The CEO of one of the biggest profile franchise chains to face and address systemic underpayment issues has used the passing of the Fair Work Amendment (Protecting Vulnerable Workers) Bill to urge for further franchising reforms.
7-Eleven CEO Angus McKay wants to give franchisors more power to rid franchise networks of non-compliant franchisees.
For more than 12 months McKay has been calling for reforms to ensure the industry can more easily terminate franchise agreements in the case of franchisee serious non-compliance with workplace laws.
“While the changes in the Bill hold franchisors to a higher standard of compliance, the relevant industry codes lack the commensurate power for franchisors to remove franchisees for serious non-compliance with workplace laws,” he said.
7-Eleven is calling for two relevant industry codes – the Franchising Code of Conduct and the Oil Code – to be amended so franchisors have the right to immediately terminate a franchise agreement in the case of serious non-compliance with Commonwealth Workplace Laws or Fair Work Instruments.
“Our experience demonstrates that the barriers to terminating a franchise agreement in cases of underpayment are difficult enough for a company the size of 7-Eleven to pursue through the courts, let alone the two-thirds of Australian franchisors that are small-medium businesses,” said McKay.
“While we support a level of expanded franchisor responsibility, we call on the Government to appropriately balance this with the right under the relevant industry codes for franchisors to reasonably terminate a franchise agreement in the case of serious non-compliance with workplace laws.”
