March 1, 2017

Retailers fearful legislation introduced today could spell the end for struggling SMEs

The National Retail Association (NRA) has today expressed serious concerns about new provisions in the Vulnerable Workers Bill being introduced to Parliament today, making franchisors responsible for underpayment of labour within their franchisee network, and potentially forcing franchisees – the clear majority of whom are doing the right thing – to fund systems to prove their compliance.

NRA CEO Dominique Lamb said the proposed legislation would add even more red tape to what is already a highly complex area of the Fair Work Act for franchisors and franchisees to navigate.

“This proposal may add significant expense and complexity to franchisor’s business models, which could result in requirements for businesses to police each other, instigate expensive and time-consuming auditing processes, and erode the important relationships between franchisors and franchisees.

“This erosion is likely to impact the number of franchises in the market, add significant expense to franchisees and franchisors and deter entrepreneurs from considering franchising as an option.

“The overwhelming majority of franchisors dedicate great time and effort to ensuring they have good relationships with their franchisees and protecting their brands by educating business owners within that brand.

“But these provisions go one step further, and will only serve to punish an entire industry for the mistakes of a few.

“Franchising has functioned extremely well for decades in Australia, has helped foster good working relationships between the majority of franchisors and franchisees, and is well-regulated by the ACCC and the Fair Work Ombudsmen,” she said.

If the Vulnerable Workers Bill is passed, a franchise group could be hit with fines of up to $54,000 for every instance of underpayment by a franchisee, and similarly, the penalty for a franchisee (individual), when a serious contravention is established, will increase from $10,800 to $108,000, and for a body corporate franchisee, from $54,000 to $540,000.

“When there are large businesses such as Masters and Dick Smith falling over, more regulation and red tape is rarely the answer. It creates more problems that it fixes, and acts as a deterrent to job creation in one of the most important industries in Australia,” she said.

Have your say

The National Retail Association are lobbying against this Bill at this very moment. We would like to hear from all retailers likely to be affected by this Bill and the proposed changes. Please contact us to have your views relayed to Parliament.

Contact us today at or call 1800 738 245.