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Bruce Billson and franchisors want employee payment responsibility law trashed

Sunday, March 19, 2017

Remember the 7-Eleven scandal? That’s the one where employees of 7-Eleven stores were underpaid and scammed. To stop this, the Federal government is now introducing legislation to make franchisors jointly responsible with franchisees for underpayment of franchisee employees. It will protect workers. It’s good legislation.

But the Franchise Council of Australia (FCA) wants to kill this off.  

In a recent article,  the chair of the Franchise Council of Australia (FCA), Mr Bruce Billson, called the laws “…a media-inspired regulatory misadventure…” that “…represents an existential threat to the successful franchise model of enterprise.”

Mr Billson was Small Business Minister under the Abbott government and championed stronger franchisee protection regulations that were resisted by the FCA. When he was Shadow Minister he said of the franchisors’ body: “The FCA’s advice … is quite unconscionable in its intentional omissions and misrepresentations.” and “…the FCA seems intent on asserting falsehoods about the Coalition policy…”

Now as FCA Executive Chair, Mr Billson sees things differently it seems. However, we say that he and the FCA are wrong to campaign against the new worker protection laws.

The fact of franchisor-franchisee contractual relationships is that franchisors impose huge contractual obligations on franchisees. These contractual requirements relate to marketing, shop design, operational and administrative requirements and precise product specifications to name just some.

The consequence of the new franchisee worker protection laws will effectively require franchisors to contractually require franchisees to pay their workers correctly and to monitor this. If the franchisors don’t do this, they will be responsible. It’s simply a matter of franchisors running ethical and legally compliant franchise systems.

In our view, any parliamentarian or advisor finding themselves being lobbied, or wined-and-dined by the FCA on this matter, should reject the FCA’s position.

We’ve prepared a more detailed backgrounder and briefing on the issue. We explain the two different franchisor business models: one ethical; the other dubious!
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