Hrm523 Advanced Studies In Industrial Assessment Answers

Answer

Introduction

Industrial relation defines the relationship between the employers and employees of an industry, which is defined by industrial laws. This study will provide a summary of 7-Eleven inquiry, which has been done by Fair Work Ombudsman. Moreover, the study will discuss the major findings in the inquiry. The study will also critical analyze the gaps in the Australian ER system, which the inquiry of the Fair Work Ombudsman has revealed in terms of the role of unions and states. Furthermore, the study will also discuss the implications of this inquiry towards regulating ER in Australia, which is not only for 7-Eleven, but also all kinds of organizations.

Summary of 7-Eleven Inquiry

Reason for Inquiry

Fair Work Ombudsman has conducted an inquiry towards looking into the employment practices of 7-Eleven, where the organization seems to make non-compliance with the employment relation (ER) laws of Australia. This inquiry was conducted with the allegations of systematic non-compliance of federal workplace laws. Fair Work Ombudsman had demonstrated significant engagement in this inquiry from 2009-2014 and expected to observe significant improvement over the compliance (Fair Work Ombudsman, 2016). Based on the continuing concern and intelligence, Fair Work Ombudsman began strategic inquiry into the sample of 7-Eleven stores across NSW, Victoria and Queensland. This inquiry had been performed over 20 stores of 7-Eleven across Australia. The intension behind such inquiry was to further the opportunities towards indentifying the root causes of non-compliance so that the statutory agency can approach 7-Elven for addressing the issues. The statutory agency also conducted this inquiry for providing support to the franchisors through advising them in ensuring high level of compliance with employee relation. Moreover, the purpose of this inquiry is to identify the ethical and legal issues associated with the 7-Eeven employment practices (Fair Work Ombudsman, 2016). Such inquiry also forces 7-Eleven towards complying with the employment relation practices.

Major Findings in Inquiry

Fair Work Ombudsman has initiated legal proceedings against 7-Eleven retail store of Australia, which allegedly underpaid 2 foreign employees approximately $50000. For more than 7 years, the organization has been consistently alleged with the underpayment to the migrant employees. According to Ferguson and Danckert, (2016), 7-Eleven has been alleged with the underpayment to the migrant employees having visa holders, where the workers are often paid with a rate of $10 an hour. However, the employees were actually entitled to get paid normal hourly rates of more $22 an hour and up to $29.27 an hour for some public holidays, weekend and overtime shifts. On the other hand, Fair Work Ombudsman, (2016) opined that 7-Eleven has also been alleged with falsifying the payroll of the employees. The employees have complained that the wage structure demonstrated in the payroll is quite higher than the amount actually paid to them. Moreover, half the working hours has been recorded in the payroll. Furthermore, Karp, (2016) opined that 7-Eleven is also forcing the employees work for longer hours, which is quite longer than the normal working hours. The organization is mostly mistreating the migrant workers among them some are the students from the foreign countries.

According to Tham, (2016), most of the employees in 7-Eleven stores are typically male international students having their visas with them. Such international visa holder students are mostly affected by the unethical employment practices of 7-Eleven. Moreover, the organization is deliberately exploiting such migrant workers, which is severely hampering the health condition of s457 visa holders and education life of foreign students visa holders. On the other hand, ABC News, (2015) opined that most of the migrant employees are from non-English speaking backgrounds specifically from Pakistan, China and India. Generally, such employees have very or no knowledge regarding the employment relation of Australia. Therefore, the organization can make them stupid and force them to work more than the normal working hours.

International students are normally allowed to work up to 40 hours a fortnight, while they are studying. However, the organization is forcing many of the migrant students to work up to 50 hours a week. It is actually hampering their physical condition due to longer working hours. Furthermore, the students are not also allowed to complain such unethical organizational behavior with any statutory and legal authorities. Moreover, 7-Elevn is threatening the student visa holder with the fear of cancelation of their visas, if they complain the unethical behavior with any statutory bodies (Ferguson & Danckert, 2016). The organization is threatening the student visa holders to the fear that they would contact the Department of Immigration and Border Protection (DIBP) regarding the employees breaching the Visa conditions. Such threatening is actually creating huge mental pressure on the students, which is actually hampering their educational life.

