The Fair Work Ombudsman

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Since 2008, the Fair Work Ombudsman and his predecessors have expressed significant concern about 7 Eleven's compliance. An ongoing report regarding claims made by employees regarding underpayment of salaries was circulated for more than seven years. Concerns were expressed in this context that suggested there was a connection between these underpayments and instances of fake employment records made by the same franchisees (McCabe, 1995). Since the Fair Work Ombudsman was established in 2009, the organization has brought over eight cases involving 7-11 franchisees before the legal system. They got to recover a total sum of $625,000 for the underpayment of the company employees from the suits that they had instituted before the courts of law.

One of the achievements that were also found was an enforceable undertaking which came along with the issuance of 20 caution letters, and sum total of 14 infringement notices. There was also an existing sum of three compliance notices which were also issues in that same regard. Later on in February 2012, the 7 eleven was again given an invitation for their participation in a pilot program which was intended to help the franchisors and franchisees get to address their issue of compliance as such (McCabe, 1995). At the very start, this company had registered themselves with personal interests, coming out on note that a good number of franchisees were new or rather recent immigrants who were not familiar enough with the their obligations at work and their labor rights as well. Despite all the assurances that had also been offered, there was some commitment that was made towards making sure that these said franchisees got to have a clearer guidance of their obligations, it was at this juncture that 7 eleven even declined to participate as such. There was again some serious engagement with the 7 eleven head office also getting the expectation to see any sort of improvements in compliance as such.

After the searching mission that was done by the Fair Work Ombudsman, there were indeed quite a number of findings that were done previously. It was found that the officers of Fair Work Ombudsman do not have the legal mandate to force a person to attend interviews and subsequently answer questions that are put forward to them. In this regard, there were a number of times where it was found out that 7 Eleven was indeed not open enough and not compliant with the demands of the public and employees. They were not more than willing to answer to all the questions that were put forward to them as such.

It was also realized that a number of the franchisees did not even maintain proper record of what the employees had worked and the amount of money that was being owed as well. They hence relied on produced false records. In some of the cases where the franchisees even failed to cooperate well, the Ombudsman had to fetch for cooperation from the employees in order for them to come out and understand what was really happening in any specific store (Poole, 2013). The lack of employee participation was noted to have impeded efforts to investigate quite a number of matters as some instances were not really true and that the truth would only be found from the employees.

The Fair Work Ombudsman noted that in one of the stores, there were very serious concerns that came out concerning fair wages and the accuracy of records under which only twelve employee’s depicted willingness to be interviewed. Some of the employees also offered very anonymous information hence requiring that the ombudsman office was to look for evidence elsewhere in order to substantiate some of the claims that were noted as such (Poole, 2013).

From the enquiry that was done at the time, there was a finding of a very huge number of instances where the information that was given by the employees was very inconsistent to what was really happening in the store or reported by other members of the staff as well. The employees would often be seen to change their responses to questions when approached on a second time hence noting that the employer had a hand in trying to interfere with the open research that was being conducted in the franchises. The Fair Work Ombudsman did also identify that there was a wholesale disregard for minimum wages in the stores; this is a clear show that indeed the employer is not willing to offer better wages even in cases where they make very high profits as such.

A good number of employees also reported having approached 7 Eleven with concerns before the inquiry was done but then the head office showed a lot of disinterest in what they were being called to. Some of the employees were even feeling that indeed the company was aware of the very high rate of non-compliance that was present across their network but then they were not even concerned by their interest. They feel that this is a company that likes to take advantage of their employees rather than offering them the best conditions for their employees to work in. The 7 Eleven gets a very good percentage of the stores gross profits and hence count on a direct financial benefit to the franchisor when the store becomes very successful. This is the more reason as to why they were not in any way willing to help their employees but would rather prefer to simply have them be as they are so long as they see the stores making good profit and that their share from the gross profit remains to be as large as possible (Poole, 2013). These wages indeed have an impact on the amount of profit that the store will make hence the stores have worked with 7 Eleven to push the interest of the employees on the side so that their profits remain to be higher and incur lesser costs in terms of wages (Poole, 2013). In as much as 7-Eleven have insisted that their own operation system has never been dependent on the franchisees underpaying their staff, this is already something that is clear to the whole public that indeed they run profits from what they do which is not taking the interests of employees keenly.

Critically analyze any gaps in the Australian ER system that this inquiry raises in regard to the role of the state and the role of unions.

From the inquiry that has been done, there are a number of gaps which can be said to be present with regard to the role of the state and that of the unions. These gaps include:

Delay by the mandated bodies to act prior to employment malpractices by the employers.

In as much as Fair Work Ombudsman intervened in this case, one thing that has been notable is the fact that this came after the facts had already taken place. This already shows an element of carelessness coming from the government bodies because it clearly shows that indeed the country has set up some guidelines but then the implementation has become a great problem. The problem of application is however brought about by the employers placing a blind eye on matters which they are fully aware and are supposed to subscribe to (Poole, 2013). This is even the more reason as to why when 7 Eleven was being investigated, they tended to try and hide some of these activities that were taking place at the time. They would do so because they were at a position of safeguarding their interests and hence they are seen to always try and take advantage of cases where the government has shown laziness in acting or rather an element of carelessness.

