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Franchisors: What to expect if the Labor Party is elected

July 5, 2016

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Today isn’t just another regular Tuesday in Australia. The counting of remaining votes from the Federal Election (including postal and absentee votes) resumes today, as we wait to see which party, if any, will form government.

As it currently stands, the Liberal/National Coalition party are 8 seats short from forming a majority government, with the Australian Labor Party trailing only 1 seat behind. This election has seen an impressive swing in favour of Bill Shortens’ Labor Party, recording a 2 percent national swing.

But what would a Labor government mean?

Protecting rights at work

A Labor Government would create a definition of “internship” to protect interns from being exploited, enable exploited franchisee employees to take legal action against franchisors and increase penalties ten-fold for those engaged in the underpayment of workers.

Focusing on the exploitation of franchise employees, a Shorten Government would reverse the onus of the proof to allow franchisors to bear the burden of establishing that they could not have known or were not reasonably aware of the underpayments and actions of their franchisees.

A Labor Government would amend the franchising code so that franchisors must take reasonable steps to help their franchisees to comply with the Fair Work Act and relevant industrial instruments. An update to the Fair Work Act 2009 is also on the cards for Labor, who wish to give the Fair Work Ombudsman the power to pursue underpayment claims against franchisors.

It doesn’t end there. The Labor party promises to boost maximum penalties for those who underpay workers. Individuals would face fines of up to $108,000 per breach, instead of $10,800, and corporations a grand total of $540,000 per breach, instead of $54,000.

A message to franchise operators

Labor has also set aside $2.4 million over four years in extra Fair Work Ombudsman funding to ensure that young Australian workers are not being ripped off.

You might be thinking, “that’s all well and good… but it’s likely the Coalition will scrape though again”. That being so, last month the Coalition also promised a similar increase in penalties for serious underpayments by franchise operators.

Regardless of whether Australia takes a jump to the left, or a step to the right – franchise operators will be at risk of starring in their own horror show if found non-compliant this financial year.

For more information, clients should contact the HR Assured team. If you’d like more information about the benefits of becoming an HR Assured client contact us today for an initial consultation.