A Franchisor's Responsibility For Franchisee's Compliance With Employment Laws
Created: Friday, 19 May 2017 15:13
Several well known franchise systems have recently made headlines in Australia in relation to Franchisees who have committed breaches of employment laws by underpaying staff and wage fraud. This has resulted in the Turnbull government introducing the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 ("Aussie Bill"). This Bill provides that Franchisors will be held liable for workplace violations by their Franchisees if they have significant influence or control over the Franchisee; if they knew or should have known of the underpayments; and if they failed to take reasonable steps to prevent the violations. For many commentators, while there is a recognition that some things need to change, this is seen as a step too far and some have even gone as far as to say that this would be the end of franchising in Australia as they know it.
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