Caltex caned as servos slapped on pay

Fuel giant Caltex is likely to face "enforcement action" from the workplace watchdog as the entire industry was put on notice to clean up persistent issues of underpayment for vulnerable workers.

Fair Work Ombudsman Natalie James will use a speech to an industry event on Thursday to reprimand Caltex for not following the example of 7-Eleven by entering a formal arrangement with the Ombudsman to provide underpaid workers restitution.

In the wake of an expose by Fairfax Media, Caltex recently reported it was establishing a $20 million fund to repay underpaid workers engaged by its franchisees and conducting internal audits across its network.

"Unlike 7-Eleven, who entered into a formal Proactive Compliance Deed with the Fair Work Ombudsman setting out arrangements for restitution of workers, Caltex has not worked with us in developing its fund," Ms James said.

"It has not engaged with the regulator with respect to the criteria or conditions that apply to making payments to employees or reporting on which individuals or entities have been involved in breaches of the law.

"These self-initiated actions follow ongoing investigations by the Fair Work Ombudsman in response to concerns about worker underpayment in the Caltex service network."

Ms James warned Caltex she expected to be issuing a report on its compliance activity in the next few months.

"All I can say at this stage is don't be surprised if I am reporting on certain enforcement actions we have felt compelled to take in the public interest," she said.

Fair Work inspectors visited 25 Caltex sites across Australia last year and reviewed the employment records of nearly 200 workers.

Similar themes

More than a quarter whose pay records were examined were under the age of 24 and more than half had a working visa.

"As we continue to assess the findings of those site visits, I can report similar themes are emerging to 7-Eleven," Ms James says.

"Once again we have concerns about false and misleading records within a well-known franchise and one of the difficulties we have faced is that many of the employees are not willing to come forward and provide evidence."

Ms James said the need for Caltex to identify and rectify underpayments was not just a matter for the company and the stock exchange.

"The Fair Work Act sets penalties for breaches of the law and it is up to the regulator, the Fair Work Ombudsman, to consider whether court or some other form of enforcement action should be taken," she said.

Ms James said the federal parliament had responded to community concern about the systemic exploitation of vulnerable workers by lifting penalties for serious contraventions to more than half a million dollars and in certain circumstances extending franchisor liability for the underpayment of workers. The Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 passed both houses of Parliament on September 5.

Last year, the Fair Work Ombudsman received more than 100 requests for assistance from the fuel retailing industry.

About 20 per cent of workers who asked the Ombudsman for help were on a student or working holiday visa.

"Given temporary visa workers are only about 6 per cent of our labour market, they are disproportionately represented," Ms James said.

"Approximately a quarter were 25 years of age or younger - despite forming just 15 per cent of the national workforce."

These workers were over-represented in the fuel industry.

"This makes them red on the Fair Work Ombudsman's risk matrix," Ms James said.

"Because we often find that these people are vulnerable workers. English may not be their first language, this may be their first job, and so they probably have little knowledge of workplace laws and fear seeking the government's help when things go wrong. Their primary concern is often their visa status as opposed to their minimum rate of pay.

"Young workers feature strongly in our work - representing over a quarter of those coming to us for help and also nearly half of our court actions.

"These are precisely the sort of workers the government's new Protecting Vulnerable Workers Bill 2017 is designed to protect - by providing the Fair Work Ombudsman with better tools to respond to the exploitation of workers."

The story Caltex caned as servos slapped on pay first appeared on The Sydney Morning Herald.

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