Gottliebsen: law changes perfect recipe for family business drama

The Albanese government has started its 2024 agenda with an unprecedented six-pronged attack on Australia’s family business network.

Australia’s 2.5 million family enterprises account for some five million workers or around 40 per cent of the private sector work force. They provide a similar percentage of the nation’s training of young people.

The attack is almost certain to reduce the number of family businesses in the economy and many of those that remain will be unionised.

The Albanese government’s strategy represents a fundamental change to the nation.

Many will say that the family business attack was not the main motive behind the measures but rather is an accidental by-product.

They may be right, but the skilful integration of each of the attacks makes it more likely to be a carefully-planned nation changing agenda.

Of the six attacks, three are already in place and three depend on the government’s industrial legislation being passed in the Senate.

But given the actions of both ACT Senator David Pocock and Tasmanian Senator Jacqui Lambie in enthusiastically legislating two of the most vicious anti-family blows, they are unlikely to want to miss the chance to attack again.

The six attacks cover a wide range of areas:

1. The Albanese-Pocock-Lambie new laws states that as from the July 1 this year, all enterprise agreements and awards and similar arrangements will be deemed to have been amended to allow any employee who is a union member to be appointed by that union to automatically become a “union delegate”. And multiple delegates can be appointed to the same business.

For instance, every chain store within a group could have a “union delegate” appointed. Accordingly the awards, agreements etc will be deemed to prescribe the rights, duties, and obligations of union delegates to family enterprises.

Under the legislation employers are obligated to allow a reasonable time for delegates to undertake their union duties and for them to be trained to perform those duties at the business’s expense.

Employers must not restrict in any way the delegate in carrying out his/her duties, which may be further expanded by the Fair Work Commission.

In most family enterprises, particularly smaller ones, this completely changes the relationship between the owners and their workforce.

And those that have 15 or more employees will need to send their “union rep” away from the work site to be trained personally by top union officials, almost certainly including the Construction Forestry Mining Energy Union (CFMEU).

Successful family businesses compete against larger enterprises taking advantage the close relationship between the workforce and the family.

2. Most businesses with less than 15 employees are thinly capitalised and usually rely on the family home as security to provide the capital to enable the business to survive.

Earlier governments of both parties recognised this and, as a result, when these enterprises let go of employees, they are required to pay holiday and long service leave but not make retrenchment payments.

Thanks to Lambie and Pocock, plus the ALP, they will now be forced to pay retrenchment benefits.

For employees, there is currently clear unfairness given the fact that if they worked for a larger enterprise, they would get retrenchment benefits.

But that “anomaly” enabled a vast number of enterprises to start up in high-risk situations and is responsible for much of Australia’s innovation, risk-taking, and employee training

3. On the surface, the new climate reporting requirements set out in the Weekend Australian will not be a major burden for smaller family businesses until 2027.

Larger family enterprises have no such luxury and will need to provide climate information by July 1.

To comply, the larger enterprises will need the required information from their suppliers, etc.

Accordingly, family businesses that are part of a supply chain involving large corporations will need to embrace systems and analysis that calculate and monitor their environmental impact and those of their suppliers, including carbon emissions.

This is one of the largest changes ever undertaken in accounting rules in Australia and most family businesses don’t understand what is about to happen to them and have not begun to undertake the task.

4. Subject to agreements with Pocock and Lambie, the government plans to make the definition of casual labour so complex that any family business employing people casually is taking a huge risk. Most don’t have the money to defend their actions with the Fair Work Commission and could face fines of up to $90,000 for any mistakes they make. Paying causal labour 25 per cent more in cash than part-time employees was of course a burden for many family businesses, but it delivered great flexibility.

5. There are some 1.6 million sole traders in Australia and most work on a contract basis. Thanks to the High Court, there are clear rules as to how this is conducted and, as a result, marketing their services via online websites and the gig economy has been a boon.

But Lambie, Pocock have the chance to back the Albanese government’s proposed legislation that makes contracting far more complex and takes regulation away from the commercial contract system to the employment system.

In many cases, there will be duplication. Operating as a sole trader becomes a total nightmare because very easily you can become an employee of a customer who is required to pay you holiday pay and long service leave, etc even though the relationship is planned as a contract.

The government hopes that Pocock and Lambie will also want to smash the gig economy.

6. Also depending on Lambie and Pocock is the legislative proposal to potentially strip the ACCC of powers to stop big transport companies and unions from forming a cartel that will probably raise prices and certainly push out of business about 50,000 family truckies.

In theory, these vicious attacks on family business should make Peter Dutton likely to become prime minister next year.

But like the ALP, the Coalition has few members with personal experience operating a family business. They have so far turned a blind eye to the attacks.

Fascinatingly, Dutton once operated a small building business together with his father, which means he is a rare politician with family business experience.

To illustrate how remote the previous Coalition government was from family business, powerful large corporations successfully pressured the Coalition into mothballing unfair contracts legislation, which the ALP passed as soon as they got to power.

Some Coalition members now understand that most big business now favour both the ALP and woke causes and are no longer a friend of the Coalition.

The Coalition needs family businesses as much as family businesses need the Coalition.