I write this post a year ago. It is relevant today because Tatts has just contacted franchisees seeking access to information many small business owners would not consider its right to have…
Newsagents have been wondering why Tatts is expressing interest in employee arrangements in newsagency businesses. I have had plenty of questions and I know others have too.
This situation has come about because of the federal government passing vulnerable employee legislation following the 7-Eleven debacle. The Fair Work Ombudsman website sets the scene:
On 15 September 2017 the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 took effect. It makes the following changes to the Fair Work Act 2009
(the Fair Work Act):
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increase penalties for ‘serious contraventions’ of workplace laws
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make it clear that employers can’t ask for ‘cashback’ from employees or prospective employees
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increase penalties for breaches of record-keeping and pay slip obligations
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employers who don’t meet record-keeping or pay slip obligations and can’t give a reasonable excuse will need to disprove wage claims made in a court (this is also referred to as a reverse onus of proof)
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strengthen our powers to collect evidence in investigations
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introduce new penalties for giving us false or misleading information, or hindering or obstructing our investigations.
Read what the Fair Work Ombudsman website has to say about franchisors that have a significant amount of influence or control over the business affairs of the franchisee:
These changes apply from 27 October 2017.
Franchisors and holding companies (a company that has control over subsidiary companies) can be held responsible if their franchisee or subsidiary doesn’t follow workplace laws about minimum entitlements, the National Employment Standards, awards, sham contracting, record-keeping and pay slips.
This will apply to franchisors that have a significant amount of influence or control over the business affairs of the franchisee.
Franchisors or holding companies could be liable for breaches or underpayments if:
- they knew (or could have reasonably known) that a franchisee or subsidiary wasn’t following workplace laws
- they didn’t take reasonable steps to prevent it.
We are working with franchisors, their advocate and advisers and will have more information in our Help for franchises section when the changes take effect.
Tatts is acting because of an understanding of that term – significant amount of influence or control over the business affairs of the franchisee.
It’s not only Tatts caught in this. Any business that can be claimed to have a significant amount of influence or control over a downstream business is in the cross hairs.
I think there will be plenty more news and engagement about this in the channel river the next few months.
The challenge is the definition: significant amount of influence or control. It is not as clear as it could be. Some politicians say the Fair Work Ombudsman has overreached. We will have to see how that plays out.
There is plenty of advice online outlining the obligations for franchisors and organisations like Tatts outlets.
For a government that said it would reduce red tape for small business, this legislation is considerably adding to it.
In my opinion, Tatts have no business being the fair work police. They are supplier to my business, one of many suppliers. Are Fairfax allowed to ask to see my employee records? GNS? The lolly rep? As an employer I will not provide copies of payslips or any other info without my employees permission. When I quizzed them about this recently, every one of them said they would not give me permission to provide payslips etc to Tatts.
It’s compliance running amok. Tatt’s do not have significant control of my business. They have a say in how and whether I operate less than 10% of it. It is not significant by any interpretation.
Seems to me that Tatts take an extreme view as they are desperate to keep their near 100% monopoly. They don’t want any reason for the compliance police to turn their attention to them.
Like with their forced implementation of the upgrade ?
The issue here is the legislation. It is vague. I can see how it could be argued that Tatts does need the information in that they can exert a degree of operational control over the businesses of their retailers and that, apparently, is the test. The control is evident in their process of agent approval, the training requirement, store compliance visits and more.
The case with Fairfax, and News Corp. for that matter, is less clear in that the level of control they exert is less obvious.
It’s all about Tatts / Tabcorp making it public that they have been seen to have abided by the Fair Work Commission and moving any fault back to the individual franchisee.
We have a competing lotto outlet being moved from a 300m distance away strip outlet into our shopping centre at a location which will be approx 50m away.
It was stressed to Tatts that this opposing franchisee outlet has an extremely poor record in paying staff the correct entitlements and that multiple former staff members had taken them to Fair Work because of unpaid penalty and superannuation entitlements.
When asked what penalties would be imposed if a franchisee had a complaint against them through Fair Work, basically they said there would be no penalty but Tatts / Tabcorp would work with the franchisee to inform them of the correct procedures and information to pay staff correctly.
Despite this, Tatts seems more concerned about maintaining the opposing outlet and very little concern for the staff whose wages have been underpaid by this franchisee.
So basically Tatts will work to ensure franchisees are informed of their obligations, but won’t actually penalise a franchisee because they fear further outlets closing down.
they knew (or could have reasonably known)
Safer not to ask. – Fools
The legislation is clear, “a significant amount of influence or control over the business affairs of the franchisee” .
Tatts are overstepping their authority, yes obviously in a Lottery kiosk Tatts business is the main income source . However there are many Newsagencies where the Tatts proportion of their business is not significant .
Tatts should not be enforcing this across the network because quite clearly it has no authority to do so in many cases . If your Lottery income for example is say 25% of your total income is that significant , no. This would be the case in many country Newsagencies .
I would say to those Newsagencies who feel Tatts have overstepped the mark on this just refuse to provide the information or allow Tatts to interview your employees . Then sit back and see how far Tatts will take this my feeling is Tatts may threaten but ultimately in many Newsagencies Tatts are overstepping their authority
I suspect Tatts’ leadership is acting on legal advice. While retailers can do nothing, all it will take is for a successful FairWork claim by an employee in a business with Tatts for there to be more focus on this.
The current legislation is unclear about which organisations can be roped in. Someone in a business with tatts with their prime role the sale of Tatts products, you can see ho0w it would play out.
The purpose of my post is to offer a possible explanation as to why Tatts has put out their current request.
Tabcorp made a submission to the Parliamentary
Joint Committee on Corporations and Financial Services 4 May 2018
The submission the interviews and the answers by Tabcorp make interesting reading for ALL Newsagents
The Report discloses attitude,perspective and position.
Some of their positions within theReport conflict with their current behaviour as of now or do they?
I would appreciate anyone’s feedback posted here once they have read the document, as to their own position and experience in relation to what or why they are taking this action when they say they don’t have the control over the reats of the business that hosts their franchise.