16/05/2018Franchising, Legislation

Our General Manager, David Price, recently attended the Franchise Forum conducted by franchise and employment law experts HWL Ebsworth. David provided this summary of the take-aways from the forum relating to the new Vulnerable Worker laws introduced late last year -

  • There has been no real test case as yet to provide clarity on how the new Vulnerable Worker laws will be applied by the courts - but this will only be a matter of time;
  • The Fair Work Ombudsman (FWO) has started listing all parties as respondents in matters it is litigating – on the basis it is easier to pursue and then remove, rather than adding respondents at a later date;
  • The FWO has commenced serving “NTP’s” - Notices to Produce - on a broad range of entities when investigating suspected breaches of employment laws by one entity. Franchisors and even HR managers and suppliers (e.g. payroll companies) are therefore being served with the NTPs.

The above are all as a result of the Vulnerable Worker laws introduced in the second half of 2017, imposing liability on franchisors (and holding companies) for breaches by franchisees, subject to a defence by the franchisor that it took ‘reasonable steps’ to avoid the breaches occurring.

It seems the FWO continues to cast a wide net to try and capture as much as possible in any litigation, for maximum publicity.

What are franchisors doing to meet new laws?

David Price was also able to update the forum on steps that our franchise clients are taking to meet the “reasonable steps” obligations –

  • Increasing the emphasis on compliance training (ERS Advertorial - note we are currently finalising a range of online induction training modules for use by franchise brands covered by our WorkShield service, suitable for play via any learning management system, in addition to our existing suite of face-to-face training courses);
  • Audits – some clients are auditing their entire network, but we recommend a cost-effective alternative is to do online audit / knowledge test first of your franchise network, as part of a systematic approach to brand compliance for a franchise. (Advertorial – a program of payroll audits are an included aspect of our WorkShield service);
  • The growth of Employee Helplines. These are favoured by the FWO to give franchisors visibility over what is happening in their franchise network. (Advertorial – ER Strategies already operates employee and whistleblower helplines for a range of clients, including 7-Eleven, KFC, Hungry Jacks and other major franchise brands. Employee Helpline are an included aspect of our WorkShield ‘brand compliance’ package of ER services);
  • Increasing the speed in moving towards cloud-based payroll solutions, which make payroll compliance more transparent and easier to manage;
  • EBAs – enterprise agreements - aren’t really an attractive option for QSR and other similar franchise models, given the highly technical approach taken by the FWC in interpreting adherence to the Better-Off-Overall Test (the ‘BOOT’). In our experience, many employers with EBAs are moving back towards modern awards – pizza sector dominant Dominos are now already on the Fast Food Industry Award, in association with a move to a cloud-based payroll system.

Call ER Strategies on 1300 55 66 37 today, if you wish to discuss how we can help you meet your new Vulnerable Worker obligations.

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