Franchisor responsibilities in the spotlight

Franchisor responsibilities in the spotlight

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Franchisor responsibilities in the spotlight

example flexible working arrangement

The Fair Work Ombudsman has two cases before the courts for prosecution of a “responsible franchisor” for Fair Work breaches by their franchisees – these are the first prosecutions of their kind.

Back in 2017, legislation was passed to increase penalties for serious contraventions of workplace laws. Among other matters included in the legislation were new legal obligations for franchisors and holding companies that effectively meant that they could be held legally responsible if their franchisees or subsidiaries did not comply with workplace laws.

In order for franchisors to be held accountable, they would have to be found to be a “responsible franchisor” –  one which has a significant amount of influence or control over the business affairs of the franchisee. This could be the case if the franchisor can provide direction on (or exercise control over) financial, operational or corporate affairs  which could involve such matters as trading hours, sales targets or quotas, business expenses and costs, staffing levels, etc.

Consideration is also given to the degree to which the franchisor is involved in management or operational decisions of the franchisee’s business in practice. 

Case #1 – 85 Degrees Coffee Australia Pty Ltd

The Fair Work Ombudsman alleges that 85 Degrees was liable as a “responsive franchisor entity” for alleged non-compliance by eight 85°C Daily Café outlets in Sydney in 2019. This includes underpayments of wages totalling $32,321 and breaches of record keeping and payslip requirements.

85 Degrees, which is based in Taiwan, entered into an Enforceable Undertaking with the Fair Work Ombudsman in 2015 following the identification of significant underpayments of wages back then.

85 Degrees was also fined $475,000 in court proceedings last year for exploiting young Taiwanese students in Sydney through sham internship arrangements. in 2016 and 2017.

The FWO now alleges that 85 Degrees’ knowledge of compliance issues as a result of the Enforceable Undertaking and subsequent audits, its knowledge of its franchisees’ financial circumstances, and its knowledge that the franchisees had limited English and limited awareness of workplace laws, is also relevant to its liability. 

This recurrent non-compliant behaviour is a good example of the conduct that has given rise to laws making wage theft a criminal offence.

Case #2 – Bakers Delight Holdings Pty Ltd 

It is alleged that 142 mostly young staff at Bakers Delight outlets in Kingston, Lindisfarne and Eastlands in Hobart Tasmania were underpaid $1.25 million between July 2017 and October 2020. In one case of a young apprentice baker, it is alleged that he was underpaid $106,281.

Fair Work Inspectors allegedly discovered that staff were underpaid entitlements including minimum wages, weekend and public holiday penalty rates, overtimes rates, leave entitlements and minimum shift pay, and had money unlawfully deducted from their termination pay.

It is alleged Bakers Delight Holdings is liable for $642,162 in underpayments at the three stores that occurred after February 2019 because it became aware the franchisee operating the stores had been underpaying staff but failed to take preventative action – and therefore it either knew or should reasonably have known further underpayments would occur.

Bakers Delight Holdings commissioned an audit of the franchisee (Make Dough Enterprises) and provided the findings of the audit which identified a number of contraventions to the franchisee in February 2019. The Fair Work Ombudsman alleges that, as a result, from that point on the franchisor knew about the underpayments and breaches but did not take action to ensure that they were remedied. 

So it appears that while in this case, the franchisor made some attempt to educate the franchisee about their obligations but has been found by the Fair Work Ombudsman not to have done enough to exercise its “responsible franchisor”obligations.

How we can help

When the legislation came in in 2017, we developed a suite of services to assist franchisors to meet these new “responsible franchisor” responsibilities under the Fair Work Act.

These services included:

  • Franchisee compliance kits tailored for the particular industry and franchise group covering National Employment Standards, relevant award provisions, record keeping and payslip requirements, superannuation
  • Online compliance questionnaires with reports generated for individual franchisees on their compliance status
  • Payroll audits of franchisees and calculation of underpayments where applicable
  • Representation and support in dealings with the Fair Work Ombudsman on any alleged underpayments

Need help?

Give us a call on 1300 108 488 to arrange your free first consultation to see how we can help with advice and support on this or any other HR matter. 

