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QLD Franchise with Unpaid Employees - Franchisor Liable?

Discussion in 'Commercial Law Forum' started by George C, 23 July 2015.

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  1. George C

    George C New Member

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    Can a franchisor be held liable for franchisee's unpaid and underpaid wages to employees at a particular franchise?
     
  2. Ivy

    Ivy Well-Known Member

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    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).
     

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