In light of recent changes to the Fair Work Act, franchisors now have an obligation to ensure that their franchisees are following IR and HR legislation in their businesses. It has been strongly recommended by the Fair Work Ombudsman that franchisors establish and regularly conduct franchisee HR audits to address this requirement.
Setting up your franchisee HR audits does not have to be an onerous task. While it is important that the audit is thorough, there are plenty of tools to utilise to make life easier. Consider utilising a surveying tool that provides your field team with a questionnaire and format to ensure that all key areas are addressed and reviewed. It is highly recommended that your field team are trained in the key areas of HR to ensure that when they are conducting the audits they know what they’re looking for, how to spot anomalies, and how deep to dive into the franchisees records.
Another key aspect of the franchisee HR audit is to ensure that the results are reviewed, and any non-compliances are addressed and rectified as soon as possible.
Conducting regular audits of your franchisees in relation to their obligations as an employer will also serve as a deterrent to your network that, as a franchisor, you will not tolerate non-compliance in their employment practices.
The key areas to audit include:
- The National Employment Standards are being observed
- Proper application of a modern awards, enterprise agreement, etc.
- Correct and timely payment of wages
- Contractor vs employee arrangements are compliant
- Record-keeping practices are sufficient
- Pay slips have the required detail and are being issued to employees within one day of pay day