How the new Franchise Wages Bill will disrupt the Removal Industry

If you don’t already know last week Adam Bandt, Melbourne Greens MP introduced a new bill to Parliament. The bill is called the Fair Work Amendment (Recovery of Unpaid Amounts for Franchisee Employees). It has been introduced in response to the recent 7-Eleven scandal.

This bill was created to prevent this from happening again and to make the franchisor be responsible for underpayments if the franchisee is unable to pay staff the correct amount on time.

To read the bill visit here.In general terms, the bill outlines that:

The employee, or anyone acting on their behalf are able to give the franchisor a written demand for payment if the franchisee employer does not provide payment to the employee by pay day.
The employee has up to 6 years from the pay day to give the franchisor a written demand
The franchisor only has 14 days to provide payment to the employee
After 14 days and the employee still has not been paid what is requested, the employee is able to take the franchisor to court.
The court then has to add interest to the amount already owed to the employee. The interest is calculated from the day the employee was originally supposed to be paid

So, what does this mean for the removal industry?

This bill will force franchisors to be on top of their books and create a lot more responsibilities for the franchisors. We know there are a lot of companies in the removal industry who engage in a franchise business model. This will definitely affect them and give their employees a lot more rights, which they actually need in this industry.

Even if the payroll is late by an hour the employee has the right to give the franchisor a written demand. The franchisor will need to be sure that their franchisees are sticking by the rules with payroll, otherwise their brand will be headline news.

The removalist industry is a high cash industry and because of this unfortunately it is common for employees to get underpaid especially on weekends and when working overtime. It is easy to see in the business structure if employees are not being paid properly by the business structure. If movers are working 14 hours straight on multiple removal jobs and the rate of each job stays the same low cost. This shows that they are unable to pay the movers overtime rates (over 8 hours) as they are not charging the clients enough to afford this.

It is sad this happens so hopefully if this bill is put in place, the removals industry will change for the better. Most companies who pay their staff incorrectly use the franchise and sub-contractor business model instead of the private and family business model.

Posted by Caleb Rook in News