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Message from the CEO: 23 May 2017

May 23, 2017

As you know, the NRA has been deeply concerned about the proposed Fair Work Amendment (Protecting Vulnerable Workers) Bill since it was introduced to Parliament in March. Our concerns have been amplified after the Senate Education and Employment Legislation Committee released its report this week, recommending the Federal Government pass the Bill, subject to three significant recommendations.

To recap, the proposed Bill has been designed to ramp up penalties for wage fraud and make franchisors jointly responsible for their franchisees’ underpayment of staff, if they have a ‘significant degree of influence or control over their franchisees’ affairs’.

While the premise behind the Bill is entirely honourable in practice it could force franchisees (the clear majority of whom are doing the right thing) to fund systems to prove their compliance.

Our concerns have been that such a Bill would add even more expense and complexity to franchisors’ business models, which could result in requirements for businesses to police each other, carry out expensive and time-consuming audits, and erode relationships between franchisors and franchisees.

It’s important to note there have been some truly shocking cases of wage fraud in recent times, and the franchise industry has never been under this much scrutiny, however we are committed to ensuring the entire sector isn’t tarnished, and unfairly penalised, as a result.

We will keep all of you updated on the progress of this Bill and its ramifications, and urge any of our members who have concerns to get in contact with our legal team to proactively plan and prepare for this Bill.

Also in the last week, handbag and accessories retailer Oroton became the latest chain to move into the double-downgrade ranks, and is facing its first loss since 2006.

Four years ago, Oroton Group was worth $300 million. Today it’s worth just $45 million, losing significant market share to brands like Kate Spade, Coach, Michael Kors and Furla.

While it’s natural to examine the business operations that are contributing to so many of these high-profile breakdowns (Oroton Group is one of more than 70 companies to have downgraded profit forecasts for 2017), I’d like to explore further how so many Australian retailers are doing just the opposite, and thriving not in spite of increased competition, but because of it.

Increased competition is not necessarily a bad thing, and is in fact breeding an impressive and exciting undercurrent of innovation within the Australian retail sector.

Every day I’m finding more retailers who are using innovation to better understand their own market (and adapt and evolve accordingly), to reinvent themselves where needed, to use omnichannel methodology to their advantage, to keep their debt levels to a minimum by streamlining and integrating their service and product offerings, and to overhauling their old marketing structures to embrace more consumer-centric methods.

We are in one of the most dynamic and exciting industries and we love exploring new ideas with our members, and we want to hear from you!

To help us continue the important conversation about consumer-centric innovation in retail workplaces around the country, please feel free to contact us on 1800 738 245.

Have a great week.

Dominique Lamb

NRA Media

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