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Issue #1701      September 9, 2015

Modern day slavery

A joint ABC Four Corners/Fairfax investigation has exposed the theft of tens of millions of dollars from workers at 7-Eleven stores around Australia. They revealed dodgy bookkeeping, blackmail and the mass underpayment of 7-Eleven’s workforce.

The reality is it's built on something not much different from slavery – 7/11.

So the issue is not exactly new. Fair Work Australia, the Australian Taxation Office and the government know what is happening, but they stand by and do nothing as workers continue to be treated like slaves.

“I don’t earn good money. I, ah, I get $12 an hour,” Sam Pendem, one of thousands of 7-Eleven’s slaves told ABC’s Four Corners program (August 31).

“I used to work 70 hours; sometimes 80 hours. Low wages, no respite, no breaks at all and underpaid everything. …

“So that is the reason only has to do more hours so to compensate, to get that money. So run for a week, surviving here. They treat like dogs. He just, like, treats like an an - slum dogs.”

The minimum legal wage is $17.29 per hour with penalty rates for night and weekend work.

Being forced to work 40 hours or more, as in the case of many students, imposes incredible difficulties for students attempting to study a full-time course.

One of the most common scams – the “half pay” scam – is a wage at half the rate on the books for double the hours on the books. So $10 per hour for 40 hours would appear as 20 hours at $20 per hour.

One franchisee admitted paying international workers without a visa $5 per hour.


“And so many students go and work for, ah, people like 7-Eleven who offer them 40 or 50 hours a week at a reduced rate of pay which is so, which is in total contravention of all of our labour laws and other laws. And in doing so they’re breaching the conditions of their visa which gives, which puts the franchisee in a position where he can blackmail these people into silence. And once they’ve exposed themselves to that vulnerability, they have to keep their mouth shut,” class action lawyer Stewart Levitt told the ABC.

Students fear deportation for visa breaches if they speak up.

There are more than 600 7-Eleven stores around Australia mostly employing international students. They rake in more than $3 billion sales per annum off the backs of their workers. They are owned by siblings Russ Withers and Bev Barlow who are said to be worth $1.5 billion. The stores are run as franchises and seem to be based on the super-exploitation of visa holders, cash-strapped students and others hoping to settle permanently in Australia. They have more than 56,000 stores located in 17 different countries around the world.

Their empire also includes the Australian arm of the Starbucks coffee chain, 300 Mobil petrol stations and an extensive property portfolio. It begs the question what is happening to workers at the Mobil and Starbucks franchises.

Consumer Advocate Michael Fraser did his own research. “I’ve been to 60 stores in three states and spoken to hundreds of people. Every single person has been underpaid,” Fraser told the ABC. He met workers outside the stores to avoid video cameras and possible loss of job for the workers being interviewed.

Head office of 7-Eleven was not interested when Fraser phoned them offering the evidence. Franchisees invest life-savings and then find that the only way to make a living is to underpay workers and commit fraud. They must return 57 percent of gross profits to 7-Eleven. They can hide nothing. Everything they sell, do or say is monitored by head office.

The ABC has also revealed the underpayment of workers at On the Run, a large Melbourne-based contractor with more than 120 stores and at Australia Post.

Union campaign

And where was Fair Work Australia in all of this? Fraud and theft on such a scale!

It takes the courage of several brave international students to bring about another exposure, more raids and then what? Will a couple of stores be checked where a few students spoke up?

UNITE, a trade union representing workers in fast food and retail outlets in Victoria, has been campaigning for workers at 7-Eleven since 2008.

The union is not registered under the Fair Work Act. It was set up in the retail and fast food sector where shortcomings were seen in term of workers’ rights in those sectors.

UNITE notes that since 2008 its campaigning has led to the Fair Work Ombudsman auditing dozens of 7-Eleven stores across the country.

While they found hundreds of thousands of dollars in underpayments UNITE explained that this was just the tip of the iceberg.

“In a face to face meeting UNITE organisers told Fair Work Ombudsman officials that a simple audit of the books would not show up the full extent of the underpayments taking place,” UNITE secretary, Anthony Main said.

“It was recommended that a comparison be done between the time and wages records and the cash register reconciliation forms. In most stores the employees log in and out of the cash register and a comparison with time sheets would show that people were not being paid for all the hours they worked.

“Similar requests for an audit were made in a face-to-face meeting with the then 7-Eleven Chief Financial Officer, David Ginsberg.” Ginsberg refused to act”, Main said.

With the additional publicity from the ABC and Fairfax and a law firm deciding to launch a class action against head office, 7-Eleven appears to have gone into damage control. The Fair Work Ombudsman is launching a new investigation into the company and 7-Eleven have agreed to an internal audit led by former head of the Australian Competition and Consumer Commission, Allan Fels.

The company has also announced it would buy out any stores that wish to cancel their franchise agreements. Head office, which previously denied any responsibility or knowledge, has announced it will fast track back-pay owed to workers.

Importance of trade unions

The situation at 7-Eleven drives home the importance of trade unions. Deunionisation and casualisation have made it easier for employers to act with impunity. Restrictions on the right of entry of trade union officials and the outlawing of almost all industrial action have fostered an environment facilitating super-exploitation and fraud on a massive scale.

Unions used to have the power to inspect time and wage books. It should be restored along with other trade union rights.

It is a reminder of the importance of our public broadcaster the ABC. The Fairfax media have also played a positive role in exposing the ongoing situation.

An amnesty is needed so that workers “breaking the law” are not punished. As it stands it is the students who face punishment not their bosses. So far Immigration Minister Peter Dutton and Employment Minister Eric Abetz are still turning a blind eye to entire rort.

However, pressure is mounting on Immigration Minister Peter Dutton to grant an amnesty for students working more than the maximum number of hours. There are currently more than one million visa workers in Australia. Instead of hounding trade unions, the government should set up a Royal Commission into the underpayment and blackmail of visa workers in Australia.

Next article – Editorial – Abbott isolated on climate change

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