Advocates of state-based franchising laws have suffered a setback after a private member’s bill in WA failed to pass through Parliament earlier this week, falling short of just one vote.
The vote was lost after the speaker, Nationals MP Grant Woodhams, used his casting vote to defeat it.
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But the bill’s author, Liberal MP Peter Abetz, says MPs from Queensland and NSW have told him they plan on introducing similar legislation in their own states.
The controversial WA Franchising Bill sought to impose financial penalties for breaches of the Franchising Code of Conduct, and provided a statutory duty of good faith.
Despite losing the vote, Abetz says he is not deterred.
“I wanted this bill to pass to provide some interim protection for franchisees against dubious franchising practices while the Nationals and the Liberal Government negotiate a way for the intent of my legislation to be taken on board by means of a revised Small Business Commissioner model,” Abetz told SmartCompany.
Abetz said it is regrettable that so many MPs were opposed to the legislation.
“They were of the view that the Federal Government should be implementing this legislation rather than the state,” Abetz said.
“By taking that stance, and with the Federal Government failing to act, those opposing the bill have unfortunately denied WA franchisees the extra protection that an obligation to act in good faith – in all matters relating to a franchising agreement – would have provided.”
The rejection of the WA bill follows the passing of the South Australian Small Business Commissioner Act, which enables the commissioner to change the franchising code of conduct following consultation with industry.
The SA bill was welcomed by franchisee groups such as the Franchisees Association of Australia and the National Franchisee Coalition.
However, it was criticised by the Franchise Council of Australia and the Federal Government, both of which argue state-based legislation is unnecessary.
Associate Professor Frank Zumbo, of the University of New South Wales, expects franchising issues will continue to be debated in WA.
“The evenly divided nature of the vote means that there was clearly strong support for the WA Franchising Bill,” Zumbo says.
“Given that strong support, one would expect that the issue of franchising and small business reform will continue to be front and centre in Western Australia.”