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The Death of Franchising as We Know It? Vulnerable Workers Bill

On the 1st of March 2017 the Turnbull Government introduced the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 (Amendment Bill). Thus giving effect to their election commitment to protect vulnerable workers from exploitative and unfair practices in the workplace.

The proposed Bill, in its current form seeks to ensure that Franchisors (or Holding Companies) have taken reasonable steps to be aware of, and reactive to, the Workplace practices of their Franchisees (or subsidiaries). The new provisions will stand in addition to the existing accessorial liability provisions of the Fair Work Act.

The purpose of the Bill is to ensure that Franchisors:

  • where they exercise a reasonable level of control over the Franchisees affairs, are responsible for contraventions by the Franchisees;
  • that Franchisors cannot claim ignorance or ignore the Workplace practices of their Franchisees;
  • will be held liable where they ought to have reasonable knowledge that a contravention was likely to occur; and
  • train and audit Franchisees to adhere to modern awards and enterprise agreements, minimum wages and ensure they are no failures in making or keeping employee records and payslips.

Extension of Penalties and Power

Penalties

For ‘serious contraventions’ of the Fair Work Act, the proposed Bill seeks to increase the maximum civil penalties by a factor of ten. From $10,800.00 to $108,000.00 for individuals and from $54,000.00 to $540,000.00 for corporations. A ‘serious contravention’ will be applied where a civil remedy provision if the person’s conduct was both systemic and deliberate.

Power

Similar to ASIC and the ACCC, under the proposed Bill, the FWO will be given broader evidence-gathering powers. Including the power to:

  • answer questions on oath or affirmation if the FWO believes that person can reasonably assist an investigation; and
  • compel a person to product information or documents.

Solutions

Assistance for Franchises

While there has been a lot of hot debate over the specific inclusions of the Amended Bill, scheduled for the Senate Education and Employment Legislation Committee inquiry and report on May 9 2017, there are actions that any business affected by these changes should already be seeking to implement.

All affected businesses should:

  • review induction and compliance training for all Franchisees and subsidiaries;
  • audit payment, record keeping and Workplace compliance processes;
  • consult with Workplace specialist advisors and proactively implement compliant systems, where possible; and
  • participate with FWO inquiry and ensure you seek adequate legal advice.

Certica® has provided compliant contracting solutions to Australian businesses for over 16 years and we pride ourselves on finding solutions for our clients who want the freedom that compliant and fair contracting arrangements provide. If you engage subbies or contractors and you have a concern about your Franchise network, please contact us immediately for a no-obligation risk assessment and practical tips to ensure you’re ahead of the change.

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One response to “The Death of Franchising as We Know It? Vulnerable Workers Bill”

  1. […] you are a franchisor and you engage contractors, this affects you. The Fair Work Amendment (Protecting Vulnerable Workers) Bill has been passed and here’s what you can […]

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