An independent regulatory body is needed to oversee the franchising system, lawyers will tell a parliamentary inquiry on Friday.

Maurice Blackburn Principal Giri Sivaraman, who has acted pro-bono for exploited 7-Eleven and Caltex workers, will urge the Federal Government inquiry into franchising conduct to look at how the Franchising Code of Conduct can be expanded to better protect workers.

Mr Sivaraman, who will appear at a public hearing in Brisbane with the shoppies union and former 7-Eleven worker Sam Rao, said the franchising model in Australia is “broken”.

“It is crucial that in reviewing the Franchising Code of Conduct that the Federal Government mandates measures to better protect workers from exploitation,” he said.

“As we have seen in countless cases, including against 7-Eleven, when the franchise business model is broken, with unrealistic targets, it is often workers – many of whom are highly vulnerable – who pay the price through underpayment of wages and exploitation.

“Regulation at the moment is piece meal and incomplete with the ACCC having no obligations to deal with wage theft under the current Code of Conduct, and franchises being one of a long list of matters for the FWO to deal with.”

Mr Sivaraman said an independent regulatory body similar to an Ombudsman was needed to oversee the franchising system to work in partnership with the national consumer watchdog. He also recommended a positive obligation on franchisors to ensure franchisees were upholding workplace laws.

Whistleblower protections, to protect workers who speak out was also recommended as was a “funder of last resort” to compensate franchisees if a franchisor was unable to do so.

“Any Code of Conduct, if it is to do its job properly, must have teeth – including in ensuring that franchisors and franchisees meet their obligations to workers,” Mr Sivaraman said.

“The current Code is deficient in ensuring that franchisors in particular are held to account in complying with workplace laws.”

Extracted from SMH