Fair Work amendment bills draw franchising fire

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Fair Work amendment bills draw franchising fire

The new Fair Work amendment bills will discourage investment in franchise businesses, industry leaders warn.

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Franchising will be discouraged by the new Fair Work amendment bills, say industry leaders but other aspects of the reforms are welcome.

Industry leaders have warned that investment in franchise businesses could be discouraged following the introduction of the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017.

“While we strongly support measures that would protect vulnerable workers, the impacts of this Bill need to be thoroughly analysed before it is passed by Parliament,” Innes Willox, chief executive of the Australian Industry Group said.

The AI Group argued that making franchisors liable for breaches of workplace law by franchisees, which are separate businesses, could lead to:
  • major international franchise operators being discouraged from making new investments in Australia
  • franchisors restructuring their businesses and terminating their relationships with franchisees
  • franchisors establishing extensive auditing, training, common payroll and other systems to ensure compliance by franchisees, with the substantial cost of this passed on to franchisees. In some circumstances this could lead to franchisee businesses no longer being viable.
“Franchising is growing rapidly in Australia. This business model enables thousands of people to establish their own small businesses, and employ many thousands of other Australians. It is important not to put a handbrake on business and employment growth,” Wilcox said, adding that the existing s550 accessorial liability provisions of the Fair Work Act have been held to apply to franchisors.

“AI Group is not convinced that the franchisor responsibility provisions of the Bill are necessary or appropriate,” he said.

Meanwhile, the Business Council of Australia stated that it was broadly supportive of efforts to tackle worker exploitation adding that “this sort of behaviour cannot and should not be tolerated in the modern workplace”.

It also supported the Fair Work Amendment (Repeal of the 4 Yearly reviews and Other Measures Bill) 2017 as making “common sense changes”. It also welcomed the clauses that would relax the treatment of minor technical errors made during enterprise bargaining.
 
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