Italian restaurant chain La Porchetta has announced it will self-audit the wages and conditions in a number of its restaurants, after two of its franchises were recently found to have paid staff in pizza and soft drink.
La Porchetta Franchising has signed a Proactive Compliance Deed with the Fair Work Ombudsman, which will see it self-audit the records of a third of its 65 Australian stores to check workers are receiving proper wages and conditions.
Self-audits will be conducted at 24 stores over the next three years, with La Porchetta agreeing to work with franchisees to facilitate prompt back-payment where any underpayment issues are identified and conduct follow-up inquiries of any stores found to have underpaid staff.
In a statement released yesterday, the company said it will also introduce new measures across its franchises, including additional induction training, ongoing reviews and regular audits.
La Porchetta chief executive Sara Pantaleo said: “We value the staff who work in our restaurants very highly and we expect all of our franchisees to pay their staff correctly and be fully compliant with the Fair Work Act.”
“We have worked closely with the office of the Fair Work Ombudsman to further strengthen our internal processes and ensure all our franchisees are fully compliant going forward,” said Pantaleo.
“The Fair Work Act is now more complex than ever and for this reason, we have reviewed our induction and ongoing training procedures to make it easier for franchisees to comply.”
The Fair Work Ombudsman said it had received a number of complaints relating to La Porchetta stores in recent years.
Earlier this month, the watchdog found the operators of two La Porchetta restaurants in Melbourne’s south east had paid 111 of its mostly teenage employees with pizza and soft drink, instead of their correct wage. The companies that owned the franchises and the franchisee, Ruby Chand, were fined $334,818 in total.
Franchise Advisory Centre principal Jason Gehrke told SmartCompany that while the responsibility of franchisors were broad and varied, franchise agreements typically state the franchisee’s responsibility to employ staff in accord to relevant laws.
“What we’ve seen with this case and cases like this, is where a franchise fails to comply, it potentially damages the reputation of the franchise brand as whole,” says Gehrke.
He says La Porchetta has responded appropriately to the commission’s concerns, and he encourages franchisors to be proactive when dealing with such issues.
“The lesson for franchisors is don’t wait for a prosecution of a franchisee before acting,” he says.
Gehrke says the fallout is often greater for franchise brands, rather than independent small businesses, because there is a perception that the franchisee should have known better.
“An unheard-of pizza store might not have garnered such national attention.”
Gehrke says franchisees should look to franchisors for guidance, and if they can’t provide that guidance, they should go to Fair Work.
“However, when somebody invests in a franchise, there is an expectation they get to know everything there is to know about business, not just how to make coffee or whatever the franchise does, but also how to employ staff,” says Gehrke.
“At the end of day, something like this is just a distraction that no franchisor or franchisee needs.”