New bill targets underpayments by franchisees

New bill targets underpayments by franchisees

It can be tough to make ends meet when running your own business – but it is important not to cut costs at the expense of worker’s rights under Australian employment laws.  Recently, there have been several underpayment scandals by large franchises such as 7-Eleven, Caltex, Pizza Hut, Domino’s and Bakers Delight.

Following these scandals, new legislation has been introduced into Parliament, the Fair Work Amendment (Protecting Vulnerable Workers Bill) 2017.  Under the amendments, maximum civil penalties will be increased and franchisors will be liable for some contraventions of the Fair Work Act by franchisees.

For a franchisor to be liable under the new amendments, they must have known or ought to reasonably have known of the contraventions, and failed to take reasonable steps to prevent them.  Additionally, the “cash back” scheme that caught out 7-Eleven will be an offence, where managers force employees to pay back part of their wages by withdrawing money at ATMs.

The bill also proposes to give more evidence-gathering power to the Fair Work Ombudsman (FTO), prohibits hindering or obstructing of the FWO or an inspector in the performance of his or her functions or powers, and prevents the giving of false or misleading information or documents.

The bill is still in its early stages, however, businesses that currently engage in franchising should consider how the changes will affect them.

If you need advice regarding any of your employment contracts, give me a call on 1300 033 934 or email me at  for a no obligation chat.

Source: SMH