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#1 Posted : 07 December 2005 14:53:00(UTC)
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Posted By Sue Powell
I am carrying out some competency checking for health and safety approval and have come across a company who is "Franchisor", who then employees a large number of "Franchisee's".

Does anybody know what the legal situation is in this regard?

The Franchisor is saying that they don't have overall health and safety responsibility for each of the franchisee's which doesn't add up legally to me anyway, but they all have access to the Franchisor's health and safety advisor.

It would seem that the employees of the franchisees aren't "employed" by the franchisor, but surely there must be a legal responsibility here.

I have asked for an organisational chart so that I can see how the franchise jigsaw fits together (with HSG65 in mind) but any helpful comments would be greatly appreciated.
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#2 Posted : 07 December 2005 17:46:00(UTC)
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Posted By sylvia
Don't see how a Franchisor has legal responsibility for franchisee workers, unless all staff in the franchise operation are employed by the franchisor. The arrangement between franchisor and franchise holders is purely a contractual one. There is no employment arrangement. It wouldn't work otherwise. You sell the "idea" and the packaging to someone who wants to set up their own business without having to invent from scratch. Each franchisee is self-employed, and will engage own staff if needed.
Access to a central advisory service is simply that. It's a free consultancy.
HSG65 is not likely to provide any answers to this.
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#3 Posted : 07 December 2005 17:52:00(UTC)
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Posted By Frank Hallett
Interesting question Sue.

I suspect that a great deal will depend upon how much actual control is capable of being exerted contractually by the Franchisor over the way in which the Franchisee conducts their business. At one extreme, they could be in the position of independant self-employed; whilst at the other extrem could be nothing more than "labour only" self-employed.

It's all down to their Franchise contract wording I think.

How about a Franchise Solicitor giving us a definitive statement on this?

Frank Hallett
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#4 Posted : 07 December 2005 19:40:00(UTC)
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Posted By David P. Johnson
This situation is, in theory anyway, much simpler than you might imagine.

The Franchiser has no responsibilities in law whatsoever to the franchisees regarding OSH, in terms of ensuring compliance.

The Franchisee is the employer, it is their sole responsibility to comply.

The Franchiser has a vested interest in making sure the Franchisee complies, since it's his corporate image at stake, despite his lack of legal liability.

The Franchiser's OHS Adviser in effect therefore provides "consultancy" services to the Franchisee to help them comply.

The Franchiser now has to ensure the advice given is both competent and suitable, and the Franchisee still needs to appoint somebody internally to assist with the management of Health and Safety.

Does this help?...

DJ
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#5 Posted : 07 December 2005 21:24:00(UTC)
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Posted By Frank Hallett
Interesting point David, but somewhat over simplified I think.

Given the original info from Sue, how would you see the relationship of the Franchisee with the Franchisor & their H&S Advisor [which appears to be the primary source of H&S info and support] with regard to HSWA Ss 36 & 37 and also MHSW Regs 7 & 21?

I still think that it will come down to unravelling the precise contractual relationship and the degree of autonomy enjoyed [or not] by the Franchisee.

This also has considerable implications for the RRFSO folks - so where are the fire legislation academics on this?

Frank Hallett
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#6 Posted : 07 December 2005 21:59:00(UTC)
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Posted By Adrian Watson
Frank,

The relationship is in theory simple as the contract between the two parties is not a contact of employment. As such there is no responsibilty under s2, however there may be duties under s3.

Regards Adrian
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#7 Posted : 07 December 2005 22:43:00(UTC)
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Posted By Frank Hallett
OK Adrian - I can understand your point. BUT - a person providing services that would fall within the context of MHSW RE7 & 21 doesn't have to be an employer or employee. And the relationship that creates that link will always be contractual - same as me providing advice to a client or a trainer providing a course to a client.

It's all down to the actual relationship I think. Of course, I could also be well off track.

Frank Hallett
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#8 Posted : 07 December 2005 23:34:00(UTC)
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Posted By David P. Johnson
(Quotes are from Frank Hallet earlier in this thread)

"Interesting point David, but somewhat over simplified I think."

It is as far as I can see a simple situation Frank. :-)

"Given the original info from Sue, how would you see the relationship of the Franchisee with the Franchisor & their H&S Advisor [which appears to be the primary source of H&S info and support] with regard to HSWA Ss 36 & 37 and also MHSW Regs 7 & 21?"

