Appliance Tagging Services gives OH&S advice
Many franchisors in Australia have the belief OH&S is the responsibility of their franchisees, and many franchisees believe direction and ultimate responsibility for OH&S should come from the franchisor as part of the franchise operations systems. In isolation, both these scenarios are incorrect, but they do highlight the confusion surrounding OH&S.
The lack of understanding may stem from current OH&S legislation. This legislation was developed with an employer - employee relationship in mind and does not specifically mention franchise systems. Add on to this, the complexities of individual State OH&S systems and corresponding industry and State specific legislation, and it is no wonder franchisors and franchisees are confused with regards to their responsibilities!
The importance of promoting and maintaining a safe workplace and the seriousness of OH&S legislation is supported by the statistics. Australia-wide in 2005, 214 people tragically lost their life in workplace accidents, down from 283 in 2003. The decrease in fatalities suggests the increased awareness of workplace OH&S is making a difference; however the majority of the reduction in fatalities has been in the mining, construction and transport & storage industries. Employers and employees within these industries have traditionally had more exposure to the dangers within the workplace and the importance of workplace safety initiatives.
WorkSafe Victoria Executive Director, John Merritt, said the death toll was a reminder for workers and employers to constantly keep safe workplaces at the forefront of their minds. "The high number of fatalities [in Victoria] already this year, and the 29 in 2006, should be the greatest incentive for workers and employers to do everything they can to ensure a safe workplace. It is WorkSafe's tragic experience that all-too-often safety improvements are made after a death or serious injury. That's too late. The risk factors for all occupations are well known. There are few incidents that could not have been predicted," Mr Merritt said.
Safety initiatives can range from safety signage, to OH&S Committees and Representatives, through to preventative maintenance in the form of electrical safety audits and testing. While they may seem like small measures, the impact can be enormous. Statistics show more than 1200 fires in Australia can be attributed to electrical faults in appliances and leads that could have been prevented by an electrical safety audit and correct testing. Business should look at initiatives such as this in the same light as insurance - you never know its value until you really need it! In our experience of "first round" electrical appliance testing, we find up to 10% of all electrical items fail the testing procedure. The fact that up to 10% of electrical items in businesses across Australia are accidents waiting to happen is very concerning. We are all happy to undertake preventative maintenance when we service our cars, so why do some business owners and operators fail to take the same care with significantly more valuable businesses and staff?
So what about franchise systems? What are the OH&S responsibilities of the employer (franchisee) who operates the franchise — the one who employs the staff, trains and directs? What are the responsibilities of the franchisor — the one who may provide the premises and equipment, and provides the detailed operations manuals and detailed systems of work explaining how and what is required to run the business?
The principles of health and safety protection are outlined in the Victorian OH&S Act, and there are three principles of note for franchise systems:
1. The importance of health and safety requires employees, other persons at work and members of the public be given the highest level of protection against risks to their health and safety reasonably practicable in the circumstances.
2. Persons who control or manage matters giving rise or may give rise to risks to health or safety are responsible for eliminating or reducing those risks so far as is reasonably practicable.
3. Employers and self-employed persons should be proactive, and take all reasonably practicable measures, to ensure health and safety at workplaces and in the conduct of undertakings.
In a "business format franchise" (the most common form of franchise) the franchisor establishes a business system operated by the franchisee under an established brand name owned by the franchisor. The franchisee is usually required to adhere strictly to the business system, and operations manual detailing specific operating procedures. Hence, the franchisor may have a duty of care to the franchisee, in the same way franchisees have a duty of care to their employees in line with the above principles.
Section 26 of the Victorian Act states: A person who (whether as an owner or otherwise) has, to any extent, the management or control of a workplace must ensure so far as is reasonably practicable that the workplace and the means of entering and leaving it are safe and without risks to health.
In plain English, franchisors (individuals with management or control of a workplace) now risk being prosecuted for deaths and injuries which occur on premises operated by their franchisees. This liability extends not only to the welfare of people employed on-site but also to customers, service contractors and others who enter the workplace.
The penalties for breaches of the Act are serious, with the maximum fines for companies (the franchisor) failing to provide a safe workplace they manage or control being $920,250. In addition, directors and other employees who have the capacity to make decisions affecting the company's financial status can be fined $184,050. There also additional penalties of up to five years' jail for individuals proven to have recklessly engaged in conduct which places a person in a workplace in danger of serious injury.
The potential prosecution of franchisors is supported by NSW Case Law after the courts found McDonalds Australia partially liable for the fatal electrocution in 1996 of a McDonald's franchisee employee. McDonald's Australia was prosecuted in relation to the employee's death on the basis that it had some level of control over the plant and in particular the kitchen equipment; in that it had failed to ensure that the equipment was safe. The McDonald's system prescribed the uniform use of equipment as part of its franchise system, which was the responsibility of the franchisor under the licence agreement.
Although it is unlikely that a franchisor will be the only party Worksafe prosecutes over a death or injury in a franchisee operated workplace, the risk of prosecution must be addressed. Franchisors will be held responsible for defective equipment, layout of premises or maintenance procedures, and they cannot afford the risk of simply leaving it up to their franchisees to introduce workplace safety measures to ensure compliance with the Act. The Worksafe penalties alone are serious, but franchisors should also think about the long term impact on their brand and staff morale along with time and focus spent on very lengthy and costly litigation.
So where should franchisors start? <www.worksafe.vic.gov.au> has excellent reference material on how you can begin to make your workplace safer, and there is also a plethora of OH&S consultants who can work with you to develop and implement an Occupational Health & Safety management plan specific to your industry and franchise system. Importantly, the time to raise the profile, or even to make OH&S a part of your organisation, is now, before it is too late.
This article appears courtesy of Appliance TAgging Services.
27.08.2007
FCA Member
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