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S P R I N G 2 0 1 8
47
to become more clearly defined through
judicial consideration. Nevertheless,
and for the reasons discussed above, the
amendments (as well as the FWA overall)
are designed to retain some degree of
vagueness in their terms and operation.
Advice for Investors and
Business Owners
To minimize the risk of violating the FWA,
franchisors should assist their franchisees
in understanding and complying with
their legal responsibilities; record-
keeping and pay slip obligations are of
particular importance now. Not only can
franchisors be liable when they have
actual knowledge of their franchisees'
wrongdoing ­ if the court is of the view
that they could reasonably have known that
their franchisee has breached workplace
laws, they can be equally liable.
Be prepared to have to disprove
allegations relating to wage claims in court.
The onus of proof has been reversed for
employers who do not meet their record-
keeping or pay slip obligations without a
reasonable excuse.
For international investors in Australia-
based franchisors, the biggest challenge
will lay in ensuring that franchisees are
following the law, notwithstanding the fact
that the parent franchisor may be many
thousands of miles away. One way to
minimize risk of franchisees breaching the
law and, in doing so, exposing the parent
franchisor to liability, is to have strict
protocols and systems in place by which
regular compliance audits are conducted.
It is also recommended that individual staff
members should be held accountable for
ensuring compliance with all laws. This
can be achieved by having carefully drafted
contracts of employment. Working closely
with an industrial and employment law
specialist to assist with the development
of these systems or protocols will be
invaluable in minimizing this risk.
1 Another example of the current government's push to
hold overseas-based companies liable is in respect of
tax avoidance, with increased penalties for the same
currently set to be forwarded to the Commonwealth
Parliament for consideration.