Coffee chain Zarraffa’s appears to be in hot water as one of its franchisees has signed a false affidavit to have an agreement approved by the Fair Work Commission (FWC).
Before an agreement can be approved, the FWC must be satisfied of a number of matters including that the agreement passes the Better off Overall Test (BOOT).
Zarraffa’s have a template agreement that it applies to all of its franchisees and employees of the franchisee.
The most recent scandal involves a franchisee in Ipswich who made a false declaration about the BOOT test in their affidavit.
A full bench of the FWC has overturned the approval of the agreement but it raises some very significant problems, particularly with non-union agreements.
Firstly, the problem with franchise arrangements were there is insufficient control over what franchisees are doing.
Secondly it demonstrates the ease with which employers can get substandard agreements approved if they make false declarations.