Wage Fraud at 7-Eleven and its Impact on Retail Employee Turnover

This essay examines the repercussions of wage fraud within the Australian retail sector, specifically focusing on the 7-Eleven scandal and its impact on employee turnover. The investigation revealed unethical practices, including underpaying international students and falsifying pay records, leading to labor exploitation. This exploitation has negatively impacted the economy and the education sector, causing a decrease in people wanting to be recruited and an increase in employees leaving their jobs, ultimately leading to employee turnover. Furthermore, the distress faced by international students has discouraged many from pursuing education in Australia. The essay references various sources highlighting the unethical practices and their wide-ranging consequences on the Australian economy and retail sector.

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Employee Turnover in Australian Retail Sector Due to wage Fraud in 7-
Eleven
The retail sector in Australia is going through turmoil. After the labor scandal by 7-
Eleven’, a Japanese owned convenience chain, came in front of the mass.
According to financial experts, the unethical and exploitative work practices adopted by 7-
Eleven’, revealed through the investigation carried on by joint four corners and Fairfax. These
reports indicated that & -Eleven is conducting unscrupulous activities in order to minimize store
and labor costs and enhance profits (Smethurst, 2019).
International students who came to Australia in order to pursue higher studies,
work at 7-Eleven stores in order to earn their living. 7-Eleven exploits those young students by
paying them 50% below the minimum wage. Further 7-Eleven is also alleged of publishing false
pay records, disobeying workplace laws (The Sydney Morning Herald, 2019).
According to the Fairfax reports argues that, 7-Eleven does not even pay minimum
hourly rates. Moreover, the company makes those young students work during weekends and
public holidays, but does not even pay them penalty for working during holidays (ABC News.,
2019). Even there are other retail chains which have started deceiving their employees from their
rights, just to complete with 7-Eleven Australia (The Sydney Morning Herald, 2019).
Experts argue that, this ‘wage fraud’ has casted upon an overall negative impacts on the
economy as well as education sector of Australia. According to them, due to the high labor
exploitation rate in the retail sector of Australia., less people want to be recruited in the retail
sectors. Again the existing employees in the retail sectors of Australia are leaving their jobs.
Thus the retail sector oof Australia is suffering from employee turnover. Moreover the demand

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for labor in the sector is increasing but as people are less interested to get job in the retail sector ,
the supply of labor is diminishing at a higher rate. This is violating the optimum level of
equilibrium and the revenue from the retail sector is decreasing day by day (Australian Financial
Review, 2019).
Again, some argue that, due to the distress faced by international student, many of them
has gone back to their countries and many of the international students are reluctant to come to
Australia to pursue higher education. Rather they are interested to study USA and UK where
incidents like workplace exploitation are rare.

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References
ABC News. (2019). 7-Eleven staff work twice as long at half pay rate. Retrieved from
https://www.abc.net.au/news/2015-08-29/7-eleven-half-pay-scam-exposed/6734174
Australian Financial Review. (2019). 7-Eleven wages scandal: culture is key to fixing problems
not expensive systems. Retrieved from https://www.afr.com/boss/culture-key-to-fixing-
problems-not-expensive-systems-20171110-gzir6g
Smethurst, M. (2019). 7-Eleven Labor Scandal (2015). Retrieved from
http://businessethicscases.blogspot.com/2017/11/7-eleven-labor-scandal.html
The Sydney Morning Herald, N. (2019). 7-Eleven operator fined $335,000 in wage scandals.
Retrieved from https://www.smh.com.au/business/workplace/7-eleven-operator-fined-
335-000-in-wage-scandals-20190118-p50s81.html