Oil giant Caltex is facing a potential class action after revelations of widespread exploitation of workers over a number of years.

ACA Lawyers and California-based barrister Julian Hammond are investigating two potential class actions against the ASX listed group – one brought on behalf of workers, the other brought on behalf of franchisees.

Fairfax Media recently revealed Fair Work Ombudsman was investigating the systemic underpayment and exploitation of workers within Caltex’s network of more than 1800 service stations around Australia.

The media investigation also revealed that Caltex’s business model is potentially unfair to franchisees who often own stores that make little profit.

The ACA investigation will seek to determine whether a class action against Caltex should be begun to recover unpaid wages and employee entitlements.

ACA principal Steven Lewis, who is the former head of Slater & Gordon’s corporate law practice in NSW, said that while the investigation is in its early stages, his firm was calling on current and former workers of Caltex and Caltex franchisees to come forward.

“Caltex is a giant international business which has been accused of paying night shift workers in its services stations as little as $13 an hour, less than half the legal rate,” Mr Lewis said.

“All workers, regardless of where they work, have the right to be paid in accordance with the law and to work in a safe workplace,” Mr Lewis said.

“From what we are hearing this is not happening for many Caltex workers.”

A spokesman for Caltex said the company was not going to speculate on potential legal tactics of others.

The spokesman added the company was focused on investigating alleged franchisee underpayment of workers.

“Where there is workplace non-compliance, sanctions will be applied and may include termination,” the spokesman said.

“There is no excuse for not operating within the law and anyone who thinks otherwise will not be in business with Caltex Australia,” the spokesman said.

Caltex has recently doubled the number of stores it was investigating for wage fraud to 50 sites, including 27 stores linked to the Rana family.

To date, five franchise agreements covering 13 sites have been terminated, according to Caltex, though the company declined to comment on any specific franchisee.

“We took this action [of terminating franchisees] because it’s unacceptable for any franchisee to underpay their people.  It is unacceptable to me personally and to Caltex as an organisation,” Caltex chief executive Julian Segal said.

Caltex’s alleged wage issues within its franchisee network has led to speculation that it might look to offload its petrol station network. The spokesman for Caltex  declined on comment on “market rumours or speculation”.

“Caltex will continue to invest in our supply chain – including our retail network and infrastructure – and seek growth opportunities within our core fuels business,” the spokesman said.

Extracted from Canberra Times.