On 27 October 2017, new workplace laws relating to franchisors and holding companies took effect.
These changes are part of the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017.
Under these new laws, franchisors and holding companies can be held responsible if their franchisees or subsidiaries don’t follow workplace laws (if they knew or should have known and could have prevented it).
The changes apply to franchisors that have a significant amount of influence or control over the business affairs of the franchisee. Holding companies have control over the affairs of their subsidiaries (by definition).
You could be held responsible if your franchisees or subsidiaries don’t follow workplace laws regarding:
For breaches relating to underpayments, you could be held liable if:
You can minimise your legal and reputational risks by helping your franchisees and subsidiaries to understand and meet their responsibilities. As a minimum, you should:
If faced with potential prosecutions under the new laws you will need to be able to demonstrate that you have taken a pro-active approach to complying with the workplace laws.