Franchises must take note of new work laws

New work laws that came into effect on 1 July will affect the franchise industry, both franchisees as well as franchisors. The Fair Work Act 2009 requires businesses, particularly small businesses, to comply with new unfair and unlawful dismissal laws, agreement making provisions, transfer of business rules and workplace rights actions.

Mark Fernandez, WA state manager for consultancy with Franchise Alliance franchise consultants, said “Franchisors need to review workplace contracts and take action to inform their franchisees of important changes.

“As well as the new national Award Modernisation conditions for employee agreements, franchisees need to be aware of new unfair dismissal laws, minimum conditions, increased penalties for trading outside normal hours, and widening of terms to the Discrimination Act,” Fernandez said.

Along with the introduction of new legislation come two new organisations that give advice. Fair Work Australia (FWA) is a one stop shop for both employers and employees and it replaces the Australian Industrial Relations Commission.

The Fair Work Ombudsman will work alongside the FWA to help educate and inform employers and employees as well as investigating and ensuring compliance with workplace laws, with powers to prosecute for breaches.

The Ombudsman Nicholas Wilson is developing a best practice guide specifically aimed at helping small business. Wilson said the guide will explain the new safety net of minimum employment conditions, about bargaining in good faith at the enterprise level, new obligations to keep records and provide pay slips, the new unfair dismissal laws and new protections for employees and obligations of employers.

Being informed is the key to compliance, advised Fernandez. “Make sure you take a close look at the new changes and get expert advice on the implications and responsibilities. I strongly urge all franchisors to review all employee agreements against new national conditions for their industry.”

In the fast food sector, he said, one major change set to impact franchise networks are the new requirements in managing those franchise outlets, which were absent in past guidelines.

Some industry standards came into play from July 1 and any new contracts must comply with these new conditions, others will be completed by January 2010.

“Knowing what the new conditions are is vital in case any reviews need to be undertaken, for instance, if it looks like they may not meet you best interests, a more attractive option could be to settle on a Collective Agreement with the Union, which must be done before January 1,” suggested Fernandez.

“In tough financial conditions, it’s common for compliance to take a back seat as much time is occupied managing the many pressures an economic downturn brings – but this can be a risky oversight and can push a solvent business over the edge, so it’s crucial this is given priority.”

This article appears courtesy of 5 Minute Franchising Newsletter