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Solicitor discussing Employment Law on 2GB

Underpayment of franchise workers

Tuesday, 6 July 2016 


WM – Warren Moore /EH –Ellen Hitchin /C1,2,3, etc – Callers 



WM    Well at that time of week again and we are talking all about the laws surrounding employment. Canberra businesses this week were asked to pay back more than $16,000 to underpaid workers, so we will be discussing what to do if you are being short changed. Also, while we await the election result. What plans do the major parties have to stop the exploitation of franchise employees and to find out joining us right now is Ellen Hitchin from Turner Freeman Lawyers. G’day Ellen.

EH      Hi Warren. How are you?

WM    Good. Now obviously the number to call 131 873. Any questions about employment and remember the best caller will win a $100 Westfield Voucher. Your area of the law is what I suppose affects…. we I suppose affects everybody doesn’t it. 

EH      Well most people are either employees or employers, so yes.

WM    And even if you retired you might want some questions – you know if you want to do some casual work that sort of thing?

EH      Absolutely and volunteer work and things like that.

WM    Okay. Well 131 873 or email by and click on the feedback icon. What are some of the recent examples of organisations underpaying franchise workers in particular?

EH      Well I think the most well known is the 7/11 scandal that’s been very public in the last few months as there have been lots of media attention to that attention where there was rampant underpayments of many employees across multiple 7/11 franchisees. But there was also a recent prosecution by the Fair Work Ombudsman against the owner of a chain of sandwich shops in the Sydney CBD that have been underpaying its workers who were I believe they were all from South Korea.  So obviously non-English speakers and they were being underpaid by more than $100,000.

WM    Is that very common when non-English speakers aren’t maybe aware of their rights or open to manipulation?

EH      They do seem to be particularly vulnerable. People who aren’t aware or aren’t significantly aware about our Fair Work system and the national employment standards. They don’t know about their rights and their entitlements or perhaps they are simply too afraid to speak up because they need their job and they are afraid of being deported if they speak up.

WM    If we are going to talk about franchises, because you know – as you say we hear so often about franchises raised with this sort of issue, what are the plans of the major parties to do something about this?

EH      Well in a rare moment of unity, both parties have almost quite similar policies for dealing with this which really seems to be a growing problem in employment law at the moment. Both parties want to amend the Fair Work Legislation to make it easier to prosecute the franchisors and the parent entities who are responsible for the franchisees and their subsidiaries exploitation and vulnerable workers. At the moment you can only prosecute the employer who is usually the smaller franchisee. You might be a really small mum and dad company with not much money but it’s the big 7/11’s – the really big companies that are sitting behind this sort of corporate curtain saying well it’s got nothing to do with us and we are not responsible and both parties want to make some changes to that.

WM    So is it like saying there’s a lack of transparency when you have a franchise operation versus a standalone business.

EH      Well both parties want to change the legislation so that the franchisors have to take reasonable steps to educate the franchisees and make sure they are complying with the Fair Work Act so they can’t simply plead ignorance. They’ll have to take positive steps to do that.

WM    Okay. Ellen Hitchin from Turner Freeman Lawyers in the studio. By the way, got any questions about employment get on the phone 131 873 or email via or I’ll ask you some more questions about that in just a moment Ellen. But in the meantime we’ve got Ted on the line for you. Hello Ted. What’s your question? 

Caller 1 – Ted 

Ted     Yeah hi.

EH      Hi Ted.

Ted     Yeah hi. Look my wife works in childcare. She’s been there for over 40 years. Is it compulsory…. they’ve told her that they must or she must take her long service leave. It is compulsory that she must take it?

EH      Employers can ask employees to take long service leave, particularly if they have a very big amount banked up. It can be problematic for employers to have that much leave accrued, so they are able to talk to their employees and come to an agreement about taking leave and I think at the end of the day, your wife should have a say in when she takes that leave but she can’t refuse to take it.

Ted     Oh I see. Okay. Thank you.

WM    Good on you Ted. Is that a similar thing with annual leave that you can’t just accrue annual leave and never take it? But then again they can’t force you to take it at a certain time. How does that work?

EH      Different employers might have policies about when you were to take annual leave and how much you are allowed to accrue but ultimately an employer can ask an employee take some leave if they have a large amount accrued.

WM    What about the Christmas closedown is a common thing in offices?

EH      It is quite common yes and most employers are within their rights to ask employees to take annual leave during that time. 

WM    Okay, 131 873.  Hello Russell.

Caller 2 – Russell

Russell            Ah G’day.

WM    What’s your question for Ellen?

Russell            Ah just about company vehicles. If you are supplied a company vehicle obviously through your work and you are travelling from home to a client’s place, are you covered by your employer as in workers compensation or if you have an accident or something like that?

EH      You should be yes. You are travelling to a client’s premises to do work, then absolutely.

Russell            So it’s not from like the office to the client.

