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Myer, 7-Eleven and Pizza Hut scandals show many workers don't get a fair go

The Guardian - 10 December - Australia is in danger of becoming a human rights backwater unless the government urgently adopts a national action plan for business

Today is International Human Rights day. It marks a watershed moment for the international community: the adoption of the Universal Declaration of Human Rights by the UN Human Rights Council in 1948.

Nearly 70 years later, where have we got to in Australia? Hardly a week passes without further media revelations of sordid labour scandals involving big Australian companies. Myer subcontractor Spotless, 7-Eleven and Pizza Hut feature prominently on the list of employers accused of cheating employees.

Human rights protections aimed at preventing labour exploitation are enshrined in international law but instances of corporate labour abuses are rife. We need a renewed focus on human rights if we are to break this pattern of labour exploitation by corporate Australia.

The issue

The exploitation of workers, both at home and overseas, is a common characteristic of our complex modern supply chains and addressing it has become a huge challenge for Australian business. Temporary migrant labourers are particularly vulnerable because of the insecurity of their residency status. Who wants to speak up when it could cost you your job and your visa?

Agriculture is a key sector in which unfair treatment flourishes. Agricultural goods produced in exploitative conditions all too easily end up in the supply systems of our supermarkets and other sectors of the food industry. Earlier this year, a Four Corners investigation revealed that exploited migrant labour from Asia and Europe was widely used on Australian farms to pick, pack and process a variety of fruit, vegetables and poultry products supplied to supermarket chains. Four Corners found that agricultural workers were underpaid, assaulted, abused verbally at work, threatened with visa withdrawal and, in the case of women, subjected to sexual harassment or propositioned for sexual favours in exchange for visas.

In October, Myer was accused of exploitation when the department store became embroiled in a labour scandal involving its subcontractor, Spotless, and the alleged cheating of cleaners working in Myer stores. The allegations involved under-payment and denial of employee entitlements through an illegal practice known as sham contracting (treating an employment relationship as an independent contracting arrangement to avoid employer obligations). Similarly, Pizza Hut has been accused of using sham contracts to cheat staff.

Labour exploitation is also common in convenience stores. The 7-Eleven franchise has come under scrutiny this year over a wage scam in which international student employees were routinely underpaid and threatened with deportation if they blew the whistle on their mistreatment. The scandal has caused the chain immense reputational damage, and its founder chairman and chief executive resigned. It also promises to be costly. In an attempt to appease its franchisees and encourage them to sign up to a revised business model, 7-Eleven’s head office has offered $25m towards paying out the avalanche of wage fraud claims. A franchisee class action to recover the shortfall continues to threaten and the eventual payout could be up to $300m.

In November, another convenience store chain, On The Run, one of South Australia’s largest employers and fastest growing businesses, also came under fire following reports its traineeship program was a sham designed to keep wages low. There are more, including Bakers Delight, Subway and Nando’s, which face similar allegations.

A national action plan for Australia

Human rights are protected by international law and standards. We need a renewed focus on this protective shield if we are to root out corporate labour abuse in Australia. In particular, we need to use the UN Guiding Principles on business and human rights.

International human rights law has traditionally focused on the role of governments in protecting and promoting human rights. In 2011, the UN Human Rights Council unanimously endorsed the UN Guiding Principles. This led to the distinct and direct responsibility of companies to respect human rights being articulated for the first time. For this reason, the UN Guiding Principles are unique and remarkable.

They provide a global standard for preventing and addressing adverse human rights impacts associated with business activity. They are a single, coherent set of principles that establish concrete steps for businesses to follow so that they avoid committing, or becoming complicit in, human rights abuses. This entails businesses knowing what their potentially adverse human rights impacts are and showing, via public disclosure, how they are addressing them, in addition to providing grievance mechanisms.

Since 2011, the UN Guiding Principles have been embraced with enthusiasm by governments, civil society and businesses the world over. To date, nine governments (including those of the United Kingdom, Denmark and Norway) have launched national action plans (NAPs) to integrate the principles into national law and policy. Countless others are either in the process of, or have committed to, developing one, among them the United States, Germany and Mexico.

The sectors in which migrant workers find employment are often under-regulated, and non-compliance with labour laws is common. An NAP process would force us to identify gaps in our current legislative structure and create an impetus for enhancing labour safeguards. Disappointingly, the Australian government has yet to announce its intention to start such a process, and we are in danger of becoming a human rights backwater.

Good business sense

There is a growing awareness in corporate Australia that respect for human rights makes good business sense. Avoiding damage to reputation is an important driver, particularly for consumer goods where brand counts for a lot and must remain beautiful. Companies are also recognising that additional benefits flow from having a healthy respect for human rights and avoiding abusive labour practices. A principled human rights strategy can aid the recruitment, retention and motivation of staff, facilitate company borrowing, attract new customers and enhance the appeal of a company to investors. It also keeps them out of court – an expensive and unpopular distraction for any board.

Smart players are taking matters into their own hands, but the challenges are big and acting alone can be a struggle to drive change. The government needs to wake up, take action and initiate an NAP. Australian businesses seek leadership, certainty and guidance on this. We need a plan to renew our focus on human rights and safeguard the rights of vulnerable groups in the labour market. We must be on track by the next International Human Rights Day. If not, Australia’s “fair go” will remain nothing more than a pipe dream for many.


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