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Message from the CEO: 6 March 2017

March 06, 2017

Last week, the NRA was concerned to hear the Federal Government announce that they would be cracking down on so-called ‘dodgy franchisees’ through the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017, which currently sits before the federal parliament.

The legislation seeks to make franchisors more responsible for underpayment of employees by franchisees and in the process lead to the introduction of additional red tape.

Moreover, the Vulnerable Workers Bill also seeks to whack a franchise group with a $54,000 fine for every instance of underpayment by one of their franchisees. Similarly, in cases where a serious contravention has occurred, the fine for an individual franchisee will increase from $10,800 to $108,000, while for a corporate franchisee it will rise from $54,000 to $540,000.

To be clear, the NRA is all for ensuring that all employees (regardless of the business model under which they operate) are paid the amount that their employer is legally obligated to pay them.

However, we are deeply concerned that the proposed legislation will add significant cost and complexity to a franchisor’s business model, which could result in requirements for businesses to police each other and potentially instigate expensive and time-consuming auditing processes – eroding the important relationships between franchisors and franchisees.

The overwhelming majority of franchisors dedicate great time and effort to ensuring they have good relationships with their franchisees and protecting their brands by educating business owners within that brand.

But these provisions go one step further, and will only serve to punish an entire industry for the mistakes of a few.

When there are large businesses such as Masters and Dick Smith falling over, more regulation and red tape is rarely the answer. It creates more problems than it fixes, and acts as a deterrent to job creation in one of the most important industries in Australia.

Meanwhile, on the back of last week’s decision by the Fair Work Commission to reduce Sunday penalty rates for some retail workers, a number of unions have vowed to launch a ‘Work Choices-style’ campaign to get the government to overturn the decision by the FWC.

The NRA feels it important that the government not only respect the decision handed down by the Commission, but be more pro-active in explaining to retail workers and Australians more generally the process for the decision.

As an independent body, formed under the previous Labor Governemnt, the notion that the government of the day should look to overturn any decision it makes (regardless of whether the NRA agrees with that decision) sets a dangerous precedent.

Any move to reverse the decision would attack the very integrity of the Commission and the thorough process it undertook in coming to last week’s decision on Sunday penalty rates.

We urge the government to respect both the decision of the Commission and its independence more generally.

Have a great week!

Dominique Lamb

NRA Media

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