World Franchise Council opposes joint employer liability

An international meeting of franchise associations in Australia has joined forces to strengthen the franchise sector by opposing dangerous legislation that would force franchisors to be recognised as the ultimate employer of staff hired by their fran

The October meeting of the World Franchise Council (WFC) in Brisbane ratified a declaration to oppose the regulation of franchisors as joint employers of workers in individual franchisees’ outlets as contrary to the growth and development of a sector worth at least USD$1.6 trillion to the international economy.

The declaration follows developments in some WFC member nations such as the United States, Australia and others, in which governments have already introduced, or are considering, legislation to force franchisors to be recognised as the ultimate employers of staff hired by their franchisees.

The notion of franchisors being held responsible for the payment of wages and entitlements to workers hired by completely separate business owners (ie. franchisees) is a legislative over-reach that could be catastrophic for franchising in the long term.

The WFC joint declaration, entitled “Workers in franchise outlets are not employees of the franchisor” reinforces the obligation of franchisees to their own workers to pay correct wages and entitlements in accordance with their relevant national laws.

The meeting, held in Brisbane from October 9-10, was attended by more than one third of the WFC’s 43 member nations. Prior to the WFC meeting, the Asia-Pacific Franchise Confederation, a regional body of franchise associations, met on October 8, and admitted Thailand and Macau as new members.

Both meetings were hosted by the Franchise Council of Australia (FCA), and were immediately followed by the FCA’s national convention, which attracted more than 500 participants.