 

CONTACT US

Ridgeline Human Resources Pty Ltd
ABN : 24 091 644 094

enquiries@ridgelinehr.com.au

0438 533 311

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Multiple lessons for employers

Multiple lessons for employers

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Multiple lessons for employers

example flexible working arrangement

A recent case in the Fair Work Commission has produced far greater consequences than might have been anticipated by an employer who faced an unfair dismissal dismissal claim from a 67 year old worker who had been employed since 2010 before being sacked in February. 

The Evidence

The employer claimed that the worker was sacked for a variety of reasons such as disposing of produce, bullying, threatening and making racist comments to other staff, being rude to customers and taking time off for health reasons. 

However, the employee denied the reasons given by the employer and said that he hadn’t been told why he was sacked. He told the Fair Work Commission that he was told by his employer to take a week off while new staff were trained and that turned into 5 weeks during which time he wasn’t paid and was denied annual leave.

Then he said he was sacked without being told why.

The Compliance Complications 

There was firstly, the question of whether the employee was unfairly dismissed and, based on the evidence, he clearly was on both substantive and procedural grounds.

There were then a number of compliance issues that emerged in the course of proceedings in that the employee claimed that:

  • Throughout the period of his employment, he had been paid a flat rate of $13.50 per hour which is well below award rates and the federal minimum wage
  • He had illegally been stood down without pay and denied annual leave 
  • He had not been paid any notice or his final leave entitlements on termination of employment
  • He had only ever received one payslip over the whole course of his employment

Other factors

In considering unfair dismissal claims, the FWC will have regard to whether the termination is harsh, unjust and unreasonable. In the absence of a valid reason or process, the termination is clearly unjust and unreasonable.

Taking into account the employee’s age and length of service, termination would also be seen to be especially harsh, perhaps even if there had been a valid reason.

The Outcomes 

FWC Deputy President Ian Masson accepted the employee’s evidence, noting that the employer had not challenged it. 

He awarded the maximum compensation available ie 6 months wages which amounted to more than $20,000 based on award rates at the time of termination.

The employer has also been referred to the Fair Work Ombudsman for investigation and enforcement action relative to the reported underpayments of wages.

Those investigations won’t be restricted to this ex-employee’s case as there would clearly be a probability that other workers have also been underpaid.

As a result, the employer will be likely to have a substantial underpayment bill to pay as well as the prospect of very significant fines for breaches of the Fair Work Act.There could also be issues around superannuation (referral to the Australian Taxation Office) and wage theft (referral to Wage Inspectorate Victoria). 

The Lessons

This an extreme case where the employer has clearly done the wrong thing on a number of counts but it does underline the importance of ensuring that:

  1.  You have your house in order in terms of your compliance with employment laws, minimum wages and modern awards.
  2. You implement fair and demonstrable processes for dealing with performance and conduct issues so that you can demonstrate the fairness of any termination of employment that you might have to enact.
  3. You have access to competent professional advice on employment matters and you access that before taking such significant action as terminating employment.

We can assist with all of that. For you free first consultation, contact us on 1300 108 488 or use the “Tell us what you need help with” box below and we will give you a call.

 

CONTACT US

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ABN : 24 091 644 094

enquiries@ridgelinehr.com.au

0438 533 311

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Your Swiss Army knife

Your Swiss Army knife

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Your Swiss Army knife

example flexible working arrangement

 

One of the psychosocial hazards that research is showing to be at the forefront of the list that organisations need to address is that of lack of role clarity.

One of the tools that we can use to help to address that is the humble Position Description (PD) which has been around for decades and can be found in lots of different forms. 

In most places where I have worked as an employee or as a consultant, PDs are commonly treated as something we have to have for our quality accreditation or our HR compliance or something that we give people when we advertise a job or when they start employment with us. They are then filed away and forgotten about. 

This is really unfortunate because the PD is a very versatile tool and arguably one of the most powerful in a manager’s toolbox. 

So how can PDs be used to good effect? Here are 5 ways that we have used them.