Terry-Armstrong, (2016) pointed out that 7-Eleven has also been alleged with cash-back scam, where the migrant employees are initially paid with adequate reward, but later on, they are forced to pay back some amount of their compensation to the organization. It is leading to financial crisis for the migrant employees. However, Abc.net.au, (2015) opined that the head office of 7-Eleven is completely indifferent of such activities in Australian franchisees and they are even unwilling to address the employment issues of such 7-Eleven retail stores.

Gaps in Australian ER system

Gaps in Minimum Wage

The minimum wage act of Australia fixes minimum rates of wages for certain employments. According to Fair Work Ombudsman, (2017), the minimum wage of Victoria, NSW and Queensland have been lifted by 3.3%, which is up by $18.29 an hour. The employers are cannot undercut the minimum wages of the employees, even the employees are willing to accept the lower rate of wages. However, in case of 7-Eleven, the employers of Australian franchisees are undercutting the minimum wage rate of the employees. Moreover, the employers are paying $10 an hour to the migrant employees of the organization. In this way, the organization is actually breaching the employment laws of the states. Moreover, the Australian Industrial Relations Commission (AIRC) is incapable of bridging the gaps in the employment laws. Furthermore, Hotline and Hotline, (2016) opined that employment relation legislation also suggests proper record of working time and ware rate of the employees. However, 7-Eleven is falsifying their payroll record for the employee, which is also breaching the minimum wage laws of the country.

Gaps in Working Arrangement

Fair work act of Australia has set standard working hours for the employees. According to Awu.net.au, (2017), employment relation act of NSW, Victoria and Queensland has set standard working hours for the employees, where the period an employee is required to work should not exceed 40 hours in a week. However, 7-Eleven is forcing the migrant employees towards working more than 40 hours in a week. Moreover, the organization is forcing the migrant employees to work more than 50 hours in a week. In this way, the organization is creating gaps with the standard employment relation regulations of Australia. On the other hand, Australia.gov.au, (2017) opined that work health and safety act of Australian employment relation encourage the unions and employers towards promoting improvement in the working arrangement. However, 7-Eleven is incapable of providing positive working arrangement to the migrant employees. The organization is forcing the employees to work for longer hours without paying them adequately. The labor union is incapable of resolving such employment issues. Therefore, such employment practices are actually breaching with the Australian employment relation.

Gaps in Working Rules for International Students

As per the Visa rules of international students in Australia, there are certain working rule and regulation for the students during their school session. According to (Border.gov.au, 2017), International students in Australia are only allowed to work for up to 20 hour a week on their valid student visa, while they are in school session. However, 7-Eleven is forcing the migrant employees towards working more than 50 hours per week. In this way, the organization is actually breaching the employment laws for the student visa holders. On the other hand, NewsComAu, (2013) opined that the student visa holders do not have any limit on their working hours during their school vacations. However, the employers in this case are liable to pay extra money to the migrant students for their overtime work. However, in this case, the employers of 7-Eleven are not providing additional compensation to the migrant employees. Moreover, the organization also has wage scam policy, where the employees are initially paid for their extra contribution, but later on, they are to pay back some amount of their compensation the organization. It is also against the employment laws of various Australian states like Victoria, NSW and Queensland.

Gaps in Human Right Act

As per Humanrights.gov.au, (2017), Human Right Act of Australian states define the ability of the people towards expressing their issues. Such rights can also be applied in the employment practices in the organization. Moreover, the employees should be allowed to express their issues with an expectation to resolve those issues. However, in case of 7-Eleven, the employers are threatening the student visa holders with the fear of cancelation of their Visas, if they complain about the unethical employment practices of the organization to any statutory body. Moreover, the employers are forcing the migrant students to work more than their normal working hours. On the other hand, they are also threatening the students with their Visa cancelation on breaching their visa condition so that they cannot complain about their long working hours. In this way, 7-Eleven is actually breaching with the employment relation laws of Australia.

