Commentary
CO-WRITTEN / PARTNER | Staff Reporter, Australia
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Vulnerable Worker Laws Coming to Franchise Sector

As the politicians return to Canberra for the opening of the 45th Parliament of Australia, we will see how the government intends to pursue its changes to the Fair Work Act (FWA) to protect vulnerable workers.

The new Senate comprises 30 Coalition, 26 Labour and 20 cross-bench senators, 9 of those Greens. It is very likely that a majority of Senators will be saying that the Government’s promised pre-election policy reforms don’t go far enough.

Range of Policy Positions

The Coalition’s policy featured 5 ways in which it would seek to deliver stronger protections for vulnerable workers -

  • increasing the penalties that apply to employers who underpay workers and who fail to keep proper employment records;
  • new offence provisions that capture franchisors and parent companies who fail to deal with exploitation by their franchisees; 

  • $20 million funding increase for the Fair Work Ombudsman; 

  • strengthening the powers of the Fair Work Ombudsman so that it can more effectively deal with employers who intentionally exploit workers by compelling them to produce information and answer questions; 

  • establishing a Migrant Workers Taskforce within the Fair Work Ombudsman, to be headed by Professor Alan Fels and Dr David Cousins.

Labor Party policy also proposed amendments to increase penalties and broaden the net with which to capture franchisors and their supply chains. Labour policy extended this further by proposing -

  • to reverse the onus of proof, meaning the franchisor would bear the burden of proving they could not have reasonably known or were not reasonably aware of the breaches;
  • amending the Franchising Code to impose an obligation on the franchisor to take reasonable steps to assist franchisees in compliance with labour standards under the Fair Work Act;
  • reform the Fair Work Act to enable employees or the Fair Work Ombudsman to pursue an underpayment claim against the franchisor;
  • amending the Act to enable a franchisor to pursue the franchisee for any amount that it pays out to an underpaid employee.

The Greens spokesperson on Industrial Relations, Adam Bandt, said last year when introducing his private members bill to protect vulnerable workers -

“It's time to treat labour laws as seriously as tax laws and beef up our enforcement agencies so everyone in Australia gets paid a legal wage.”

Featured in the bill was the ability for franchise workers to pursue “the company’s head office for the money and compensation they are owed.”

Accordingly we can expect the Greens to push for reform in the franchise sector and support a wider range of penalties.

Our View: It’s not “If”, but “When”

The Turnbull Government's workplace reform agenda will hopefully become clearer as Parliament commences its spring sitting in the first week of September.

As the Coalition’s policy positions on increasing penalties, key reforms in the franchise sector including increased franchisor accountability, and greater resourcing support for the Fair Work Ombudsman, have in- principle support from both the Labour & Greens, we can expect that this will be a positive catalyst for action in the short term.

ER Strategies will be following the progress of legislation as it is introduced and providing updates and commentary as the program unfolds.

How We Can Help

While protecting your franchise brand can be complicated, we are familiar with all the common challenges and headaches that both franchisors and franchisees face, and have experts to help you navigate the changes in legislation. 

We provide a range of “Brand Protection” services to help you prepare for the coming laws, including payroll audits, franchisee advice lines on correct wage rates and conditions, employee helplines, workplace health and safety programs and enterprise bargaining.

Contact us at ER Strategies on 1300 55 66 37, or visit https://erstrategies.com.au/franchisorprotection.

The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by QSR Media. The author was not remunerated for this article.

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