7-Eleven: New chairman says nation has widespread problem
Adele Ferguson and Sarah Danckert
September 30, 2015
Scandal-plagued 7-Eleven’s newly minted chairman has declared the nation has a widespread problem with wage fraud and revealed that even his own daughter has been ripped off.
Speaking as 7-Eleven chairman and billionaire Russ Withers and chief executive Warren Wilmot resigned from their roles, Michael Smith told Fairfax Media that his company’s problems were the tip of the iceberg for wage exploitation of young and foreign workers in Australia and made a plea for an immigration amnesty for affected workers.
I can now walk around here and say ‘underpayment, underpayment, underpayment’.
“We have a problem in this country,” said Mr Smith who has been on the board of 7-Eleven since 1999 and became deputy chairman in August 2014.
7-Eleven chairman Russ Withers has resigned in the wake of the wage scandal. Photo: Wayne Taylor
“This has opened my eyes, I think we’re at the beginning of the revelation of something that is a very widespread problem.
“A week ago I could have walked around these city blocks ignorant, I can now walk around here and say “underpayment, underpayment, underpayment”.
Daughter ripped off
New 7-Eleven chairman Michael Smith says it’s time for change on wages. Photo: Supplied
Mr Smith said he believed the country was about to discover that “we will find very large numbers of young and foreign workers who are not paid properly”.
“My youngest daughter told me the other day three of her last four jobs didn’t pay her full wages,” he said.
On his first day as 7-Eleven chairman, Mr Smith said he supported an amnesty for workers at 7-Eleven. The Turnbull government refuses to countenance the idea.
“I think they should [have an amnesty] but I’d go further,” Mr Smith said, adding increasing the work limit for international students to more than 20 hours a week should be considered by the government as it had contributed “significantly” to the problem.
“Many of the people that have come here come from places where they are not well off and they don’t need to be well off, we’ve got a lot small businesses in this country and we’ve got a relatively high level of migration.”
Mr Smith drew an analogy to the American experience where the economy operates on low wages being paid to people who were often there illegally.
“And there’s been largely been an acceptance of it because if we know and deal with it we are going to re-price our economy,” he said.
Up until the wages scandal was revealed by Fairfax Media and Four Corners, Mr Smith was chairman of the prestigious Australian Institute of Company Directors. Mr Smith stood aside from this position to focus on 7-Eleven.
He said he had been “shocked” and “appalled” by revelations in Fairfax Media and Four Corners of systemic wage abuse and a flawed business model. The media investigation also found head office had been complicit in covering up the extent of the problem.
Mr Smith estimated the soon-to-be-announced changes to the company’s business model would cost “many millions of dollars”.
“As incredible as this might seem, I’d like to think I’m a careful, competent director who has taken a lot of care in this business with a high quality board and high quality advisers,” Mr Smith said.
“If I was on the outside, I’d find that incredible to believe and I don’t expect people to believe differently.”
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