx. 18 hours. Since these people themselves
breached the visa norms hence their case becomes weak. The Fair work Act 2009 could have
helped the company in attaining their motives especially in terms of hiring employees and

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future treatment of the employees. In such situation it was necessary that all the employees
have raised the issues simultaneously (Parliament of Australia, 2019). This would have given
them stronger voice and can protect the rights of the people that were exploitation.
Possible majors that could have been taken by the employees at the time of getting hired
include collective bargaining. This is because it is a mechanism that allows the employee and
employers to express their objectives with respect to work. Without the tension of cause and
effect it was necessary that legal approach should have been taken by the workers. In this also
the collective approach of the people would have given them support in their case. Since it
was not only the case of underpayment, it was also the case of mistreatment and threatening
of the people hence they could have easily taken the support from the legal experts (Stewart,
2011). It was also the fact that these people were from different parts of the world hence they
could have seek the help of embassies. This would help them in protecting their Visa which
was major concern due to which employees did not complained about the wrong practices at
the workplace. Consulting the embassy could have given them a strong legal support as well
(Employmentlawonline, 2019). This is because most of the employees that faced such issues
were students and they do not have proper knowledge about the legal routes they can take
while ensuring that their own academic career does not get affected.
Since it gives a foreign employee six year time to claim for the underpayment of wages hence
a whole lot of people can become a team and complain in the Fair Work Ombudsman. This is
an organisation that has the role in ensuring that the employers are complying with their legal
obligations and that workers are receiving proper entitlements. This organisation has the
power to enforce the entitlements of the employees to the correct rate of pay (Smith, 2011). It
acts as an organisation that provides support to the employees and they might provide the
employer with an official causation letter and communicating them that in the future actions
could be taken against them (Fair work ombudsman, 2019). It is critical that employees
obtain a court order against the 7-Eleven company and take an enforceable undertaking from
the employers that they would not take against the others. Their case was strong because it
was not the problem of one or two employee rather it was faced by larger numbers of people.
The approach that could have been taken by the people is that they should have taken the help
of the union. This company did not allow forming any employee union. In this regards it is
critical that there is utilisation of many employee unions existing in Australia. These labour
unions are powerful enough to improve the condition of the people at the workplace. This is

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also true in terms of the fact that these unions have the powers to launch a protest against the
companies (Pekarek, et al. 2017). Since these unions have support of the employees from
other companies as well hence the voices of the people become stronger when they join
union. These unions give a platform to the employees that were underpaid in terms of legal
access to the people. Since the numbers of employees whose entitlements were compromised
from underpayments were more hence the unions would have certainly supported these
people in getting the compensation against the abuse they had to face.
Approach for involving management, unions and colleagues
The approach that could be taken is that all the employees that faced some or the other kinds
of underpayments issues against their entitlements can be taken together and should reach to
the unions that exist in the Australia. Taking initiatives they must be enrolled as soon as
possible and with the help of unions they can arrange a meeting with the employees (Sbs
News, 2017). It is suggested that unions have to first write a letter to the management where
they need to provide signature of the people that were underpaid and at the same time the
proofs should also be provided to the management. It is critical to ensure that management
gets ready without confrontation. Once the meeting is arranged all the possible points of
confrontation needs to be discussed. It should be a collaborative effort where interests of all
the parties need to be addressed but on the point of payment union should remain firm. Union
should also state their demand in front of the company and in case the company’s
management does not agrees with their demands then they should warn the company about
their actions in the future and also the legal route that employees will take if they are not
ready to understand the suffering of the employees. Employees should be given free
opportunity so that they can speak up about their problems (Sloan, 2010).
After the meeting all the three must work together to come to some mutual agreements where
the paper works about the employees needs to be completed. All the documented files need to
be replacing with the original ones and a copy of all the original documents that contains the
details of the employees that how much time they have worked and overtime they did needs
to be documented. In all these there must be a mediator institution like FWO which can be
consulted beforehand so that all the proceedings can be done under proper jurisdiction and at
the same time it will also ensure that every party gets agreed about the terms and the must
follow the resolutions that will be passed in the meeting (Fair work ombudsman, 2019). In
case the meeting gets failed then it is this FWO that needs to be engaged for taking legal

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actions against the 7-Eleven. Apart from this it is also to be communicated between all the
members of the meeting that whatever the results of this meeting everyone will have to
follow.
Conclusion
In conclusion it can be said that the approach that can be adopted by the employees should be
collective bargaining approach. In this approach they should take the approach of multiple
meetings where everything needs to be discussed and at the same time it will also be ensured
that everyone’s point is heard and whatever will come out of the meeting will be acceptable
to everyone. In case the meeting fails employees and union should take legal steps against the
company.

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References
Bray, M. and Stewart, A., 2013. From the arbitration system to the Fair Work Act: the
changing approach in Australia to voice and representation at work. Adel. L. Rev., 34, p.21.
Employmentlawonline, 2019. I am a foreign worker and feel that I have been underpaid.
What can I do?. [Online] Available at: https://www.employmentlawonline.com.au/i-am-a-
foreign-worker-and-feel-that-i-have-been-underpaid-what-can-i-do/
Fair work ombudsman, 2019. Awards & agreements. [Online] Available at:
https://www.fairwork.gov.au/awards-and-agreements. [Accessed on 23rd August 2019]
Fair work ombudsman, 2019. How to fix an underpayment. [Online] Available at:
https://www.fairwork.gov.au/how-we-will-help/how-we-help-you/help-resolving-workplace-
issues/how-to-fix-an-underpayment. [Accessed on 23rd August 2019]
Feguson, A. 2017. We worked like slaves and no one cared': 7-Eleven worker. [Online]
Available at: https://www.smh.com.au/business/companies/we-worked-like-slaves-and-no-
one-cared-7eleven-worker-20171222-h092ff.html. [Accessed on 23rd August 2019]
Parliament of Australia, 2019. 9. Labour exploitation and Australia's visa framework.
[Online] Available at:
https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Foreign_Affairs_Defence
_and_Trade/ModernSlavery/Final_report/section?id=committees%2Freportjnt
%2F024102%2F25425. [Accessed on 23rd August 2019]
Pekarek, A., Landau, I., Gahan, P., Forsyth, A. and Howe, J., 2017. Old game, new rules?
The dynamics of enterprise bargaining under the Fair Work Act. Journal of Industrial
Relations, 59(1), pp.44-64.
Sbs News, 2017. International students urged to complain if exploited at work. [Online]
Available at: https://www.sbs.com.au/news/international-students-urged-to-complain-if-
exploited-at-work. [Accessed on 23rd August 2019]
Sloan, J., 2010. Evaluating the Fair Work Act. Policy: A Journal of Public Policy and
Ideas, 26(4), p.19.

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Smh, 2015. How 7-Eleven is ripping off its workers. [Online] Available at:
https://www.smh.com.au/interactive/2015/7-eleven-revealed/. [Accessed on 23rd August
2019]
Smith, M., 2011. Gender equity: The Commission’s legacy and the challenge for Fair Work
Australia. Journal of Industrial Relations, 53(5), pp.647-661.
Stewart, A., 2011. Fair Work Australia: The Commission Reborn?. Journal of Industrial
Relations, 53(5), pp.563-577.
Toscano, N. 2019. 7-Eleven operator fined $335,000 in wage scandals. [Online] Available at:
https://www.smh.com.au/business/workplace/7-eleven-operator-fined-335-000-in-wage-
scandals-20190118-p50s81.html. [Accessed on 23rd August 2019]