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.
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/