EH      I know that…. sorry… I’m not a workers compensation lawyer so I am not 100% sure. I know that certainly journeys to and from work used to be covered under  the Workers Compensation Legislation but there a raft of changes a few years ago in NSW and I think that might not be the case anymore or certainly the coverage was reduced. But if you are attending a client’s premises then you are there for work and yes you should be covered.

WM    Okay Russell?

Russell            Okay, thank you.

WM    Yeah. That was quite controversial I remember when that happened and they were talking about whether there should be …. and I don’t know whether there are or not but exemptions for emergency service workers and so on the list went.

EH      Yes there are a lot of controversial changes at the time.

WM    Yeah under I think Barry O’Farrell when he first became Premier. 131 873 or email via How we’ve got Peter for you. Hello Peter.

Caller 3 – Peter 

Peter   Hello. How are you doing there?

EH      Hi Peter.

Peter   Look, I’m ringing up on behalf of my son who just recently handed in his resignation and he’s trying to calculate how much annual leave and holiday leave he had left. He’s been told he’s got nothing left because he’s used them all up and he knows that he has several weeks owing to him. How can he determine how much is owing to him and how much has he taken over the last three or four years?

EH      Well his payslips should have an indication of how much leave he has accrued. Does he have any such thing on his payslip?

Peter   That’s another issue.

EH      Does he not get payslips?

Peter   I’m not sure, but he’s been speaking to the…..

EH      Certainly employers are required to keep records.

Peter               I’m sorry?

EH      Sorry, beg your pardon – employers are required to keep records of things such as how much leave for every employee has accrued and if they are saying they don’t have any and he is quite adamant that he does, then he might want to give the Fair Work Ombudsman a call and talk to them about that.

Peter   Sorry, who was it?

EH      The Fair Work Ombudsman 

Peter   Fair Work Ombudsman. The employer, he should know……

EH      They have to keep records. Absolutely

Peter   How long are those records kept for? The duration of his employment?

EH      And beyond I understand.

Peter   And beyond.

WM    Okay Peter. Fair Work Ombudsman.

Peter   Thank you very much. Thank you very much for answering my question.

EH      Thanks Peter.

WM    Nice to have you on the show. Ellen, it would be a matter of course for most people as you say the payslip every month or every week depending on your pay would have that statement of not just what you are being paid but what the annual leave is.

EH      Absolutely. The accrued leave and any other leave that they have taken during that pay period.

WM    Yeah. That’s a very good point for people to make sure they are getting it.

EH      Absolutely and it is compulsory for employers to supply payslips.

WM    131 873. Hello Paul.

Caller 4 – Paul 

Paul    Hello.  How are you?

WM    We’re good. What’s your question for Ellen?

Paul    I wanted to find out what my entitlements were if – at the moment I work a rotating shift of day and afternoon one week each. If the company was to propose to change that, what are my entitlements?

EH      In terms of changing your roster?

Paul    Yes.  But my hours have been the same for 18 years as they have. If the company wanted to suddenly change that to a 12 hour shift for instance, what are my rights, if any?

EH      Well they certainly have to discuss that with you. Major work place change is something that employers have to discuss with their employees and they have to take your view into account before they’ve even made the decision to implement it, but certainly they need to consider things ….. people that are on shift work quite often work shift work because they have carers responsibilities or school aged children and all those things need to be taken into account by the employer before they go about changing people’s shifts.

Paul    Correct. But if ….. even if they discuss it…. it doesn’t give me any peace of mind that once it’s discussed they’ll still proceed with whatever they want to do in the first place.

EH      Well they may do that… It’s possible. Look you really have to look to – I’m not sure if you are covered by an Award. A lot of shift workers are, but …..

Paul    Yes – it’s Metal Trades in my case.

EH      Well you’d want to have a look at the Award provisions, certainly about discussing major work change with employees. I’m not sure if you are a member of the Union, that’s quite often something a Union can assist with.

Paul    I am. I know when the old terms …. my understanding was… any change in your hours once they have been established needed 75% or more of the people to agree to the change but that might have changed in recent years.

EH      Yes. Look, I’m not familiar about the particular Award. I don’t have the provisions in front of me but that is the first place I’d be looking to, would be to the Award and certainly you would want to look at the proposed changes meant any decrease in your wages that would be something that should be taken into account by your employer.

WM    Okay good on you Paul. Thank you for that. We’ll take a break. We are having legal talk as we are doing every Tuesday as part of Chris Smith’s Afternoon Show. From Turner Freeman Lawyers, Ellen Hitchin taking your calls on employment law. 131 873 or email via or It’s 13 to 2.

Short break 

WM    And we are in the midst of Legal Talk for a Tuesday afternoon. Our number is 131 873 and from Turner Freeman Lawyers we’ve got Ellen Hitchin in the studio talking employment law today. Ellen, Lexter is on the line. What’s your question there Lexter?

Caller 5 – Lexter

Lexter             Oh yeah, hello. Good afternoon. I’m a first time caller.

WM    Yes.

Lexter              I just want to ask some question regarding my friend. He came over here on a 457 Visa and then just last year they then told to put down the salary for 20% because the company said they were not really doing well. So is that really right?