#1. Compliance satisfaction

Every employer has a statutory duty to ensure that every employee is properly instructed in their duties and has the skills and abilities to perform their tasks safely for themselves and others. This is enshrined in workplace health and safety law and is also an important part of employment law in general.   

The PD is an effective aid to that instruction and skills assessment and enablement. It helps with documentary evidence of satisfaction of the statutory duties that all employers have as well as in dealing with employee grievances and actions against the employer (eg in demonstrating reasonable management action in response to an adverse action or bullying complaint).  

#2. Recruitment effectiveness

If you are going to be effective in recruitment, you first want to know what the attributes required for competent performance of a role are so that you can prepare a fit advertisement. 

You then need to identify selection criteria and the how to assess candidates by considering the attributes required in the role and the best ways to test candidates for those attributes. 

You also want to communicate what attributes are required to candidates (so that the right ones apply).  

A properly constructed PD helps with all of that and assists you to make an informed and evidence-based selection decision.

 #3. Targeted development

The content in PDs that details the skills, knowledge and attributes required provides a great foundation for assessing the technical strengths and weaknesses of an employee and why that is the way they are.  

That, in turn, can lead to targeted development that leverages those strengths or builds on areas of weakness. That will deliver the optimal return on investment in learning and provide the best support and recognition for the individual employee.  

It is also a great aid to onboarding of employees and getting them up and running quickly because their role and responsibilities are clearly communicated and easily understood from day one.

 #4. Performance management

Clearly, if we are going to expect people to perform their roles effectively, we have to tell them what their roles and responsibilities are and what performance standards are expected. A good PD does this and helps employees to be more productive and aligned in performance as a result.

Conversely, when performance management concerns arise, it is very important to go through a methodical, relevant and procedurally fair process that is supported by documentary evidence.  

The PD plays a critical part in this as it describes what is expected of the role the person is performing and the attributes required to meet those expectations. It also provides documentary evidence that the employer has clearly communicated the duties and expectations to the employee.  

Additionally, as with development of employees, the PD can be a useful tool for analysing why an employee might not be meeting expectations eg because they are lacking in some particular attribute (skill, ability or knowledge) required for the role.  

#5. Better employee engagement and wellbeing

Study after study tells us that key elements in good employee engagement and wellbeing practice include: 

  • giving people clarity about their roles and the expectations of them
  • providing the support that they need as an individual to be successful in their roles
  • having clear meaning and purpose in the work that they do and
  • feeling psychologically safe by feeling included and informed and involved in their work, in their relationships and in their team.

 A well-structured PD helps with all of these factors when all of the PD purposes outlined above are part of everyday practice in organisations.

 So that is why I think of the PD as the HR Swiss Army Knife – it can be used constructively in so many different ways. 

 Of course, it is just a tool and there are many others in the HR toolkit that need to be used to deliver best practice in People and Culture management.

Do you need to reimagine how you use PDs in your business?

How can we help?

We can provide you with tools like Position Descriptions and coaching in how to apply these tools effectively to control psychosocial hazards, otherwise meet your compliance obligations and build better communications and employee engagement.

If you want to know more, give us a call on 0438 533 311.



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ABN : 24 091 644 094

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The biggest increase in minimum wages ever

The biggest increase in minimum wages ever

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The biggest increase in minimum wages ever

superannuation changes

On Friday 2 June 2023, the Fair Work Commission handed down this year’s Annual Wage Review and it delivered the biggest ever increase in the federal minimum wage and award rates.

The Minimum Wage Panel decided to do it in two steps:

  1. To award a 5.75% increase in minimum wages in modern awards (up from last year’s 4.6%) and
  2. To raise the benchmark for the Federal Minimum Wage from the rate for classification C14  to the rate for classification C13 under the Manufacturing and Associated Industries and Occupations Award 2020 causing an aggregate increase of a record 8.65% (up from last year’s 5.2%) in the federal minimum wage and the lowest rung of award rates.These increases will apply from 1 July 2023 when the federal minimum wage will move up to $23.23 per hour (plus 25% for a casual employee).

A 0.5% increase in the superannuation guarantee rate will also apply from that date when it moves to 11% of ordinary time earnings.