The question that serious brings up this gap is, why did the government mandated bodies not intervene before the situation got to this position? They have to make sure that they take into account the best interests of their employees. The Australian Employment Relations system has therefore failed in this regard because by doing this they are disregarding the immigrants who have come to work in their country out of good will or rather in search of greener pastures. They were certain that the conditions will not be as they are at the time, but then when they got to the country, the position changed and it was a mistreatment after the other (Poole, 2013). This is very clear that in as much as the country has set out very good intentions through having better written international employment relations contracts, the application format that has been taken has been lazy. There are people who receive huge amounts from the budget for them to take up certain tasks but then they do not feel as though they have the duty to make sure that they come out clean and that at the same time they must also deliver nothing more but the best to their clients.

Poor set up of employment laws for the immigrants

What has been seen is non-compliance for the organization such that they act knowing that the implications that they will be facing will not be severe. In that regard, it also means that the kind of laws that we do have are not up to the task of achieving better employment status which is indeed the target that we have set at the time as such.

In Australia, there is an employment system that has a mixture of legislation, binding agreements and common law. There is an existing syndicate of federal and state laws which are all meant to address the various issues inclusive of the high number of working hours, plus the working conditions including occupational health and safety plus annual leave and a reasonable pay. There is already a set up weekly cap which entails the fact that employers are supposed to set in the case of extra works hence compensating for the extra fees for employees. It has also been noted that the overtime compensation should be set at half of the normal pay that is given to the employees. As per the termination process, there is a demand that the employer must always offer enough notice or rather offer an equivalent pay as well. Under the Workplace Relations Act, it has also been provided that the minimum notice should be set at one to five weeks.

In as much as we do have all these laws put in place, the implications that have been awarded on the same are not so severe as one would expect. It is such a legal gap that the rest of the group is taking advantage of hence they easily just let some of the companies to work in hiding while defying these rules. In that regard, there is actually a dire need for the same laws to be reformed to the extent that they will be able to give more responsibility to any company to make sure that they comply. This might include having hefty fines which companies do fear because when they are involved in hefty fines, then they do not make profits in amounts that they so wish to have.

Not taking the interests of employees to be the main interest

The state and the unions have failed to understand that they are supposed to defend the interest of the weak first before the interests of the very strong ones are taken into account (Knights & Willmott 2016). In these cases, through the slow reaction that has been witnessed all along, the country can easily conclude that indeed there was a slow reaction to the interests of the employees which should indeed be their main interests. Being that the unions have all been set up with the will and wish of the employees, it remains absurd to see that they act so late and remain silent about the employees. This is also another show that indeed their interaction with the employees is also very low as well.

Implications of the inquiry for the regulation of ER in Australia

Through the inquiry that was done, there is are great implications that are present for the regulation of ER in Australia. They include:

The need for change in employee handling in Australia generally

Through the inquiry that was done here, there has been much that has been noted regarding the question of manner in which immigrant employees should be treated in Australia. There is a need for regulation of ER to be made in such a way that it is user friendly to all the employees who come into the country in the form of immigrants as such (McCabe, 1995). As a country, one thing that is very clear is that there has been complacency when it comes to ensuring that employees are handled with care and that their interests are also given utmost priority altogether. It is indeed time to make sure that we have a system which indeed gets to reflect to reflect the will of the majority which in this case is the group of the employees (Artus, 2013). There is a dire need for greater changes to be made in all this and that employees be given better opportunities in organizations and also wages which match the kind of work that they have been procured to be do. As a matter of fact, the inquiry has shown that the employees are acting as though they are in fear when it comes to dealing with their employer and that is why the interviews are easily changed by the employees when they are asked the same questions for the second time. This is the same position that the whole inquiry has shown and indeed that is why there is a need to have a better balance in terms of the engagement of employees at work place and in decision making processes.

There is a desire for employers to have wages gazette before they seek for foreign employees

Looking at the manner in which evidence has been shown all through the arguments that have been presented in the inquiry, it has been more than clear that indeed the employees were not fully aware of the exact amount that they will earn once they cross the borders (Clawson, 1980). This is actually a position that mirrors what a majority of employees go through in the country and thus a dire need to have changes in the whole system (Clawson, 1980). It is notable that salaries are no secret and hence for the future, through the inquiry it is implied that it will indeed be a better decision if the employees can access information about the possible amounts that they will be earning once they join the said groups as well (Mehta, 2014). Henceforth, it is implied from the inquiry that indeed the best method will be to get information about salaries to come from the employers even before they officially recruit the employees.


Introduction of stringent foreign employment policies

Ensuring that employees are fully aware of the wages and the working conditions that they are subject to before they travel into the country.

Having a well regulated contract for employees that all employers should offer to their foreign employees.


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April 06, 2023
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Employee Problems Employment

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