7-Eleven work practices under fire

Wage scandal investigation

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Wage scandal investigation

Penny Thomas, Staff reporter

The 7-Eleven chain of convenience stores is the latest franchise in Australia to come under fire for underpaying employees.

The 24 hour chain store joins other Australian brands such as Grill’d, Bakers Delight, Gloria Jeans and La Porchetta who have all been accused of underpaying and overworking employees.

In a joint Fairfax Media and Four Corners investigation, a former 7-Eleven employee said he was paid as little as $10.00 an hour, and would often not get paid for seven to eight weeks.

The Fair Work Ombudsman, who are responsible for enforcing workplace relation laws in Australia, attempts to regulate and ensure workplaces abide by the set award wages.

However, many individual franchisees who go against these regulations blame the parent company for their decision to underpay workers.

According to the investigations into 7-Eleven, once the franchisee covers labour costs, meets interest repayments and pays the necessary royalty fees to the franchisor, the store owner generally makes a profit of $40,000 a year.

Dr Tess Hardy, a member of the Centre for Employment and Labour Relations Law and lecturer at Melbourne Law School told ECU Daily there were concerning issues being raised by the 7-Eleven case, especially the vulnerability of the many international students caught up in the scandal.

Dr Hardy also outlined that with thousands of international students coming to Australia to study, and with the youth employment rates at the lower end of the spectrum, most students will take any work they can get.

In the Fairfax Media and Four Corners investigation, allegations have been made about the treatment of foreign employees.

Because of visa requirements, international students are restricted to the amount of hours they can work. It is alleged that some rogue 7-Eleven stores doubled the employees hours but halved their pay.

The investigation revealed the vulnerability of international employees, as some were being blackmailed by their employers who would threaten to get them deported if they did not agree with the pay practices of the franchise.

Dr Hardy believes changes need to be made.

“Some employers will continue to breach the law and some students will continue to work in these places because they cannot find work elsewhere and need the money.

“This is why I believe more needs to be done to address the drive of employer behaviour, as well as the sources of employee vulnerability,” said Dr Hardy.

The former ACCC Chairman, Allen Fels, told the Canberra Times, “The business model will only work for the franchisee if they underpay or overwork employees.”

In a statement 7-Eleven claimed, “Our business does not condone the action of any franchisee who does not meet their employer obligations, and we do not and will not hesitate to take any appropriate action, under law and within the franchise agreement, where a franchisee is found to be in contravention of the law.”

An inquest into the treatment of employees at the 7-Eleven chain stores is under way, and this was the first time a Four Corners investigation had prompted an inquiry prior to the investigation going to air.