Finance

Employees in the dark on fairness test… New pay scales on the way… Telstra plans DIY broadband kit… Franchise Code changes… Oporto sold… Microsoft vs Google… Economy roundup…

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Employees in the dark on fairness test

Almost 90% of employees do not think the Federal Government’s AWA fairness test is truly fair, according to a recent survey of 2000 employees conducted by human resources firm Talent2.

But the judgment may not be an entirely educated one: while just 13.9% were prepared to agree that the fairness test is fair, 60.9% new little or nothing about the test, whether it applied to them and how workplace agreements work.

The result suggests the Government’s information campaign on the fairness test has yet to hit its mark, Talent2 director John Banks says.

And for employers hoping the recently introduced fairness test will help them persuade employees to embrace AWAs, there is still plenty of work to do.

“Many employers will face an uphill battle to educate employees and get them on board. In this environment most employers will only use AWAs if they can introduce them in a cooperative way, but clearly there is a mix of misunderstanding and distrust out there that they will have to deal with to do that,” Banks says.

Interestingly, workers in boom state WA the most likely to be employed under an AWA, with 25.4% covered, but just 11.1% said they thought the fairness test was truly fair, 2.8% below the national average.

– Mike Preston

New pay scales on the way

The Australian Fair Pay Commission will begin publishing pay scales covering the clothing, hospitality, retail, insurance, building and construction industries in October.

An outcry by business groups struggling to inform members about their employees’ entitlements prompted the AFPC to commit to publish comprehensive scales pay scales in April this year.

“The new pay scales will be legally binding documents and will provide certainty for pay scale-reliant employees about their entitlements, and for their employers,” AFPC chairman Ian Harper says.

– Mike Preston

Telstra plans DIY broadband kit

Telstra is targeting SME customers with a wireless broadband kit that it says will allow businesses to wirelessly network an office of between four and seven users, The Australian reports.

The entry level price for the package is $54.95 for a 512/128 Kbps plan with a 500 MB data allowance, up to $310 per month for the top level plan.

Telstra’s move follows a recent launch by Optus of an SME oriented phone and broadband package and suggests an escalation in competition for business in the sector.

– Mike Preston

Private equity inquiry threat to SME investment

Extra regulation of private equity firms could cost small and medium business investment opportunities, according to one submission to the Senate enquiry on private equity.

The Senate economics committee is considering whether the high debt levels involved in some private equity deals could be destabilising the economy or eroding the nation’s tax base and, if so, whether extra regulation of private equity firms is required.

Wendy Erhart, the co-founder and chief executive of Queensland company Withcott Seedlings, says it is important that SMEs’ ability to attract investment is not compromised by extra regulation.

Her company took “a significant investment” from private equity firm NBC Capital in 2006, a partnership she says has enabled the business to grow and injected a new level of management expertise into the business.

“The danger is that the outcome of the inquiry could make it harder for SMEs to get the investment they need to grow their businesses. I’ve looked at the other submissions and the majority are to do with large corporations and unions, which is fine, but I hope they don’t lose sight of the position for SMEs or come up with regulations that make it too stringent for SMEs to get private equity investment,” Erhart says.

The Australian Private Equity and Venture Capital Association has also drawn attention to the effect increased regulation of private equity could have on SMEs in its submission. AVCAL points out that for the many SMEs that are too small to float on the ASX, private equity and venture capital investors are one of the few sources of capital growth.

Private equity also plays a valuable role in assisting SME owners struggling with succession issues to “exit their businesses whilst improving rather than jeopardising the ongoing prospects of the business”.

The Senate inquiry into private equity is conducting hearings tomorrow and on Thursday. It will hear the views of key bodies such as the Reserve Bank of Australia and the Australian Securities and Investments Commission. It is due to report on August 16.

– Mike Preston

Franchise Code changes coming soon

The Minister for Small Business, Fran Bailey, has told the Australian Financial Review that the Federal Government will introduce changes to the Franchising Code of Conduct when Parliament resumes in August.

The proposed changes to the code follow the review ordered by Bailey last year in response to growing disquiet from disgruntled franchisees and former franchisees.

As SmartCompany has previously reported, a growing number of franchisees from big name chains, including Bakers Delight, Midas and Lenards, are working hard to make protection of franchisees an election issue. They have won the support of parliamentarians on both sides of the house. National Senator Barnaby Joyce, government whip Joanna Gash and West Australian Labor MP Graham Edwards have all spoken out on behalf of the disgruntled franchisees.

Some franchisee groups believe the Government’s changes to the code will not go far enough, so the new legislation is unlikely to bring an end to the debate.

– Jacqui Walker

Oporto sold

Quick Service Restaurant Holdings, the owner of franchised chicken chains Red Rooster and Chicken Treat, expanded its franchise empire by buying the 100-store Oporto franchise chain last week for $60 million.

Oporto was founded by Antonio Cerqueira in North Bondi in 1986 and grew quickly, especially in NSW. The Oporto management team, Jeff Fisher and Glen Lees, will stay on to keep growing the Oporto business, according to a company press release.

QSR recently formed a partnership with private equity firm Quadrant, which was behind April’s $180 million leveraged management buyout of Australian Fast Foods, which had 450 company-owned and franchised Red Rooster and Chicken Treat stores.

QSR managing director and owner Frank Romano told WA Business News the Oporto deal was in the pipeline prior to signing off on the private equity buyout. “We did the Quadrant deal to buy AFF, but they were both on the table at the same time,” he said.

– Jacqui Walker

Microsoft fights Google with new offer

Microsoft is determined to fight off Google, by adding more online features to its office productivity applications next year. The first step could be to let Office users share spreadsheets and documents created on their PCs over the web. Google already offers web-based spreadsheets and word processing.

– Amanda Gome

Franchised posties Pack & Send exports to UK

Pack & Send is using master franchising to expand internationally, with the first deal done for the UK. The NSW-based franchise has signed an memorandum of understanding with a UK master franchisee, which plans to start opening stores in the UK in October. There are plans for 240 stores across the UK over the next 15 years.

Pack & Send is talking to prospective franchisees for New Zealand, Singapore, Hong Kong, India and Dubai, according to a report in the Australian Financial Review. The franchise has 77 stores offering packaging and freight-forwarding services to business, eBay buyers and seller, tourists and householders.

– Jacqui Walker

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