The battle between Caltex and its franchisees is turning ugly with one prominent store owner accusing the oil giant of  victimising him for speaking out.

Caltex has returned fire, claiming that the franchisee is part of a group of agitators taking action only because they fear they will be hit with “imminent notices of breach” following adverse audits.

The stoush has deepened as the oil giant tried to root out wage fraud in its network after Fairfax revealed rampant underpayment by franchisees last year.

After the expose, Caltex pledged to audit its entire store network, in some cases asking franchisees to pay for it. As that has progressed Caltex has removed store owners and bought back their stores for a fraction of their market price, paying only for assets such as stock.

Franchisees claim an unprofitable franchisee model is to blame for any underpayment and have called on Caltex to make the system fairer.

Two weeks ago franchisees wearing their branded uniforms and waving placards protested in front of the corporate headquarters.

Store owner Sanjeev Sharma spoke for disgruntled Caltex franchisees on the day and claims he is now paying the price after he was hit with 13 breach notices two days after leading the protest.

“You know how the mafia and underworld operate, that’s how they operate.”

A spokeswoman for Caltex denied the accusation and said the only timeline behind the issuing of the breach notices was driven by the need to “conduct a thorough wage underpayment audit process”.

“Caltex Australia respects the right of people to protest. We do not, however condone underpayment or mistreatment of workers, and this is what our audit has been about,” she said.

Chief executive Julian Segal also weighed in and said his stance on wage fraud was “non-negotiable”.

“There is no excuse for wage or visa fraud,” he said.

Lawyer Tean Kerr, acting for Mr Sharma, believes Caltex’s timing shows “Mr Sharma has clearly been singled out by Caltex as a troublemaker”.

“It appears that Caltex is trying to send a message to franchisees to keep quiet otherwise they will similarly receive breach notices,” he said.

Mr Kerr said he is still “investigating the alleged breaches” and would not say whether he disputes the allegations. Mr Sharma, however, denied the allegations, when asked by Fairfax.

A Fairfax investigation last year found large franchisee networks were engaging in wage fraud. In some cases individual workers were being physically threatened, or having their families intimidated by armed men, to stop them from speaking out.

Following the allegations, Caltex pledged to stamp out wage fraud, and promised to terminate any store owner found to have engaged in the practice.

But it is facing resistance from a block of store owners scared by the prospect of losing their stores and angry at Caltex which, they believe, should be held accountable for a franchisee system that they claim encourages wage fraud.

Caltex has repeatedly rejected the idea underpayment is linked to the profitability of its franchise model. In November, it announced an independent review looking at the sustainability of its franchise model, while also promising to root out wage fraud.

Last month Mr Segal revealed the outcome of its review, using an opinion piece in Fairfax newspapers to say the Caltex model “allows franchisees to draw a wage, make a profit and pay employees in accordance with lawful wage rates”.

Mr Sharma disagreed and challenged Caltex to release the data underpinning the report. He has also been trying to raise awareness with authorities in Canberra.

“Nobody is preparing to listen to the Caltex franchisees who claim the model is faulty. Why is nobody listening to this? … We have been in the industry for 10 years, we know,” he said.

Extracted from Canberra Times.