Joint employer liability proposed in Australia

After being delayed since May, the bill reappeared in the Australian senate this month, and then was adjourned after only a few minutes discussion. According to Jason Gehrke of the Franchise Advisory Centre, 'Labor Senator Doug Cameron launched an extraordinary personal attack on the efforts of Bruce Billson, the executive chairman of the Franchise Council of Australia (FCA), to have the bill modified to be consistent with the recommendations made by the Senate’s own committee of inquiry.'

'In the few minutes available for debate, Cameron did not even talk to his own proposed amendments to the bill, which would extend the risk of joint employer liability beyond franchisors potentially to suppliers and other types of business arrangements as well.'

Gehrke also points out that, 'Claims by the Australian press that the FCA chairman lobbied parliament against the bill on behalf of the FCA while still a member of parliament prior to the last election failed to highlight that the election policy which led to the Protecting Vulnerable Worker’s Bill was not announced until after he (Billson) had left parliament.'

We reported in May that the Franchise Council of Australia supports the penalty rate cut, but not the full reforms proposed in the Australian Government’s Protecting Vulnerable Workers Bill. The Franchise Council of Australia believes that the bill in its current form will unfairly hold franchisors liable for the wage underpayments of their franchisees, even if they could not have reasonably known that such underpayments were occurring.

The bill was proposed following revelations that underpayment and wage fraud were common practice within the majority of outlets operated by 7-Eleven franchisees. The company has since paid out claims worth A$128 million to thousands of underpaid workers, mostly migrants on foreign student visas. Ironically, since the bill was formed to stop the franchisees of large multi-national franchisors from exploiting workers, it could well be the franchisees of smaller systems that really suffer. Gehrke suggests that, 'if the new laws are adopted in their current form, small franchisors could be forced to divert resources away from supporting franchisees to offset greater compliance costs, resulting in franchisees potentially being worse off.'