FIVE CALTEX FRANCHISEES TERMINATED IN WAGE FRAUD INVESTIGATION

CALTEX is working alongside Fair Work Australia to investigate allegations of wage fraud in its franchisee network.

In a statement released today, the company (ASX: CTX) condemned unlawful activity and revealed its own investigations had resulted in the termination of five franchisees in the past 12 months.

There are around 1,900 Caltex-branded stores around Australia, and 650 of those are owned by 300 franchisees.

The company received a report about a franchisor in 2015, and subsequent investigations led to it calling in the Fair Work Ombudsman in November that year.

It has worked with the investigator over the past 12 months, as well as conducting its own investigations into 20 of its franchised sites, owned by eight franchisees, and is investigating a further 40 sites.

"We have terminated five franchisees over the past 12 months they represent a small fraction of our network of over 300 Caltex franchisees and unfairly damage the hard-earned reputation of the overwhelming majority who do the right thing by their employees," says Caltex.

The company has established an anonymous hotline for employees to call in case they are being treated illegally.

"There is no excuse for underpaying workers - if any further cases of fraudulent or deliberate misbehaviour are identified, whether through Caltex's independent investigation process or as a result of the FWO auditing over coming weeks, we will not hesitate to terminate our agreement with the franchisee involved."

As well as the franchised stores, 85 are owned and run by Caltex, while Woolworths owns around 500. Last month, Caltex made an undisclosed offer to buy the Woolworths stores.

Caltex is trading steady this morning at $30.350 per share.