, Australia

La Porchetta underpayments expose brand risk

By Steve Champion

Recent press exposure regarding allegations of significant underpayments to staff have once again displayed the serious risk to brand equity that can result from franchisees not complying with Australia’s industrial awards and wages system.

It has been has been reported that a La Porchetta franchisee believed he could ‘top up’ their sub-minimum wage pay packets by providing pizza and soft drinks. The case will appear in the Federal Circuit Court in Melbourne for a directions hearing on September 18 later this year.

QSR Media has previously reported that many sector employers are confused on their employment obligations, due to transition arrangements towards new awards.

BRW in its online news says the story highlights the risks associated with operating a franchise business model with numerous owner-operators, and the franchisor’s inability to monitor every individual franchisee’s actions.

The Fair Work Ombudsman has previously commented in relation to the Bakers Delight franchise chain disciplining a franchisee for alleged breaches of workplace laws, that franchisors need to play a greater role in ensuring franchisee compliance.

In my consulting business, we have a growing number of franchise businesses engaging us to provide direct advice to franchisees on wage rates and employment conditions, as well as helping the brands to meet their occupational health and safety obligations.

Bad press arising from rogue franchisees can seriously hurt businesses and their brand. Customers make split second decisions about where they will eat – you don’t need a psychological turn-off impacting that decision.

ER Strategies provides simplified wage schedules tailored to the particular circumstances of the franchise business, to make compliance easier. We have also provided enterprise bargaining assistance to many firms in the industry over many years, to tailor employment conditions to the needs of small business operators, so that they are easier to understand and apply.

ACTU Issues Press Release

The ACTU has issued a press release
in relation to the reports, seeking to maximise exposure to employment issues during an election year. “It’s easy for business to rail against red tape – but the consequences of cutting regulation are that more workers will miss out on their pay and entitlements with no recourse,” said ACTU Secretary Dave Oliver.

“Business has been out making their views on workplace relations very clear: they don’t want to pay penalty rates, they don’t want to pay additional superannuation, they want more ‘flexibility’ – but all on their own terms.

“When the Coalition says it will introduce individual flexibility agreements into our industrial relations system, it is paving the way for more employers to pay their workers in pizza rather than fair wages.”

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