Earlier this week, the Australian Financial Review released an article detailing the findings of an investigation by the Fair Work Ombudsman (FWO) into alleged wage non-compliance with workplace law amongst a select group of Caltex franchisees.

The release of this report prompted a series of news stories in the national media which quite rightly focussed on the wrongdoing by those franchisees involved and drew attention to the need for industry to get its act together to stamp out worker exploitation (and counter the competitive distortion created by market participants who were not paying the correct wages).

Unfortunately, some of the media stories focused on sensationalised headlines, drawing a longer bow than evidenced by the findings of the FWO.

“As it happens, ACAPMA staff were involved in dealer information days with two major networks this week and the questions posed by attendees at these events suggests that the recent media has created unnecessary anxiety amongst the majority of fuel businesses that are doing the right thing”, said ACAPMA CEO Mark McKenzie.

So, let’s look at the facts surrounding the media this week.

In a month-long investigation by the FWO, with simultaneous but independent audits being taken by Caltex in its own right, the FWO investigated 25 suspicious sites within Caltex’s 433 strong franchise site network.

In other words, the FWO work had identified a group of franchisees (i.e. Commission Agents) who they suspected of wage underpayment and then initiated a more detailed investigation of this group – which constituted about 6% of the Caltex network.

“It is important to understand that this 6% sample was not just a ‘random sample’ but rather, was a group that the FWO had targeted as a result of complaints received by workers within the network of 433”, said Mark.

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.

The results of this targeted investigation by FWO revealed that approximately 3/4 of these 25 franchise sites were guilty of breaches in workplace law – which equates to just 4% of the Caltex franchise site network and not 76% as stated in numerous media reports.

Given the targeted nature of the FWO investigation, suggestions that three-quarters of all Caltex sites are non-compliant is a very long bow to draw.

“To suggest that the extent of non-compliance is at 4% across the entire industry at such an early stage in this ongoing investigation is, however, likely to be just as wrong as media reports suggesting that it is as high as 76%”, said Mark.

“Ultimately, the real extent of non-compliance with workplace law within this particular network is a matter for both Caltex and the FWO and will only be known once their collective work has been completed”, said Mark.

Importantly, Caltex has publicly stated that their audit program is working and they are committed to continue. Additionally, as the Caltex audit program moves to sites where there have been less whistle-blower reports, the number of sites where evidence of workplace breaches have occurred is declining.

To be clear, however, ACAPMA maintains that no level of wage underpayment is acceptable and is worth noting that the Caltex CEO, Julian Segal, has made similar public statements on numerous occasions in the past.

The intensity of this latest media interest indicates that our industry will continue to be closely scrutinised in terms of our collective compliance with Australian workplace law.

“There is an absolute obligation on every fuel retail business owner in the country to ensure that their wage and employment practices are fully compliant with the law”, said Mark.

In an effort to support the early achievement of this active compliance objective, ACAPMA launched its’ Compliance Partner Programme (CPP) last year.

This programme provides a practical way of helping business owners fully understand their employment obligations and ensure that they are compliant with the law. The operation of this fee-for-service offering can be summarised as follows:

  1. A member business (or network operator) contacts ACAPMA to enrol in the CPP process, including the conduct of annual employment audits
  2. ACAPMA requests detailed information from the business and copies of specific documentation to be provided for review
  3. ACAPMA conducts a desktop audit of supplied documentation and prepares a draft assessment identifying any gaps in current practices
  4. ACAPMA then organises a meeting (typically by phone) to discuss the nature of any compliance gaps that have been identified. Often these relate to missing documents and policies and ACAPMA assists by providing generic documents that can be adopted by the business.
  5. The member business is then given a short-period (two weeks or so) to implement improved practices and address key gaps identified.
  6. ACAPMA then conducts a follow-up review and, on the basis of this second review, issues a certificate of audit completion (which identifies any issues that will need to be addressed in the future).

“Essentially, the CPP is a confidential service designed to give provide business owners with guidance in respect of their current wage and employment practices”, said Mark.

“We are not the ‘employment policemen’ – that is the role of the FWO and why we have been discussing the structure and scope of the CPP with the Ombudsman”, said Mark.

“Rather, our role is to work with member businesses to identify any issues of concern and then provide guidance on how these issues can be quickly and effectively resolved”, Mark continued.

“If we are doing our job correctly, this service will complement the work of the FWO and the wider industry in seeking to eliminate non-compliance in our industry as soon as possible”, said Mark.

ACAPMA’s CPP programme has recently been embraced by three national fuel retailers and several mid-cap distributor-retail businesses and small retail businesses. Enquiries about participation in this Programme can be made by contacting the ACAPMA Secretariat on 1300 160 270 (or by emailing communications@acapma.com.au).