As I stated earlier, the Franchiser is in effect providing consultancy services. Reg. 7 of MHSWR provides for appointed persons to be outside of employment - hence the thriving H&S consultancy industry that exists. The only consideration here is that, rather than charging for the service, it is provided freely due to the vested interest the Franchisor has - he takes (presumably) a cut of the Franchisees profit - so makes things as easy as possible; and by the same note wants to ensure the image of the Franchise isn't brought into disrepute (bad PR). Reg. 21 of course ensures the Franchisor must provide competent advice when he is asked to advise; a point I did address in my original post. Again, as for S36 and S37 respectively of the HASAWA, they would apply to the Franchisor in the same capacity of any other consultant.

"I still think that it will come down to unravelling the precise contractual relationship and the degree of autonomy enjoyed [or not] by the Franchisee."

Prima facie the information given by the original poster, this is a standard Franchise relationship. Therefore, the Franchisee is a separate business to the Franchiser; they just pay for the privilege of using their logo, PR and products. Now, unless in the few hours since my first post, whilst I've been out doing the pub quiz [which I lost :-(], Mr. Blair and Big John have reformed Health and Safety legislation, you cannot contract out your duties or liabilities as an employer to a consultant; so I can't really see the contract having a bearing on this.

"This also has considerable implications for the RRFSO folks - so where are the fire legislation academics on this?"

Not being completely swotted up on the RRFSO as yet (not my remit as yet), I wouldn't like to comment.

DJ
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#9 Posted : 08 December 2005 10:19:00(UTC)
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Posted By Frank Hallett
My apologies for hijacking your thread Sue.

Many thanks for the very clear exposition David - Franchise application is not an area that I've had to deal with directly.

From your last response, it does appear that an assumed "standard" franchise contract will remove the application of most h&s liability from the franchisor other than being caught by HSWA S3 and MHSW Res 7 & 21.

My concern is that a contract that requires the franchisee to use a specific source of equipment, h&s information &/or support may be capable of being interpreted in a different way.

Frank Hallett
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#10 Posted : 19 December 2005 16:06:00(UTC)
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Posted By Sue Powell
Thanks everyone for the information and discussion which has been helpful in itself.

Well hijacked Frank but you appear to have done me a service as I have been indisposed for a couple of weeks, so keeping the thoughts progressing was well worth while!

Thanks again everyone.

Sue
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#11 Posted : 19 December 2005 17:21:00(UTC)
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Posted By Adrian Watson
Frank,

In law, you're either an employee or you're self employed, so HSWA 74 S3 applies:

3.-(1) It shall be the duty of every employer to conduct his undertaking in such a way as to ensure, so far as is reasonably practicable, that persons not in his employment who may be affected thereby are not thereby exposed to risks to their health or safety.

(2) It shall be the duty of every self-employed person to conduct his undertaking in such a way as to ensure, so far as is reasonably practicable, that he and other persons (not being his employees) who may be affected thereby are not thereby exposed to risks to their health or safety.

Regards Adrian
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#12 Posted : 19 December 2005 18:16:00(UTC)
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Posted By Adrian Watson
Frank,

Everybody at work, is employer, employee or self employed, so a person would be caught somewhere by HSWA 74 S3 (1) or S3 (2) or S7.

3.-(1) It shall be the duty of every employer to conduct his undertaking in such a way as to ensure, so far as is reasonably practicable, that persons not in his employment who may be affected thereby are not thereby exposed to risks to their health or safety.

(2) It shall be the duty of every self-employed person to conduct his undertaking in such a way as to ensure, so far as is reasonably practicable, that he and other persons (not being his employees) who may be affected thereby are not thereby exposed to risks to their health or safety.

Therefore if a consultant (franchisor) is appointed by an employer under Reg 7 of the Management of Health and Safety at Work Regulations 1999, the consultant would have a duty under section 3 of the HSWA 74. Likewise if the franchisor imposed conditions in a contract upon a franchisee regarding equipment, premises layout etc, and then the franchisor would acquire duties under S3 as an employer/self employed and S6 as a designer.

Regards Adrian.
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#13 Posted : 19 December 2005 22:24:00(UTC)
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Posted By Frank Hallett
Glad to have been of service Sue.

Adrian, many thanks for the response - we actually appear to be revisiting the same issues but from slightly different angles as we don't appear to actually differ in our fundamental understanding of the relationships that might be created.

I'm still concerned that no others have had an input on this though.

Frank Hallett

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