Implications of Inquiry

Compliance with Fair Work Ombudsman

The inquiry suggests that 7-Eleven should enter into the compliance partnership with Fair Work Ombudsman. Such partnership is not just applicable on 7-Eleven; rather such compliance is applicable on all kinds of organizations. Moreover, the compliance partnership with Fair Work Ombudsman ensures that organizations maintain all their moral and ethical responsibilities. Furthermore, the compliance partnership with this statutory agency ensures safe, fair and equal opportunities for all the employees (Fair Work Ombudsman, 2016). Therefore, organizations can better comply with employment relation legislation through the compliance partnership with Fair Work Ombudsman.

Effective Governance Arrangement

The inquiry of Fair Work Ombudsman also suggests implementation of effective governance arrangement within the workplace. 7-Eleven can better ensure effective employment relation within the workplace through effective governance arrangement. Such arrangement ensures effective employment relation only for 7-Eleven, but also for all kinds of organizations. Moreover, effective governance arrangement ensures compliance with all federal workplace laws for all types or organization. This workplace arrangement would ensure that the employees have got their equal right and fair benefits from their organizations (Townsend et al., 2014). Furthermore, such governance arrangement would also ensure fair working time and fair payment to the employees. In this way, organization will be able to maintain the employee relation properly.

Reviewing Operating Model 

The inquiry conducted by the Fair Work Ombudsman, every organization should regularly review the operating model of the organization. Such reviewing of operating model would ensure financial viability and legal exposure of franchisee arrangements. Furthermore, it would engage external and independent parties for self-auditing the compliance of the organizations with the federal workplace legislation. Therefore, reviewing of operating model would ensure proper employment relation of the organization. In this way, the organizations can minimize the gaps between the employment practices and federal employment legislations (McBride et al., 2015). Moreover, reviewing operating model would better ensure proper employment relation in all kinds of organizations.

Setting Up Staff Consultative Forum

Effective employment relation depends on the agreed terms and conditions between the employers and employees. However, there should be an intermediate for minimizing the gaps between the employers and employees. Moreover, the employees should have a representative body for raising their concern to the employers and getting solution to their issues immediately. The inquiry of Fair Work Ombudsman suggests that every organization should set up a staff consultative forum having employee representatives from across the networks, which are separate from franchisees (Fair Work Ombudsman, 2017). Such representatives will be responsible for raising the concern of the employees to the employers of organizations for performing effective collective bargaining. In this way, the employees will be able to get their right values and benefits and the organizations will be better able to comply with the federal workplace legislation.

Conclusion

While concluding the study, it can be said that Fair Work Ombudsman has conducted an inquiry on 7-Eleven, as it has demonstrated non-compliance with the federal workplace legislation. It has been found that 7-Eleven is constantly exploiting its migrant employees. Moreover, the organization has been alleged with underpayment to the migrant employees. Furthermore, 7-Eleven is also falsifying the payroll of the employees. Apart from that, the employers of the organization are also forcing the employees to work more than the normal working hours. In this way, the organization is creating gaps with the employment relation act of Australia. Moreover, the employment relation act of Australia has set normal hour for the employees, which is 40 hours per week. However, 7-Eleven is forcing the migrant student visa holders and s457 visa holders to work more than 50 hours per week. In this way, the organization is creating gaps with the working rules for the international students.

The international students are allowed to work for only 20 hours per week. However, the organization is forcing them to work more than the legal working hours. Furthermore, the organization is also creating gaps with the Human Right Act, where it is threatening the migrant students with the fear of visa cancelation, if they complain about the unethical organizational practice. The inquiry of Fair Work Ombudsman implies that every organization should make Compliance with Fair Work Ombudsman for effective employment relation.

