A franchisor cannot contract out of its health and safety duties, but that does not mean that a franchisee has no obligations either.  The new Act is clear that more than one PCBU can owe the same duty at the same time.  Further, the Act confirms that both PCBUs (franchisor and franchisee) have to consult and cooperate with each other in respect of that duty.

A PCBU only owes a duty to the extent that it has the ability to influence or control that matter.  A simple rule of thumb is that the more prescriptive your franchise model is, the more effort you will have to put into health and safety.  For example, there are duties for PCBUs who manage or control a workplace, or control, install or supply fittings, fixtures or plant at that workplace.  If you are a franchisor which requires its franchisees to have a certain premises, type of fit-out or machine, then you will have to ensure (so far as is reasonably practicable) that people’s health and safety is not put at risk by those things.  This is a serious business consideration, as franchisors need to retain a certain degree of control to protect the integrity of their brand.

What can I do?

The best starting point is to have a comprehensive health and safety programme which sets up processes to ensure compliance (with a minimum of administration time or cost).  This programme should cover the risks and hazards involved with the franchisor’s own employees and contractors, but also with elements of the franchise model within the franchisor’s control.  Many franchisors are considering providing such programmes for all their franchisees to retain total control of health and safety processes and to ensure that nothing is missed.

We recommend including a comprehensive health and safety clause in all franchise agreements.  Most agreements have a generic requirement to comply with all laws (which will include the new Act), however a more detailed clause will set out the explicit steps and powers necessary to allow a franchisor to ensure compliance and reduce the risk of accidents and a potential Worksafe prosecution.

The senior management of the franchisor (called “Officers”) have new due diligence duties.  These duties require periodic consideration of specific issues and should be clearly documented.  We recommend that Officers take specific advice on this duty as it cannot be delegated to others.