Business, Property & Finance

A Franchisor's Guide to the Health and Safety at Work Act 2015

on Wednesday, 13 July 2016. Posted in Business, Property & Finance, Franchising

A Franchisor's Guide to the Health and Safety at Work Act 2015

The Health and Safety at Work Act 2015 ("HSWA") has a much wider reach than the previous Health and Safety in Employment Act 1992. If you are a Franchisor then the HSWA will impact you on a number of levels.

You are a PCBU
The Act introduces the term "Person Conducting a Business or Undertaking" ("PCBU"). Both you and your franchisees will be considered to be a PCBU.

The primary duty
As a PCBU your primary duty is to "ensure so far as reasonably practicable the health and safety of your workers" and those workers who are influenced or directed by you. "Workers" includes both employees and contractors. There is a risk that as a franchisor you could have a duty in relation to the health and safety of your franchisee's workers depending on whether or not they are influenced or directed by you.

What is "reasonably practicable" is defined as what is or was reasonably able to be done at a particular time to ensure health and safety in the workplace; taking into account and weighing up all relevant matters. The actual influence and control you could reasonably be expected to have in relation to any matter where there are health and safety issues is taken into account. The costs of taking steps to prevent the risk are only relevant if such costs are grossly disproportionate to the risk.

Other duties
If you control or manage a work place or the fixtures, fittings or plant at a work place (for example; if you lease, sublease or license premises to your franchisees) then you must ensure so far as reasonably practicable, that the means of entry and exit to the workplace and anything arising from the work place are without risks to the health and safety of any person.

If you are involved in the design, manufacture, importation, supply or installation of plant, substances or structures which are used in a work place then you will have duties to ensure so far as reasonably practicable that these items are without risk to the health and safety of any person using, handling, storing or constructing them. This may apply to you if you arrange the supply of goods or plant (which are used in the work place) to your franchisees or you are involved in arranging the fitout or refurbishment of premises.

Your other duties as a PCBU include:

  • A requirement to engage with your workers in relation to health and safety matters (for example when identifying heath and safety hazards, making decisions about eliminating those hazards and proposing any changes which affect health and safety).
  • The provision of a worker participation process which provides workers with a reasonable opportunity to participate in improving health and safety in the work place on an ongoing basis.
  • You must have a health and safety representative if one of your workers notifies you that that they wish to have one elected. But this is not required if you have fewer than 20 workers or you are not in a high risk sector or industry.
  • You must establish a Health and Safety Committee if requested by a health and safety representative or by more than 5 workers. However, you are not required to do so if you have fewer than 20 workers or you are not in a high risk sector or industry.
  • Notification of Notifiable Events to Worksafe and record keeping in relation to those events (records must be kept for at least 5 years). A Notifiable Event includes death or serious injuries to a person such as serious head or eye injuries, serious burns and lacerations and incidents such as explosions, collapse of a structure, spillage of a substance and fire.

You must collaborate

It is highly likely that there will be situations where you and another PCBU (for example; your franchisees, landlords and approved suppliers) will have the same health and safety duties in relation to a matter. For instance, if you lease or sublease premises to your franchisees then both you and your franchisee will have health and safety duties in relation to the premises. Any contractors you engage to do work on the premises will also have duties in relation to any construction carried out at the premises. Where more than one PCBU has the same duty in respect of a matter the HSWA requires you to, so far as reasonably practicable, consult and cooperate with and coordinate activities with that other person.
But remember that you are only liable to the extent of your ability to influence and control the matter to which the risks relate.

Officers

People who are considered to be "Officers" under the Act have a duty of due diligence to ensure that their PCBU complies with its duties under the HSWA. You will be an Officer if you hold one of the following positions in relation to the franchisor entity:

  • Director
  • Partner (of a partnership)
  • Any person occupying a position comparable to a director; or
  • Any person who holds a governance role in the business who exercises significant influence over the management of the business or undertaking.

If you do not carry out your duty of due diligence there are fines of up to $600,000 and you could be subject to a term of imprisonment of up to 5 years.

WorkSafe
Worksafe has the role of regulator under the Act and its objective is to monitor and enforce compliance with the Act, and also providing guidance about health and safety and codes of practice.

What should franchisors do?

  1. Understand the Act and what implications it has for you and your franchisees. If you are deemed to be an "Officer" then you must take positive steps to ensure that the franchisor entity is complying with its obligations under the Act. Consider engaging a health and safety expert to assist you with this.
  2. If you are involved in leasing, subleasing or licensing premises to your franchisees then you will need to consider what steps you will need to take to comply with your duty to ensure that the premises are without risk to the health and safety of any person. How will you consult with the head landlord (if any) and the franchisee to ensure that this duty is being met? You may wish to consider adding additional obligations on your franchisee in relation to health and safety in your franchise agreement, lease/ licence documentation and manual.
  3. Think about how you will collaborate with other PCBU's which have similar duties under the HSWA as you. For instance – pre meetings and ongoing meetings and site visits to find out what each party is doing to discharge their obligations, clauses in franchise agreements, lease agreement and construction contracts. Be aware of not assuming that someone else is taking care of a health and safety matter.
  4. Do you supply or arrange the supply of plant, substances or goods to your franchisees which are used in a work place? If the answer is yes then you will need to take steps to ensure the health and safety of any person using, handling or storing the plant, goods or substances. Again you need consider how you will consult with the manufacturer of such items and your franchisee to ensure this duty is being met.
  5. Consider what training you will provide for your franchisees. Consider engaging the services of an expert who can do this or recommend that your franchisees do the same.
  6. What special policies or procedures need to be developed to ensure compliance by the franchisor and franchisee? Make sure your manuals and agreements are updated to contain correct references to the Act. Again engage the services of an expert to assist you with this. It is vital that any advice you give your franchisees is completely accurate as you are opening yourself up to potential liability if you get anything wrong. We recommend having a comprehensive clause in your franchise agreement which covers issues such as obligations to provide information evidencing compliance with the Act and meeting with you to discuss health and safety matters.
  7. Review your franchise agreement and practices to make sure that you do not have any control and therefore liability with respect to your franchisee's workers under the HSWA. Seek professional advice if you need to.

For more information or assistance contact

Stephen Corlett

Lizandra Bailey

DISCLAIMER

This information is intended to be general in nature. You are strongly recommended to seek your own legal advice in relation to the matters dealt with here.

© Brookfields Lawyers 2016 – All Rights Reserved

 

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