SMBs Require Clear IR: COSBOA

The Council of Small Business Organisations Australia (COSBOA) has released a blueprint for a simplified and pro-employment workplace relations system. It highlights the role of small businesses as a central driver of productivity, jobs and living standards in the country.

COSBOA CEO Luke Achterstraat has raised concerns over the increasing burden of industrial relations (IR) changes, calling for urgent reforms. He described the current situation as unsustainable for the millions of small business owners grappling with excessive costs and regulatory complexities.

“Small businesses are the backbone of our economy, but the workplace relations framework has become more complex, confusing and costly for them,” Achterstraat said.

A Complex and Costly Landscape

Achterstraat criticised the introduction of numerous regulatory changes, citing examples like the 15-factor test for casual employment, expanded union access rights, and the Greens-led ‘right to disconnect’ legislation.

Since May 2022, there have been at least 35 major amendments to the Fair Work Act, with additional regulations that small businesses must adhere to.

“Whilst more complexity is a boon for lawyers, mum-and-dad businesses are left behind and must incur considerable time and cost to receive advice,” Achterstraat said. “We are talking about employers without in-house HR or IR teams, often navigating an increasingly complex labyrinth on their own.”

Small Business Underrepresented in Policy

Achterstraat pointed out that despite small businesses employing five million Australians, their needs are often sidelined in workplace relations policy.

“Take Division 2 of the Fair Work Act, which outlines the objectives of our workplace relations system. Small business only gets a brief mention in paragraph ‘g,’ buried at the bottom. This sends the message that small business is an afterthought,” he said.

To address these issues, COSBOA has identified several priorities for the government, including simplifying the hiring process for casual workers, limiting expanded union rights, and ensuring freedom of association for small businesses unwilling to engage in multi-employer bargaining.

A Call for Practical Policies

COSBOA is also advocating for improved policy-making processes. Achterstraat has suggested that new legislation should include mandatory Small Business Impact Statements to ensure the practicality of proposed changes.

“We need systems that work for small businesses and their workers, not against them,” he said.

Updating the definition of small business is another priority. The current classification of 15 employees or fewer, Achterstraat argued, no longer reflects the reality for many small businesses.

“Too many small businesses risk losing their status by hiring extra casuals for seasonal demand. A more appropriate definition would be 50 full-time equivalent employees, excluding casuals,” he said, adding that this would align Australia with international counterparts like the European Union, the United Kingdom and Canada.

Institutional Support for Small Businesses

To navigate the challenges of workplace relations, COSBOA has proposed the establishment of a small business triage service within the Fair Work Commission. This service would assist businesses in dealing with frivolous or vexatious complaints.

“Too often, small businesses find themselves victims of ‘go-away’ money, where the cost of engaging legal representation outweighs the cost of settling a spurious claim,” Achterstraat said.

He also stressed the importance of expanding funding for advisory services and co-developing simplified compliance codes with small business representatives.

Fixing a Broken System

The current workplace relations system’s flaws are evident, Achterstraat said, referencing non-compliance findings within the Department of Employment itself.

“It says a lot about our system when the department drafting the rules can’t comply with them,” he said.

Achterstraat argued that reforming industrial relations is vital for improving Australia’s economic performance.

“To boost productivity growth, competition and living standards, we need to create confidence and certainty for small businesses and the people they employ,” he said.

“It’s time for a workplace relations system that reflects the value of small business and supports their success, rather than one that panders to sectional and vested interests.”

For more details, visit www.cosboa.org.au.

Last Updated on December 16, 2024 by Nick Ross