QLD Franchise with Unpaid Employees - Franchisor Liable?

Australia's #1 for Law
Join 150,000 Australians every month. Ask a question, respond to a question and better understand the law today!
FREE - Join Now

George C

New Member
22 July 2015
1
0
0
Can a franchisor be held liable for franchisee's unpaid and underpaid wages to employees at a particular franchise?
 

Ivy

Well-Known Member
10 February 2015
498
87
789
If it is a legitimate franchise in that the franchisor and franchisee relationship is akin to that of independent contractor and principal (not an employer/employee relationship that is disguised as a franchise) then to date, the law in Australian indicates that franchisors are unlikely to be held liable for underpaid wages where the franchisee has underpaid their employees.

However the courts have held franchisors liable for providing unsafe or unsatisfactory goods and for failing to train the franchisee in health and safety (in a NSW case this negligence led to an employee of the franchise being electrocuted).