Thursday, 13 April 2017

Turnbull Government dragging its heels on legislation to protect vulnerable workers?

The Age, 6 April 2017:

The peak body for the $150 billion franchise sector has launched an intense behind-the-scenes lobbying campaign to convince MPs to water down Turnbull government legislation designed to prevent future worker exploitation scandals.

Spearheaded by former Liberal minister Bruce Billson, the Franchise Council of Australia is targeting the government, opposition and crossbenchers as it seeks to pressure Employment Minister Michaelia Cash into changing course on the bill.

It has also directed its members - which include 7-Eleven, Pizza Hut, Caltex and other companies accused of underpaying their workers - to bombard MPs with calls and letters about the Fair Work Amendment (Protecting Vulnerable Workers) Bill.

The campaign comes as petrol giant United Petroleum became the latest company to be embroiled in an exploitation scandal, with the workplace regulator blasting it for rampant underpayment of workers across its franchise network. United Petroleum is not listed as a FCA member.

Mr Billson personally pressed the franchisor case with visits, calls and texts to MPs during the most recent parliamentary sitting fortnight in Canberra.

And in emails that have begun arriving in MP's inboxes in recent days, franchisors argue it is "unreasonable" to single out the franchising sector.

"The real issue here is that the risk of worker underpayment exists across the economy," the missives read.

The government's bill was introduced into Parliament last month but subsequently disappeared from the agenda, fuelling speculation from the Opposition that the council's campaign was succeeding.

However Senator Cash said the government remained "firmly committed to this policy"…..

The Franchise Council originally sought to kill off the bill entirely, warning it would lead to unavoidable unintended consequences.

It is now arguing for extensive amendments and is particularly concerned about the world-first "joint liability" provisions, claiming they will negatively impact investment, growth and employment.

It also wants courts and regulators to be explicitly forced to take a businesses size and resources into account, and further clarity about what "reasonable steps" actually means….

Franchises employ close to 500,000 people across 73,000 outlets across Australia and contribute up to 10 per cent of Australia's GDP.

The Age, 7 April 2017:

Shocking cases of wage fraud in the big brands of 7-ElevenDomino'sCaltex and United Petroleum, ricochet across the country, prompting all sides of politics to promise new legislation to rein in systemic wage fraud.

Or so we thought.

In the weeks before the election the Turnbull government promised to change the law to make franchisors jointly responsible with their franchisees for workplace abuses if they have significant control or influence on the franchisee……

But the sector decided to have none of that.

Enter Bruce Billson, the former small business minister who became chairman of the franchise lobby group just before the last election. His role as chairman of the Franchise Council of Australia has been to tell anyone who will listen that the proposed laws are too draconian.

It was a smart move by the FCA. In one newspaper article Billson described the new laws as "a media-inspired regulatory misadventure to introduce unprecedented laws that fit up the franchisor for the Fair Work Act breaches of their franchisees where they have had no actual involvement".

The article worked itself up into a fervour, arguing that the laws represent an "existential threat" to the successful franchise model of enterprise.

The reality is convenience store giant 7-Eleven became embroiled in a systemic wage fraud scandal in August 2015. It shocked the nation. The business model was flawed and head office agreed to repay exploited workers. More franchisors should follow its lead.

The Protecting Vulnerable Workers Bill was designed to do just that. It was introduced on March 1, with the legislation listed on March 20.

But it quietly disappeared from the program last week with two other Fair Work Bills listed in its place, without explanation.

When it will be re-listed is anyone's guess but it is unlikely to be the next sitting as it will be dominated by the federal budget.

According to the Australian Parliament website the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017: "amends the Fair Work Act 2009 to: increase maximum civil penalties for certain serious contraventions of the Act; hold franchisors and holding companies responsible for certain contraventions of the Act by their franchisees or subsidiaries where they knew or ought reasonably to have known of the contraventions and failed to take reasonable steps to prevent them; clarify the prohibition on employers unreasonably requiring their employees to make payments in relation to the performance of work; provide the Fair Work Ombudsman (FWO) with evidence-gathering powers similar to those available to corporate regulators such as the Australian Securities and Investment Commission and the Australian Competition and Consumer Commission; and prohibit the hindering or obstructing of the FWO and or an inspector in the performance or his or her functions or powers, or the giving of false or misleading information or documents.”

On 23 March 2017 this bill was referred to the Senate Education and Employment Legislation Committee.

Submissions were invited but none are listed on the Inquiry’s webpage to date. Public hearings are being held in Canberra on Wednesday 12 April and in Sydney on Thursday 13 April 2017.

Those giving evidence before the Senate  inquiry are:

Australian Chamber of Commerce and Industry (ACCI)
Council of Small Business Australia (COSBOA)
Franchise Council of Australia
National Retailers Association
The Australian Industry Group (AIG)
McDonalds Australia
Department of Employment
Fair Work Ombudsman
Fair Work Commission
West Justice (Western Community Legal Centre)
Prof. Andrew Stewart
Gerard de Valence
Australian Council of Trade Unions (ACTU)
Shop, Distributive and Allied Employees’ Association (SDA)
One other to be announced
The Committee is due to report to Parliament on 9 May 2017.

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