7-Eleven’s pay woes

7-Eleven

Opinion 
There is no excuse for breaking the law. But if you create a situation where it is virtually impossible for people to not break the law, you must expect survival instincts to kick in.

Both 7-Eleven and now United Petroleum franchisees are currently pariahs, accused of underpaying their staff. They maintain that they cannot stay in business without paying below award wages.

The manufacturing industry “went west” years ago driven into obscurity by the unions. The result is that now we simply do not have a manufacturing industry to speak of.

Are retailers being forced into a similar quagmire where survival is becoming increasingly difficult for a host of reasons, wages being paramount?

Some employers have broken the law. Put another way, they are practicing civil disobedience. Some of their underpaid employees are moaning and groaning but the majority are not.

This is not unique to retail. There is a flourishing garment manufacturing industry – call it a cottage industry if it makes you feel better – where sweat shops are producing goods under our noses using underpaid labour.

There is not a retailer of consequence who will disagree that rent and wages are too high. Colleagues in the retail industry have scorned the notion that wages must come down. Or at least not go up. If this doesn’t happen, we will see more wage rorts taking place. And if we believe that the current outcry is confined to 7-Eleven and UP, we are being naive.

Do the government and the RBA understand that the economy is flat and that the dollar is at a historical low hitting 69 plus cents? What will this do for retail? Imports will continue to increase in price. Sure – exports will be helped and so will tourism but this hardly affects retail. Higher prices mean less sales.

One does not want to scaremonger but right now, retail is looking at a pretty ordinary future and the actions by 7-Eleven and UP are symptomatic of desperate people.

Stuart Bennie is a retail consultant at Impact Retailing www.impactretailing.com.au and can be contacted at stuart@impactretailing.com.au or 0414 631 702.

Comments

4 comments

  1. Brett Stevenson posted on September 4, 2015

    That article reads like a 'red rag to a bull' to me Stuart. I am always intrigued that whenever you see any public contention on wages, retail in particular, it usually involves media between the union organisations and the larger retail operators. The recent Business Summit is a good example of that. The BCA (top 100 CEO's or so) was a prime mover, as was the ACTU etc. But I did not see any mention of small businesses being present. Yet by far the biggest employers in the economy are small businesses. To put that into context ask any small retailer regarding wages what they have in common with the likes of Bernie Brooke's (Umbers now) at Myer, or Richard Goyder(Coles, Bunnings etc) or any of the other large retailers who receive very very large salaries. This is where the real challenge for retail lies in relation to wages. The big operators call the shots with the unions with the small retailer hardly in the discussion. They just cop the results. Hopefully Minister Bilson can see through the public noise to see where her real heartbeat of much business in Australia is when they talk about things like retail wages. Even a daily newsletter such as this one almost always focuses on the big names in retail. What about the smaller retailers who abound in every shopping precinct in Australia?

  2. Andrew Viles posted on September 4, 2015

    Civil disobedience? Really? So they thought they'd stand up to the "big guys" by stealing from the little guys who don't have the strength or the position to fight back?

  3. Peter posted on September 4, 2015

    Stuart I agree with everything you said in your comment, under paying employees is not just limited to a few retailers it is a reasonably common practice in the market place. In a lot of cases employees are willing to take less money so that they can just have a job that gives them a wage. Pressure is increasing immensely on businesses and the unions just gouge and make further demands putting more pressure on all businesses and they are certainly not blood free either when it comes to why manufacturing is moving off shore. Clearly the labor government is also out of touch as well wanting to add two more public holidays to Victoria, a totally ill conceived idea.

  4. Michael Hymer posted on September 4, 2015

    There are always two parties & in these cases maybe three parties. 1. The franchisee (owner) who doesn't want the add on cost of superannuation, work cover, maybe payroll tax. Who can't find employees to work odd or late shifts. The attitude of they won't be caught. That his friends are also doing. 2. The Franchisor. The computerization, the reviews they conduct, ratios they perform, normally control stock or cost of sales and provide financial reports to the respective stores. They must be ignoring their own stats. 3. The influx of 457visa workers & their mates who are willing to do the hours for any pay. The employees on centrelink. The second job & taxes. This episode is not confined to this industry only. Only the tip is being currently review. The government ca smell the dollars and it effect a lot more. This form of evasion or corruption involves the direct and indirect involvement of all parties.

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