Caltex responds to wage fraud claims

In response to allegations raised by Fairfax Media this week, Caltex Australia said it does not tolerate any unlawful activity – including deliberate underpayment of workers – anywhere in its network. 

Fairfax Media reported that some Caltex workers are being paid in cash and sleeping in beds at the back of the store when their shift ends. It also suggested that store owners were “tipped off” about planned unannounced audits by the Fair Work Ombudsman (FWO).

In a statement released yesterday, Caltex said it is not aware of any allegations raised against Caltex or any of its 85 company-operated sites. Similarly, Caltex requires its more than 300 franchisees to comply with the law.

“We conduct annual review and audit processes to ensure compliance with these laws and our franchise agreements,” the statement said. “Caltex also has a sustainable franchise business model, which is very different from other franchisors. The Caltex model is structured so that there is never a need for franchisees not to meet all wage obligations.”

Caltex says it conducted forensic independent investigations into its own franchisees to determine whether any of them were breaching Australian workplace laws, following reports regarding another franchisor in 2015.

For the past 12 months, Caltex has continued to provide regular updates to the FWO and also continued to communicate with franchisees to further remind them of their obligations to their employees, Caltex and the FWO.

Responding to the “tip-off” claims, Caltex said the FWO advised Caltex that it would be conducting random audits across its network and requested that Caltex communicate with each site operator.

“Caltex wrote to its franchisees and company stores to ensure their full cooperation with the auditing process should their site be inspected,” the statement said.

“Caltex was not provided any information about the specific sites the FWO would be auditing.”

Caltex has conducted forensic investigations into 20 franchised sites (eight franchisees) and is investigating more than 40 other sites. The company says this process will continue.

“We have terminated five franchisees over the past 12 months – they represent a small fraction of our network of over 300 Caltex franchisees and unfairly damage the hard-earned reputation of the overwhelming majority who do the right thing by their employees,” Caltex said.

“There is no excuse for underpaying workers – if any further cases of fraudulent or deliberate misbehaviour are identified, whether through Caltex’s independent investigation process or as a result of the FWO auditing over coming weeks, we will not hesitate to terminate our agreement with the franchisee involved.”

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