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'Alarmingly high' non-compliance surfaces at national franchise

'Alarmingly high' non-compliance surfaces at national franchise

Troubled national franchise Caltex has a workplace non-compliance rate of 76 per cent, according to the Fair Work Ombudsman (FWO). 

Bookkeeper Katarina Taurian 08 March 2018

Investigations into Caltex began in 2016, after complaints surfaced about non-payment and underpayment of wages, cash payments made ‘off the books’, false records, and threats of termination or visa cancellation for any workers who complained.

During the compliance activity, FWO inspectors visited 25 retail fuel outlet sites operated by 23 Caltex franchisees in Brisbane, Sydney, Melbourne and Adelaide.

Six of these sites were found to be compliant with workplace laws, the rest were found to be non-compliant.

Inspectors also had concerns about the accuracy of the time and wage records provided by non-compliant franchisees, with legal action being taken against two franchisees for allegedly providing falsified records.

Across the non-compliant sites, inspectors found evidence of underpayment of wages, non-payment of overtime and penalty rates as well as record keeping and pay slip breaches.

“In light of this alarmingly high level of non-compliance across its retail fuel outlets, I am not surprised by Caltex’s announcement to the ASX last week that it will transition franchise sites to company operations,” FWO Natalie James said.

“FWO’s report shows Caltex Australia has been presiding over a non-compliant and unsustainable operating model.”

The Fair Work Ombudsman commenced proceedings against the former operator of the Caltex Five Dock service station in Sydney and has also initiated proceedings against the former franchisee of a number of other Caltex outlets in Sydney.

In both cases, the FWO alleges that the absence of accurate time and wage records prevented inspectors from completing audits and determining whether employees had received their lawful entitlements.

During the activity, the regulator issued nine infringement notices, 11 compliance notices and 16 formal cautions to non-compliant franchisees.

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'Alarmingly high' non-compliance surfaces at national franchise
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