Impact of raising the benchmark for the federal minimum wage

The lowest classification level in many awards has historically been at the level of the federal minimum wage. This level has commonly been applicable to new employees to an industry while they undergo basic training which, depending on the award, might be for a maximum of between 38 hours and 3 months.

So it generally has quite limited application in practice albeit that in industries where there might be high utilisation of casual and seasonal employees entering the workforce e.g. in hospitality, restaurants, alpine resorts, horticulture or wine industries.

Other industries with similar features like retail and fast food already have minimum award rates that are significantly above the federal minimum wage and so are not as affected by the decision to raise the benchmark.

What employers need to do

Regardless of whether you engage people on award rates or on overboard payments or on annualised salaries or wages or some other remuneration arrangement and whether that is based on a modern award or an enterprise agreement or a common law contract or a handshake (which really is a common law contract anyway), you need to review all of that to ensure that your remuneration levels remain at or above award rates from 1 July 2023.

It is also a good idea to review your employment contracts while you are at it.

Need help?

Give us a call on 1300 108 488 to arrange your free first consultation to see how we can help with advice and support on this or any other HR matter. 

 

CONTACT US

Ridgeline Human Resources Pty Ltd
ABN : 24 091 644 094

enquiries@ridgelinehr.com.au

0438 533 311

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Changes to flexible working arrangements and the NES

Changes to flexible working arrangements and the NES

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Changes to flexible working arrangements and the NES

example flexible working arrangement

Under National Employment Standards, employees (other than casual employees) who have worked with the same employer for at least 12 months can request flexible working arrangements if they:

  • are the parent, or have responsibility for the care, of a child who is school aged or younger
  • are a carer (under the Carer Recognition Act 2010)
  • have a disability
  • are 55 or older
  • are experiencing violence from a member of the employee’s family, or
  • provide care or support to a member of their household or immediate family who requires care or support because that person is experiencing violence from their family.

These entitlements have been around for many years but some changes are coming in.

From 6 June 2023, the right to request flexible working arrangements will also apply to:

  • employees, or a member of their immediate family or household, experiencing family and domestic violence
  • employees who are pregnant.

In what circumstances does the entitlement arise?

What is important to remember with this entitlement is that the need for the flexible working arrangement arises specifically from the particular attribute (ie the parental or carer status or the disability, etc) that applies to the employee.

For example, the fact that I am a parent does not, of itself, mean that I have an automatic entitlement to have a flexible working arrangement. However, I do have that entitlement if the exercise of my parental responsibilities gives rise to a need for a flexible working arrangement.

Similarly, the fact that I am 55 years of age or older does not of itself mean that I can access a flexible working arrangement but I have the entitlement if a flexible working arrangement is necessary to support my transition to retirement or to allow for some age-related disability (ie it is related to the fact that I am 55 years or older),

In some cases, multiple attributes can come in to play eg I could be over 55 years of age and transitioning to retirement and be a carer for my grandchild or I could be a victim of domestic violence and have parental responsibilities. Sometimes it will be this combination of factors which gives rise to the genuine need for a flexible working arrangement.

What must an employer do if an employee requests a flexible working arrangement?

Under current rules, employers have to genuinely consider a request from an eligible employee and can only refuse a request on reasonable business grounds. An employer must respond to a request in writing within 21 days and, if the request is refused, provide details on the “reasonable business grounds” in which it has been refused.

However, from 6 June 2023, two more very important changes come in:

  • Employers will have a duty to consult the employee about the request for a flexible working arrangement – to discuss it with the employee and to see if their needs can be accommodated in some way and
  • If the employer and the employee are not able to reach agreement or the employer does not respond in writing within the prescribed 21 day period, the matter can be taken to the Fair Work Commission for mediation, conciliation or mandatory arbitration.

What are reasonable business grounds?

The threshold of “reasonable business grounds” and examples of reasonable business grounds on which an employer can refuse a request have not changed.

