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Employment policies and franchisees

Consumer markets: Navigating COVID-19 for franchisors

Australia Publication October 2020

COVID-19 has seen an unprecedented number of businesses forced to close their doors, halt trading or operate under reduced trading hours. Many franchised businesses have been considered a “non-essential service”, or shopping centres have closed or had insufficient customers. So franchisors (and franchisees) have been forced to stand down or dismiss staff or reduce workers’ hours.

While the government has flagged a cautious easing of certain restrictions, the impact of continuing COVID-19 measures is likely to be felt for many more months.

COVID-19 has created new legal obligations and some unforeseeable circumstances, and all existing laws remain in place. It is therefore important that franchisors continue to keep up to date with work, health and safety developments and communicate transparently with franchisees about important policy changes and challenges. Here are some tips:

  1. Ensure you keep employees and franchisees informed about emerging issues or urgent changes, such as new policies and procedures or safety measures. Provide as much notice as possible if these changes are likely to impact a franchisee’s business continuity.
  2. In response to the crisis, both State and the Federal governments have announced a number of measures aimed at providing financial support to businesses and keeping as many workers employed as possible during the current economic downturn.

    Under the Federal Government’s JobKeeper scheme, eligible employers will be paid $1,500 a fortnight (before tax) for each “eligible employee”. The scheme will start on 30 March 2020 and continue for a period of six months.

    Ensure that you have a good understanding of how relevant schemes operate as well as important eligibility criteria and communicate accurate information about this to your employees and franchisees. Be ready to respond to questions from franchisees and their employees.

    For more information about the JobKeeper scheme, see here.
  3. Ensure that work health and safety requirements and worker entitlements continue to be met. Be responsive to suggestions of underpayments and be prepared to respond to questions from franchisees and their employees regarding leave arrangements or payment entitlements.

    It is important to remember that vulnerable workers legislation continues to operate and that a franchisor can be held responsible if their franchisee contravenes the law.
  4. Consider how you can adapt your business model or implement agile working practices within your business. Provide guidance about how franchisees can do the same, where your business model can accommodate this.

If you have any questions about issues affecting your business as a result of COVID-19 contact any member of our Consumer Markets and Franchising team.

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