On Monday night, the ABC’s Four Corners programme ran a story about potential breaches of employment law by some 7 Eleven “Franchisees”. This has been followed by news this morning about similar allegations amongst some United Petroleum franchisees.

7 Eleven responded swiftly to these allegations by announcing the establishment of an independent panel to handle any claims that arise from incorrect employment practices of its affiliated businesses. The company also announced that affected businesses would be given the opportunity to exit current arrangements if these businesses were not satisfied with the changed financial outcomes that would likely be realised from fully compliant operations.

United Petroleum was understood to be investigating the most recent allegations as this article was being written.

But the Four Corners story is not just significant for 7 Eleven, United Petroleum and their affected franchisees.

The story is relevant for the entire industry on two counts.

First, the story reinforced the fact that all people employed in the petrol convenience industry must be paid the minimum award rates applicable under the Vehicle Manufacturing, Repair, Services and Retail Award (2010). The latest version of the Award (and related pay tables for permanent and casual staff) can be sourced by visiting https://www.fwc.gov.au/documents/documents/modern_awards/award/ma000089/default.htm

“While the retail side of our industry strives to provide competitive pricing to motorists, low prices must not come at the cost of breaching employment law”, said ACAPMA CEO Mark McKenzie.

“As the peak representative body of the downstream petroleum industry in Australia, we will always defend the rights of business to recover their bona fide costs of operation and a reasonable profit margin. We will not, however, defend any business that does not operate in full compliance with employment law”, said Mark.

One of the key functions of ACAPMA is to provide member businesses with advice on employment practices, employment law and IR law. Any retail business that is unsure about their current level of compliance is encouraged to make contact with Elisha Radwanowski (ACAPMA’s Executive Manager, Employment & Training) on 1300 160 279 or email via employment@acapma.com.au.
The second issue relates to the nature of the legal arrangements that exist between fuel marketers/fuel resellers and their affiliated fuel retailers.

As most industry participants would be aware, the legal arrangements that operate between a fuel marketer/reseller and their fuel retailer are not typical franchisor/franchisee arrangements. Rather, these arrangements operate under the Oilcode (see https://www.comlaw.gov.au/Details/F2012C00467).

“These arrangements are more complex than typical franchise arrangements and give rise to a risk that the fuel marketer/fuel reseller may be considered liable for breaches of employment law – to say nothing of the fact that any high profile publicity of these instances risks a devaluation of the value of the marketing brand”, Mark said.

This weeks Four Corners programme suggests that it would be prudent for all fuel marketers/fuel resellers to revisit the nature of their existing retailer relationships and/or seek assurances that their affiliated retailers are operating in full compliance with all relevant laws.

“As the peak representative body of the industry, we encourage all downstream petroleum businesses to contact us if they have concerns about their current employment issues and/or contingent liability”, said Mark.

Businesses seeking advice on employment matters should contact ACAPMA on 1300 160 270 or via email us at employment@acapma.com.au.