Sharryn Jackson (Hasluck, Australian Labor Party) Share this | Hansard source

I too rise to speak on the franchising resolution tonight and I do so in the context of having a particular dispute in my electorate involving a KFC franchise in Thornlie. I can indicate to the member for Canning that I also recognise the severe financial distress and hardship faced by a number of current and former franchisees throughout Australia as a result of franchisor conduct. Of course, he would acknowledge that the distress often flows onto the people employed in these franchises.

I note the inquiries that have been launched and undertaken by both the Western Australian and South Australian governments into franchising and, in particular, the one in Western Australia where the report was handed down in April of this year. The catalyst for the inquiry in Western Australia in large part involved the KFC franchises in Western Australia. Many of them have been run by a company known as Competitive Foods Australia Ltd, or CFAL, that held nearly 50 of those franchises in WA and have operated the brand in Western Australia since 1969. The member for Blair and the member for Parramatta made reference to that. CFAL concerns were indeed the catalyst for the inquiry.

Some 40 staff are currently employed at the KFC franchise in Thornlie in my electorate. Their jobs are threatened with the closure of the KFC franchise, which is likely to take place in December this year. This follows the closure of a store in Rockingham last year where some 40 employees lost their jobs, and I understand that there are two other stores in the Perth metropolitan area that face similar circumstances. I must say, if there is one thing on which I think immediate action needs to be taken, it is also the recommendations from the Western Australian government inquiry involving the issue of the nonrenewal of franchising agreements. In particular, I would commend recommendations 3.1 and 3.2 of that inquiry which are to make the necessary changes so that there is an amendment to the franchising code to require franchisors to explicitly specify, in their disclosure documents, what end of agreement arrangements are in place under the franchise and also to indicate what the franchisee’s entitlements are in respect of those and any entitlement to goodwill or other compensation if the agreement is not renewed.

Whilst I do not think that unconscionable conduct should be condoned anywhere—I think businesses and individuals should be held accountable for such conduct—it was the case that the Western Australian inquiry indicated that they believed there was not existing protection in current law to provide the desired level of protection for all franchising participants. This is why I largely support the motion brought by the member for Canning. I certainly agree that many franchisees have no adequate or available means to redress their grievances without recourse to expensive or unaffordable litigation.

I am pleased to note the current inquiry being undertaken by the Joint Committee on Corporations and Financial Services into the Franchising Code of Conduct and related matters. The committee’s terms of reference encompass the matters raised in this motion by the member for Canning, and I am sure that within its terms of reference it will be able to encompass the reports and recommendations from both the South Australian government’s inquiry and the Western Australian government’s inquiry. I am confident that it will make sound and considered recommendations to address the shortfalls in the current code. I believe that code will be enhanced by strengthened good faith provisions and by a more effective low-cost dispute resolution procedure.

It was with some irony that I read point (4) of the member for Canning’s motion because, as a representative of the party that supports Work Choices, it is interesting that the member can so clearly see the need for decent conciliation and arbitration proceedings at no cost when it comes to small business but perhaps cannot so wholeheartedly endorse that when it comes to the ordinary working person. I certainly would urge the Committee to support changes to the code requiring franchisors to show good cause when refusing, in particular, to renew franchising agreements. I am concerned the inquiry will not be dealt with quickly enough to assist my constituents in Thornlie, so I intend to pursue this matter directly with the minister and assist the staff and management at Thornlie KFC as best I can.

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