Editorials on News Reports: 7-Eleven Wage Scandal Analysis

This report presents an analysis of the 7-Eleven wage scandal through two editorials, focusing on the exploitation of employees, particularly international students, by franchisees. The editorials, based on news reports from "Fair Work" and other media outlets, examine the severity of wage theft and the impact on the Australian taxation system. The first editorial delves into the systematic exploitation of workers, the ineffectiveness of current remedies, and the role of the business model in perpetuating wage rip-offs. The second editorial critically assesses 7-Eleven's response, questioning the delay in addressing the issue and the adequacy of the proposed solutions. The report highlights the different editorial approaches, reflecting varying newspaper styles and perspectives on business practices, ethical standards, and stakeholder treatment, ultimately concluding that the root cause of the problem remains unaddressed.

Running Head: EDITORIALS ON NEWS REPORTS ABOUT WAGE SCANDAL IN 7-
ELEVEN
Editorials on News Reports about Wage Scandal in 7-Eleven
Name of the Student:
Name of the University:
Author Note:

1EDITORIALS ON NEWS REPORTS ABOUT WAGE SCANDAL IN 7-ELEVEN
Introduction
The wage scandal of 7-Eleven has been exposed to the public by Fair Work and other
media houses, which has highlighted the percentage of money being ripped off from the
employees by the franchisees. While the Chairperson of the chain of convenient stores has taken
up the responsibility for paying off the wage rip offs.
Editorial one
Title: Wage Scandal of 7-Eleven: Cutting to the Heart of the Matter
The exploitation of workers has been going on for years in various franchises of 7-
Eleven. The exposure took place as ABC’s “Fair Corner” and “Fairfax” media house released
reports that showed the messing up with payrolls was only the tip of the iceberg (Ferguson &
Danckert, 2015).
The reports show that the labor market of Australia is on a trip downhill. The majority of
the working forces being as high as 1.3 million are bound by their conditions of being granted a
visa makeup for one among ten workers. The wage rip off is not only being detrimental for the
workers, but also for the taxation system of the Australian government as taxes are not being
filed for more than hundreds of millions of dollars on a yearly basis. The wage fraud that has
been reported by Fair Works itself stands to be more than tens of millions of dollars (Ferguson &
Danckert, 2015). The worst hit group of workers is students who are on student visas that allow
them to work for not more than twenty hours every week. This makes them the most vulnerable
and prone to being exploited by the employers. As per the raids carried out by the Fair
Ombudsman, the rate of abuse is getting worse with each passing year. Fair Work raids that took
place on September 2014 revealed that almost 60% of the total count of 20 stores have issues

2EDITORIALS ON NEWS REPORTS ABOUT WAGE SCANDAL IN 7-ELEVEN
directly based on their payroll (Ferguson & Danckert, 2015). Here, the Senate is also questioning
the effectiveness of Fair Work. The internal review that took place in July and August has
showed that there are issues with complying with the payroll in more than two-third of the stores,
while some findings have been reported to be repetitive in nature.
To address this issue, 7-Eleven has released statements that say them being “extremely
disappointed” by the dysfunctional nature of the franchisees and have called for “appropriate
actions” being taken against those at fault (Ferguson & Danckert, 2015).
The basic question that arises from this response of the authorities is whether they have
understood the problem that has been responsible for the wage swindle. The answer is a clear no.
the heart of the issue remains to be the business model that is primarily driven towards exploiting
the employees systematically by depriving them of their wages. The fact is that the remedies
have been nothing but temporary, as the head offices have paid off the pending wages of those
who have been denied. The root cause of a faulty business system keeps being functional and
hence is adding to the issue instead of eliminating it. Some business houses have come up with
excuses such as not being aware of the basic pay scale that they are required to pay their
employees. This state of affairs needs to be highlighted by the politicians and regulators before
they spiral out of hands.

3EDITORIALS ON NEWS REPORTS ABOUT WAGE SCANDAL IN 7-ELEVEN
Editorial Two
Title: 7-Eleven bearing the cross: Bucking wage rip offs or compensating for the act?
With Russ Withers, the chairperson of one of the biggest chain of convenient stores, 7-
Eleven, owning up to take the responsibility of the huge wage rip offs from the staff, a lot has
been pushed to the frontlines. The act of taking up the responsibility can addressed in two ways.
First, easing off the huge number of franchisees from the burden of paying back its employees,
thereby making it a statement that portrays the head office as a savior, who is paying off the
price of blunders that the franchisees carried out (Baxendale, 2015). Secondly, a shift in the
focus by diverting the issues of deliberates ignorance both from the part of the franchisees and
the head office by paying the due amount of their staff.
On this very light, more questions keep coming up as to why did the higher authority
take such a long time to find out about the discrepancy in the pay rolls of the franchisees. How
did it get past the audit teams that were supposed to carry out a detailed enquiry into the entire
system of operation? Was owning up the fault, a last step that resolved by the higher authority
for pacifying the people in the face of reports and surveys carried out by Fair Work and other
media houses? Mr.Withers’ statement on this issue however denies acknowledging the extent to
which the problem of underpaying their staff has reached.
The reason behind the lack of spot-checking as the first step to detect the problem of
exploitation is also shocking. According to the Chairman of 7-Eleven, the franchisees were
providing the head office with information that were being accepted by them without any fact
checking, based “on face value” (Baxendale, 2015). It is important to point out that it is this same
chairperson who had told the media about the journey of 7-Eleven as a small company, and its

4EDITORIALS ON NEWS REPORTS ABOUT WAGE SCANDAL IN 7-ELEVEN
present day dominance in the market that took those thirty-eight years to build. If the years of
evolution of the company were such an important number for Mr. Withers, how did the same
authority make the mistake of accepting figures simply based on the face value of it? It took 20
spot-checks from Fair Ombudsman on twenty stores in Melbourne, Sydney and Brisbane to
reveal that there is a shortage of payment summing up to and amount of tens of thousands of
dollars along with forging records of employee to cut down on the costs (Baxendale, 2015).
With the act of owing up the responsibility, the Chairman makes an attempt of thrusting a
temporary solution and paying back the employees. However, root cause of constant deficit from
the end of the franchisees remains to be inadequate profit margin for the chain of franchisees.
There is no end to this ever growing problem of wage rip offs and exploitation as it shall
continue to be a vicious cycle, making international students the most vulnerable target for their
conditions on student visas.
Conclusion
From the two different approaches above by two different media houses, it is clear that
one of them addresses the heart of the situation that still needs to be addressed. The first editorial
attempts to put up a clear picture of the scenario while the second editorial takes up a critical
approach to the issue.

5EDITORIALS ON NEWS REPORTS ABOUT WAGE SCANDAL IN 7-ELEVEN
Reference
Baxendale, R. (2015). The Buck Stops With Us: 7-Eleven [Ebook]. The Nation. Retrieved from
http://theaustralian.com.au
Clibborn, S., & Wright, C. F. (2018). Employer theft of temporary migrant workers’ wages in
Australia: Why has the state failed to act?. The Economic and Labour Relations
Review, 29(2), 207-227.
Ferguson, A., & Danckert, S. (2015). 7-Eleven: wage fraud cover-up from head office [Ebook].
Sydney. Retrieved from https://www.smh.com.au/business/workplace/7eleven-wage-
fraud-coverup-from-head-office-20150829-gjahrc.html
McKenzie, M. (2018). The erosion of minimum wage policy in Australia and labour's shrinking
share of total income. Journal of Australian Political Economy, The, (81), 52.