Caltex chief executive Julian Segal has set up a $20 million fund to compensate staff underpaid by franchisees. Credit:Pat Scala A Fairfax Media investigation this week revealed that the Fair Work Ombudsman, which enforces minimum pay rates across Australia, gave Caltex advanced warning that it was going to raid its service stations across the country. The Fair Work Ombudsman asked Caltex to inform franchisees of the imminent raids. Rana family focus Separate to the raids, the company said it had more than doubled the number of stores it was investigating for wage fraud to 50 sites, including 27 connected to the Rana family.

Fairfax Media can reveal that Aurangzieb Rana, who operates eight sites in South Australia, is under investigation. Caltex will 'work with our advertising agency to identify keywords that will ensure more appropriate placement for our ads'. Fairfax has obtained numerous timesheets and pay records that appear to show employees at Aurangzieb Rana's sites being paid as little as $13 dollars an hour, in cash. The part-time adult rate for service station workers who work behind the counter is $19.56 an hour, rising to $29.34 for the first three hours of overtime. On Sundays, the equivalent part-time adult rate starts at $29.34 and on public holidays it starts at $39.12. The casual rate is $25.65 an hour rising to $33.34 on weekends. Records appear to show workers were paid as little as $13 an hour in cash.

'We get nothing' Syed Aqeel worked for the Grange Caltex station operated by Aurangzieb Rana. He said he was paid $12 an hour when he started. The accounting student from Pakistan worked overnight shifts and if a customer drove away without paying for petrol, he says the franchisee made him pay for it. "We stand there for eight-hour and 10-hour shifts and we are getting nothing, and if someone drives off, you have to pay out your whole shift money," he said. We are disgusted and we will act on any unlawful behaviour, including termination of franchise agreements. Julian Segal, Caltex CEO Other workers also confirmed they had been underpaid but requested anonymity.

Aurangzieb Rana has denied any allegation of wage fraud. He said he was estranged from other members of his family and otherwise had no connection to companies within the Rana group. "This is totally incorrect and wrong ... We comply with the law in regards to wages," he said. Caltex has now begun investigations into all sites with known associations with Aurangzieb Rana and said it may terminate its franchise agreement with the Rana group if it finds "any breach of law or contract". Previous incident In 2012 another Rana family member, Rizwan Rana, who operates stations in NSW, was forced to pay 20 employees $18,367 in back pay by the Fair Work Ombudsman. A later audit in 2015 found minimal issues.

Mr Segal said he was unaware of the 2012 audit by the FWO or that workers had been underpaid. He said Fair Work hadn't told Caltex. He said franchisees were supposed to report any incidents to head office. Mr Segal said he "strongly" condemned wage fraud and was disgusted by some of the stories he had heard relating to intimidation in the Caltex franchise network. One worker was forced to withdraw his consent to have his photo published and story told when he received a late night visit threatening him not to speak up. The next day his family in Pakistan were visited by four armed men. He is now fearful of speaking out to authorities or the media in case the threats of violence against his family are carried out. He said, "In Pakistan, it costs $50 to kill someone. Life is cheap." Franchisees terminated

In the past year Caltex has investigated eight franchisees and terminated five of them, equivalent to 13 sites. Workers were not paid compensation. Bruce Rosengarten, an executive with Caltex, said the company had offered workers counselling and a job that paid correct wages. Eight were offered an ex gratia payment. "Some of these sites the staff didn't want to co-operate, under fear," he said. "These are some of the challenges we face, to weed out this behaviour," he said. Caltex refused to be drawn on whether it would consider setting up a compensation scheme for victims, similar to 7-Eleven, which has so far paid more than 800 workers $42 million. Loading On Thursday Caltex instructed franchisees to publicly display a hotline for workers to come forward and lodge a complaint if they had been underpaid.

Do you know more? Contact adele.ferguson@fairfaxmedia.com.au