WM    So in other words… to summarise your question there Lexter. Can you have your salary reduced based on company performance?

Lexter              Yes. 20%.

EH      Lexter, the first place I would be looking to for answers would be the Employment Contract, but ultimately as long as the salary that has been proposed is higher than the minimum wage, that is something that could be negotiated between an employer and an employee. It’s not usual and it’s not great, but quite often the employer needs to propose a reduction in salary in order to maintain their staff and if somebody is not happy with that then they always have the option of moving on. So it’s not great. It’s not great for either the employee or employer but it is something that can be negotiated between the parties.

WM    Getting back to what we were saying at the beginning of our segment Ellen, the cases of the franchisees, particularly the 7/11’s, they were below the minimum wage, weren’t they?

EH      Absolutely and one of the cases, the case that I mentioned about the sandwich shop employees, they were getting paid almost half of what they should have been entitled to under the Award.

WM    Okay. Hope that helps you out there. 131 873. Hello Michael.

Caller 6 – Michael

WM    Michael?

Michael           Yes hello.

WM    What’s your question?

Michael           Yes I have a question in regards to long service leave.

EH      Hi Michael.

Michael           I’ve been at a company for 9 years and I’m entitled to long service leave and if you could clear up the word “pressing necessity”.

EH      Are you referring to the Section of the Act that talks about if an employee leaves of their own ….. well if an employee resigns rather than terminated, that they only get paid pro-rata long service leave if they are leaving for pressing necessity, is that what you are referring to?

Michael           That’s correct.

EH      So the usual rule is that between – in NSW – between 5 and 10 years you only get pro-rata long service leave if you are terminated or made redundant not if you resign. In order to be entitled to long service leave upon resignation, you have to have been there for 10 years. The exception is that if you leave for pressing necessity such as family needs, you require to stop your job to take care of somebody at home or there’s been other situations where you know couples split up and one of them has to leave their job to make arrangements for the children and things like that. So not just because you don’t like the job anymore, you are not happy and you want to move on or you have a better offer, those sort of things would not be pressing necessity.

WM    Does that answer your question Michael?

Michael           It exactly answers my question. Thank you.

WM    Okay good on you mate. Hang in there by the way. That’s an interesting question so we will award you today the $100 Westfield Voucher – thanks to Turner Freeman Lawyers and Legal Matters. And by the way they provide a range for specialised services such as employment law, we are talking about today, Wills and Estates, commercial litigation, superannuation and disability claims and compensation and negligence and also asbestos litigation. 131 873. Ellen, this is Matthew on the line. What are you – what is your question there Matthew? 

Caller 7 – Matthew

Matthew         G’day. I work for the Local Government and I’ve got two things. First of all with doctor’s certificate, when we call in sick apparently there’s a clause in our EBA that tells us that we have to state what the condition is actually on the certificate.

EH      Okay.

Matthew         When you go to do that, some on the doctors don’t like doing that. Generally when they give a certificate they’ll say so and so is suffering from a medical condition and he’s unfit for work, but that want to specifically specify the condition on the certificate.

EH      Well if that’s something in your EBA, then that is something that the employer is entitled to as for and that would be something I would be telling my doctor in those circumstances that it’s a requirement from EBA to access my sick leave that the employer gets a description of the illness.

WM    Okay Matthew.

Matthew         No problems. Thank you.

WM    Okay thank you. In an email, Warwick has emailed in regarding the annual leave sort of question we had earlier.  He says that his wife had some of her annual leave deducted because she had a large amount of annual leave and was told “use it or lose it”.  So they can’t just take it even though you didn’t use it can they?

EH      If an employer has a policy that says that and the employees are aware of the policy and were given enough notice then in theory they can.

WM    Well there you go, We are warned on that one aren’t we? Use it or lose it. 131 873 and quickly I think we’ve got – we’ll go to Peter. G’day Peter.

Caller 8 – Peter

Peter               Yeah g’day.

WM    What’s your question Peter?

Peter   I’ve had some experience with real estate and I’m aware that the McGrath Group retains real estate agents as companies via contractors as opposed to employees, but the Tax Office was taking that up because they were avoiding payroll tax as a result of that, I just wanted to find out if Ellen knows the position on that and in particular knows the outcome of any case that happened?

EH      Oh, I’m not familiar with that particular employer and the allegations that you are making but certainly it is an issue because across Australia employers using individual contracts to avoid having to employ people and then being bound by the employment requirements of the Fair Work Act, but it is a really difficult question to answer in the short space of time as to whether someone’s an employee or a contract worker.

WM    Yes – Of course it doesn’t mean there is something illegal about that.

EH      No because it’s perfectly legal to hire independent contractors as long as they are independent contracts and not actually employees.

WM    Which is important to highlight that. We are out of time Ellen. Thank you so much for that.

EH      Thank you. Thanks for having me Warren.

WM    Ellen Hitchin in the studio from Turner Freeman Lawyers. It is 4 to 2. More coming up after the news.


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