The increasing responsibility of Franchisors


It is fair to say that the Protecting Vulnerable Workers Bill has been the elephant in the room in the franchising space. While its introduction is positive to help regulate the industry, it has also introduced confusion around how this will change the franchisor and franchisee relationship, and what steps will need to be taken to comply and reduce risk.

The Protecting Vulnerable Workers Bill seeks to amend the Fair Work Act and tighten the levels of responsibility between a franchisor and franchisee. The Act will be introducing larger penalties for serious violations of workplace laws and increased penalties for non-compliance in record-keeping. Where Franchisees in the past would have been responsible for violations of workplace laws, the new bill now means that Franchisors may also be deemed responsible for non-compliant practices where they knew or should have reasonably known the contraventions and failed to prevent these.

So where does this leave Franchisors? the key in short is to ensure compliance. And take it seriously.

Compliance starts with understanding the legislation in place. For example;  the Fair Work Act 2009 (Cth), Modern Awards, Occupational Health & Safety (OH&S) and Equal Employment Opportunity (EEO). To comply with these key pieces of legislation, it is critical that your franchisees:

  • are familiar with the Modern Award and minimum pay rates and entitlements that apply to their business (no risk of underpayments);
  • their record keeping meets Fair Work requirements;
  • contracts are compliant with the National Employment Standards and other regulations and employees are receiving the correct entitlements;
  • policies and procedures correctly outline the responsibilities and standards of behaviour expected within the business in relation to OH&S and EEO.

As each franchise network is different, the strategy to achieve compliance is also going to be different. However, the most common methods of ensuring compliance include conducting audits of each franchisee or a sample of franchisees, developing baseline documents and procedures to provide to each franchisee, arming Regional Franchise Managers with key knowledge to support franchisees with their HR, rolling out HR 101 training to arm franchisees with baseline knowledge around compliance all the way through to engaging with an outsourced HR provider to support your franchisee network.

To summarise, Franchisors may be in a vulnerable position since the Bill has been introduced.  It is therefore time to arm yourself with a strategy to begin tackling the task of ensuring compliance across your network. Have a chat to one of our HR Specialists about your specific situation and we can work with you to remain ahead of the 8 ball.

Members of the Franchise Council of Australia are able to contact the FCA HR Helpdesk for free HR advice 

Others can call HR Central on 130 717 721 for further information



HR Central

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