Franchise Legal
Women in Franchising:
Employment and Labour Law Concerns Arising in the Franchise World Due to Non-Standard Employment BY P E T E R S N E L L
T
his article looks at the employment and labour law concerns that arise due to non-standard employment (“NSE”) in the franchise world. In particular, this article looks at the concerns that arise for the new female franchisee as she starts up her franchised business. In today’s economy, many people are engaged in NSE. Different phrases describe the changing economy, for example “Alternative Work Platform” or “Gig-Economy”. Franchising’s flexible model can also fit under the umbrella of NSE arrangements, new concerns are raised concerning labour standards that have been designed to apply to workers in traditional employment relationships. These concerns are especially pertinent to the increasing number of women who are entering the world of franchising. Many women are attracted to franchising due to its potentially flexible model, because some franchises allows women to have careers outside of the traditional nine-to-five role. As such, the flexible model allows women to build a career around their other commitments, and to have the support of the franchisor. While the flexibility of NSE in the franchise world can be a huge draw for potential female franchisees, both franchisors and potential franchisees must first understand how NSE arrangements can work for and against them. These arrangements are not always successful, and the concept that the franchisor and franchisee chooses must make sense in their circumstances. General Pros and Cons: On the one hand, NSE can offer flexibility, enabling women who become franchisees to meet personal and family obligations and contribute to an improved work-life balance. It can also help franchisors remain competitive and increase profits by allowing them to build a flexible and agile business model, which in turn incentivizes women to become franchisees.
On the other hand, NSE can create legal, financial, scheduling, overtime pay, efficiency, work environment, and other types of challenges for workers. For example, the British Columbia Employment Standards Act (“ESA”) was designed to protect the average British Columbian in a standard work arrangement, but that, as fewer workers are engaged in this type of work arrangement, a growing number of people may not be entitled to legislative protections. This means that there are a rising number of workers not protected by the ESA or other federal programs like the Canada Pension Plan (“CPP”) and Employment Insurance (“EI”). Those not covered could include the new franchisee starting up her franchised business, and the workers that she may hire. Luckily, the franchise model allows potential franchisees to shop around and see which NSE works for them. Some franchise systems allow the franchisee to operate from a home office, and do not require spending long hours at a specific location. Each franchisor places their own restrictions, which could be anything from hours of operation, to products and services, to location. By looking indepth at what the franchisor is offering, the potential franchisee is able to make informed decisions on employment and labour protection, as well as what kind of workers she may need to hire. Common Employment and Labour Legal Issues that Arise Due to NSE: Franchisees are usually the sole employer of those working for the franchised business, which includes the franchisee herself.1 As legislation has had a hard time keeping up with the increasing prevalence of NSE, many workers are calling for more minimum statutory standards for their protection, because they cannot look to a trade union or legislation to protect their interests. This means that franchisees must be aware of the employment and labour legal issues surrounding their own circumstances, as well as her employee’s circumstances.
The question of whether a Franchisor is the employer of their Franchisee is a hotly litigated topic. While this discussion is outside of the scope of this article, it is worth mentioning that traditionally Franchisors are NOT employers of the Franchisee. However, in certain circumstances, the Franchisor CAN be deemed to be the employer of the Franchisee if the actions of the Franchisor have led to a joint employer relationship. This can happen if the Franchisor is involved with the day-to-day management of the business in a way that steps over the line set by the courts (York Condominium Corp., [1955] OLRB Rep. Oct. 645). 1
28 The Franchise Voice // Winter 2020
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