Increasing the definition of a small business from 15 to 25 employees would have a “significant” impact in reducing the level of compliance and red tape those companies have to deal with, according to the Australian Chamber of Commerce and Industry.
ACCI CEO, Andrew McKellar, said the chambers survey of small business found 82 per cent were struggling with the level of regulation compliance and 45 per cent had considered closing down in the last 12 months.
“We want to change that dynamic. At the moment, small business is really struggling with the new regulations that have come into place under the IR law changes. What we want to do is get to a situation where small business finds it easier to create jobs, to employ more people,” McKellar said.
Employment and Workplace Relations Minister, Murray Watt, said the government wouldn’t consider the move because it would remove industrial rights for around one million workers.
Watt told ABC radio on Monday, “There is absolutely no evidence we need to make it easier for small- and medium-sized businesses to unfairly sack workers – and that’s what this change would amount to.”
The Ai Group said a review should be part of a “broader effort” to “tackle the minefield of regulation” employers navigate.
Ai Group chief executive, Innes Willox said, “The current Australian approach to defining a small business is ham-fisted, unsophisticated and outdated.
“Any business with 25 employees or less is in reality still a very small business. Very often it is a family business, or a start-up. It is ludicrous that many of the current exemptions or special rules for small businesses cut out as soon as an organisation engages the 16th staff member.
“In other jurisdictions, small businesses are defined both by the number of employees they engage as well as revenue thresholds. There is no such sophistication in the Australian taxation and regulatory systems which appear to be stuck in a time warp.”
Council of Small Business Organisations Australia CEO, Luke Achterstraat, said the change, “would not dramatically increase the number of firms defined as small businesses, but would create more certainty for those small operators that hover close to the edge of the definition.”
The current definition means small businesses are covered by a specific fair dismissal code that requires workers to be employed for 12 months rather than six to claim unfair dismissal. Workers also need to be employed for 12 months before they can convert from casual to permanent and employers won’t be subject to the criminal penalties being introduced for underpayments.
The Australian Council of Trade Unions (ACTU) said the changes would significantly reduce workers’ unfair dismissal rights and make it more difficult for workers trying to convert from casual to permanent jobs, or who need flexible work or extended parental leave.
Recovery of unpaid wages would be more difficult, union delegates would lose the right to training, and employers would be allowed to cut wages using labour hire.
ACTU Secretary, Sally McManus, said, “It is unfair to expect workers taking on a new job to be on a compulsory statutory probation period for an entire year – knowing they can be sacked or terminated at any time on a bosses’ whim and without having access to unfair dismissals protections.
“Up to one million workers will have unfair dismissal rights, protections from wage theft and job security protections taken from them if the business lobby gets their way.
“If the business lobby got their way, this would act as a green light for bad bosses to return to the days when they could hire and fire when they feel like it, without having to give workers a reason for why they are working one day and gone the next.”
McKellar said the government’s refusal to consider the change due to concerns around unfair dismissal went against assurances it made to review the impact of the legislation on small business when the IR legislation was passed in February.
“The views of small business are absolutely critical. 98 per cent of all businesses are small businesses. Small business is doing it tough at the moment. They’re struggling with higher costs; they’re struggling with compliance and red tape. We think it’s important if you’re going to grow the economy, if you’re going to create jobs for the future, you’ve got to give small business a fair go,” he said.
