Compliance (or, the lack thereof) with the Fair Workers Act has attracted unprecedented attention in recent times.
- MAdE Establishment (George Calombaris) being ordered to publicly promote compliance with the Fair Work Act (as well as make a contrition payment of $200,000)
- Michael Hill Jewellers underpaying employees up to $25,000,000 over 6 years – which may result in a similar value one-off cost
- Subway is now under investigation for franchisees underpaying its staff
- 7‑Eleven’s franchisee-employee misconduct which resulted in massive fines and prompted a significant amendment to the legislation.
It’s clear that not investing in workplace relations training is a financially expensive mistake. In fact, it is an oversight that can cost your organisation its reputation – an immeasurable price to pay.
This is an important issue for all organisations, but for franchisors and holding companies, there is more focus with the Vulnerable Workers Act coming into play.
We look at the impact this new legislation has on your organisation and how an online compliance training program can assist in providing an effective method of awareness and education.
The Fair Workers Act and Vulnerable Workers
A major amendment to the Fair Work Act is the increased protection of ‘Vulnerable Workers’. This means that certain franchisors and holding companies can be held responsible if their franchisees or subsidiaries don’t follow workplace laws. Relevant changes are as follows:
- Increased penalties for a ‘serious breach of the law’ – this occurs when a person or business knowingly breaches a workplace law and that breach is part of a systemic pattern of conduct affecting more than one person. In such cases, a corporation can be fined up to $630,000 for each breach, and an individual can be fined up to $126,000 for each breach.
- Increased stance against asking for cashback from employees or prospective employees (known as the ‘cashback’ scheme).
- Increased power is given to the Fair Work Ombudsman to investigate and collect evidence of misconduct and to penaliseactions that mislead or hinder any investigation on a business or company.
- Increased penalties for businesses who fail to keep time and wage records, fail to keep accurate records, fail to provide proper payslipsto employees or knowingly provide payslips that are false and misleading.
What does this mean for Franchisors or Holding Companies specifically?
The potential impact on Franchisors (and officers, thereof) or Holding Companies (Directors and Senior Management) is twofold: reputation and cost. The amendment has placed even greater responsibility on the top line of an organisation in ensuring that misconduct does not occur – opening you up to risk. You may be liable if your franchisees or employers do not follow the NES or Fair Work Laws or if you have not taken reasonable steps to prevent it from happening. Implementing compliance training that educates your organisation on the Fair Work Laws is an important effort in the prevention of misconduct in accordance with the legislation.
Prevention is better than cure: Mitigating Risk with Compliance
Fair work practices are vital to the ongoing health of your organisation no matter the structure of your organisation. Maintaining employee work satisfaction and providing adequate protection of their rights is a key factor in the longevity of your business. The lack of which, can pose serious financial and reputational harm for your organisation and its brand.
The Employment Obligations (Vulnerable Workers Act) Course assists in educating your subsidiaries and franchisees on current legislation so they’re less likely to breach the law. With content developed in conjunction with legal experts from MinterEllison, this course (along with all Safetrac’s courses) has the ability to be customised to your unique workplace scenarios and relevant awards. It’s an engaging form of training for your organisation that can be done anywhere, and on any device, whilst helping you to remain compliant and in tune with the current legislation.
Be proactive in your training with Safetrac
Contact Safetrac to discuss how we can support you to create a training solution that engages and educates your staff, protects your organisation and its bottom line.