FWO praises café franchisor’s commitment to compliance

The Fair Work Ombudsman has released a report on its compliance partnership with Minor DKL Food Group Pty Ltd (MDKL), the franchise group behind brands The Coffee Club, Coffee Hit, Ribs & Rumps and Veneziano Coffee Roasters.

In 2015, MDKL voluntarily entered into a compliance partnership with the Fair Work Ombudsman (FWO) as part of a broader attempt to improve workplace compliance in larger networks.

The two-year partnership saw MDKL implement a series of education, training and support initiatives, with franchisees offered greater access to industry resources in accordance with the terms of the proactive compliance deed underpinning the partnership.

The release of the FWO’s latest report shows that the number of requests for assistance received by the FWO involving MDKL declined as the partnership progressed, from 15 matters in the first year, down to just one in the second.

Fair Work Ombudsman, Sandra Parker said the compliance partnership publicly signalled MDKL’s commitment to ensuring its franchisees remain compliant with workplace laws.

“The decline in requests for assistance to the FWO from MDKL workers across their franchising network demonstrates the effectiveness of the training and education measures implemented under the Proactive Compliance Deed,” Parker said.

“Our partnership with MDKL sets a positive example for the hospitality industry, which continues to be a key focus for the Fair Work Ombudsman as it employs a significant proportion of vulnerable workers including young people and migrants.”

Under the terms of the partnership, MDKL conducted two rounds of audits to assess its franchisees’ workplace compliance, with the second audit demonstrating strong improvement.

Parker suggested internal and external compliance audits should remain a priority for franchise networks.

“It is in franchisors’ best interest to proactively promote compliance across their business. Not only is this good business and ethical practice, but recent law changes mean they can be held liable for workplace breaches by franchisees in their networks,” Parker said.

The partnership was initiated following allegations of underpayment and exploitation of a visa worker by a Coffee Club franchisee.

An ensuing investigation prompted the FWO to commence legal proceedings against the employer, resulting in the Federal Circuit Court issuing penalties in excess of $180,000 for the franchisee. MDKL subsequently terminated the franchise relationship.