It can be difficult for franchise and multi-site operations (MSOs) trading in various regions and locations to keep up to date with the relevant state and territory legislation for HR issues. A misunderstanding of the relevant legislation or case law can lead to a costly and time-consuming workplace dispute. A recent case before the Fair Work Commission illustrates the importance of employers understanding their legal responsibilities when investigating workplace disputes.


A worker at a large transport company commenced employment with the company in August 2010. The employer has a number of worksites spread across Australia. The employee was dismissed in February 2015 after a workplace investigation supported a co-worker’s claim that the employee had made culturally insensitive comments.

The Afghan co-worker claimed that he was subjected to persistent racial and cultural abuse and that the employee made inappropriate remarks, such as asking whether he was from the Taliban and discussing other sensitive cultural and religious topics including the involvement of Australia and the US in the Middle East.

Examples of the comments made include; “Does Islam say to kill?” and “Are you from the Taliban?”. The company acknowledged the site located in inner Sydney was a particularly hostile working environment.

The Commissioner found that while there was a valid reason for the dismissal, she considered it a severe penalty because he had not received any previous formal warnings. The Commissioner adding “I am satisfied that the decision to terminate [the employee’s] employment was harsh for the personal consequences of it for him and because of the severity of the punishment when little has been done with respect to his past behaviours”. The Commission ordered the employee be reinstated to a similar position in a different work area, also ordering remuneration for lost pay from the time he was dismissed, less three months, and that he attend a refresher training course as part of his return to work.

The above case illustrates the importance of employers ensuring that non-head office sites and franchises have access to human resources specialists that can guide them through the various state and territory laws. In this case, the employer misunderstood the importance of providing formal warnings and counselling employees on inappropriate behaviour. Had the employer sought advice early from a human resources specialist they could have avoided a costly, time consuming and embarrassing legal dispute.


Eileen Walsh, iHR Australia’s Director of Operations/Professional Services, as told to the Franchise Review Magazine:  “We conducted research last year among MSOs, and found that 32 per cent of surveyed organisations did not apply benefits and compensation practices uniformly at all sites and locations, and 22 per cent stated that recruitment policies were not consistent at all sites. So, clearly, consistency is an area that franchisors and MSOs can struggle to achieve in their approach to HR”.

iHR’s Employer Advisory Service can provide up-to-date advice on high risk HR issues including unfair dismissal, discrimination, and harassment claims to franchise operations and MSOs. All team members are workplace specialists with over 20 years’ experience. Contact IHR today to find out how the Employer Advisory Service can help you avoid a costly and time consuming workplace dispute.


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