The plot to kill off tough new wage fraud laws

Adele Ferguson
APRIL 7, 2017
The Age

Shocking cases of wage fraud in the big brands of 7-Eleven, Domino’s, Caltex and United Petroleum, ricochet across the country, prompting all sides of politics to promise new legislation to rein in systemic wage fraud.

Or so we thought.

Alleged 7-Eleven underpayment undermines guest worker regulations, says former ACCC chairman Allan Fels. 

In the weeks before the election the Turnbull government promised to change the law to make franchisors jointly responsible with their franchisees for workplace abuses if they have significant control or influence on the franchisee.

It sounded reasonable enough. 

Looking at the profits franchisors extract from their franchisees and the control many of them wield, who could disagree?

We know that worker exploitation isn’t limited to the franchise sector, but enough big players have been caught out, which is why we need to start somewhere. 

But the sector decided to have none of that. 

Enter Bruce Billson, the former small business minister who became chairman of the franchise lobby group just before the last election. His role as chairman of the Franchise Council of Australia has been to tell anyone who will listen that the proposed laws are too draconian.

It was a smart move by the FCA. In one newspaper article Billson described the new laws as “a media-inspired regulatory misadventure to introduce unprecedented laws that fit up the franchisor for the Fair Work Act breaches of their franchisees where they have had no actual involvement”.

The article worked itself up into a fervour, arguing that the laws represent an “existential threat” to the successful franchise model of enterprise.

The reality is convenience store giant 7-Eleven became embroiled in a systemic wage fraud scandal in August 2015. It shocked the nation. The business model was flawed and head office agreed to repay exploited workers. More franchisors should follow its lead.

The Protecting Vulnerable Workers Bill was designed to do just that. It was introduced on March 1, with the legislation listed on March 20.

But it quietly disappeared from the program last week with two other Fair Work Bills listed in its place, without explanation.

When it will be re-listed is anyone’s guess but it is unlikely to be the next sitting as it will be dominated by the federal budget.

Fairfax Media’s Adam Gartrell has written today that the FCA has directed its members, including 7-Eleven, Pizza Hut and Caltex to call and write to their politicians about the bill. He says Billson has been visiting, calling and texting MPs.

The Turnbull Government says it is “firmly committed to this policy” and urges the ALP to support the legislation. If that’s the case, they should get on with the job.