Calls for action after the Inconvenient Truth about 7-Eleven is revealed

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Author: Corrine Barraclough

On Monday night, ABC’s Four Corners aired an investigation into the 7-Eleven business empire.

A whistleblower chose to speak out saying: “Head office is not just turning a blind eye, it’s a fundamental part of their business. They can’t run 7-Eleven as profitably as successfully as they have without letting this happen, so the business is very proud of itself and the achievements and the money it’s made and the success it’s had, but the reality is it’s built on something not much different from slavery.”

Revelations were the result of months of painstaking research and insider accounts. Accusations included wage-abuse, blackmail, and dodgy doctoring of bookkeeping which was confirmed when CCTV footage was checked alongside paperwork.

On investigation, it seems the average 7-Eleven worker in Australia faces a grim and dreary decision – accept a wage of half the $24.50 an hour award rate (sometimes even less) or face deportation. This is after they have completed training, for free.

The company is in crisis as the shocking scandal breaks. Headquarters were quick to respond, pin blame on franchisees, announced an “independent review” of wages and offered to buy out franchisees.

Gold Walkley Award-winning reporter Adele Ferguson tells PASA: “The findings of the 7-Eleven investigation where shocking on a few levels. Firstly, this is a big familiar brand yet head office has allowed wage fraud and doctoring of payroll records to get out of control. They have an ethical and moral responsibility to stop this yet they haven’t – until now. Secondly, when we first started looking at it we didn’t realise just how deep it goes into the organisation.

She continues: “It isn’t just a few rogue franchisees ripping of their workers, it is systemic. Some of the bigger franchisees are motivated by greed but some have been forced into it because they aren’t making enough money to cover payroll and pay their interest payments. 7-Eleven head office has conducted a review of 225 franchisees between July and August and found 69 per cent have payroll compliance issues. Every worker we spoke to says they are getting paid between $10 and $15 an hour. The award rate is around $24.50 not including penalties for night work, weekends and holidays.”

Allan Fels, who was chairman of the Australian Competition and Consumer Commission between 1995 and 2003, says 7-Eleven is one of the toughest, controlling business models he has come across and says something needs to be done.

With the spotlight shining firmly on 7-Eleven and the pressure firmly switched on, PASA asked Ferguson what needs to happen to safeguard against this kind of exploitation and non-compliance happening in other Australian businesses.

“We need to beef up the powers of the regulator because the penalties are too weak,” she tells us. “There needs to be stronger legislation to make the head office of these companies accountable. Right now there is a clause in the Fair Work Act that can make head office an accessory but the penalties are ridiculously low and the wording is such it is very hard to argue.

“The regulator also needs to be better resourced and the government needs to give amnesty for a period to foreign workers to come forward and expose what is going on without the fear of being deported for breaching their visa conditions (students on visas can only work 20 hours a week and at 7-Eleven they are being forced to work longer hours so they are in breach of the law).”

Stewart Levitt, a Sydney-based lawyer has set up a website and is signing up people to join a class action against 7-Eleven. He has also called on the Abbott Government to offer an amnesty to international students to come forward and give evidence of wage abuse without the fear of deportation.

7-Eleven: The Price of Convenience, reported by Adele Ferguson and presented by Kerry O’Brien will be replayed on Tuesday 1st of September at 10.00am and Wednesday 2nd at midnight. It can also be seen on ABC News 24 on Saturday at 8.00pm, ABC iview and at abc.net.au/4corners.

 

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Procurement and Supply Australasia (PASA) is the leading provider of information and education to procurement and supply professionals throughout Australia and New Zealand. PASA supports the largest community of engaged procurement stakeholders in the region, through its renowned series of events, publications, awards, plus various community and network building activities. PASA is a trading name of BTTB Marketing, for many years recognised as the leading producer of conferences and events for the procurement profession in Australia and New Zealand. Whether producing under the BTTB, CIPSA Conferences or now PASA brands over the last ten years, our events have consistently led the market in terms of both educational and networking opportunities.

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  1. Pingback: 7-Eleven scandal: Time to look closely at franchises and their supply chains - Procurement and Supply Australasia

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