The obstacles workers face in successfully pursuing their entitlements and the inadequacy of our current penalties to deter underpayments means problems with franchises will remain.
The franchise business model could be undermined by proposed laws which make franchisors and franchisees jointly responsible for wage underpayments.
The law assumes franchisees do their financial and legal homework when it comes to signing up to a chain, but research shows franchisees are often overconfident and ignorant of the risks.
7-Eleven’s decision to take charge of the compensation process for underpaid workers highlights the problems with voluntary commitments and underlines the need for increased legal accountability.
Extending individual protections to franchisee owners is supposed to offer protection, but will have the opposite affect.