Caltex terminates 19 franchise agreements

Caltex has terminated agreements with 19 franchisees covering 43 sites for underpayment of employee entitlements and other significant workplace non-compliance issues.

Caltex has audited about 130 of its 1,900 retail sites. Following a report against a franchisee in 2015 which found evidence of significant underpayments and compliance failures. About 600 Caltex sites are operated by franchisees.

Caltex says "The responsible franchisees will remain liable for any underpayments".

However, Caltex has established a $20 million "assistance fund" to allow franchise employees to claim underpayments from 2015 onwards.

"Caltex will seek to recover the costs of its fund from franchisees responsible for underpayment of their employees' entitlements." says Caltex.

When franchisees are "exited" from the Caltex network, the company will also invite employees to come forward if they believe they have been underpaid.

Discovery of significant underpayments and compliance failures by Caltex franchisors comes at the same time the Turnbull Government has legislation before Federal Parliament to extend responsibility for deliberate and serious underpayments to franchisors and holding companies, and increase penalties for non-compliance 10X (up to $540,000) in the wake of the problems exposed at 7-Eleven, Pizza Hut and other franchise chains.

Read more about fines and penalties: Fair Work Act 2009 |  Recent prosecutions