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The trouble with Caltex…

Around 100 fuel outlet franchisees marched from Martin Place to the Caltex Australia headquarters on Market St in Sydney today, in protest against what they claim is unfair treatment.

The march through Martin Place was a peaceful affair, but the worry and concern in these families was palpable. Image: Ben Hagemann

Bearing placards with slogans like “Stop stealing our stores”, and wearing their Starmart uniforms as a show of solidarity, the protesters stood in front of the Allianz Centre, chanting: “Cal-tex! Shame, shame!”

The protest didn’t last long, with the crowd dispersed within the hour, however the message was clear: They are not happy.

Speaking with one of the leaders of the protest, who wished to remain nameless for fear of retribution from the petrochemical retailing giant, I was told that Caltex wanted to charge each franchisee close to $10,000 for the privilege of being audited by contracted Ernst and Young. And why? To find out if they have been underpaying their workers.

“We’re very upset,” the leader told me.

“We want them to give us a fair go, hear our grievances and treat us with some respect, fairly, not under the threat of sites being terminated.” He looked genuinely worried.

I asked: “The $10,000 you say they want to charge, that’s for auditing by Ernst and Young, is that right?”

“Yes,” he said. “To find any mistakes.”

“They’re treating us all the same way, even though it’s a small minority of people who may have done the wrong thing, which we would like to clear up as much as Caltex, because we’ve invested a lot in terms of our energy, and our financials, and we’re invested in the brand because we believe in it.”

“We would like this all sorted out, to move on with our lives, and not have to be financially worse off. We are small businesses: $10,000 is a lot of money, and that $10,000 is only a start.”

It costs around $300,000 to $400,000 to invest in a single Caltex site, he told me, and that’s without trying to buy one already operating in the market.

“The charge will come once the audit is done, and we have a looming termination on the 22nd of March if we don’t comply with the audit, if we don’t submit our documents, they have threatened us in writing that they will terminate.”

“We are not comfortable about how we’ve been treated so far. They don’t want to talk to us, didn’t want to give people extensions, and we were slapped with [this] audit on the 23rd of December.”

During the entire protest, no representative of Caltex Australia came to meet the crowd. When asked why, the company responded: “On a daily basis we are, and will continue to visit site, meet with and talk to franchisees about their issues and concerns. Caltex Australia will meet with any franchisee who would like to do so”.

In the wake of the 7-Eleven scandal, it’s clear that Caltex is eager to avoid the risk of damage to brand that the practice of staff underpayment can cause. But are they too eager?

So how many did not want to submit their documents? “You see them all here.” He waved his arm towards the crowd. “And there are more people. It’s a very large number who are very upset, and this is all of a sudden. I’ve been in franchise for seven years, and I’ve worked for Caltex before and there weren’t audits. Now all of a sudden this has come in, but we believe there is a better way of doing it. We’re not saying we don’t want to be a party to it: We want to as much as Caltex does because we want to get rid of these [issues], but there is a better way, a more cost effective way of conducting these audits.”

Caltex Australia, on the other hand, says none of this is true. A spokesperson who insisted all correspondence be conducted by email rather than discussed over the phone answered my questions about the $10,000 audit charge with the following line: “This information is false and misleading.”

Another spokesperson came back to me when I suggested that this did not make the issue very clear: “Caltex is not charging each of our franchisees for an audit.”

And so, we whittle the stick of truth. The hour ticking past the close of business, it gets tiresome to continue the back and forth, the rigmarole, the stuff of PR that we journalists find hardest to bear.

What Caltex would reveal was that 155 site audits are currently underway, and by June, 200 will have been completed, with plans to audit the some 600 outlets in Australia. They do not say how many outlets have been accused of underpayment so far, explaining that “Caltex is still working with franchisees to assess the nature and extent of any breaches of workplace obligations and determine how any breaches are to be remedied or otherwise dealt with”.

.A chat with Landers & Rogers partner Tean Kerr, who represents 40 Caltex franchisees, was a little more enlightening.

It is understood that the matter of the $10,000 was raised in state franchise meetings, when the audit was discussed. This figure has never been put into writing, and is only an approximate figure. Kerr says, for the amount of information Caltex is demanding from the franchisees, and that is ALL documentation going to back to the start of each franchise (in some cases more than 10 years of records), $10,000 would probably come nowhere near the cost of Ernst and Young conducting an audit of a single business.

What is much more troubling however, are the allegations of encouragement to break Australian workplace laws. Kerr conveyed that many franchisees have told him the same thing: When franchisees complain to Caltex’s business managers that they can’t afford to run their business, that their revenue simply does not cover the costs, they have been told something quite disturbing… that they need to drop their labour costs. It’s never explicitly stated, Kerr told me, but there’s no doubt that a number of franchisees believe they have been encouraged to pay their staff less, and all at the request of Caltex business managers. So far, this is all hearsay, but proof will be in the pudding.

It would seem this story is not about to simmer down, any time soon.


Please click here for video of the Caltex protest group’s media address, and full transcript.


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