Greens MP Plans To Introduce Bill To Make Head Offices Liable For Underpaid Franchise Wages
Thursday 1 October 2015 @ 11.24 a.m. | Industrial Law | Legal Research
Greens MP Adam Bandt has announced plans to introduce a new bill to enable underpaid franchise employees to recover amounts from the franchisor’s head office.
According to the Brisbane Times, the Fair Work Amendment (Recovery of Unpaid Amounts for Franchisee Employees Bill 2015, would “put the onus on the franchisor to make good on the repayment of wages to workers and then reclaim the money from the franchisee”. The Bill will be introduced after the Commonwealth Parliament returns on October 12.
Background to the Bill
Currently, a full text draft of the bill is unavailable, but in a media release, Mr Bandt outlined his intentions for the legislation:
“Something is wrong with our system when the boss of 7-Eleven is a billionaire but its workers are getting paid under $10 an hour and threatened with deportation. We’ve also heard reports that suggest this kind of widespread worker exploitation doesn’t end with 7-Eleven.
If head offices can enter into franchise contracts then turn a blind eye to what happens in their stores, workers can get exploited… By allowing workers to claim any underpayments directly from head office, this law will help bring about a culture shift. Instead of leaving it to vulnerable workers to uphold the law through expensive legal action, head offices would take more responsibility for what goes on in the stores that carry their name.
The head office could still pursue the franchisee for the amount of any underpayment, but they'd have an extra incentive for ensuring the underpayment didn't happen in the first place."
The 7-Eleven franchising scandal has now led to the resignation of the chairman and chief executive. New chairman Michael Smith told the Sydney Morning Herald he believes underpayment of wages is a “widespread problem” across the country, and has called for an amnesty for workers who report wage fraud to encourage disclosure.
The Senate Standing Committee on Education and Employment is currently holding an inquiry into temporary work visas. While submissions are closed, the inquiry is holding upcoming public hearings on 13 November in the ACT and on 20 November in Brisbane. The Committee is due to report by 11 February 2016.
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