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WARNING TO FRANCHISORS: ARE YOUR FRANCHISEE’S PUTTING YOU AT RISK?

In the wake of the many investigations into underpayments, such as the 7-Eleven, Pizza Hut, Dominos Pizza, Crust and Caltex wage underpayment claims, the Federal Government has proposed amendments to the Fair Work Act 2009 with the introduction of a new Bill into Parliament. The Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017, while not yet law, sends a clear message that Franchisors will likely be held responsible for Franchisees’ failure to pay employees correctly.

The Bill introduces responsibility and liability to those who are an accessory to the underpayment of workers, such as the Franchisor or an Officer of a Franchisor in circumstances where it “ought to have known or could reasonably be expected to have known that a contravention by the Franchisee Entity was likely to occur.” Accordingly, HR and managers should also satisfy themselves that their organisation is compliant.

The powers for the Fair Work Ombudsman to investigate are proposed to be extended and penalties are set to increase.

It would be timely to conduct audits to ensure compliance with the Fair Work Act at the earliest opportunity and to continue to audit regularly.

Further information will be provided in our future blogs, e-alerts and on our social media platforms on the Bill as it passes through the various stages prior to becoming law.

If you require assistance with auditing your employment practices or getting your systems straight, our Workplace Lawyers can help. Contact our team of experts today!