In a major warning to all businesses operating in the fuel retail industry, the Fair Work Ombudsman (FWO) launched legal action against United Petroleum this week claiming that the company was obstructing an investigation into alleged wage underpayment within its network.

The issue was first triggered by an incidence of alleged wage underpayment by one of United’s Commission Agent businesses which commenced operations in mid-2017, only to have its agreement terminated by United Petroleum twelve months later.

Despite the FWO making numerous requests to United Petroleum for the provision of relevant documentation, United Petroleum has apparently failed to produce this documentation prompting the FWO to take legal action.

“This case is very significant in that the action is being taken against United Petroleum – not the Commission Agent business – as part of an investigation into whether the company knew, or could reasonably have been expected to know, that the Commission Agent was underpaying wages”, said ACAPMA CEO Mark McKenzie

“This is the first time that the FWO has attempted to enforce provisions of the Vulnerable Workers Act (2017) against a fuel marketer (or franchisee) as a result of alleged wage underpayment actions of a franchisee – in fact, it is the first case against a business in any industry”, Mark added.

The action comes after a separate investigation of wage underpayment in a dozen outlets within the 440 strong national retail network, allegedly found that 40% of workers were being underpaid.

The FWO reports that it has made numerous attempts to get United Petroleum to enter into a compliance partnership – where the business enters a voluntary undertaking with the FWO to identify issues and resolve them – and/or provide relevant documentation surrounding these incidents, but has failed to do so over the past 2 years.

“This will be a Test Case of the Vulnerable Workers Bill (2017) as the deliberations will likely establish the precedents for what constitutes a fuel marketer being ‘reasonably expected to know’ about wage underpayment within its own network”, said Mark.

What is also interesting, in the face of current Australian Government moves to make company directors criminally liable for very serious cases of wage fraud, is the very strong language being used by the FWO in the public statements that they have made on this case – including suggestions suggests that the behaviour of United Petroleum has been extraordinary in the face of the allegations that have been made to date.

“It is hard to understand United Petroleum’s response to the reasonable requests of the FWO in the face of what, appears to be a significant wage underpayment issue within its network”, said Mark

“For the record, ACAPMA has zero tolerance for any fuel retail businesses that knowingly breach wage and employment laws in Australia – or that fail to take reasonable action towards ensuring that they are complying with Australian employment and other laws”, said Mark.

“Failure to pay correct wages is not only immoral but, in a deeply competitive market where small differences in retail prices can have a marked impact on sales revenue, failure to pay correct wages provides offending businesses with an illegal competitive advantage over the vast majority of retail businesses that are doing the right thing”, concluded Mark

ACAPMA runs a national compliance programme, in partnership with a number of major fuel marketers, where fuel retail businesses can cost-effectively (i.e. $385 per site per year) have their employment and other legislative employment practices audited by ACAPMA – and assistance provided with the correction of any issues identified.

ACAPMA members wishing to take advantage of this service should email or call the ACAPMA Secretariat on 1300 160 270.