Home' The Franchise Review : March 2017 Contents THE FRANCHISE REVIEW
In order to fulfil your HR-related compliance obligations,
you firstly need to know and understand your obligations
under the law. While this may sound obvious, few businesses
deliberately break the law with the intention of disadvantaging
their employees. Most businesses that are prosecuted for
legal breaches involving their obligations to their employees
do so unintentionally due to a lack of knowledge or a
misinterpretation of their obligations under the law. This article
outlines the four areas of HR-related legal compliance where a
business is most likely to make a costly mistake.
Fair Work Act
At the centre of Australia’s workplace relations system is
the Fair Work Act. The Fair Work Act sets out the rules and
obligations for employees and employers under the national
workplace relations system. Its purpose is to provide a
balanced framework for productive workplace relations that
promotes national economic prosperity and social inclusion
for all Australians. The Fair Work Act provides a guaranteed
‘safety net’ of fair, relevant and enforceable minimum terms
and conditions through the 10 National Employment Standards
(NES), modern awards and national minimum wage orders.
National Employment Standards
The NES are 10 minimum employment entitlements that apply
to all employees and, in conjunction with the national minimum
wage, make up the minimum employment entitlements for
employees in Australia. An award, employment contract or
registered agreement cannot provide for conditions that are less
than those contained within the NES.
As an employer, one of your key obligations is to ensure that
modern awards are correctly applied within your workplace.
Modern awards outline the minimum entitlements awarded
to employees, covering wages and conditions based on
industry and occupation. These conditions include the
type of employment, overtime, penalty rates, allowances,
superannuation and leave entitlements. Understanding
which modern award applies to your business, industry and
employees is essential, but can also be difficult and, in some
cases, not all employees in your business will fall under the
same modern award.
Even if you are doing everything right in relation to your
employee entitlements, a failure to maintain your records in
accordance with the law can land you in trouble. The Fair Work
Act places specific obligations on employers regarding record
keeping and pay slips.
Employers are required to keep time and wage records for seven
years. If an employee asks to see their records, an employer
must make them available, and Fair Work Inspectors can also
ask for time and wage records to determine what an employee
is entitled to and whether they have been paid correctly. All
records must be readily accessible to a Fair Work Inspector upon
request, and must be clearly legible and in English.
In addition, pay slips must be provided to employees within
one working day of pay day, even if an employee is on leave.
Pay slips can be in either electronic form or hard copy, and an
electronic pay slip must have the same information as a paper
pay slip. The Fair Work Act also outlines the information that
must be present on a pay slip.
Support for franchisees
As a franchisee, you are not alone. In fact, you have more
support than most business owners in the form of your
franchisor and fellow franchisees. As a franchisor, there are
proactive steps that you can take to support your franchisees
in fulfilling their legal obligations and, in turn, protect your
brand and your company from liability under accessorial
liability legislation. Some of the recommendations that I would
make to a franchisor include establishing an audit system and
undertaking frequent audits on franchisees, the provision of
training to your franchisees on employment-related compliance,
and the provision of a standardised, legally ratified employment
contract for use across the entire franchise network.
But, the most important thing that you can do as a franchisor
is to talk to your franchisees. It is important to make yourself
available to answer all of their questions, and to always
remember that most franchisees didn’t go into the franchise
sector with all of the answers – they chose the franchise sector
for the support and guidance that comes with being part of a
About the author:
Susan Bromley is a committed HR professional whose
uncompromising standards, energy, insight and
intellect ensure that HR is at the forefront of planning
and operational processes. Committed to her own
development, Susan recently completed her Executive
MBA, positioning her to provide the valuable strategic
link between HR and viable business outcomes.
Susan Bromley, HR Central
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