Without limiting these grounds, they include the following:

  • that the new working arrangements requested by the employee would be too costly for the employer

  •  that there is no capacity to change the working arrangements of other employees to accommodate the new working arrangements requested by the employee

  •  that it would be impractical to change the working arrangements of other employees, or recruit new employees, to accommodate the new working arrangements requested by the employee

  • that the new working arrangements requested by the employee would be likely to result in a significant loss in efficiency or productivity, and

  • that the new working arrangements requested by the employee would be likely to have a significant negative impact on customer service.

The specific circumstances of the employer, including but not limited to the size and nature of the employer’s enterprise, are relevant to whether an employer has reasonable business grounds to refuse a request.

What should I do with a request from an employee who is not eligible?

 If an employee is not eligible due to not having completed 12 months service but would otherwise qualify because the request arises from needs associated with one or more of the prescribed attributes, we would suggest that you should still see if there is a way to accommodate the employee’s needs even if they technically do not have a legal right to request a flexible working arrangement.

There are other jurisdictions where an employee might be able to take a complaint of unlawful discrimination if a request is unreasonable refused.

If an employee is not eligible because the request does not arise from a need associated with one or more of the prescribed attributes, there is less of a risk of an employee having a legal basis on which to prosecute a complaint of some sort.

Having said that, we know that, resultant from COVID lockdowns, there are a lot of people who have had the experience of working from home and are looking for working from home or hybrid working arrangements.

Employers really need to look at what they are able to offer employees in flexibility of working arrangements as part of their overall talent attraction and retention strategy.

Some organisations are shifting to 4 day weeks.

For categories of employee who cannot work from home because of the job that they do (eg  nurses, factory workers, drivers, construction workers, hospitality and shop-based retail staff), look at what flexibilities you might be able to offer such as an RDO or a 9 day fortnight or an early finish on Fridays. 

Need help?

Give us a call on 1300 108 488 to arrange your free first consultation to see how we can help with advice and support on this or any other HR matter. 

Note: some of the content has a been sourced from publications by the Department of Employment and Workplace Relations and the Office of the Fair Work Ombudsman. 

CONTACT US

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ABN : 24 091 644 094

enquiries@ridgelinehr.com.au

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15% wage increase awarded to Aged Care workers

15% wage increase awarded to Aged Care workers

Latest News & Events

 

15% wage increase awarded to Aged Care workers

father with newborn

As a result of a work value case that the Fair Work Commission (FWC) has been running, there will be a 15% minimum wage increase granted to certain employees in the aged care sector. Here are the details of that decision and who it effects.

Who does the increase effect?

The increase applies to employees who perform direct care roles under the following Awards and classifications:

    • Aged Care Award 2010 – Applies to recreation/lifestyle activities officers, personal care workers, and the most senior food service employee (classified as levels 4–7) in particular aged care facilities
    • Nurses Award 2020 – Nursing assistants, enrolled nurses,registered nurses,and nurse practitioners working in aged care
    • Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS) – Home care workers working in aged care

The increase does not apply to other supporting employees such as administrative/clerical employees or chefs and cooks who are not the most senior food service employee at a particular aged care facility or site.

When does it come into effect?

The Federal Government had been pushing to have the 15% applied over 2 years with a 10% increase from July 2023 and a further 5% increase coming in July 2024. The FWC, however, decided to introduce the entire 15% increase from the 30/6/23 meaning employers will need to ensure that they have applied the full 15% increase from the first full pay period after that date.

More to come

The FWC has not concluded it’s work value case into the aged care industry and is still considering some matters including how the three Awards above are structured and how they classify employees, as well as whether further increases are needed to other employees in the aged care sector.

There is also some uncertainty as to how the increase will interact with the FWC’s Annual Wage Review and whether the 15% will be the entirety of the increase for those workers or if they will also get the increase that will apply to the minimum rates under Modern Awards.

For more information on this topic please visit the Fair Work Ombudsman’s website here or if you need further assistance please give us a call on 1300 108 488.

CONTACT US

Ridgeline Human Resources Pty Ltd
ABN : 24 091 644 094

enquiries@ridgelinehr.com.au

0438 533 311

PARTNER LINKS

TELL US WHAT YOU NEED HELP WITH