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Fair Work discusses new franchising laws

By   /  October 9, 2017  /  No Comments

With new laws set to take effect this month making some franchises and holding companies liable for underpayment of workers, the Fair Work Ombudsman has cautioned the industry against being complacent.

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Businesses could face $630k penalties under new laws

Speaking at the National Franchising Conference on the Gold Coast, Fair Work Ombudsman Natalie James said the new laws set clear expectations that a franchise needs to consider how to prevent exploitation of workers in its network.

“Franchisors should be asking themselves, what steps do they need to take to ensure the businesses within their network are paying workers correctly,” she said.

“By now, franchisors should be making it clear to its network that it expects franchisees to comply with workplace laws. Best practice would be to enshrine these expectations within franchising agreements. Franchisees should also have clear guidance on how to identify and correct mistakes when they occur.”

Fair Work Ombudsman Natalie James.

James’ comments follow a round table discussion held on October 4 attended by senior members of the Fair Work Ombudsman and key stakeholders in the franchising industry, including representatives from McDonald’s and 7-Eleven.

The new laws include penalties for serious contraventions which could see businesses penalised up to $630,000 and individuals up to $126,000 per contravention.

James said Fair Work hopes to prevent breaches from occurring in the first place.

“We recognise that investing proactively in compliance has a cost for a franchisor but it should be seen as an investment to protect your brand and reputation as well as the wellbeing of the workers who support and build the brand,” she said.

However, James warned franchisors against taking a narrow view of their responsibility to ensure compliance in their networks.

“In passing the new laws, the Parliament has reflected the community’s concerns about deliberate exploitation of vulnerable workers,” she said.

“We will apply the new laws judiciously and fairly but we will not hesitate to use them to the fullest extent to protect vulnerable workers, I encourage franchisors to be proactive in taking steps to promote compliance in their networks.”

More information about these new laws will be available at www.fairwork.gov.au when the changes take effect later this month.

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