7-Eleven supports ‘Protecting Vulnerable Workers’ bill, questions franchisor responsibilities

7-Eleven Stores Pty Ltd this week made its submission to the Senate Education and Employment Committee’s inquiry into the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017.

According to 7-Eleven Stores CEO Angus McKay, the convenience and petrol retailer is advocating for:

  • Changes to the termination provisions in the Franchising Code of Conduct and the Oil Code to give franchisors the right immediately to terminate a franchise agreement in the case of serious non-compliance with Commonwealth Workplace Laws or Fair Work Instruments.
  • Harmonisation of the relevant provisions of the two codes.
  • Expansion of franchisor responsibilities within the applicable industry codes.
  • Increasing penalties for employers who breach the Fair Work Act, consistent with ensuring an effective level of deterrence is in place.
  • A mature debate on potential reform of the conditions attached to student visas to ensure students are able legally to work a sufficient number of hours to earn enough to cover average tuition and living expenses, beyond the first year of their course.

7-Eleven’s submission broadly supports many of the proposed amendments, such as increased penalties for employer breaches and increased evidence-gathering powers for the Fair Work Ombudsman (FWO) – but raises concerns around franchisor responsibility.

“While we support a degree of increased franchisor responsibility,” Mr McKay wrote, “we have three primary concerns relating to this provision.

“The assessment of what ought reasonably to be expected to have been known will inevitably occur with the benefit of hindsight.

“Notwithstanding the list of indicative factors to consider in determining ‘reasonableness’, there is a lack of clarity provided.

“The liability under the proposed ‘responsible franchisor’ provision is clearly at odds with the rights that franchisors have to pursue franchisees under their franchise agreements and the codes, as mentioned earlier. It also relies on a significantly lower evidentiary burden than that which a franchisor would need to satisfy to actually terminate a franchisee, particularly for fraud. This incongruity in standards and approach highlights the urgent need for reform to the codes.”

7-Eleven has also expressed concern over the Bill’s introduction of a right for a franchisor to start proceedings against a franchisee for payment, where the franchisor reimburses the affected worker for the relevant contravening conduct by the franchisee.

“While this provision of the Bill appears to be of some benefit to franchisors, we would be concerned if it signals an intention for the FWO to look to pursue franchisors for recovery in the first instance, leaving the franchisor to seek recovery from franchisees [who in some instances may be potentially bankrupt],” Mr McKay wrote.

The full submission can be downloaded here.

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