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Franchising code “deficient and ineffective”

A union representing retail and fast food workers will tell an inquiry into franchising the current regulations surrounding the industry are “deficient Donut Kingand ineffective”.

The Shop, Distributive and Allied Employees Association will give evidence to a federal joint parliamentary committee hearing in Brisbane on Friday alongside employment lawyers Maurice Blackburn.

SDA national secretary Gerard Dwyer says the Franchising Code of Conduct is deficient.

“The current code makes absolutely no attempt to ensure that franchisors and franchisees abide by workplace laws,” Dwyer said in a statement.

“As a result, we have seen appalling examples of systemic wage theft and exploitation of thousands of workers by major companies such as 7-Eleven, Caltex and Subway.”

Dwyer said migrant workers, who fear being reported to immigration and deported, were particularly vulnerable and poorly served by the code.

“Proceedings to recover unpaid wages in the current system are complex, time-consuming and costly,” he said.

The code also lets down franchisees, as it doesn’t require franchise models to be structured in a financially sustainable manner, he said.

“It’s clear that many individuals enter into franchise arrangements without having a clear understanding of all that’s required.

“It is virtually impossible for many franchise holders to operate a successful business without ‘cutting corners’ such as engaging in wage theft.”

Dwyer will recommend a range of changes to the code, including holding franchisors to account.

“Liability for breaches of the Fair Work Act by franchisees should extend to the franchisor,” he said.

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