References

ABC News. (2015). ABC News. Retrieved 6 September 2017, from https://www.abc.net.au/news/2015-09-10/7-eleven-founder-flags-changes-to-business-model/6765940

Abc.net.au. (2015). Abc.net.au. Retrieved 6 September 2017, from https://www.abc.net.au/4corners/stories/2015/08/30/4301164.htm

Australia.gov.au. (2017). Australia.gov.au. Retrieved 6 September 2017, from https://www.australia.gov.au/information-and-services/jobs-and-workplace/whs-workplace-health-and-safety

Awu.net.au. (2017). Awu.net.au. Retrieved 6 September 2017, from https://www.awu.net.au/employment-legislation

Border.gov.au. (2017). Border.gov.au. Retrieved 6 September 2017, from https://www.border.gov.au/Trav/Stud/More/Work-conditions-for-Student-visa-holders

Fair Work Ombudsman. (2016). Welcome to the Fair Work Ombudsman website. [online] Available at: https://www.fairwork.gov.au/about-us/news-and-media-releases/2016-media-releases/april-2016/20160409-7-eleven-presser [Accessed 6 Sep. 2017].

Fair Work Ombudsman. (2017). Fair Work Ombudsman. Retrieved 6 September 2017, from https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/fact-sheets/minimum-workplace-entitlements/minimum-wages

Fair Work Ombudsman. (2017). Fair Work Ombudsman. Retrieved 6 September 2017, from https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/best-practice-guides/consultation-and-cooperation-in-the-workplace

Ferguson, A., & Danckert, S. (2016). 7-Eleven's wage fraud sparks $170 billion blow back. The Sydney Morning Herald. Retrieved 6 September 2017, from https://www.smh.com.au/business/retail/7elevens-wage-fraud-sparks-170-billion-blow-back-20160826-gr264h.html

Ferguson, A., & Danckert, S. (2016). An inconvenient year for 7-Eleven. The Sydney Morning Herald. Retrieved 6 September 2017, from https://www.smh.com.au/business/retail/an-inconvenient-year-for-7eleven-20160826-gr1xff.html

Hotline, J., & Hotline, E. (2016). Australia's National Workplace Relations System. Department of Employment. Retrieved 6 September 2017, from https://www.employment.gov.au/australias-national-workplace-relations-system

Humanrights.gov.au. (2017). Humanrights.gov.au. Retrieved 6 September 2017, from https://www.humanrights.gov.au/our-work/legal/legislation

Karp, P. (2016). 7-Eleven workers beaten and forced to pay back wages, Senate inquiry hears. the Guardian. Retrieved 6 September 2017, from https://www.theguardian.com/australia-news/2016/feb/05/7-eleven-workers-beaten-and-forced-to-pay-back-wages-senate-inquiry-hears

McBride, A., Hebson, G., & Holgate, J. (2015). Intersectionality: are we taking enough notice in the field of work and employment relations?. Work, employment and society, 29(2), 331-341.

NewsComAu. (2013). NewsComAu. Retrieved 6 September 2017, from https://www.news.com.au/national/work-rules-relaxed-for-foreign-students/news-story/

Terry-Armstrong, N. (2016). 7-Eleven: A case study of a flawed franchise model. Busidate, 24(2), 8.

Tham, J. (2016). 7-Eleven is the tip of the iceberg in worker exploitation. So who's turning a blind eye? | Joo-Cheong Tham. the Guardian. Retrieved 6 September 2017, from https://www.theguardian.com/commentisfree/2016/may/12/7-eleven-is-the-tip-of-the-iceberg-in-worker-exploitation-so-whos-turning-a-blind-eye

Townsend, K., Wilkinson, A., & Burgess, J. (2014). Routes to partial success: Collaborative employment relations and employee engagement. The International Journal of Human Resource Management, 25(6), 915-930.