Up until recently there was some uncertainty about the legal obligation of the franchisor when it came to the HR practices of their franchisees. In light of the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017, there is no uncertainty. Franchisors can be held responsible for breaches of the Fair Work Act by Franchisees within their franchise network.
What steps do you need to take to ensure that your network’s HR practices are compliant and your franchisees have tools, policies and procedures they need?
A HR audit can provide the franchisor with great insight into the compliance of franchisees in this area in order to be able to improve HR processes. When undertaking a HR audit, it is important to check:
- Wages and employee entitlements are paid in accordance with agreements and awards.
- Payslips are distributed in accordance with regulation.
- Superannuation payments are being made at the correct rate to your employee’s nominated fund.
- All contractor arrangements are valid and legal.
- Records are being written and kept (for example, written warnings, meeting minutes, performance review notes).
- Regular performance appraisals and performance management activities are being conducted
It is also recommended that franchisors take additional steps to support franchisee compliance in their employment practices, such as:
- Development of clear policy and procedure templates that are accessible to franchisees to support them in handling employee performance and behaviour.
- Identification of skills or knowledge gaps for franchisees in dealing with issues such as employee performance.
- Implementing appropriate training, coaching and support mechanisms to help bridge any skills or knowledge gaps.
- Implement a HR support service, either from head office or via a third party, to provide advice and guidance on HR matters.