UPDATE - Fair deal for franchisees delayed

UPDATE – The changes affecting franchisees which were announced on 7 April have not yet been put into effect. Sources say that the delay is owing to 'IT issues'. No firm date has been given for the resolution of these; estimates given have ranged from mid-June to up to three months, meaning that some franchisees may need to apply (and pay for) a further 12 months’ accreditation shortly before the scheme is disestablished.

The change means that franchisees will no longer pay more for accreditation under the AEWV scheme. The previous scheme, introduced in July 2022, meant that franchisees had to pay up to five times the cost to employ the same employees as independently-owned businesses. New owners also faced issues when buying an existing franchised operation because they had to wait 12 months to acquire Accredited Employer accreditation, making it impossible to retain existing staff. A review of the franchisee requirements promised for mid-2023 was delayed; however, it seems this will no longer be required.

The news came in a media release from Hon Erica Stanford, the Immigration Minister, at 1pm today. This outlined a suite of changes to the scheme designed to ensure New Zealand is attracting the skills it needs, and reducing the vulnerability of migrants to exploitation. It has been welcomed by the Franchise Association (see below).

Announcement

'Getting our immigration settings right is critical to this Government’s plan to rebuild the economy,' said the Minister. 'The Government is focused on attracting and retaining the highly skilled migrants such as secondary teachers, where there is a skill shortage.  At the same time we need to ensure that New Zealanders are put to the front of the line for jobs where there are no skills shortages.'

In 2023 migration was 173,000 non-New Zealand citizens, a near record.

'I am bringing in a suite of changes that will improve the AEWV scheme and ensure we are better testing the local labour market and reducing the risks of putting New Zealanders out of work. Many of these are not new, but rather a return to pre-pandemic settings that better balanced the needs of business with the wider interests of New Zealand.

'It is important that the AEWV settings facilitate the right mix of skilled temporary migrants to address genuine skill and labour shortages, support rebuilding the economy, and to help manage numbers and pressures on core infrastructure, such as schools, housing, and the health system.' 

This suite of changes includes:

• Introducing an English language requirement for migrants applying for low skilled level 4 and 5 roles;
• A minimum skills and work experience threshold for most AEWV roles;
• For roles that fall into the level 4 and 5 categories, employers will need to engage with Work and Income before approval to bring in migrants will be granted;
• Reducing the maximum continuous stay for most level 4 and 5 roles from five years to three years;
• The franchisee accreditation category will be disestablished and these businesses will be able to apply to bring in workers from overseas through the standard, high-volume, or triangular employment accreditation.

'These steps improve the scheme’s integrity and will help to prevent migrant exploitation, following recommendations from the recent Bestwick review, which found serious issues with the AEWV processes,' she says. 'These changes are the start of a more comprehensive work programme to create a smarter immigration system that manages net migration, responds to our changing economic context, attracts top talent, revitalises international education, is self-funding and sustainable, and better manages risk.' Read the full media release here.

Franchise Association welcomes news

The Franchise Association of New Zealand (FANZ) enthusiastically embraces the positive changes, saying that over 32,000 franchisees are set to benefit from the levelled playing field of the AEWV accreditation programme for hiring migrant workers. Announcing the change to members, it said: 'This development brings significant advantages, including substantial cost savings in application fees and enhanced efficiency with a streamlined two-year renewal cycle.

'Moreover, franchise businesses can now provide long-term job security to employees under an Accredited Employer Work Visa, ensuring stability and peace of mind as jobs will no longer be at risk during business transfers. New franchise purchasers can seamlessly apply for accreditation without a one-year stand-down period.'

FANZ CEO Robyn Pickerill thanked both the Minister of Immigration, the Hon Erica Stanford, and the Minister of Small Business, the Hon Andrew Bayly, for swiftly addressing and removing barriers for franchise businesses to achieve accreditation.

'Franchising plays a vital role in empowering individuals from diverse backgrounds to own businesses across all regions of NZ. These businesses not only create local employment opportunities but also actively contribute to their communities through sponsorships and fundraising initiatives. With over 156,000 people employed by franchising businesses, today marks a celebration of their recognition as valuable contributors to New Zealand's GDP.'

Robyn Pickerill also affirms FANZ's unwavering support in taking measures to eradicate migrant exploitation and the objectives of the AEWV accreditation process. She states, 'FANZ provides many opportunities for education and sharing of resources, promoting the importance of compliance with New Zealand employment law and supporting a positive working experience for all employees in the franchise sector, and will continue to do so.'

FANZ Chair Brad Jacobs expresses relief and gratitude for the positive impact on franchisees. 'This news is a great outcome for everyone involved in franchising. Franchisees can now operate their business on a fair playing field while providing even better employment security for their team members. I believe all franchisees will be very thankful for these changes.'

FANZ emphasises that franchising plays an integral part in the growth and prosperity of NZ small business. It is a business model to be proud of; franchisees across NZ will be able to celebrate this milestone that recognises the significant contributions of the franchising sector, the turnover of which is equivalent to 12 percent of New Zealand's GDP, and which supports over 156,000 jobs across 590 franchise brands. (source 2021 Franchising New Zealand survey, Massey University).

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