Australian Newsagency Blog

A blog on issues affecting Australia's newsagents, media and small business generally.

Has Tatts overreached in dealing with franchisees on retail employee conditions?

Mark Fletcher
February 1st, 2019 · No Comments

Tatts appears to be demanding retailers adhere to employee terms that are not required by FairWork. I have seen them do this either not back down or take months to back down even after being shown that their demands on the retailer are considerably beyond the scope of the legal obligation of the newsagent employer.

The situation has come about because of the legislation the parliament passed following the 7-Eleven employee scandal. It was designed to protect employees in franchisees. As the Tatts / retailer falls under the definition of a franchise, Tatts has certain rights /. obligations under the legislation.

I would argue that Tatts has been overs jealous in actions of which I am aware and that they have issued formal breach like notices for matters that have no support in FairWork mandated obligations for employers.

The result is considerable stress for retailers, plus costs in dealing with what Tatts puts them through.

To avoid being caught in a Tatts created and managed stressful situation:

  1. Ensure you pay everyone according to the award.
  2. Provide a complete payslip for every pay period, preferably directly out of a reputable accounting program.
  3. Pay on time.
  4. Have written time sheets.
  5. Do not pay employees in cash.
  6. Have your processes and records checked by your accountant or some other appropriately skilled person at least once a year.
  7. Treat family member employees as you would any employee.

A challenge with the Tatts approach is they will ask employees to complete a survey. One wrong answer to a misunderstood question could result in Tatts coming for you. This is why you need to be certain of your processes and be able to defend your position based on documentary evidence.

As I have written previously, the 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 2009external-icon.png (the Fair Work Act):

  • increase penalties for ‘serious contraventions’ of workplace laws

  • make it clear that employers can’t ask for ‘cashback’ from employees or prospective employees

  • increase penalties for breaches of record-keeping and pay slip obligations

  • 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)

  • strengthen our powers to collect evidence in investigations

  • 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.

I think  that in terms of tatts, they do have significant amount of influence or control over the business affairs of the franchisee.

There is plenty of advice online outlining the obligations for franchisors and organisations like Tatts outlets.

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Category: Newsagency management

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