Print Friendly Version Convert to PDF Convert to RTF
September 08, 2015

Judy Phair, APR, Fellow PRSA, Comments on Wall Street Journal's "Crisis of the Week"

Recently 7-Eleven Stores Pty Ltd. came under fire after reports that some of its franchise owners weren't giving their employees their fair share of salary and benefits. According to The Wall Street Journal, the company released statments saying that they would not tolerate any owners who failed to follow rules, they would assist owners who are unsure about the laws and they would form an independent panel to look into the allegations. 

The Wall Street Journal spoke with Judy Phair, APR, Fellow PRSA, president of PhairAdvantage Communications, LLC and chair of PRSA's MBA Business School Committee, for her thoughts on 7-Eleven's handling of this crisis. She stated: 
“Smart business leaders know the difference between accepting responsibility and liability. They know that assuming responsibility and acting accordingly are both the ethical and smart responses to a crisis. However, 7-Eleven Stores Ltd. has spent more time distancing itself from allegations of illegal labor practices by some franchisees than working to solve the problem and regain consumer confidence.

“Since Australia’s Fair Work Ombudsman filed charges against a 7-Eleven franchise owner for allegedly underpaying workers and fabricating false records to hide it, 7-Eleven has made several weak–and even evasive–statements. In its first public announcement on Aug. 29, the company expressed ‘extreme’ disappointment that some franchisees ‘have chosen not to meet their obligation as employers.’ Missing in non-action were:
  •          An apology for any illegalities by its franchisees.
  •          A specific plan of action to ensure such violations would not recur.
“Communicating with franchise owners the same day, 7-Eleven said it did not condone actions by any franchisee ‘who does not meet their employee obligations.’ It urged those with questions about pay or conditions to contact the Fair Work Ombudsman—not 7-Eleven management. Rather than helping its franchise owners by answering questions and offering support, 7-Eleven chose to push the issue away from itself and to the Ombudsman.
“Two days later, 7-Eleven Australia backtracked a bit, expressing support for the Ombudsman’s prosecution of the errant franchisee and announcing that it would set up an independent panel to receive and review claims of underpayment by franchisees. Still, the company brushed aside assertions that its franchise model was ‘financially unviable,’ driving some franchisees to deceptive practices to stay solvent. It concluded that the company ‘cannot allow the few to taint the achievements of the many.’
“It’s time for 7-Eleven to change a communications tone varying between arrogance and cluelessness. It needs new words and actions that accept responsibility and seek to correct past mistakes, create solutions, and monitor future practices.”

To read the full article, visit The Wall Street Journal's Risk & Compliance Journal website. (Please note, you must be a subscriber to view the article) 
< back

You must be logged in to view this item.

This area is reserved for members of the news media. If you qualify, please update your user profile and check the box marked "Check here to register as an accredited member of the news media". Please include any notes in the "Supporting information for media credentials" box. We will notify you of your status via e-mail in one business day.