The issues of wage fraud occurring across multiple industries last year and more recently alleged in the Caltex franchisee network are unacceptable.
Depriving employees of their entitlements is illegal and immoral.
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Do Caltex franchisees need wage fraud to survive?
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Investigations are being carried out as to whether Caltex franchises are financially viable and if this results in Caltex franchisees underpaying staff.
Caltex wage fraud: the system is broken
First it was 7-Eleven. Now, petrol station chain Caltex is under the spotlight for rampant wage fraud through out it's franchise network- as Fairfax's Adele Ferguson explains.
Franchisees engaging in such behaviour do not deserve to be part of the more than 2 million small businesses that nearly 5 million Australian workers rely on for employment.
My hard-working team and the vast majority of our valued franchisee partners at Caltex Australia are proud of the reputable small businesses they have each helped build. It is in the best interests of workers and the small businesses they rely on for their livelihoods that we identify and eliminate any fraudulent or exploitative operators.
The franchise model has served Australian business – large and small – very well for decades, providing economic returns and opportunities for franchisors and franchisees. Franchising is well-regulated by the ACCC and the Franchising Code has been updated over time to reflect community expectations.
Similarly workplace laws are tightly regulated by the Fair Work Ombudsman.
'No excuse'
Caltex has been and will continue to work with regulators to stamp out any illegal and unethical employment practices occurring in our network.
Despite this good regulation, the number of recent incidents relating to worker exploitation is undermining community confidence in franchising.
While there is no excuse for any employer to underpay or exploit their employees, franchisors like Caltex bear a responsibility to ensure our business continues to generate appropriate returns for all parties – that's shareholders, franchisees and employees.
Caltex has designed a franchise model that has long provided fair reward to our franchisees. However, in light of new information arising from our investigations, we have decided to take a more holistic look at our model and our network.
Model review
To that end I have initiated an independent review of our franchise model; starting with our franchise agreements through to the financial returns as well as the ongoing governance and compliance arrangements.
This goes beyond the forensic review of financial statements and wage records we have already conducted since the issues of wage fraud were first raised in 2015.
There is no excuse for depriving employees of their full entitlements.
The findings of this review will determine whether any change is made to how we operate.
One thing is not negotiable – there is no excuse for depriving employees of their full entitlements or not operating within workplace and immigration laws. Anyone who thinks otherwise will not be in business with Caltex Australia.
Julian Segal is managing director & chief executive of Caltex Australia
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