Although we have no franchise legislation in New Zealand, franchises are, of course, subject to the same laws relating to all businesses. The franchisor/franchisee relationship is a complex one, however, and sometimes the implications of legislation as applied to that relationship may not be obvious. Health and safety legislation and the ACC are areas which can have significant importance for both parties.
Although the issue of whether a franchisor can be liable for an injury to a franchisee’s employee has not yet been directly addressed by the courts, cases to date give a clear picture of the manner in which a decision may be determined.
The Health and Safety in Employment Act 1992 aims to ensure that employers operate safe businesses both for employees and for all those who enter and use the workplace. The obligations imposed under the Act are basically for employers to remove, minimise or isolate possible hazards in the workplace so that health and safety risks are eliminated, or at least minimised where total elimination is not possible.
Franchisees are often employers, and are therefore subject to the Act in providing a safe workplace for employees. Health and safety legislation does not, however, vest responsibility for maintaining a safe workplace solely on the employer or franchisee. The Act also extends responsibility to ‘principals’. Read on.
