SEVEN TIPS for FRANCHISORS to Solve the Problem of Shared Franchisor/Franchisee ...

In discussions we have with Franchise Groups, we regularly get asked if we have any 'quick tips' on solving the legal requirements Franchisors have relating to health and safety.

We found an article on this topic from Scarlet Reid, WHS partner at McCulloch Robertson...

The nature of work is changing, and government, courts and regulators are taking an interest in

compliance with those involved in non-traditional employment practices, including the franchising

industry. In light of this, franchisors must remain proactive when managing work health and safety to

ensure the safety of their workers and to minimise legal liability.

The model Work Health and Safety Act 2011 (WHS Act) imposes a duty on 'Persons Conducting a

Business or Undertaking' (PCBU) to ensure the health and safety of workers and other relevant persons

so far as is reasonably practicable. Most franchisors will be a PCBU. This duty is non-delegable and as

such, franchisors cannot delegate this legal duty to their franchisees or contractors. 'Officers' of a PCBU

also hold individual and specific duties in their personal capacity to exercise due diligence to ensure

safety.

This article discusses effective and practical steps that franchisors can take to manage legal risk and

avoid (sometimes significant) penalties and enforcement action.

Consult with franchisees

The WHS Act imposes a strict duty on PCBUs to consult with others who hold a safety duty over the same

matter. This will include franchisees. What is needed is a systematic approach to ensure regular

consultation with franchisees to enable issues to be identified and addressed in a timely manner.

Franchisors should be aware of WHS risks arising from obligations they impose on franchisees (i.e. is PPE

mandated, is standard plant and equipment safe, are Safe Work Procedures developers by the Franchisor

or Franchise, are lessons learned shared between multiple franchises?). 

In this context, franchisors should ensure that adequate mechanisms are in place to facilitate these discussions.

By scheduling time to consult with franchisees, activities between franchisors and franchisees can be

practically coordinated to ensure effective management of risks to health and safety. For example,

franchisors might discuss setting aside an annual budget per franchise to tackle WHS issues - potentially

via a cloud-based health and safety system as referred to below.

Review

Franchisors should review:

 their organisational structure to ensure delineation of responsibility for work health and safety is

clearly defined and reviewed;

 policies, procedures and consultation processes to ensure that they are effective in identifying

and managing risks; and

 current franchise agreements for innovative solution. For example, franchisors may consider

introducing a 'safety levy' within all agreements to supplement the annual budget for

management of risks and safety.

Subscribe

A simple way for franchisors and their 'officers' to develop their understanding of work health and safety

matters is to subscribe to relevant email alerts, many of which are available for free online such as the

alerts provided by Safe Work Australia.

Consider contacting providers of cloud-based health and safety management software

Cloud-based health and safety management systems have been specifically created to enable businesses

to collect, manage and review work health and safety data. Franchisors should consider contacting

providers of this software to identify ways in which the risks relevant to their business can be minimised

through implementation of these systems and how they can help create a culture of safety.

Introduce a 'Safety Corner'

In future communications sent to franchisees, consider introducing a regular health and safety related

article or section to start the conversation. This simple step will strengthen the safety culture within the

franchise structure and serve as an ongoing reminder of the need to be vigilant when it comes to work

health and safety.

Keep a diary

Documentary evidence of ongoing improvement when managing health and safety is crucial. Make a note

of each action you take to create a safer system of work should you need it at a later date.

Seek advice

Both franchisors and franchisees are likely PCBUs under the WHS Act, and as such will share a duty to

ensure the health and safety of workers and relevant other persons. However, each franchisor will have

varying levels of control over franchisees and face unique risks. Officers of the franchisor should seek

independent legal advice to confirm the level and nature of the shared responsibility for health and safety

and what actions are required for practical compliance with this duty.

This publication covers legal and technical issues in a general way. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.

Scarlet Reid

Partner

+61 2 8241 5688

sreid@mccullough.com.au