The Protecting Vulnerable Workers Bill, more commonly known as the 7-Eleven bill, has been passed by the Senate, including amendments from both sides of the house.

The bill massively ramps up penalties for franchisors in cases where they ought to have known of payment related breaches by franchisees, and clearly defines the legislative, and information collecting powers of the Fair Work Ombudsman.

Fines can be $108,000 for franchisors who fail to act when the franchisee is breaking the law, or $540,000 when the franchisor is party to the act.

Mary Jo Fisher, director government relations, Printing Industries says, “This means that in practical terms, a franchisor is probably going to be sticking its nose into the day-to-day business of a franchisee, more than they would have done in the past.”

There are more than 500 print franchisees in Australia across groups including Snap, Kwik Kopy, Worldwide, Minuteman, MBE, Signarama and Signwave.

Fisher says, “It means that a franchisor or holding company will be responsible for underpayments by a franchisee or subsidiary, where the franchisor or holding company knew, or ought to have reasonably known of the underpayments of wages, and failed to take reasonable steps to prevent them.

“The precise meaning of these terms is anyone’s guess. It is going to be a Pandora’s Box, and it remains to be seen how the law will be interpreted and applied. Let us hope that is not a print franchise put in that position.

“We do not think the bill should have been proposed. There is no need for the bill, as the existing law does the necessary work. The resolution of the 7-Eleven cases are an example of that.

“This is the sort of law that you would expect a Labor Government to enact. What is a Coalition administration doing, proposing legislation which will result in more red tape for franchisors, franchisees, and holding companies, increasing cost for doing business?

“In many cases, the franchisor will be best advised to be regularly checking up on a franchisee to make sure that, to the franchisors satisfaction, the franchisee is not breaching payment related workplace relations laws.

“Technically, the franchisee remains as liable as he/she ever was, but, the human reaction from the franchisee is likely to be that ‘the franchisor will be checking I am complying with the laws so I don’t have to worry about checking it as much myself.’

Amendments introduced by Senator David Leyonhjelm of the Liberal Democratic Party and Cory Bernardi of Australian Conservatives to include the words “…in the ordinary course of business” throughout the bill were knocked back 31-34 in the Senate.

The amendment would have limited a franchisor's liability to situations in which a franchisor had some sort of control or influence over a franchisee's payment practices.

Printing Industries’ Mary Jo Fisher had welcomed the amendments when they were first introduced.

Printing Industries has been concerned the bill could be overreaching, creating unreasonable liability for franchise head offices, and unnecessary red tape for franchisees and franchisors.

Andrew Macaulay, CEO, Printing Industries says, “That a franchisor can be fined, and fined a substantial amount, because of the actions of a franchisee, is clearly against the principles of law and justice that we adhere to in this country, and will impact on the relationship between franchisor and franchisee.”

The bill still needs to pass the House of Representatives, which is considered a formality.

Comment below to have your say on this story.

If you have a news story or tip-off, get in touch at editorial@sprinter.com.au.  

Sign up to the Sprinter newsletter