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Franchisors and Franchisees as Joint Employers

Recently, international law has undergone changes that could impact your franchise in NZ. The law is rapidly changing to reflect franchisors and franchisees as joint employers. Now is the time to ensure that your business is utilising the correct practices.

In recent times many large franchise corporations have come under fire for their employment practices. International cases like the ones with 7/11 and Caltex are moving closer to home. The Ministry of Business, Innovation and Employment (MBIE) are enforcing correct practices across all areas of employment, including small business.

Franchisors – now is the time to wake up and be prepared. Don’t let yourselves get in a mess over incorrect practices.

Franchise Joint Employers – What does it mean for me?

In the eyes of the law, franchisors and franchisees could be viewed as joint employers. This means that franchisors are being held accountable for their franchisees’ actions. Franchisors need to ensure that their franchisees are operating within the boundaries of New Zealand employment law. This means keeping correct records, meeting all the correct obligations and treating staff fairly.

The Labour Inspectorate has recently released a warning to say that all small businesses should expect a visit in 2017. Now is the time to be proactive and ensure that your franchisees are following best people practices.

What do I need to do?

First and foremost, you need to ensure that all of your own employment practices are correct. The next step would be to check in with your franchisees and ensure that they are following the correct procedures. There are a number of areas that they will need to be compliant in. An example of these areas are:

-        Fair and correct staff employment contracts

-        Fair treatment of staff

-        Following company policies and procedures

-        Maintaining proper employee records

-        Meeting immigration requirements

-        Meeting obligations for kiwisaver, PAYE and deductions

These are just some of the main areas that your franchisees will need to comply with. There will be other things to consider too. It is vital to ensure these practices are correct now, to prevent major headaches down the track.

How do I safeguard my franchise?

As a franchisor, have you thought about how you can provide HR support to your franchisees?

Here at in2HR we have specialist knowledge in franchises. This means that we are experts in helping both franchisors and franchisees with their people practices. We would be able to help you develop effective HR procedures that will keep your business out of hot water. Know that you are ready for a visit from the Labour Inspectors by having all of your practices complaint with employment law.

Get in touch with us today to see how we can help.