Fair Work Amendment
What Now?

The Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 (Act) came into force in October 2017 – increasing the exposure and legal responsibilities of franchisors to employees within their franchise system.

Franchisor responsibility:

Franchisors will be held responsible for workplace violations (such as wage under-payment) if the franchisor had a significant degree of influence or control over the franchisee.

Franchisors will be liable if they or an officer knew or could reasonably be expected to have known that:

  • contraventions would occur or were likely to occur; and
  • they had not taken reasonable steps to prevent the contravention.

Where the franchisor is held not to have taken reasonable steps to prevent the contraventions, liability will be imposed for the unpaid wages of the aggrieved employees and civil penalties of $63,000 for a corporation and $12,600 for an individual per contravention.

With thanks to: Chris Verebes  http://franchiselawmelbourne.org/

Here’s How Franchise Right Can Assist You

Given the potential liability for franchisors, we strongly suggest contacting your lawyer to update your franchise agreement to include training requirements and more comprehensive rights to audit. We also recommend and are experts in the following:

  • Update operations manuals to ensure that there is sufficient information for franchisees in relation to workplace obligations
  • Update your induction and HR training programs to include compliance modules
  • Ensure franchisees sign a statement to the effect that they have completed the required training
  • Ensure franchisees have an external help line or other resource from which they can obtain advice when necessary
  • Mandate that franchisees undertake refresher training in industrial relations and Fair Work obligations at regular intervals
  • Implement a compliance program which may include regular (random) field audits to ensure franchisees are meeting their employee payment obligations.

Contact us to see how we can help protect you.