FAIR WORK - Your brand reputation depends on it!

Lynda McAlary-Smith, Fair Work Ombudsman

Franchises come in all shapes and sizes – from fast food chains, to retail shops and household services. But ultimately, the business priorities remain the same.

As a franchisor, much of your attention will be focussed on building your share of the market, supporting your franchisees, and, without question, managing your brand.

In an environment where branding is central to business success, the last thing you want to see is your brand headlining the daily news – for all the wrong reasons. Being accused of treating workers unfairly or not paying entitlements is not the type of image a business wants to project.

But for most franchisors, keeping up with employment laws may not be a high priority – particularly when you are running a business that is operating nationally or across the globe. That’s the franchisees’ responsibility, right?

While it may appear that you are a mere bystander in the day to day issues of staff management in your franchises, the reality of the situation is, if something goes wrong with their employees, it won’t be just their business name in the newspapers – it will be yours as well.

So why should employment laws matter to you? Because the success of your business brand depends on it.

The Fair Work Ombudsman is currently running a pilot program working with franchisors to support them in creating fairer and compliant workplaces. Through this direct interaction, we have developed some key insights into the issues affecting  franchisors and the steps we think you can take to minimise the risk to your brand.

Below are my top ten tips for franchisors who  are interested in protecting their brand name and minimising the risk of breaking the law:

1. Provide access to sound and accurate advice. Franchisees need to know their rights and responsibilities under the workplace relations system. Often, they will approach you when seeking this information as a first point of contact. It is important  that you familiarise yourself with their obligations and are either in a position to provide advice when it is needed, or can refer your franchisees to someone who can. You can facilitate access to reliable and cost effective advice by arranging corporate  memberships with an employer association or special rates with a professional advisor. You may also want to consider investing in HR/IR systems or software to help achieve consistency across your business.

2. Use our Employer Obligations Guide. We have specially developed an Employer Obligations Guide for franchise businesses. The Guide provides an overview of key employer obligations under the Fair Work Act 2009 and is free to download from our website. The Guide can be dropped into your business’ operations manual or used as a standalone resource for franchisees. We encourage you to tailor the Guide for your own franchise business and promote its use to franchisees via your newsletters  or training sessions. You can access the Guide under the ‘Advice for Franchisors’ section at www.fairwork.gov.au/franchising.

3. Invest in training and development. You may want to engage appropriately qualified human resources and industrial relations personnel to provide workplace relations training, regular legislation updates and ongoing assistance to your  franchisees.

4. Monitor workplace issues. You can help ensure your franchisees are complying with national workplace laws by regularly monitoring any issues that arise. You will be better placed to see and address these issues before they become a problem.  When implementing new monitoring activities, you should check that your franchise agreement and business structure allows for this, and ensure you adhere to any applicable privacy obligations.

5. Conduct periodic audits. To support franchisees in meeting their record-keeping obligations, we recommend conducting periodic audits of employee pay and leave records. You may also wish to provide access to information and tools for franchisees to conduct ‘self-audits’ and ask them to report back the results. The FWO offers a ‘self-audit checklist’ that can assist.

6. Assist franchisees to resolve workplace disputes with employees. Setting up an anonymous enquiry or complaint service for employees to raise concerns about their employment will help resolve disputes at the enterprise level. It is important that  you are notified when such issues arise in your business, so ensure franchisees know to make you aware of any employee complaints or Fair Work Ombudsman investigations and audits.

7. Review your business systems to ensure they support compliance. For example, make sure your franchise agreement contains terms that require franchisees to comply with national workplace laws. Also, check that your franchises’ business model  takes into account the costs of lawfully employing adequate numbers of staff. By doing this, you set your business up to support compliance.

8. Facilitate agreement making. Negotiating an enterprise agreement for your franchise business can create clarity and consistency about conditions of employment across the business. You might facilitate agreement making by developing a template  agreement for your business (which can be used as a basis for individual franchisees bargaining with their employees), or by obtaining a single-interest employer authorisation, which allows franchisees to bargain together for a single enterprise  agreement.

9. Keep the lines of communication open. Make sure that you are in touch with your franchisees on a regular basis as having an open communication line between franchisors and franchisees can uncover potential problems before they escalate.  Franchisees should not feel they are left by themselves. Continue to build on this relationship and encourage open communication.

10. Use the FWO tools and resources available. There are many tools and resources available on our website that are designed to assist employers to run their business. In addition to our resources for franchisors, we have a large number of resources  for franchisees, such as templates for managing the employment life cycle, fact sheets, best practice guides and online pay tools. Visit www.fairwork.gov.au/resources.

Ensuring that workers are fairly treated should not be left solely to the franchisee. Franchisors have a role to play in ensuring that their franchisees are well supported and properly equipped with the knowledge, training and guidance required to operate fair and compliant workplaces. By taking a genuine interest in workplace compliance, you will be helping to mitigate the risks to the reputation of your business.

The effects of negative branding are far-reaching and can be detrimental to business success. Don’t turn a blind eye to employment laws, just because you’re not the employer. After all, it is your brand’s reputation on the line.

Lynda McAlary-Smith is the Executive Director of the Education & Major Employers Branch at the Fair Work Ombudsman. Lynda leads the National Franchise Program focused on identifying ways to assist franchisors to better promote and support  franchisee compliance.

The Fair Work Ombudsman is an independent statutory agency created by the Fair Work Act 2009 that promotes harmonious, productive and cooperative workplaces. We provide free tools, information and advice to assist both employees and  employers about their workplace rights and responsibilities.

Contact the Fair Work Infoline on:

Phone: 13 13 94
Web: www.fairwork.gov.au.

Through its National Franchise Program, the Fair Work Ombudsman assists franchisors to protect their brand by supporting fair and compliant workplaces in their franchise business. Boost Juice is one of the franchises currently participating in the  ational Franchise Program. Davina Teskey, National HR & LD Manager for Boost Juice explains “Boost has a passionate commitment to ensuring our franchise partners are successful, and therefore was keen to become involved in the program as we  look to provide first class systems and processes to support our Franchise partners. The FWO program has been extremely valuable in providing practical support around employment practices for both our franchisees and support for us as a franchisor to improve and create better support systems in the employment area.” The National Franchise Program is currently fully subscribed, however, you can find out more about the Program by emailing franchising@fwo.gov. au.

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